Learn More About Women-Owned Small Business Programs

March 8, 2019 by Comerica Bank

Women face more than the gender pay gap when it comes to economic headwinds. There are also specific challenges that women entrepreneurs and women-owned small businesses undergo compared to their peers and the rest of the market, respectively.

Lack of access to financing and bias in contract awarding can negatively impact the success of these organizations. However, the federal government and many other advocacy groups have made boosting support for women-owned small businesses a priority. Tackling the particular pains and pressures of being a female entrepreneur can be as easy as learning more about the women-owned small business programs that are out there to help.

Certification as a women-owned business

There are many programs designed to specifically help women- or minority-owned ventures. For instance, some companies make a specific point to reflect diversity in their supply chains by increasing the footprint of women-owned businesses. However, before organizations can take advantage of such opportunities, they must fulfill one essential prerequisite: becoming certified as a women-owned small business. There are a couple of options for certifying bodies and business designations to brush up on, including:

  • The Women-Owned Small Business (WOSB) designation offered by the U.S. Small Business Administration (SBA).
  • Certification from the Women's Business Enterprise National Council™ (WBENC).
  • Certification from the National Women Business Owners Corporation™ (NWBOC).
  • Designation as an economically disadvantaged women-owned small business (EDWOSB) from the federal government.

Though what qualifies a business for certification differs slightly depending on the options, especially regarding economically disadvantaged status, general criteria include: 

  • U.S.-citizen women directly owning at least 51 percent of the business.
  • Women overseeing day-to-day operations and making long-term decisions.
  • A woman holding the highest possible rank of officer.

Applicant organizations should ready their cases with plenty of other documentation, as the process is known to take time. The reward, however, can be immeasurable, as certified businesses can take advantage of:

SBA WOSB Contracting Program

The SBA maintains a federal contracting program designed to steer contracts toward deserving, certified WOSBs. The contracts typically reserved for the program are from industries where women-owned businesses are underrepresented, and the SBA's leveling of the playing field helps position WOSBs to compete in the federal contracting arena more effectively. Some example industries include forestry, construction, civil engineering, industrial manufacturing and energy. Businesses can be certified directly by the SBA or through the WBENC.

WBENC or NWBOC benefits

When a business is certified by either the WBENC or NWBOC, that enterprise is now entered into the fold and able to access the full range of benefits each organization offers. For instance, small businesses can display the logo of their accrediting body in a storefront or on marketing materials. The WBENC and NWBOC also run conferences, seminars, training sessions, networking events and other opportunities, while engaging with corporate partners with whom their members then have established inroads.

Getting help as a women-owned small business doesn't end with certification. There are other avenues of support and opportunity offered by institutions committed to the success of these firms. Talking to Comerica Bank today can help connect women-owned small businesses with lending assistance and financial advice.

 

 

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice. 

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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What Is an SBA Loan?

February 26, 2019 by Comerica Bank

While multinational corporations and conglomerates seem to get the most news, it's small businesses who represent the real engine of growth in America. Routinely cited as the backbone of the economy, small businesses make up an overwhelming majority of the market and employ the largest share of U.S. workers. However, despite this importance to the overall economic landscape, small businesses can often feel underserved by financial institutions.

While lending to small firms has recovered in the years since cratering after the Great Recession, it has experienced stagnation and unevenness in institutional readiness to approve smaller borrowers, according to the U.S. Small Business Administration. These conditions might create problems for entrepreneurs with the next million-dollar idea, but not a million dollars in the bank to launch their venture.

Fortunately, the federal government understands the role of small business to the economy and operates an entire agency devoted to that segment. The U.S. Small Business Administration (SBA) is important for a number of reasons, but providing loans is among its most mission-critical functions. The SBA exists not only as a knowledge and advice resource for small business owners but also as a lending partner to small firms.

Whether you're looking for funds to start a small business, finance investment or expansion, or even recover from disaster, the SBA has a menu of loan offerings that can help small business owners. However, before they can take advantage of loans, entrepreneurs need to know exactly what an SBA loan is, how they can qualify and what else they should know about (like how the SBA doesn't actually disperse money itself).

What is an SBA loan?

The first thing small business owners or prospective entrepreneurs need to know about an SBA loan is that the loan does not actually come from the SBA itself. As explained by the agency, the "loan" is made possible by the SBA providing a guarantee to partner banks and lenders for the money they would then extend to small businesses. The guarantee mitigates risk for lenders by ensuring partial repayment should an owner default (in some cases, this can cover up to 85 percent of the loan amount). The SBA also reviews all applications to ensure loans fit within its established lending guidelines and standards.

This financing arrangement creates two general advantages to SBA loans:

  • With the government backing the loan, partner banks and lenders are more capable of offering flexible and attractive loan terms. Often, SBA loans come with lower down payments, more favorable rates or a longer repayment period. 
  • The federal guarantee also opens up the lending pool to small business owners or entrepreneurs who have been denied before, either because of credit history or risk associated with the loan, for example. However, the loan-backing process can encourage more lending to growing firms, unproven startups or businesses run by underserved or protected populations - including women, minorities and veterans.

The amount of an SBA loan can range from between $350,000 to $5 million, generally. Funds can be used for a number of purposes, including working capital and fixed assets.

How do I qualify for an SBA loan?

While an SBA loan is not technically a loan from the agency, the SBA is closely involved in vetting applicants and reviewing materials. In this way, SBA loans are very much like the rest of commercial and private lending in that qualifying standards generally revolve around creditworthiness, risk and business opportunity. In addition, the SBA also requires that businesses meet size definitions, be for-profit, be registered in the U.S., and that owners have equity invested in their venture and have exhausted all other means of available financing with no success.

Regarding the basic documentation you'll need, the SBA notes specific materials to prepare your application, which include: 

  • Personal information, including financial history and income tax returns.
  • Business statements, like cash flow projections and balance sheets.
  • Business valuation and debt schedule.
  • Applicable certifications, licensure or leases.
  • Past loan application history.

Entrepreneurs with no such established business information can still make an emphatic case for their loan worthiness. The SBA advises new businesses and startups to:

  • Describe their plan and business opportunity in detail.
  • Pin down exact capital needs, as well as forecast revenue projections.
  • List out collateral that can be offered.

Which SBA loan is right for you?

When asking "what is an SBA loan?", interested borrowers need to also ask "which SBA loan is best for me and my business?" This is a central question simply because there are many loan options made available by the SBA, some designed to meet specific or urgent needs. Finding the right SBA loan starts with brushing up on the various offerings and their specifics:

7(a) program

The SBA's primary program for lending, the 7(a) program acts as an umbrella for a number of diverse loans, in addition to traditional, mainstream offerings. The Standard 7(a) loan can reach $5 million and can be used for leasing or purchasing new equipment to replace old and inefficient units, or as working capital. Other loans in the program include:

  • SBA Express: Which ensures the SBA will respond within 36 hours of a request ($350,000 maximum).
  • Export Working Capital: Targeted funding for exporting businesses ($5 million maximum).
  • International Trade: Long-term financing designed for businesses growing overseas or facing stiff competition within domestic borders from foreign imports ($5 million maximum).
  • CAPLines: Short-term or seasonal loans made to help small businesses increase inventory, pay labor, finance renovations or tap revolving credit.

CDC/504 program

The CDC/504 loan program is made available to help small businesses finance large-scale investments, namely real estate. The end goal is growth, as physical expansion generates more jobs and business, and the 504 program connects qualified companies with long-term, fixed-rate funding through Certified Development Companies (CDC) to buy fixed assets or modernize operations. Possible uses for a 504 loan include purchasing an existing building, undertaking land improvements (landscaping, parking, utilities), building new structures or upgrading facilities, acquiring long-term machinery and refinancing debt linked to expansion. Particular advantages to this loan program that the SBA highlights include 90-percent financing, no balloon payments and savings used to improve cash flow.

Microloans

As the self-evident name indicates, this loan program is maintained to extend comparatively small-scale loans. The target audience for these loans includes small businesses in need of working capital or funds to repair furniture, as well as startups that need only a small amount to get off the ground. The maximum loan that can be made under this program is $50,000, while the average amount is $13,000.

Disaster loans

The costs of dealing with a natural disaster can run exceptionally high for small businesses, both in the near and long term, following a calamitous event. Companies that need financing to keep the door open, employees paid and the lights on can look to the SBA, which offers disaster loans of up to $2 million for small businesses, as well as for nonprofits and homeowners. Finding the right lending partner also factors into securing the best SBA loan for you. Given the SBA itself does not disburse funds, working with the most suited SBA partner to your needs is an essential part to taking advantage of such loans. Talk to Comerica Bank today about what SBA loan options are available to your growing small business or new startup.   

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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Growing Your Business with LinkedIn®

February 15, 2019 by Comerica Bank

LinkedIn® is the world’s largest professional network. It also serves as a great platform to grow your business, as it can help connect you with other professionals.

It’s a highly valuable business network that can help you grow your network of contacts, generate new leads and accelerate your go-to-market opportunities.

How to develop your LinkedIn® profile

By building a presence on LinkedIn®, you can drive engagement to your business. It could be your next step towards continued growth. Follow these steps to develop your profile:

  • Create your page. Known as a LinkedIn® Company Page, it will give you the opportunity to tell your business’s story, drive word-of-mouth and share career opportunities.
  • Entice followers. Engage with potential customers and spread the word about what your business does. Connect with your employees and network contacts so they can ‘like’, comment and share your business updates. Link to your other marketing channels like your emails, newsletter and blog.
  • Share useful content that’s fresh and interesting, such as industry articles and thought leadership items. Provide regular updates about your business and its goods or services.
  • Track your business’s analytics, such as how engaging your posts are, how quickly your followers are growing and any relevant trends.

Complete your profile

Before you can reap the benefits of LinkedIn®, it’s vital you progress through all the steps of completing your profile.

Fill in your company’s details (an overview and description of your business) and upload a logo and banner image. This will help bring your business to life on LinkedIn®, as your logo will be visible in search and it will also appear on your employees’ profiles.

Get started creating your company page by watching this short LinkedIn® video.

Begin posting updates about your business

Schedule a content plan along with product or service updates that will be useful to your potential customers. When posting, keep the following points in mind:

  • Think about your business’s page as more of a forum than an advertising platform.
  • Focus on discussing your industry and creating thought leadership content.
  • Post helpful advice and resources that can offer practical value to your customers.
  • Engage with your followers and aim to help solve their problems. This may encourage them to share your content.

Promote your page to gain more potential customers

Encourage your staff members to add your business to their personal profiles, and to post content or updates regularly. If potential followers notice that professionals with related skills and experience follow your company page, you might enhance your business’s credibility.

Think about adding a link to your email signature to promote your page through blogs and newsletters. Add a ‘follow’ button to your company page to make it easy for people to track your business.

LinkedIn® strategies

Try some successful LinkedIn® promotional strategies, such as:

  • Utilizing visual content. LinkedIn® isn’t a very visual network, so it’s important to try to make your business stand out where possible. Your company logo and profile image are two avenues for achieving this.
  • Writing expert content. Use keywords that highlight the uniqueness and experience of your business, with the aim of portraying you and your staff as experts in your industry.
  • Interacting. LinkedIn® is a social network and to successfully grow your business, you’ll have to engage with people. Browse the profiles of your connections and see who they’re linked to. You might just come across some valuable leads.

Design showcase pages for your goods or services

Showcase pages can tailor messages to different segments of your audience while highlighting certain brands or product lines. Your followers will be able to see this content in their news feeds if they’re interested in it, meaning it’s more focused and relevant to them.

Find out how to add showcase pages to your company page.

Harness the power of LinkedIn® Groups

For a small business owner, LinkedIn® Groups represents a powerful strategy to build your business network by communicating regularly with colleagues, industry leaders, suppliers, and prospects.

You can use LinkedIn® Groups to share content, ask questions and find answers, view job opportunities and make contacts. Learn more about how LinkedIn® Groups can help grow your business.

Consider paid LinkedIn® services

It could be useful to look into the costs and benefits of upgrading to LinkedIn®’s premium services.

For example, InMail messages can be sent to anyone on LinkedIn® without needing their contact information. It’s a professional outreach service that can put your business’s LinkedIn® profile in front of potential customers.

 

LinkedIn® is a registered trademark of the LinkedIn Corporation.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.  

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Market your Point of Difference

February 8, 2019 by Comerica Bank

One reason why people will choose your product or service over a competitor’s is the perceived, real or otherwise, difference to similar ones in the marketplace. You’ll need to find a competitive advantage over your rivals to make your business comparatively more appealing in the marketplace.

Doing business with you should be more attractive and compelling than with your competitors. A brand positioning strategy can help your business focus on the key ingredients that will set it apart from the crowd. It should be simple and needs to easily connect with potential customers.

Consider your options

Your primary marketing goal should be to create a unique point of difference. It will make your business stand out from your competitors and convince consumers to choose your product or service.

Your point of difference, also known as a unique selling point, needs to be the key benefit that you want your target market to associate with your product or service.

Your customers should have a favorable perception of your business so identifying a point of difference can be vital to achieving that outcome. Some areas of difference you might consider include:

  • Customer service.
  • Convenience.
  • Specific benefits of your product or service.
  • Your business story.
  • Variety.
  • Price.

Consult your customers

If you already have customers, survey them to find out what they’re really wanting from you and your competitors. Consumer knowledge is crucial to finding your unique point of difference.

You may find out that the reason why you thought your customers choose your business wasn’t actually the reason why they keep coming back. They may be motivated by something you hadn’t even considered, making this research critical.

Sometimes, customers will be more loyal to a brand that they can relate to. Consumers who show a positive response to a business story they correlate with will sometimes become emotionally connected.

Make your business look unique

The simplest way you can make your business more unique and transparent is by telling your story. Tell potential customers how your business started, your role and what you put into your product or service for them.

Start by listing the steps you take from product or service initiation through to end delivery to your customers.

You can then use this list to form the basis of your business’s story, which can ultimately build your entire marketing strategy.

Differentiate from the competition

You might start out with exactly the same product or service commonly available in the marketplace, but add features that differentiate it from the pack.

It’s difficult to stand apart from the competition in a global marketplace. You’ll need to talk about the special features of your product or service to gain interest from potential buyers.

Determine your key strengths and weaknesses against your competition. Examine your three main competitors and take a close look at what your personal business brings to the table in comparison to them.

Focus on your market

An effective technique for a small business that’s struggling to compete against larger operations is to serve a specific market better than the rest. One example could be a small hardware store that can’t compete on price. To build a competitive edge, it focuses on a wider range of certain tools and equipment, while training its staff to be more knowledgeable about the hardware it sells.

In this example, the business develops expertise in the products it sells, which becomes its competitive advantage.

Contemplate cost leadership

By closely monitoring the costs of your business, you can aim to become a cost leader in your market. You want your business to operate at its highest possible level of efficiency so you can compete on price and use it as a competitive advantage in your industry.

This strategy can be risky, as you’ll push down the price and potentially start a price war with your competitors. Whoever has the most resources to sustain smaller margins will eventually come out on top.

After you determine your unique point of difference, focus on developing a marketing strategy that will show off your competitive advantage.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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5 Low-Cost Tips for Growing a Small Business [Infographic]

January 3, 2019 by Comerica Bank

Growth is a core objective for any business owner, yet only about a third of small businesses make it past the first 10 years, according to the Bureau of Labor and Statistics. Just getting a business off the ground requires a Herculean effort. Growing it further demands a clear set of long-term business goals that are facilitated through low-cost, high-yield expansion efforts.

A core reason business owners struggle to expand their operations is that they don't always know where to look for methods that cost-effectively grow their customer base while scaling up the output of their products and services. Many factors certainly have to be considered: Marketing capabilities; the bandwidth of your current sales funnel; the size, knowledge, and expertise of your staff; your ability to find new potential customers; your technological resources and so on.

But while the specific growth mechanisms for every business will depend on the industry it's in and the nature of its customers, there are several common-sense steps that can substantially improve any business's expansion efforts.

For example, a well-conceptualized social media strategy is a cheap and effective way to engage new and existing customers. Email marketing lets you segment your potential customers based on their location, demographics and even more crucially, their interests. This is to say nothing of the power of building brand loyalty and relying on returning customers as a steady, recurring source of revenue.

Simply put, there are low-cost strategies to grow your business at every corner. It's just a matter of knowing them when you see them and understanding how they can facilitate new opportunities. 

 

Small Business Growth Infographic

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