If you collect any kind of information about your customers online, you need a privacy policy. A privacy policy lets customers know exactly what information is tracked and tabulated and how it will be used. According to the U.S. Federal Trade Commission’s Fair Information Practice Principles, you must meet the principles of privacy protection by providing the following information in your policy: 1) Who is collecting the data; 2) The uses to which the data will be put; 3) Recipients of the data; 4) A description of what and how the data is collected; 5) Whether the requested data is voluntary or required, and what if the user refuses to comply; and 6) What steps are being taken to ensure the confidentiality, integrity and quality of the data.
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Web.com Small Business Tip of the Day: Why You Need a Privacy Policy
April 30th, 2013 :: Maria Valdez HaubrichU.S. Crowdfunding More Than Doubled Last Year
April 23rd, 2013 :: Maria Valdez Haubrich
By Maria Valdez Haubrich
Crowdfunding—a method of soliciting small donations of money from large groups of people online—is growing exponentially, according to new data from research firm massolution. According to the company’s annual 2013CF – Crowdfunding Industry Report of more than 308 crowdfunding platforms (CFPs), CFPs worldwide raised $2.7 billion in 2012–an 81 percent increase compared to 2011.
CFPs successfully financed more than 1 million crowdfunding campaigns, with 95 percent of these taking place in North America and Europe. In North America alone, crowdfunding volume more than doubled, growing by 105 percent to hit $1.6 billion. This year, massolution expects worldwide crowdfunding volume to top $5 billion, largely thanks to new laws in the U.S. that will enable crowdfunding to expand beyond simply seeking donations or rewards-based contributions, and actually seek equity investments.
The current report focused on lending-based, donation-based and reward-based crowdfunding. However, thanks to the Jumpstart Our Business Startups (JOBS) Act signed into law last April, which will allow non-accredited investors to make investments in companies in return for equity, equity-based crowdfunding is expected to grow substantially in 2013 and beyond.
The SEC still needs to revise several key sections of the act before equity-based crowdfunding can take place in the U.S. While the SEC has failed to meet deadlines for doing so, the regulations are expected to be set by the end of the year.
What types of campaigns are most likely to get funded via crowdfunding? Massolution identified the five most popular types of crowdfunding campaigns and found social causes still lead the pack; nearly 30 percent of all crowdfunding activity involves social issues.
However, business and entrepreneurship campaigns are moving up in the ranks, with 16.9 percent of crowdfunding activity last year coming from this category. In fact, massolution reports that last year’s growth in lending volumes was primarily due to crowdfunded microloans and community-driven loans to small and midsized businesses.
Films and performing arts accounted for 11.9 percent of all crowdfunding activity in 2012, and music and recording arts accounted for 7.5 percent. The emerging category last year was energy and environment, which accounted for 5.9 percent of crowdfunding activity.
A few interesting trends massolution points out that could have implications for small businesses:
- Crowdfunding is no longer just for small companies seeking to fund individual projects, but is poised to become a means by which big corporations and even institutions could raise funds. This could mean even greater competition in the crowdfunding space, making it harder for small companies to stand out.
- At the same time, new platforms are likely to emerge dedicated to smaller companies and even specific industries, which could make it easier to find financing within these platforms.
- In fact, there’s even opportunity for entrepreneurs to start their own crowdfunding platforms to target underserved niches.
Image by Flickr user James Cridland (Creative Commons)
Google+Small Business Optimism Slips
April 9th, 2013 :: Karen Axelton
By Karen Axelton
Beginning to see the glass as half empty, small business owners are more worried about a recession than they were a few years ago, the 2013 Small Business Economic Forecast from Pepperdine University’s Graziadio School of Business and Management reports. Conducted in partnership with Dun & Bradstreet Credibility Corp., the annual study of more than 2,700 small business owners found that more than one-third (36.2 percent) of small business owners fear a recession this year. That’s substantially up from the 28.4 percent who were worried about a recession in 2011.
In addition, small business owners are less optimistic about growth prospects than last year. In early 2012, 54 percent said they were more or somewhat more confident than they were in 2011. By contrast, in early 2013, just 45 percent reported feeling more or somewhat more confident about their business’s growth prospects for the coming year.
“Small business owners, who are optimistic by nature, are still taking a highly cautious view of the economy and their personal business prospects,” said associate professor of finance Dr. John Paglia, founding director of the Pepperdine Private Capital Markets Project. “The ‘foxhole mentality’ among small business owners to dig in and stay low has the potential to slow the still fragile recovery.”
What’s holding small business owners back from growth? Four in 10 say government regulations–specifically, taxes and healthcare–are the biggest impediment to overall growth in the GDP, compared to 32 percent who said so in 2012. Four in ten (42 percent) of respondents also believe the Affordable Care Act will make their companies’ healthcare costs rise; as a result, 33 percent plan to make changes to their coverage that will negatively affect employees.
Probably because they’re feeling cautious, fewer small business owners are planning to give their staff raises (39 percent) than were planning to do so in early 2012 (41 percent). This is despite the fact that employees’ take-home salaries have been hurt by the end of the payroll tax cut in early 2013. Of course, it could also be because small business owners themselves aren’t seeing any increase in pay—61 percent say they are not making more than the year before.
Two bright spots on the horizon are the housing market, with small business owners overall feeling that housing prices will rise 3 percent this year, and unemployment, with small business owners predicting that the national unemployment rate will decline to 8 percent.
You can view the full 2013 Small Business Economic Forecast at http://bschool.pepperdine.edu/accesscapital.
Image by Flickr user Cali4Beach (Creative Commons)
Google+Retailers Play Wait-and-See Game With Mobile Payments
March 21st, 2013 :: Maria Valdez HaubrichBy Maria Valdez Haubrich
Has your small business already adopted a mobile payment processing option such as Square? Are you scared about the technology issues mobile payments present? Or are you eagerly waiting to see what kinds of mobile payments your customers demand? If your answer is “all of the above,” you fit right in with the predominant attitudes in the retail industry.
When it comes to mobile payments, it seems the retail industry is stuck in the middle—believing that mobile payments will be key to success in the very near future, but worried about implementation and concerned about choosing a solution that will keep customers happy. In fact, a new report on mobile payments from RSR Research says “uncertainty” about mobile payment technology was a top business challenge for 76 percent of retailers polled.
Overall, retailers are bullish on mobile payments. Even though just 1 percent say that mobile payments are currently the dominant form of payment in their business, almost 1 in 5 (19 percent) believe mobile payments will be their dominant form of payment in three years. The smaller retailers were more likely to believe mobile payment would be important to them. These retailers currently take most of their payments in cash, the use of which they believe will shrink as mobile options grow. (Retailers also think that debit cards will become increasingly important, while credit cards will be less so.)
Where are retailers looking for the mobile payment options of tomorrow? They’re not counting on traditional payment services providers to develop these solutions. Instead, they expect Google, PayPal and other consumer technology companies to take the lead in this arena. In fact, 63 percent say that traditional payment services providers are actually impeding progress toward mobile payments becoming ubiquitous. Many of them also expressed concerns about what types of fees such providers would charge for mobile payments.
Retailers are also following the lead of consumers. Many are waiting to see if rapid consumer adoption of smartphones for browsing and shopping will translate into similar adoption of smartphone payment technologies and “digital wallets.” Retailers are wary of taking a wrong step, and very concerned about the customer experience. More than half (51 percent) say that a consolidated, cross-channel payment processing service is crucial to their adoption.
Overall, the RSR report paints a picture of retailers poised and ready to jump on mobile payments, but hanging back until payment provider options shake out and a clear winner emerges.
Image by Flickr user Ron Bennetts (Creative Commons)
Google+Web.com Small Business Toolkit: Kashoo (Cloud Accounting Service)
March 13th, 2013 :: Maria Valdez HaubrichAs tax season approaches, you’re probably wondering why you never got around to using a cloud accounting system to keep track of your business finances. Even if you use an accountant, your business will benefit from cloud accounting. Connect your online bank accounts, business credit cards and stay on top of your cash flow with a simple dashboard. Since it’s cloud-based, you can access your books from anywhere. Each entry goes to your profit and loss statement and balance sheets automatically, and everything can then be shared with your business accountant online.
Google+What Are Small Businesses Spending On, and How Does Your Spending Measure Up?
March 12th, 2013 :: Maria Valdez Haubrich
By Maria Valdez Haubrich
How do your small business’s spending habits stack up against those of other entrepreneurs nationwide? PEX Card’s first SMB (Small and Midsized Businesses) Benchmark Expense Survey, conducted in December, has some good and bad news about small business expenses.
First, the bad news: PEX Card found that more than 60 percent of businesses expect their spending to increase in 2013. Among businesses with 25 to 49 employees, that figure was even higher (70 percent). Now, the good news: For more than one-third of businesses, spending is going up because of expenses associated with business growth.
Overall, PEX found, the average SMB spends nearly $800K annually in the categories that were itemized in the survey. Expenses vary widely, though, depending on the size of the company. For those companies with fewer than 10 employees, average expenses were $378K; for companies with over 25 employees, the average was $1.7M.
What’s taking the biggest bite out of small business budgets?
Staffing expenses (which include sales staff compensation and incentives, healthcare coverage and the cost of workers’ compensation insurance) accounted for 50 percent of itemized expenses overall. Those companies with 10 to 24 employees spent the biggest proportion of their expenses on staffing (57 percent).
Where were the biggest cost increases?
More than 50 percent of respondents said that fuel, taxes and licenses increased the most year-over-year.
What are the costs attributed to growth?
The more businesses grew, the more they spent on fuel and insurance. However, the more businesses grew, the less they spent on taxes and licenses, sales and marketing, and office supplies and equipment.
How much is spent on marketing and sales?
This was a fairly large portion of expenses, representing 30 percent of expenses overall. Companies with fewer than 10 employees spent proportionally more on this category (34 percent), while the largest companies (those with 25 or more employees) spent the least (26 percent). However, those companies spent 50 percent of their sales and marketing budget on advertising, significantly higher than the average of 34 percent.
Equipment and office supply expense accounted for 15 percent of expenses overall, but for the smallest companies, it accounted for 20 percent of expenses. Insurance accounted for 14 percent of total expenses; in this case, the largest companies were likely to pay proportionally more for insurance.
See the full survey results to compare how your business stacks up with others like you.
Image by Flickr user Tax Credits (Creative Commons)
Google+Web.com Small Business Toolkit: NolaPro (Cloud Accounting)
February 27th, 2013 :: Maria Valdez HaubrichGetting a five-star rating from CNET is nothing to be humble about. NolaPro is a cloud-based accounting system that includes invoicing, order tracking and inventory tools. Not just for accounting, NolaPro also has extensive CRM capabilities and is customizable for your business. NolaPro can also act as an employee time clock, do your payroll and integrate with other Web apps. It’s also available in a desktop app. You can try the NolaPro tool for free for 30 days; after that, subscription rates start at $9.99 a month.
Google+Web.com Small Business Toolkit: Small Biz Reg Watch (Government Regulations)
February 21st, 2013 :: Maria Valdez HaubrichKeeping up on government regulations affecting small business can be overwhelming for any business owner. In addition, it’s important to know what new regulations are being considered so you can make your voice heard. The House Committee on Small Business has created Small Biz Reg Watch, a website to help business owners stay informed about regulatory proposals that are open for comment and that may have a significant economic impact on small businesses. The Committee wants business owners to get involved by letting the government know how its proposals will impact them. The page lists current proposals and their impact on small business and provides a place to post your comment.
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Web.com Small Business Toolkit: TripIt for Teams (Travel and Expense Management)
February 12th, 2013 :: Maria Valdez HaubrichIf you and multiple employees of your company all travel for business, you need an organized management system to keep track of all travel plans and expenses for the company. TripIt for Teams was developed to allow small and midsized businesses to centrally manage employee travel, keep everyone connected on the road, and provide insight into the company’s travel spending. Travel planners know who’s travelling when, where they’re staying, and how much the trip will cost. The TripIt for Teams travel calendar makes it easy for the whole team to see when and where their colleagues are traveling and have access to confirmation numbers, maps, directions and other trip details anywhere at any time.
Google+Good News for Home-Based Business: IRS Simplifies Home Office Deduction
January 31st, 2013 :: Karen AxeltonBy Karen Axelton
If you are a home-based business owner but have never claimed the home office tax deduction because you don’t want to deal with the complex reporting and calculation that’s required—or because you’re afraid making a mistake could trigger an IRS audit—you can breathe a little easier this April. That’s because the IRS has announced a simplified, optional method for claiming the home office deduction.
The new optional deduction allows taxpayers to claim $5 per square foot of home office space up to a maximum of 300 square feet, or $1,500 per year. Currently, small businesses and others claiming a home office deduction have to complete Form 8829, a 43-line form that includes complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers who want to claim the optional deduction instead will complete a much simpler form.
The IRS estimates the change will affect more than 3.4 million taxpayers (the number who claimed the home office deduction in tax year 2010, the most recent year for which the agency has data) and will reduce the paperwork and recordkeeping burden on small businesses by an estimated 1.6 million hours per year.
Here are a few things to be aware of in deciding whether you want to claim the traditional home office deduction or the optional simplified verson:
- Homeowners using the simplified option cannot depreciate the portion of their home used for business. However, they can claim allowable mortgage interest, real estate taxes and casualty losses on the home as itemized deductions on Schedule A. These deductions do not have to be allocated between personal and business use, which the traditional method requires.
- Since the optional deduction has a cap of $1,500, if your home office is significantly bigger than 300 square feet or if you have extremely high utility bills or other costs, you may want to stick with the traditional method of claiming deductions.
- No matter which method you use, you still have to meet the current restrictions regarding the home office deduction. For example, the home office must still be used regularly and exclusively for business, not for personal use.
The new simplified option is available starting with the 2013 return most taxpayers file early in 2014. For more details on the new option, visit the IRS website to read Revenue Procedure 2013-13.
Image by Flickr user james.thompson (Creative Commons)
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