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Are Women Running the Small Business World?

According to Beyonce, women run the world. And while women have made great strides in so many ways, and broken into so many areas that were previously closed off to them, we might not go quite that far yet. But with that being said, when it comes to the world of small business, women are actually kind of crushing it, and have been for a while, although the last few years have meant a lot of major setbacks. So what does the landscape look like for women in the small business world right now, and what kind of help is available to allow women to continue to run things?

Women in Small Business by the Numbers

Women entrepreneurs have come a long way since the days of nineteenth-century women like Rebecca Pennock Lukens, who became “America’s first female CEO of an industrial company,” and former slave Bridget ‘Bidy’ Mason, who built a West Coast real-estate empire. Those impressive women were outliers in the country at the time, and while there can still be obstacles standing in the way of getting ahead these days, things are looking up, with a few Covid-related caveats (which we’ll look at below). Check out these numbers:

In the last 20 years, the number of female business owners has increased by 114%.
According to 2019 numbers from the National Women’s Business Council, that year, women owned nearly 13 million businesses in the United States (around 42% of all companies). Compare that to 1972, when there were only 402,000 women-owned businesses, representing 4.6% of all firms.
In 2019, women-owned businesses employed 9.4 million workers and generated $1.9 trillion in annual revenue.
According to a 2021 survey by Small Business Trends, 31% of all small business or franchise owners were women last year, up from 27% in 2020.
Women launch more than 1,200 new businesses every single day in the US.
The growth rate of women-owned businesses is 5%.
In 2018, women owned 4 out of every 10 businesses in the U.S.
In 2017, 1,821 net new women-owned businesses were launched every day. Women of color founded 64% of those new businesses.
From 2007 – 2018, total employment by women-owned businesses rose 21%, while employment for all businesses declined by 0.8%.
In 2018, women of color accounted for 47% of all women-owned businesses, employed 2.2 million people, and generated $386.6 billion in revenues.
Businesses owned by women of color grew by 163% between 2007 and 2018.
Women of color were responsible for 89% of newly created businesses in 2019.
The number of businesses owned by Latinx women has grown by 172% in the last 10 years.
30% of women business owners have owned their business for 10 years or more
Women are slightly more likely to start a business than men, according to the SCORE report.

Turns out, these days, women are running a lot. But that’s not to say there aren’t challenges. Let’s look at two: the pandemic and funding.

Has the Pandemic Derailed Progress?

The last few years have been tough on everyone, but the pandemic seems to have hit women business owners particularly hard, probably because of the multiple roles women are expected to fulfill, even while running a business.

According to data from Goldman Sachs, almost half of all women business owners, and nearly 60% of African American women small business owners, continue to struggle financially due to the pandemic. A smaller share of men owners (39%) said this. Not only that, but:

At the start of the COVID-19 pandemic, from February to April 2020, the number of female-owned businesses dropped 25%.
21% of women-owned businesses experienced revenue loss due to Covid.
Goldman Sachs also found that around 4 in 10 female small business owners are worried the debt they’ve accumulated will hurt their ability to recover – and even more African American owners have this concern.
Bank of America’s 2021 Women Business Owner Spotlight found that around half of women entrepreneurs cut their own pay to keep staff members employed during the pandemic.
More than half of African American women small business owners said they’ll need to take out a business loan this year; only 27% of their male peers said the same.
7 in 10 women business owners under 45 said they or their employees have been plagued by mental health issues during the pandemic.

But even with all of this bad news, women business owners are optimistic. Despite the challenges they’ve faced in the last few years, a full 77% of women business owners expect their business to survive through the COVID-19 pandemic, and 61% expect their revenues to grow over the next year, compared to 31% last year. Not only that, but 76% of women business owners report being somewhat or very happy, while just 14% report being very or somewhat unhappy.

So women entrepreneurs are continuing, and will continue to triumph, despite the challenges thrown at them. But there is still another issue to look at: the disparities in funding for women’s small businesses. Fortunately, there is some help in that department that women can take advantage of.

Where Women Entrepreneurs Can Get Help

What does the landscape of funding for women’s small businesses look like now? Well, it’s complicated. While studies show that female-owned businesses are safer for investors, that businesses founded by women earn twice as much money as those founded by men, they have better loan repayment records, and they are less likely to declare bankruptcy than men, female entrepreneurs usually face greater difficulties when it comes to obtaining funds for their businesses, and are submitted to more scrutiny than their male counterparts. According to Sharon Miller, the President of Small Business at Bank of America, “Women think they have to have it perfectly right before they go to the bank. Many men come in without even having a concept.”

And consider this:

Women receive an average loan of $39,000, while men receive an average loan of $44,000.
Only 25% of women seek financing for their businesses. In contrast, 34% of men look for financing from investors.
Women who do seek funding are successful in 31% of cases, while 34% of men who applied for a loan said that their funding request was approved.
Groupon reports that 54% of women entrepreneurs say they’re held to a different standard than their male counterparts when accessing capital.
Research from the Kauffman Foundation shows women-owned startups pay higher interest rates and take on more collateral than similar businesses owned by men.
Of the $130 billion venture capital funds invested last year, companies with a female CEO got less than 3% of the funding. And less than 0.2% of all VC funding went to women of color.

But since around 47% of women small business owners now have less than three months’ cash reserves, having access to capital might just be a make or break thing. Without equal access to capital, women business owners do not have equal opportunities to grow, innovate, or scale, limiting their ability to succeed.

Fortunately, if you are a woman entrepreneur, there are avenues open to you to help you move forward. First of all, you need to be creative and, as Lakshmi Balachandra, Ph.D., assistant professor, entrepreneurship at Babson College, says “turn the challenges into opportunities.” She recommends networking, seeking out a mentor (and being a mentor in return), buying from women-owned businesses – and, of course, exploring all of your options for capital.

There are various alternatives open to you for funding your business, including:

VC firms led by women or with a solid record of investing in women-owned businesses, like 37 Angels, Belle Capital, and the Women’s Venture Fund. There are also organizations that help connect women with investors, like Astia and Women’s Capital Connection.
In partnership with Seneca Women, Bank of America has launched the Bank of America Access to Capital Directory, a platform that helps educate women-owned businesses to “navigate the capital landscape and identify potential sources of funding, such as equity, debt, and grant capital.”
The government’s Small Business Association offers the 8(a) Business Development program that helps small, disadvantaged businesses compete in the marketplace, as well as a Lender Match tool for finding capital. The SBA also hosts the InnovateHER Challenge every year. Any woman-owned business that offers a product or service that has an impact on the lives of women and their families may be eligible to participate in this challenge.
Government-backed Women’s Business Centers offer training to help bridge the funding gap in multiple locations around the country.
WomenOwned is a database that allows women to have access to thousands of grants and assistance programs. These grants are all woman-owned and minority-owned small business funding options.
The Count-Me-In/Make Mine a Million organization offers a variety of events and grants for woman-owned businesses that are trying to expand their business to over one million dollars in revenue.
KeyBank offers the Key4Women program, which aims to provide women entrepreneurs with capital and financial assistance. Since 2005, KeyBank has lent more than $6 billion with this initiative to woman-owned businesses.
Wells Fargo is actually one of the leading lenders for woman-owned businesses. They offer multiple financial solutions designed to support woman-owned businesses, whether they are well-established and looking to grow or just starting out. They also offer lines of credit for woman business owners.
The Women’s Economic Ventures Loan Program, established in 1995, works to help woman-owned businesses that do not qualify for traditional bank financing. They offer a variety of different funding options with a fixed rate of 5-10%.

The above resources are just some of the places that are helping to fill the funding gap, and that women entrepreneurs can turn to for assistance. There are many more, including various small business loans and grants, as well as organizations that cater to specific regions.

Women have made an enormous impact on the world of small business, despite historical obstacles and disparities in funding. Woman-owned businesses have a high success rate and tend to be a low risk for investors, so it’s time lenders caught up with the times and backed these businesses. Otherwise, they’ll be the ones left behind as women continue to move towards running the small business world.

Want to Get Ahead? You Need to Know Your Competition

What keeps you up at night as a small business owner? Profit margins, product launches, how to win customers and keep the ones you’ve got? Ok, but how about your competition? Whatever kind of business you’re running, no matter how unique you are (and we’re sure you’ve got your own dazzling USP), you’re sure to have another business that’s doing something at least similar, and competing with you for customers. It’s up to you to know what they’re up to so you can have a fighting chance, and we’re not just talking about scrolling through their social media accounts or checking out their website. We’re talking about something more in-depth: a competitive (or competitor) analysis.

What Is a Competitive Analysis?

Simply put, a competitive analysis is a strategy for:

Identifying competitors in your industry
Researching their marketing tactics, products, and sales
Using this information as a way to compare your business with your competition, so you can identify your company’s strengths and weaknesses relative to each competitor

It sounds like more work than a simple breeze through social media – and it is. But it will be worth it for the insights you gain.

Why Do a Competitive Analysis?

So why embark on a project like this, when you’ve got so much on your plate? Well, there are a lot of benefits to doing a competitive analysis, including: illustration of a laptop screen with competitor websites on the screen

Gaining a better understanding of your market – When you start identifying who your competitors are, you might discover some businesses that you didn’t know about, or that you hadn’t even considered to be your competition before. In addition, when you more thoroughly understand your competition, you might also be able to identify areas where your market is underserved, so you can move in and fill those unmet customer needs, or even find a new niche for your business.

Getting an insight into industry trends – You’ll be able to see where things are headed, but you’ll also know how your competition is reacting, so you can zig when they zag!

Identifying your business’ strengths and weaknesses – Knowing how your competitors are perceived will help you draw conclusions about your own brand’s strengths and weaknesses. With a competitive analysis, you’ll be able to identify your business’ unique value proposition in comparison to others, and what makes you different from your competitors. This will allow you to clearly communicate to potential customers why your product or service is the best choice of all those available. And studying your competition to find out what they’re doing right will help you understand where you fall short in your relation to your competition, so you can identify areas where you may want to invest time and resources.

Identifying your competitors’ strengths and weaknesses – Knowing what your competitors are doing right will help you stay relevant and ensure that both your products/services and your marketing campaigns are outperforming industry standards. And knowing their weaknesses will tell you where your competitors are falling short, which will help you identify areas of opportunities, and maybe even figure out new, unique marketing strategies they haven’t taken advantage of.

So there’s lots to be gained by doing a bit of research into your competition. But where do you start? Check out the following steps.

Doing a Competitive Analysis

Start your competitive analysis by creating a competitor matrix on a spreadsheet.

Conducting a competitive analysis just means following the steps below, so you can get a comprehensive look at what your competition is doing compared with what your business is doing. Start by:

Creating a competitor matrix

A good way to start with your competitive analysis is by creating a competitor matrix. This can simply be a table or spreadsheet you can use to compile your research, which will help you spot trends as you go. On your matrix, or grid, you’ll have one row or column for each competitor that you’ve identified. On the other axis, you’ll list data points or categories of information you want to find out about each of your competitors. Some of the basics you’ll be starting with might include company history and location.

Determining who your competition is, and what they’re offering

Now you’re ready to go. Start with the basics: who is your competition – who are you going to put in each of the columns on your matrix? This means making a list of businesses where your customers would turn if they weren’t going to buy from you. Make sure you separate your potential competitors into two categories:

Direct competitors – These businesses sell a similar product or service to a similar target audience. These are likely the companies that first come to mind when you think of your competition.

Indirect competitors – These businesses sell a different product or service in the same category as your business, but target an audience similar to yours. For example, if you run a coffee and dessert cafe, a luncheonette that also has dessert offerings might be your indirect competition. Or think of clothing subscription services: some offer designer items, while others offer workout gear – these companies would be indirect competitors.

While you’ll want to focus more on your direct competition, you should always keep one eye on your indirect competitors: you never know when they’re going to make a move into your territory.

Narrow your list of direct competitors down to around 10 diverse businesses that you can really focus on. Once you’ve done that, start analyzing your competitor’s complete product/service line and the quality of the products or services they’re offering. In addition, ask questions like:

Are they low-cost or higher-cost?
Are they operating on a volume basis, or are they mostly one-off sales?
How do they distribute their product or services?

Profiling your competition’s target customers

You’ve got an idea of who your competition is and what they’re offering, so it’s time to think about who those businesses are targeting. To get a good idea of your competition’s target customers:

Read their mission statement
Check out any messaging they use
Look at their social media accounts, and get an idea of who they’re responding to, how they’re interacting with them, and who they follow
See if there are any customer testimonials in their content, so you can see who they’re highlighting

Unsurprisingly, you’ll probably find a lot of overlap with your target customers – you’re competitors, after all! But you might find some very useful small differences that you can take advantage of.

Examining their sales tactics

Some of the information about how your competition’s sales tactics work might be trickier to come by, but if you can, get some answers to the following:

What does their sales process look like?
What channels are they selling through?
Do they have multiple locations?
Are they expanding? Scaling down?
Do they offer discounts?
Why do their customers choose them over you, or vice versa? Why do they end relationships with your competition?
What is their revenue and total sales volume?

Completing the 4 P’s

If you’ve already looked at “place” (or locations of your competitors, and the market to which they primarily sell), and the “products” they offer (including any special features they offer, and what is most and least appealing about them), it’s time to complete the 4 P’s and look at “pricing” and “promotion.”

When thinking about pricing, ask these questions:

What kind of pricing model do your competitors use? One-time purchase or subscription?
How much do they charge for their product or service? Do they offer sales or discounts?
How does their pricing reflect the quality, or perceived quality, of their product or service?

When you’ve answered these questions, you can look at if the quality of your product/service in comparison warrants you raising your prices, or, alternatively, if there is a gap in the market for a more affordable option. You can also consider matching any perks or discounts (like referral discounts, or free trials) that your competitors are offering, if it seems right for your business.

Next, promotion, or marketing: how do your competitors go about reaching their target customers? Ask questions like:

What unique selling propositions do they emphasize?
How do they tell their company story and talk about their brand?
What kind of advertising avenues do they use? Traditional print, social media, email newsletters? Do they have a blog, or post videos and webinars, or even host a podcast? Have they found a really unique tactic, like guerilla marketing?

Looking at your competitors’ content strategy and social media presence

Related to the above, you’ll have to take a look at your competitor’s content strategy, including how often they’re posting on social media, their website, and/or their blog, etc, and the quality of their content. Is it original, accurate, in-depth, and full of engaging photos? And, most importantly, is it working for them?

To determine this, head to social media and see if:

Certain topics seem to hit the mark better than others
The comments are negative, positive, or a mix
People are tweeting about specific topics more than others
Readers respond better to Facebook updates about certain content
There is specific content of theirs that is highly shared and linked to. How does your content compare?
Your target audience is using specific platforms more than others
There are sites that are linking back to your competitor’s site but not yours
Third parties are sharing what your competitors are publishing
You can see who is referring traffic to your competitor’s site

Performing a SWOT analysis on your competition

Finally, try performing a SWOT analysis on your competition, or identifying their strengths, weaknesses, opportunities, and threats. If you’re not familiar with this type of analysis, check out our description of how to do one here – and don’t forget to do one for your own business!

When it comes to your business, that old saying “What you don’t know can’t hurt you” doesn’t apply. Whether your business is big or small, well-established or just starting out, you can’t afford to be ignorant of what your competition is up to. You need to do some strategic planning around them, and a competitive analysis is a great place to start. Follow the steps outlined above, and consider performing a SWOT analysis on your own business once you’ve done so, so you can set yourself up for success!

Are We Finally Addressing Racial Inequality in Small Business Funding?

Here’s an interesting statistic: while around 37% of all small business owners use their own cash to start their venture, around 44% of African American small business owners say they started their businesses with their own cash. But now, get this: according to the most recent census data, African Americans own 2.2% of the 5.7 million businesses with employees in the U.S., and according to the U.S. Chamber of Commerce, African Americans make up 9.4% of business owners (despite making up more than 12% of the U.S. labor force) in the U.S. Do those numbers seem a little, well, off to you? They should – so let’s take a look at why things are so skewed when it comes to funding small businesses, and how African American entrepreneurs can seize opportunities from larger organizations, and help level the playing field.

African American-Owned Small Business Funding by the Numbers

So why are so many more African American small business owners self-funding than other business owners? Unfortunately, it’s probably because the racial funding gap is very real. Federal Reserve numbers show that:

80.2% of Caucasian business owners receive at least a percentage of the funding they request from a bank, while only 66.4% of BIPOC (Black, Indigenous, or people of color) business owners can say the same.
When BIPOC-owned businesses do get funding, the amounts tend to be about $30,000 less than comparable Caucasian-owned businesses.
Just 1% of African American business owners obtain business loans in their first year, but 7% of Caucasian-owned organizations get business loans in their first year.
Only 18% of African American business owners report receiving assistance from loan officers in completing applications, compared with 59% of Caucasian applicants.
37.9% of African American business owners say they feel “discouraged” from applying for loans.
The average level of startup capital is $35,205 for African American entrepreneurs, and an average of $106,720 for Caucasian entrepreneurs.
African American entrepreneurs are around three times as likely to have growth and profitability hindered by a lack of financial capital.

All of the above does sound discouraging, especially since Citigroup recently put out a report showing that the cost of systemic racism to the U.S. economy over the last 20 years has been around $16 trillion, with $13 trillion of it being attributed to failure to equitably invest in African American entrepreneurs. But fortunately, big corporations and venture capitalists are finally sitting up and taking notice of the damaging inequality all around us, and are beginning to lend a hand.

A Real Return on Investment Opportunity

According to Melissa Bradley, founder and managing partner at 1863 Ventures, a Washington, D.C.-based business-development nonprofit that works with historically marginalized entrepreneurs, “…an amazing amount of corporate commitments [have] now also [been] focused on Black and brown founders, which I think has been amazing. There was over $66 billion committed by Fortune 1000 companies toward racial-justice initiatives. And so I think a combination of COVID-19 and the death of George Floyd, unfortunately, have triggered people to reorient what’s important to them, and to unlock capital to recognize that there’s real [return on investment] opportunity in these communities that have been historically overlooked and underserved.”

What Bradley is talking about is a whole host of companies and venture capitalists that have begun initiatives over the last few years or so, focused on lifting up African American businesses and communities. Let’s take a look at a few of them:

Goldman Sachs

The firm launched an initiative in March of 2021 called “One Million Black Women,” pledging $10 billion over 10 years to advance racial equity and economic opportunity for African American women. The initiative was set to focus on areas such as access to capital, job creation, financial health and workforce advancement; the bank also pledged to invest $100 million in philanthropic capital over the next 10 years. The targeted funding will take the form of direct investing, as well as grants.

Goldman Sachs noted that reducing the earnings gap for African American women could create up to 1.7 million jobs and add as much as $450 billion to the U.S. GDP annually.

Target

In April of 2021, discount retailer Target said it was rolling out a $2 billion dollar plan to support African American-owned businesses by 2025 by adding new brands to its shelves, hiring African American-owned construction or advertising firms and suppliers, as well as launching a new program for start-ups. This new program, called Forward Founders, was created to work with early-stage start-ups led by African American entrepreneurs to help them develop, test, and scale products to sell at mass retailers like Target. The company and its foundation are also giving $10 million to nonprofit organizations focused on addressing barriers for African American communities.

Netflix

Netflix shifts some of its $5 billion in cash to financial institutions that focus on African American communities.

In 2020, streaming platform Netflix announced that it would shift some of its $5 billion in cash to financial institutions that focus on African American communities. The company said they would bank up to 2% of its holdings, or about $100 million, with such lenders, starting with $35 million, split two ways: financing a new fund, the Black Economic Development Initiative, that will invest in African American financial institutions, and banking with the Hope Credit Union, an African-American owned institution.

According to Bill Bynum, Hope’s C.E.O, the money will have “a tremendous impact” in African American communities: “Pound for pound, no entity has a bigger impact” than a community lender, he said, pointing to a greater ability to lend to small businesses.

In December of 2021, Netflix announced that they had achieved their goal.

Lowe’s

In June of 2020, Lowe’s, the home improvement superstore, opened its first round of grant applications for $25 million in small business grants for minority-owned businesses. These grants were meant to provide emergency assistance during the pandemic, but C.E.O. Marvin Ellison, one of only four African American C.E.Os of a Fortune 500 company, said the grants would be the first step in a $50 million effort to support African American communities.

PepsiCo

The snacks and soft drink giant has said it plans to invest more than $400 million over five years to “lift up Black communities and increase Black representation at PepsiCo, specifically in leadership roles,” according to a statement. The company also committed to invest $50 million over five years to strengthen local African American-owned businesses, and plans to more than double spending with African American-owned suppliers and expand its supplier pipeline.

Its latest initiative is the “Dig In” platform, and “Dig In Day,” during which the corporation called on people to dine in or order from their African American-owned restaurant of choice, then upload their receipts to the dedicated Dig In Passport site, where they could explore African American-owned restaurants and show support. They hope to generate $100 million in sales for African American-owned restaurants over the next five years: “The impact we want to have is to grow this restaurant community by $100 million, that’s the commitment and things like the database of Black-owned restaurants is going to be super helpful because it will allows us to connect those restaurants and connect others to help them,” according to Scott Finlow, CMO at PepsiCo Global Foodservice.

Other Resources

The above are just a few of the corporations that have pledged support for African-American entrepreneurs and African American-owned businesses, and other types of firms and government-related agencies are also getting in on the action. For example, African-American business owners looking for help with funding can look into:

Founders First Capital Partners – This investment firm based in San Diego has launched a “Racial and Social Economic Equality Initiative,” designed to offer financial assistance for businesses led by underserved and underrepresented entrepreneurs. Under the Founders First program, entrepreneurs pay up to 6.5% of their revenue for up to three years, for an investment that will average $250,000 but could go up to $1 million. Because repayments are tied to revenue, those payments will decline if revenue drops, unlike payments on a fixed loan.

Kapor Capital – This Oakland-based venture capital firm’s current portfolio has 59% of its investments going to companies with “a founder who identifies as a woman and/or an underrepresented person of color.”

Humble Ventures – This venture development firm provides consulting to diverse tech startups to help them grow and find funding.

Harlem Capital Partners – New York City-based Harlem Capital Partners debuted its $40 million diversity-focused venture capital fund in December 2019 with a goal of helping to invest in minority and women founders around the United States.

The Minority Business Development Agency (MBDA) – This agency of the U.S. Department of Commerce works to promote the growth of minority-owned businesses by doing such things as providing resources about grants and loans.
The Community Development Financial Institutions (CDFI) Fund – According to the U.S. Chamber of Commerce, these institutions are Part of the U.S. Treasury Department, and “specifically provide loans, investments, financial services, and technical assistance to underserved populations and communities. On top of this, the CDFI Fund offers tax credits to spur investment. Business owners can search for local financial institutions that have received money from the CDFI Fund and that, in turn, should be able to provide tailored assistance.”

All of this is a great start for turning the tide when it comes to the racial inequity of small business funding in this country, but we all know there’s more to do to change the systemic issues that still plague us. These initiatives are helping, though, as well as helping to highlight the need to support African American entrepreneurs. As Larry Ivory, chairman of the National Black Chamber of Commerce, points out: “I think that there’s been a light shining on the United States in terms of the disparity treatment of African Americans that is systematic, the economic lack of opportunity that exists, that creates the environment that we’re in today. I think America has to have a very serious conversation and take a look at its own history.”

For now, if you’re an African American small business owner, or an aspiring entrepreneur, take advantage of any funding out there to support you! And we want to know: have you used any new resources or initiatives to help fund your small business?

Attract, Engage, and Delight: Using Inbound Marketing to Grow Your Business

We’re pretty sure you’ve noticed that consumer behavior has changed over the last few decades. Not only do consumers have different expectations when it comes to things like customer service and the number of choices offered to them, but they also want to be marketed to in a different way. And it seems like these two sides of the consumer coin are completely in opposition: while consumers want more service and more choices, they want less traditional marketing.

Think about how you feel about TV commercials now that media consumption has changed so much. They annoy you, right? And you’d prefer to skip right past them; maybe you even feel less inclined to buy from a business that interrupts your video with their intrusive ad! That’s pretty much how a lot of consumers feel about any kind of “outbound marketing” these days, or marketing that seeks them out and gets in their faces. Cold calling, email blasts, and direct mail are turning consumers off to an ever-greater extent, meaning you’ve got to find other ways to attract customers to you. That’s where “inbound marketing,” or marketing that “attracts, engages, and delights” your customers comes in.

What Is Inbound Marketing?

person's hands on a laptop keyboard with a graph on a screen — *Inbound marketing methodology has the customer at its core, and is designed to meet their specific wants, desires, and needs through relevant content and resources.*

As we’ve pointed out, consumers are much less likely to be tempted by traditional, outbound marketing these days. Instead, they seem to increasingly prefer doing research online to choose companies and products that meet their needs. They want to feel in control of the whole process, and feel like they sought out the right product or service for them.

So that means your business needs to be there and ready when they come looking. Not necessarily ready to sell to them, but ready to help them and eventually become their go-to in your industry, so they are ready to buy from you. While outbound marketing is marketing geared towards reaching as many people as possible, inbound marketing is geared towards reaching the right people.

To break it down, inbound marketing methodology has the customer at its core, and is designed to meet their specific wants, desires, and needs through relevant content and resources, such as blogging, social media, ebooks, guides, and more. This content is created to answer common questions, speak to pain points, and offer solutions to your customers’ problems, in order to create a more seamless buying experience.

How do you do all that? It all comes down to attracting, engaging, and delighting your customers.

Attract, Engage, Delight

You can boil inbound marketing strategies down to these three little verbs: attract, engage, and delight. These are basically the three stages that you’ll need to guide your customers through to make this method successful for you – and remember, the whole goal is to pull them, not push them!

Attract – This first stage has also been called the “stranger” stage: your customer doesn’t know you, and you don’t know them, so you’ll need to draw them in with valuable content and conversations that will make them want to engage with you, and that will earn their trust. For your part, you also want to make sure that you’re using this stage to attract the right customers.

Engage – If you’ve attracted a stranger, you’re now at the point where you’ve got a lead. You’ll need to offer solutions and insights that speak to their pain points and help them towards their goals so they are more likely to buy from you.
Delight – Once you’ve succeeded in engaging a lead, you’ll probably end up with a customer! But don’t stop now: you have to keep working actively to make sure people are completely satisfied with the services they receive from you, so that they stay loyal and continue to buy from you.

Sounds so easy when you break it down into those snazzy little verbs, right? But how do you get to the stage of having some new, delighted customers?

Inbound Marketing Strategies

1. Content, Content, Content

Inbound marketing is all about offering solutions and being a trustworthy source, so the most important way to get started is by creating valuable content. For example:

Start a blog on your website, and post articles that display your expertise, as well as educate, inform, or entertain, depending on your audience.
Offer a free downloadable guide that is directly related to your business – again, you want to attract the right customers.
Post customer testimonials, so leads will know that you’re the right business for them.
Use landing pages to tempt leads to exchange their contact information for additional helpful content or relevant offers with a compelling call to action.
Create some infographics with tips and supporting statistics to both grab attention, and show your knowledge.
Shoot some videos: some of the best marketing methods for capturing the attention of prospects include explainer videos, customer testimonials and other types of visual media.

Whatever content you decide is right for your business, remember to have a strategy behind it, produce it continuously, update it often, and always be answering your customers’ top questions: “What’s in it for me?” and “Why you?”

2. Go with SEO!

So how are you actually going to attract people to all this great content (and to your business)? That’s where a solid SEO game comes in: remember, 81% of consumers do research on the internet before they settle on a product or service, so you’ve got to be at the top of the search engine heap. If you’re using the right keywords, you can get your content (websites, blog articles, etc.) to the top of the Google search results and in the hands of the right potential buyers.

You can focus on multiple keywords to try and gain traffic, but some experts suggest focusing on a few keywords that are valuable, and creating specific pages on your website that are for those keywords specifically.

3. Get Social

It probably comes as no surprise to you that the average adult in the U.S. spends around 2 hours a day on social media, so guess what? You’ve got to be there, too! That’s where your customers are, and even if you aren’t there, they still could be talking about you – so take control of the conversation by:

Sharing your blog posts on social media platforms, so you can both showcase your expertise AND drive traffic back to your website.
Engaging with others on social media to humanize your brand. Get into the mix and post, comment, like, share, and follow so you can connect with your customers and leads.
Offering extra support by being available to answer questions via various platforms.

“Listening” to and interacting with your customers on social media is a great way to meet them wherever they are in their buyer’s journey: you’re making things easy and convenient for them, and you’re learning a whole lot about them in the process.

4. Expand Your Offerings

After you’ve attracted some customers, you should also consider getting deeper into things in the engagement phase in order to convert leads into customers. You can offer them something of value in return for their conversion, like:

Premium content
Consultations
Subscriptions
Newsletters

To get leads to this point, always include a compelling call-to-action in your content, so they know exactly what they should do next to get to your special offers! And remember, at this stage, you’re still selling solutions, so focus on how you’re handling your interactions with interested parties.

5. Keep Delighting

Delighted customers are the best! They themselves can be a source of continuous revenue AND they can help bring in revenue by singing your praises to others. That means it’s important not to neglect them, and not to leave them out of your content creation – even after becoming your customer, people still want to consume valuable content. Consider creating both:

Product-focused content, which includes information on how to get the most out of their purchase. This can include user guides, tips and tricks, or how-to/tutorial videos.

AND

Company-focused content, which keeps customers engaged with your business as a whole. Play around with live videos on social media, or offering meetups or other events.

6. Ask Away

Finally, if you want to turn your delighted customers into brand ambassadors who are singing your praises, you have to know what’s on their minds, and make sure they’re satisfied. Ask for feedback, maybe by giving surveys (with incentives, if necessary) – this way, you’ll have a better idea of how to keep your customers AND how to attract more leads at the top of your sales funnel. Integrating the feedback you get from customers will allow you to create a friction-free sales experience throughout your whole cycle of attracting, engaging, and delighting.

There might still be a time and a place for outbound marketing, but in a lot of cases, it feels a bit like a thing of the past. These days, you need to be more creative to attract, engage, and delight people, and turn them into loyal customers. Maybe it feels a little daunting to rely on customers finding you, instead of you going out and pursuing them, but trust us: you can pull them in, instead of pushing them away, with some of the techniques laid out above. Let us know how your inbound marketing journey goes!

Will Live Chat Boost Your Business or Chain You to Your Desk?

Here’s a question: how do you get your customers to feel connected to you? For lots of small businesses, making a connection is all about those little personal touches – but what if you’re an e-commerce business and don’t have the option of a smile and a handshake (or fist bump)? Well, if you can’t make every customer feel like a VIP in person, you’ve got to find other ways to make them feel catered to and confident that they’re making the right purchasing decision, so that they’ll become repeat customers. In the e-commerce world these days, that means having a live chat function available on your website. But is manning a live chat worth the hassle for your small business?

Live Chat by the Numbers

Before you make up your mind about utilizing a live chat feature on your website, especially if you’ve written off the idea as just too much to deal with for a small business, you should take a look at the data. We’re not spoiling any surprises here by saying all stats point to some serious benefits of live chat for any e-commerce business – just take a look at these numbers:

More than 41% of customers expect a live chat feature on a website, and that number rises to 50% if we’re talking about customers who are visiting your site on a mobile device.
More than 50% of customers prefer chatting with someone in real time, online over speaking to someone on the phone. Not only that, but J.D. Power found that live chat has become most customers’ preferred digital contact method: 42% of customers prefer live chat compared to just 23% for email, and 16% for social media or forums.
38% of consumers are more likely to buy from a company if they offer live chat support (CrazyEgg).
63% of customers are more likely to return to a website that offers live chat (Emarketer).
For businesses using live chat, there is a 3.84% increase in conversion rates, with a 6% overall lift in revenue (GoInFlow).
Website visitors that engage with your company via live chat are worth 4.5 times more than visitors that don’t (ICMI).
A study by Forrester saw that there was a 10% increase in the average order value from customers who engaged in a chat before making a purchase compared to those who did not use the chat function.
The same study found that live chat leads to a 48% increase in revenue per chat hour and a 40% increase in conversion rate.
Again according to Forrester, 1 in 5 customers are willing to stop using a product or service for slow response times.
82% of customers in one survey were satisfied with their live chat experience, compared to just 61% of email users, and a worrying 44% of phone users (Comm100).

So it looks like live chat, when done right, can offer a huge boost to revenue. This is mostly because it provides the fastest possible customer service, delivering a better customer experience, and therefore promoting customer retention. And you know what? You’re not the only one who knows this: adoption rates for live chat are skyrocketing, and it’s only a matter of time before all of your competitors are using it! In fact, in some industries, live chat use has grown 150%, and its use is expected to continue to grow by as much as 87% over the next year or two.

All of the above means that you should really start to seriously consider getting in on the live chat action – but if you’re a small ecommerce business, how can you make it work?

Before You Get Started…

If you’re thinking that live chat is the way to go for your small business, great! But you’ll have to start somewhere, namely by doing some research into how you can use this tool most effectively and get the most positive ROI without demanding too much time, effort, and resources.

Most importantly, you’re going to want to roll out a chat feature gradually, and in a targeted way. Remember, this type of tool can be high-maintenance, but it can still pay for itself even if you can’t devote a small army of staff to looking after it (and who can, if you’re wearing a ton of hats as a small business owner?) Before you start, try to answer questions like:

Which of your pages have the highest bounce rate?
Which pages have the highest conversion rate?
How many return visits does it usually take for someone to sign up or make a purchase?

If you’re not sure, try using Google Analytics to help you get this information. Once you have a clearer picture of these numbers, you can look at how to get the most out of the resources you have available by targeting specific parts of your site and specific customers. So now let’s look at a few rules for how to make live chat work for your small business.

1. You Don’t Have to Be Everywhere, All the Time

Already feeling overwhelmed by the idea of chatting with every customer who checks out any part of your site? Don’t worry – you don’t have to add a chat function to every page on your domain right away. Go back to your research from above and choose one or two pages to start with. For example, you might want to add live chat to:

Your pricing page
A page where customers sign up for an event or service
Pages where customers seem to need the most support, like the help page for a popular product or service
“Coming Soon” pages that feature new products or bestsellers
The page where you get the most qualified leads

Another option besides limiting where you place your chat, is to limit when you offer it. Again, go back to your research to see your traffic patterns, and consider just staffing your live chat at your peak hours. You can play around with this: when you first get started with live chat, pick a 1-2 hour shift during one of your peak traffic times. Take note of how many chats you receive, and how many of those are productive (did you provide useful information that moved a visitor closer to purchase?), then experiment with changing your chat time to other high-traffic windows over the next couple of months. Eventually, you’ll be able to pinpoint the best times to be available on chat.

You can target your chat times even further once you’ve done this: you can also choose to staff your chat during big sales, or after you’ve done a big marketing push. For example, if you are planning on sending out a big email newsletter, be sure to hop onto chat right after you’ve sent it out, so you’re ready to talk to these customers. After all, they’ve already clicked through to your site, meaning they’ve demonstrated an interest in buying, so you want to be ready to talk to them!

And that brings us to our next rule…

2. You Don’t Have to Chat with Everyone

Let’s go back and take a closer look at one of the points we made above: you can target your chat to the page where you get the most qualified leads. Building on that idea, another thing to remember is that you can actually target which customers you want to use your live chat resources on.

Your live chat software should allow you to control when and how the “click to chat” button and chat window are displayed on your website. Make sure you can show and hide the chat option, and send automated greetings, based on criteria like which page a visitor is on, the time they’ve spent browsing, and their location (based on IP address). Lots of live chat software offers these functions, so if yours doesn’t, move along!

The best way to control all of this is to start by hiding your chat function, then adding it strategically in places where you’re probably going to be targeting the right customers. For example:

Show the chat option only when a customer is viewing their cart
Only show the chat option to visitors referred from email promotions, digital ads, or other marketing campaigns
Only show the chat options to visitors in certain geographies. For example, if your website is in English, focus on engaging visitors in English-speaking regions. Or, if your services are tied to a certain location, only show the chat box to people in that location.
If your research shows that people are more likely to purchase from you after they visit your site 4 or more times, for example, change the parameters of your chat to only include people who have visited your site that number of times.
Have your chat box triggered only after a customer has spent a certain amount of time on your site

The key here is to be showing your chat box only to visitors who are genuinely interested in making a purchase, and engaging them at the moments when they need more information or when they need that little extra personal attention to close the sale.

3. It’s All About Quality, Not Quantity

Even with all of the restrictions we’re suggesting, you might still be worried that you’ll be overwhelmed with trying to chat with a dozen customers at once, which will drain not only your time, but your mental energy, as well. And you know what? You’re right – you shouldn’t allow yourself to be overwhelmed like that! In fact, you’ll serve your customers – and your business – much better if you focus on the quality of your chat, as opposed to the quantity of chats you’re engaged with (not to mention, you’ll have a better chance of keeping your sanity). After all, who wants to wait ages for a one-word answer fired off by someone who can’t focus on them?

So, to avoid this, again, focus on quality over quantity by trying things like:

Configuring your software to automatically limit the number of simultaneous chats (try 5 and see how that works for you)
Manually hiding the chat function when you are dealing with a demanding customer, so you have time to focus on them, and so you can get a break when you need it
Using a pre-chat survey to gather basic details from your customers – this can help to filter out customers who aren’t seriously interested in making a purchase

Make Sure to Measure

Finally, if you are going to take the time to connect with your customers through live chat, don’t forget to measure and make sure that every minute you’re spending on live chat is making an impact! Encourage customers to rate your transactions, and then look for patterns in the ratings: what was consistently “great?” What needs review? And if you have sales goals tied to live chat, you can use Google Analytics to track post-chat conversions.

You can also use your live chat transactions to help you improve your business. Spending just a few hours a week chatting with your customers can give you lots of new perspectives on your business. For example:

Are you using terminology for products on your website that your customers aren’t using in chat? You might need to change how you’re describing things.
Do multiple visitors seem lost on your site? You might need to work on your layout.
Getting a lot of questions about particular products or services? Your product page or FAQs might need to be revamped.
Customers requesting the same things over and over, like options for faster shipping or different colors? It might be worth looking into accommodating requests that seem pretty universal.

Adding a live chat feature to your website might seem like it would be a nice thing to do, but just not feasible or too daunting for your small business. But it looks like your competition is getting on it, and they’re already reaping the rewards! So you might want to give it a try, and by following the rules laid out above, you could be boosting your revenue and growing your business, just by connecting a little bit more with your customer base.

Putting All Your Eggs in One Basket? It Might Be Time to Create Some New Revenue Streams

Doesn’t it feel great to be running a business that’s actually generating revenue? Are you amazed by it all? No, of course not! Because you started with a solid idea and well thought out goals, so naturally you’re succeeding. But wait – before you get too comfortable, have you thought about what might happen if business slows down? You could end up running out of cash, and that’s definitely a position you don’t want to be in. If this is something that could happen to your business, it might be time to get proactive and start adding some revenue streams, so you can be sure that your business will keep growing!

Getting Creative with Your Assets

So what do we mean when we say you should be looking for more revenue streams? Well, basically, that means taking what assets you have and using them to generate more revenue for your business. These assets can be physical, but they can also be intangible. Get creative when it comes to what you have to offer customers! We’ll get into that more below, but for now, here’s a great, simple example of what it means to take what you have and use it to create cash flow.

Let’s say you have a car. That’s most definitely an asset, and could be used to generate revenue – sure, you could sell it for ready cash, but you could also get creative. You could:

Rent the car to other people
Use it for ride-sharing/as a taxi service
Sell advertising space on it

That’s just an easy example to get the juices flowing: your assets and how you can creatively capitalize on them is up to you!

Why take the time to think about diversifying? Well, besides what we touched on above – the fact that relying on a single revenue source can be risky – taking the time to think about new sources of revenue is a good goal in and of itself. Why? Well, if you’re completely focused on a single revenue stream, you might actually get distracted from growth as that single product, client, or service starts demanding all of your focus. Putting all of your time and energy into one source, leaves little room to explore other opportunities, and can lead to complacency, which can be the kiss of death for a small business!

As Peter Frumkin and Elizabeth K. Keating wrote in Diversification Reconsidered, “Business and non-profit researchers have long argued that by establishing and maintaining multiple streams of funding… organizations are able to avoid excessive dependence on any single revenue source, stabilize their financial positions, and thereby reduce the risk of financial crises.”

Adding Revenue Streams

So let’s take a look at some examples of how you might be able to add revenue streams, so you can avoid the double risk of putting all of your eggs in one basket and falling into complacency – and grow your business.

Add a subscription service

We often think of subscriptions as working well with businesses like SaaS models, so if that’s what your business is focused on, you should seriously consider allowing customers access to your services or products by paying a monthly, yearly, or quarterly fee. Why? You’ll have a reliable source of revenue so you can easily predict how much you can expect to take in each month (at least from your subscriptions). Not only that, but for some products and services, subscriptions tend to feel like a lower risk than upfront purchases for customers, which could make it easier to close sales.

But even if your business isn’t SaaS-based, or something you’d normally associate with subscriptions (like a streaming service, for example), you can still get creative and find a way to add revenue from subscribing customers into the mix. For example, if your business is product-based, consider offering subscriptions boxes that allow your customers to sample products, or adding the option to have their product re-upped every month to make their lives easier (think: Dollar Shave Club, for example). Or, if you offer a service that isn’t software, licensing, or something else that seems to work naturally as a subscription, consider offering a “membership” option for your services, and giving those customers attractive extras.

While you do have to be really on the ball when it comes to offering subscription services, and invest resources to avoid high cancellation rates, if you get it right, your subscription services will regularly keep you in mind for your customers. This will make them more likely to buy additional products or recommend your services.

Offer a workshop or online course

laptop screen open with a person on the screen writing on a white board — *Consider providing a workshop or online course that would be beneficial to your customers.*

You know what you’re talking about, right? Why not offer your expertise as an online course or workshop so you can display your industry knowledge AND keep your customers engaged with how your product or service can enhance their lives? For example, if you sell food or kitchen-related items, try offering video cooking tutorials that feature your products. But you don’t have to offer a product to make this model work for you: you simply need to find a creative way to showcase your knowledge, and give your customers a compelling call-to-action.

How should you approach this revenue stream? Make sure you’re getting customer feedback on what customers like about your product or services and what they want to know more about. Then decide how to package your workshops or courses: you can offer them as a subscription service, a recurring class that your customers register for, or you can offer them as one-time purchases for your customers.

Open up to advertising

There are ways you can leverage your customer base to bring in some extra revenue, by trying out different forms of advertising. For example, if you are producing audio (like podcasts) or video content, and you’ve got a following, consider creating ad breaks in your content and selling that time to relevant companies. Or, if you have an email list or blog, you can also partner with other brands to advertise their products or services to your subscribers.

In addition to the more old-fashioned model of simply selling advertising space, you can also consider affiliate marketing. This means you’ll promote other services and products either through your own website or on social media, or in person, and when one of your customers purchases what you’re promoting, your business gets a commission. The more products or services you sell, the more commissions you make.

These are great ways to make some extra money without having to invest a lot of resources – just make sure you choose the brands you associate with wisely!

Look into leasing

Do you have some big assets that you aren’t always using, like a large office space, a van or truck, or specialty equipment? Consider renting or leasing them out: you’ll gain a new type of customer who is more likely to spend their money, since they don’t need to justify a big, long-term purchase; you’ll also be generating a lot of revenue from one single asset over a period of time. Just remember to account for wear and tear, as well as depreciation, to whatever it is you’re leasing out!

Add additional products or services

shopping cart on a laptop screen with credit cards on the table next to it — *Consider providing more services and options that will bring in more revenue.*

This might seem like a really obvious suggestion, but you can also get creative with the way you add new offerings to your customers. Yes, you can simply start selling a new product related to your existing line, or expanding your services, but you can also flip the script. If you sell a particular product, consider adding a complementary service, or if you’re service-focused, consider offering a more affordable, productized version of your services. For example, do you have a great home design product? Consider offering some interior design consulting. Or do you do digital marketing? Consider offering a product package to small businesses.

There’s a reason that people warn against putting all of your eggs in one basket: one wrong move and you could lose everything you worked so hard for. And sometimes you can do everything right, and still find yourself with a floor covered in broken eggs – anyone remember 2020?? If the market suddenly shifts again as it did then, and your main source of revenue dries up for a bit, you could end up scrambling to find sources of revenue. So it might be in your best interest to look for ways to diversify now and get yourself ahead of the game! Try dipping your toe into the waters of one or two new revenue streams for now, and remember not to get distracted from your vision and main goals for your business. Now get out there and grow!