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Should Your Small Business Play the Credit Card Transfer Scheme?

You are probably going to start seeing slews of new credit card offers hit your mailbox in the coming weeks. That’s because the government just approved amendments to regulations that were passed last year. The new rules become official on Oct. 1.

All week, I’ve seen stories about credit card balance transfer schemes, reducing credit card interest rates, and credit cards as an alternative to bank loans. Capital One announced card balance transfers with a 1 percent cash back reward. MBNA announced zero percent balance transfers. In a word, the next wave of credit card company battles for small business customers is on.

Perhaps one of the most helpful articles I saw on the credit card balance transfer scheme was in The Economic Times. The Times reports, “The key appeal lies in the lower interest rate charged by the institution offering the scheme. Suppose, you are paying an interest of 2.95% per month on your existing credit card's balance outstanding. If you decide to transfer this amount to another bank under a scheme that doesn't levy any interest for, say, three months, your savings could be huge if you manage to clear the dues within this period.”

But there are pitfalls to credit card balance transfer schemes. You need to read the fine print before you sign on the dotted line. The low-interest transfer may expire after 90 days and leave you with an even greater interest rate than you were paying to your previous credit card company. Sure, you could work the system by continuing to move your debt from one card to another, chipping away at bigger chunks of the balance due by taking advantage of the lower or no interest. But one little slip up could cost you. It’s a lot of work to work the system.

The ultimate goal is to use credit cards for the rewards they offer—whether that’s cash back on purchases or dinner gift certificates—and then pay them off at the end of the month. Dave Ramsey has excellent advice for using credit cards: don’t use them. “If you ‘have to’ use plastic, I suggest a debit card,” Ramsey says. “I use them for travel and the occasional convenience of ordering something over the Internet or phone. Other than that, I use cash.”

Check out this Ramsey radio clip on credit cards:

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Does Your Entrepreneurial Mindset Need A Massive Makeover?

Everything you know about entrepreneurship may be wrong. But don’t worry, because you can access the 10 entrepreneurship rules for building massive companies. Those were among the headlines I was greeted with this morning on my quest to help you grow your small business.

The first headline came from Nathan Furr’s “The New Entrepreneur” blog in Forbes magazine. “Most new ventures, either within a corporation or standing alone fail, sometimes at rates approaching 90 percent,” Furr writes. “Such immense failure rates beg the question, are new ventures inherently so risky or could we be doing something wrong?”

This is a fascinating piece that explores the roots of wrong ideas, along with emerging insights, tactics and processes that are transforming entrepreneurship. Indeed, after you read this article you might end up changing your approach entirely.

If that article doesn’t get your mind working overtime on a Thursday morning, consider the thoughts of Reid Hoffman, the co-founder and Chairman of LinkedIn and a partner at venture capital firm Greylock Partners. In his All Things Digital column, he shares his top 10 rules for entrepreneurs. I found this one particularly interesting:

Rule #6: Launch early enough that you are embarrassed by your first product release.

With my first startup, Socialnet.com, it took us nine months to launch the first product. That was a disastrous mistake. We wanted to have all the detailed functionality right away, including social controls to people could decide to connect or not with the people in their networks. We wanted everyone to “Ooh” and “Aaah” about how terrific the product was. We wasted a bunch of time and it put us months behind on more important problems that needed to be solved, such as how to get our product in the hands of millions of people. From that I learned, if you are not embarrassed by your first release, you’ve launched too late!


These two articles could revolutionize your small business, or your start-up. Also check out this video where Hoffman shares his inspiration for LinkedIn. And let us know your own experiences.

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How Groupon Can Help Your Small Business Grow

If you haven’t heard of Groupon, you are either living under a rock or you don’t go online much. And if you haven’t heard of Groupon, you could be missing out on mobile marketing opportunities for your small business.

Groupon is shopping Web site that offers a daily deal on the best local goods, services and cultural events in more than 500 markets around the world. Next month, Groupon is going to launch Groupon Now, a smartphone app that lets users hit one of two buttons: “I’m hungry” or “I’m bored.” Click on a button and you’ll find plenty to eat, plenty to do, and plenty of discount coupons.

So if you haven’t signed up your small business for Groupon, now is the time. Consider the opportunity…

The group buying industry, of which Groupon is a part, will grow by 138 percent to $2.66 billion in 2011, according to a new report from Local Offer Network. In all, more than 63,000 deals were published in 2010, and more than 39,000 will be published by the end of the first quarter of 2011 alone.

The report also reveals that a wider variety of merchants and new entrants from luxury and higher-priced product categories are moving average transaction values considerably higher. While dining, spa and health-related deals still abound, Local Offer Network has monitored dramatic growth in segments such as apparel and home products.

So how can your small business make the most of Groupon? Here’s a few pointers to get you started:

  1. First, understand how it works. You have to open a Groupon Store to get started, then create your deal.

  2. Figure out how much new business you can handle. If you are a personal trainer, how many more clients can you train in a week? If you are a restaurant, how many more customers can you serve a week? If you aren’t careful, Groupon will drive so many people through your doors that you can’t service them all, which can also be bad for business.

  3. Plan to staff up. If you are going to put out a Groupon offer, be sure to have the appropriate staff on board to handle the rush.

  4. Think long-term. Remember, Groupon is a tool to get customers in the door. You aren’t going to make maximum profits on the deal because you are offering it half price and then Groupon gets its cut. But you will get an opportunity to wow new customers that might never have tried what your small business has to offer.


Check out this video for more info on Groupon and decide if this is the right move for your small business:

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What Is User-Generated Content Doing for Your Small Business Reputation?

You know what they say about word of mouth...One person tells two friends, who tells two friends, who tells two friends—and so on and so on and so on. (Yes, I took that from the 1980s Faberge Shampoo commercials.)

But when that friend goes online, they aren’t just telling two friends—they are telling anyone looking for information about your small business. It seems user-generated content is replacing old-fashioned word of mouth, in some instances. And a company called Marchex has set out to reveal the impact of this newfangled word of mouth mechanism on small businesses.

Marchex reveals that online consumer reviews and social network sites have a greater impact on the reputation of a small business than the company's own Web site. Marchex analyzed the search results from about 150 small businesses and found that more than 80 percent of search results did not point to the Web sites of those small businesses.

This study looked specifically at small businesses in the Northeast U.S. that rely on customer reviews (read: restaurants, travel, legal, beauty, plumbing, automotive businesses and the like). But the results probably ring true anywhere in the U.S.

The good news: user-generated content is driving revenue for companies. The bad news: if what users are saying about your company isn’t peachy keen, then you could be sucking lemmons. The lesson: You need to understand your online reputation—and manage it.

Your online reputation is what your customers and others are saying about you online. If they are singing your praises, it could drive new customers through your door. But if they are complaining about your brand’s poor service, they could be doing your local competitors a favor.

How do you find out what’s being said about your company online?

You could tap into reputation management software. Companies like Marchex and PR Newswire offer these tools. Or, if a software spend isn’t in your budget, you can put a Google Alert on your company’s name that will pick up mentions online, in blogs and in news articles.

Whatever you do, don’t stick your head in the sand. It’s better to know what’s being said about your company, even if it’s bad, so you can act on the feedback and provide the best possible service.

Just for fun, check out the 1980s commercial I mentioned. Does it ring any bells?

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How to Be the Employer Of Choice in Your City

You don’t have to have on-site day care and a fitness center to be considered a great company to work for. Let’s face it—small businesses can’t compete with many of the megacorp perks and pluses.

But that doesn’t mean your small business can’t be the employer of choice in your city for your industry.

Indeed, a little appreciation goes a long way. That’s the point of an “Ask the Expert” column from USA Today’s Steve Strauss. He outlined four ways to become a great employer. In a nutshell, those are:

  1. Feed the whole person

  2. Give away unexpected freebies

  3. Create a creative, fun culture

  4. Don’t pigeonhole people


I won’t steal Strauss’ thunder. You can read his whole article for a deeper explanation and even examples of companies doing what he’s espousing.

The essence of being a great employer is about more than money. People want to be recognized and appreciated for a job well done. People want to feel that they are a part of the company’s success, that they are in on the decisions, and that bosses and coworkers care when they are going through the storms of life.

Yes, a healthy wage and job security are important. But some small business owners may mistakenly believe that money, job security, promotions and exciting work are more important than consistently treating the person like a valued member of the team.

If you aren’t good at dishing out praise to your employees, check out this Fox News report on the “carrot principle”:
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