Case Study: SME Capital Markets: Educating the Small Business Owner

Introduction

Small business owners spend years growing their dreams into income streams that support them and their families. They sink every dime they have into developing websites, offering new products, and getting in front of potential customers. Over time, these businesses grow into entities of pride and value. It is impossible not to feel proud of an endeavor that started as an idea and evolved into a way to earn a substantial or comfortable living.

In the process of becoming a consistent and viable way to earn a living, small businesses become inherently valuable. Owning a business is like owning stock, only you own all of it. The problem, though, is finding a way to recapture some of the value you have created. Imagine owning a $1 million dollar business, but not being able to access any of that $1 million. It is a challenging situation, and it is not unique. Small business owners tend to have nearly all of their wealth in their businesses, which means that they cannot diversify their investments and protect themselves from normal business risk.

There is a way out of this predicament, and SME Capital Markets is ready to help. With a plethora of resources and advice available, small business owners can learn how to take their businesses public. Going public is not the exclusive domain of large companies with hundreds of millions of dollars in their war chests. A small public offering can be a viable way for small business owners to recapture some of the wealth they have created.

Your Most Valuable Asset

Small business owners tend to have the vast majority of their wealth tied up in their businesses. This means that you can take the actual cash that you earn (after expenses), but you cannot tap into the full value of your business. For private companies, a rule of thumb is that your business is worth 2.5 times earnings – essentially 2.5 times what you make after business expenses and salaries. After you pay all your expenses, including your salary, you have a certain amount of cash left over. Your business is worth more than twice that amount, but you cannot reach the total value. So, you have a dilemma.

SME Capital Markets helps small business owners increase the value of their companies and access that value. Focused on small companies, SME Capital Markets provides information and advice on how to go public. The information and advice is focused on the issues that smaller businesses face; large companies should look elsewhere.

SME Capital Markets offers all the resources that small business owners need to make an informed decision about going public. The website offers reports, original research, and mountains of data. Using this information, small business owners can decide if going public is right for them. If it is, they can contact the company’s principal, Brad Smith, to explore a public offering in more detail. Prices for information are quite reasonable, making it easy for small business owners to understand what it means to go public, and whether to take the next step.

Cashing Out

SME Capital Markets offers real advice for small business owners. Their goal is not to drag you into a difficult decision that is not appropriate for a business of your size. Instead, they prefer to help you make an informed decision. If the decision is to go public, they will help you every step of the way. Electing to go public is a serious decision, requiring a considerable amount of work (just to make the decision). SME Capital Markets endeavors to make this a realistic option for small business owners while not pushing them into unnecessary complexity.

There is a special environment for small businesses that go public – the Over the Counter Bulletin Board ( OTCBB ). Unlike the big IPOs of the dotcom days, the OTCBB is for smaller companies that want to generate more capital (either for growth or as a way for the business owner to cash out). Stock prices are lower, and the stock trading patters are a bit trickier than for large companies. This venue, though, allows successful small business owners to recapture much of the wealth that they created – and otherwise would not be able to touch.

Going public also can increase the value of your business. As mentioned earlier, the value of a small business usually is determined by multiplying your earnings by 2 ½. Not bad, right? Your business is worth more than twice the income it generates. By taking your small business public, though, it could be worth much more. Public companies tend to trade at more than 5 times the company’s earnings, so by going public, you can double the value of your company.

That is the goal of SME Capital Markets. They want to help small companies that are ready to take a big step. But, they want to help in a way that only works to the benefit of the small business owner.

How the Web Helped

SME Capital Markets chose to market its services via the web for many reasons. Essentially, the web opened a much larger market to the company than simply pursuing clients through word of mouth networks or traditional print advertising. Small business owners represent a diverse, disparate market. Small business owners can be hard to find. Print advertising would have been inefficient, since small business owners read the publications that matter to their businesses. A small online retailer, for example, is more likely to read publications that cater to online retailers than small businesses. The information in the former is much more directly valuable.

The information offered by SME Capital Markets is easily delivered over the web. Small business owners can save up to 10% of the cost of a report by downloading it instead of paying for shipping and handling. The information is easy to find, and customers can access it quickly. As a result, using the web for its major presence was natural; SME Capital Markets can make its products more accessible and less expensive by operating online. This helps SME Capital Markets fulfill its mission of helping small businesses make difficult decisions without having to spend a fortune.

Lessons for Small Businesses

SME Capital Markets offers a twofold lesson for small businesses across the country. First, the services offered by this company offer small business owners a way to tap into the value of their businesses while potentially increasing that value (by going public). Also, SME Capital Markets has used the web as a way to communicate information quickly and efficiently to a distributed audience without having to increase its prices to reach this audience.

Helping small companies is fundamental to the mission of SME Capital Markets. In the world of finance, fortunes are made with larger businesses. To enter the small public company space requires a focus on service instead of astronomical profits; there is no other reason to enter that market. Consequently, SME Capital Markets remains focused on its purpose of helping small business owners enjoy the wealth they have created but cannot access. Going public is not the right decision for every small business, but SME Capital Markets can help you decide if it is the right decision for you.

In accomplishing its mission, SME Capital Markets has demonstrated the importance of using the web. The entire business would not have been viable without a way to reach a diverse, fragmented market. With the development of a simple website, using prepackaged and inexpensive components for processing payments and disseminating information, SME Capital Markets was able to launch in a short period of time and begin to serve its constituency. Its materials are accessible to entrepreneurs who may not be able to find them otherwise.

SME Capital Markets used the web to assemble expertise, generate information, and reach its market quickly and effectively, demonstrating the potency of an online presence for small businesses. With the work of SME Capital Markets, entrepreneurs can focus on new growth techniques while learning the flexibility of the online business environment.

Copyright 2006 Daniel Scheff

 

5 Best Practices For Small Business Websites

A small business needs to work harder than its business counterparts do. While a big brand does not have a strict budget and resource, a small business needs to take every step carefully. It cannot experiment with strategies for too long, and therefore, has to follow a strict set of rules. However, every small business has the potential to outshine its peer group.

A small business’s official website is the platform that can get used to take the game to a whole new level. Are you wondering how this is possible? Some practices can help a small business grow, and increase its conversion rate.

Practice 1: Incorporating Informative Videos

Web visitors do not like to read long, textual content anymore. If they are looking for some information, the information should get delivered to them as fast as possible. Adding crisp, precise and informative videos is the perfect solution to the problem. Visitors will not only find you interesting, but you will also have enough whitespace to add something new.

Practice 2: Keeping the Navigation Predictable

You should keep the website navigation simple and clean. Web visitors should find it easy to find the information they want. As a small business, you cannot afford to lose even a single customer. Therefore, you need to do what your visitors are expecting you to do. It is better if you avoid using something smart like “Say Hello” when your visitors are expecting to see the “Contact Us” button.

Practice 3: Installing Analytics

Analytics will help you know what pages your visitors are finding nice and useful. Moreover, you will also get an idea about what pages are not attracting any visitor. Analytics will help you get amazing insights into the habits of your visitors. As you can guess already, this will help you improve the ineffective pages and make you work harder on the effective pages.

Practice 4: Launching a Mobile App

A small business mobile app is a very effective solution if you want to reach a wider audience. People are relying more on their mobile devices when it comes to surfing the Internet. As a result, they are now keener on getting everything on the go. A mobile app that talks about your business means that it will become easier for your customers to know about your recent activities.

Practice 5: Investing in Social Media and SEO

Both SEO and social media will give you a great amount of exposure. Search Engine Optimization or SEO is a necessity today. SEO can increase your visibility in the SERPs, and a higher ranking in the SERPs will bring you more visitors. Similarly, social media engagement will make your followers become more aware about your small business.

 

Small Business Bookkeeping Software

In an increasingly technological world, many companies are turning to small business bookkeeping software to meet their needs. This software is tailored especially for small businesses, leaving out the extra features that only a larger business could use. It is also generally less expensive to purchase and maintain. This demand has lead to the development of small business bookkeeping software. Small businesses still need software that can handle sizable quantities of information quickly and accurately.

It should also be user friendly and have safeguards in place to reduce the incidents of handler mistakes. The expected final output, much like that of a human bookkeeper, is the generation of financial reports to help the business owner guide the business towards optimal growth.

Ideally, small business bookkeeping software should include the following features:

 

  • Standard bookkeeping operations. This involves accounts payable and receivable, price quotes, merchandise stock, orders, etc.. The format should be clear and easy to read and use.
  • Integration. Each function should work with and support the others. Data should never have to be re-entered into the system for different functions. This saves time and money.
  • Reporting Options. Information should be readily accessible to check accuracy and the feasibility of your business practices. The uses for the reporting function are various and flexible, and should be easy to use and access.
  • Audit trail. This allows the user to follow any information through the entire system automatically. Any changes that have been made to a transaction or software setup can be detected by this function, creating a sense of asset security for the business owner.
  • Software access. Many businesses require several people to access its financial information from a variety of locations. The software can be put onto individual computers, or might use a server. The internet is an increasingly popular option, which makes remote personal access easier for the authorized user and reduces the amount of time needed to install the program separately.

It is a good idea to ask fellow owners what business bookkeeping software they use, especially those who own similar businesses. Each industry needs different features from their software; certainly a small clothing boutique will use different bookkeeping features than a landscaping company. Many software developers diversify their products so that business owners can have a product customized to their needs. As the business grows which is the goal of any small business owner the software needs are likely to change.

The right software for your company will be able to grow along with you. There is no one-size-fits-all approach to selecting bookkeeping software. It must be reasonably priced and readily used, and equipped for a variety of uses. Investing in quality small business bookkeeping software is one of the most important decisions to be made to secure success and a competitive edge in the marketplace, and a business owner needs every advantage in tough economies like the one we face today.