Why You Should Consider Renaming Your Business (And How To Do It Right)

by Katie Lundin of crowdspring

A great business name identifies your business, tells your customers and prospects something meaningful about your brand, and helps to differentiate your business from your competition.

But what should you do if the name you’ve been using for your business isn’t effective at accomplishing those goals?

Here are 4 reasons to consider renaming your business… and 7 tips to help you pull it off successfully.

#1 Trademark Issues.

Occasionally more than one company has the same name. Or, the names are so similar that they may as well be the same.

When this occurs, there’s a good chance that one of those companies will get a cease-and-desist letter requesting that they stop using that name.

This is exactly what happened to entrepreneur Jacob Childrey and his established food spice company. He received a cease-and-desist letter from a much larger competitor.

Fortunately, Jacob found a fresh, powerful new name for his company.

You are at a big disadvantage too if another business with your name is caught up in a scandal. The resulting reputation blow will affect your business as well!

To learn more about how to properly register and protect your business name, check out What Small Businesses Need to Know about Trademarks.

#2 Your Name No Longer Reflects Your Business.

Businesses grow and change over time.

Some business names are adaptable enough to survive this growth. Others are not.

Not all changes warrant a new business name. But, some do.

  • Have you recently switched to a new product or service?
  • Did your business merge with another?
  • Has your business philosophy or mission changed significantly?

If you answered “yes” to any of these, then it may be time to consider a new name that better reflects your brand’s current identity.

#3 Your Name is Not Unique.

Your business name needs to stand out.

If you are one of ten variations of the same generic business name, you will be nearly impossible for customers to find on the web. They don’t want to sift through a full page of search results to find just the right “ABC Plumbing.”

#4 Your Name is Confusing/ Hard to Spell.

A business name that doesn’t make sense and confuses consumers won’t be remembered.

And if it’s hard to spell, your customers may end up finding one of your competitors instead.

How to Rename Your Business.

Follow these tips to name or rename your business to help ensure that your new name serves your business well for the long run. For more about naming a company, be sure to read 10 Tips for Naming Your Startup or Small Business.

#1 Start with your Brand.

Your business name should be an extension and representation of your brand. So, start by thinking about your brand.

  1. What does your business do?
  2. What does your business stand for?
  3. How is your business different from your competition?
  4. What is your brand’s personality? (Quirky, Solemn, Formal, Playful, Aggressive, Warm)
  5. What is your unique value proposition?

Take your time and give some serious thought to what your brand is now. You knew your old brand, so you may be tempted to blow through this process. Don’t.

If you’re changing your business name, enough has changed that you need to take the time to rediscover what your brand is today.

#2 Make it Easy to Pronounce and Spell.

Don’t make it harder to find you with an unpronounceable name or a name even Rhodes Scholars can’t spell. As in all aspects of your business, make your name easy for your customers. 

#3 Avoid Too Narrow and Too Wide – Aim for The Goldilocks Zone.

Choose a name that is unique, but flexible enough to allow your business room to grow.

Review your prospective names to ensure you avoid the following traps:

  • names that are linked to specific technologies likely to become outdated (remember Radio Shack?)
  • names with a focus so narrow that they preclude future evolution (ie. “Just Cabinets”)
  • geographical references that may make your business seem irrelevant in a broader market
  • broad or generic names without personality that don’t tell consumers anything about your brand

#4 Don’t Forget to Differentiate.

It’s vital that your new business name help your brand stand out from your competitors. So, get to know who they are. And then choose a name that can’t be confused with theirs.

#5 Get Your Logistical Ducks In a Row.

Here’s a quick list of logistical chores you’ll need to complete in order to ensure that you can legally operate under your new business name and protect that business name from competitors.

  • Ensure the name is available to trademark (Check the Trademark Electronic Search System (TESS) on the USPTO website).
  • Check to see if an appropriate domain name is available. We recommend searching here.
  • Register the new name with your state and/or the Federal Trademark Commission. You can read up on the basics of trademarking here and research the requirements for your state here.
  • Update or amend any legal documents to reflect your new name.
  • Notify the IRS of your new name.

#6 Remember to Tell Your Story.

Renaming your business isn’t ever just renaming – it’s also re-branding.

And, part of a successful rebranding process is figuring out the authentic brand story you want your audience to associate with your business.

After you’ve selected your new name, decide how you’ll publicly share the brand story that supports your new name.

#7 Update All of Your Branding Elements.

Sharing your brand story is an important piece of the renaming/rebranding process. And, in order to make it stick, you’ll need to update all of your visual branding elements. After all, a strong brand is important for your business.

This includes updating your business logo, business cards and stationery, your website, and any other visual collateral like data sheets, or marketing collateral.

Every aspect of your brand will be impacted from start to finish. So, make sure to complete the transformation your name change will start throughout your brand.

When you realize that a name change is in your future, follow our tips to do it right.

 

Katie Lundin is on the customer support team at crowdspring, one of the world’s leading marketplaces for crowdsourced logo design, web design, graphic design, product design, and company naming services. Katie helps entrepreneurs, small businesses and agencies with branding, design, and naming, and regularly writes about entrepreneurship, small business and design on crowdspring’s award-winning small business blog.

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Source: http://www.youngupstarts.com/2018/07/20/why-you-should-consider-renaming-your-business-and-how-to-do-it-right/

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[ADV] How To Migrate From Magento To Shopify

If you have an eCommerce store, then you do not want to be involved in totally migrating your website to some other platform. This is much work, and it will also impact your sales.

Continue reading on to find out some ways that might help you in Migrating from Magento.

Evaluate solutions present.

You can consider contacting Shopify and ask them about solutions that are available and if they can handle what you want. You can list the things you require on your website that will make you successful. You can ask Shopify these questions. Shopify can actually suggest some apps that can help you out.

You can also talk to other representatives from BigCommerce, Magento, DemandWare, Mozu, as well as LemonStand. Ask these representatives the same questions. It is important that you focus much on this because when you select a platform, it is tough to alter this again.

Find the correct development team.

You can ask Shopify for some teams that can help you out. You can ask some local firms also to help you out. You need to consider some things. This includes what exposure they have to the Shopify setup along with API. If they have this experience, then this will actually determine how fast they will work on your site. For those teams that are only learning Shopify setup still, they can take much time.

Also look at the payment plan they have. Cost, as well as payment terms, can actually make a huge difference when it comes to cash flow.

You also need to find a team to whom you are comfortable functioning with. This is due to the reason that you will be spending much time with them. Therefore, you want a team that you will like to work with.

Have reasonable goals.

You should set goals that are reasonable. Do not be too overly optimistic. Also, make sure that the goals are conforming to the statement of work you have. Set a reasonable time span for how long it will take the site to become live. Remember that many hours will be taken by everyone to complete the task at hand.

Remember that Shopify may not be able to handle you.

Some companies experience the issue that Shopify cannot handle them. It may even quit functioning while the import is occurring. You should keep this in mind before the migration.

Some tools you can use.

You can use some tools along with apps which can help you out.

Asana – Tasks can be handled internally amongst different departments with the aid of this app. Critical discussions can also occur with developers. People tasks can also be assigned, and you can also add some due date, as well as a due time. Subtasks can be assigned as sometimes there are some things which have to occur before finishing any task.

Slack – You can use this chat application. It can be employed to communicate critical site problems with your developers. You can also share GIFs at the time that you get impressed with how your website is progressing.

Zendesk (Shopify App) – Zendesk can be used to organize important tasks. This app can help you to assign individuals to do important tasks. You can also find some quick responses that can be employed for some frequently asked questions. Customer service requests can be used for this.

Zopim (Shopify App) – When it comes to Zopim chat that integrates properly with Zendesk. Therefore, you can develop support tickets and that directly from chat sessions that you have. Live chat can help with the success of a new website. You may have many customers who do not like your new site as they are used to the old one that you have. This may include the old navigation, the old checkout flow, and more. Some people do not want change. Therefore, you need to be able to aid them in navigating the site.

Magento migration is not an easy task, no matter what platform you want to migrate to. You can try out some of the above if you wish to migrate from Magento to Shopify. It is crucial you do this properly so that you do not end up losing more customers.

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Source: http://www.youngupstarts.com/2018/07/20/adv-how-to-migrate-from-magento-to-shopify/

Is Your PR Agency Dying On The Vine? Seven Steps To Make You Relevant Again

by Iliyana Stareva, author of “Inbound PR: The PR Agency’s Manual to Transforming Your Business With Inbound

If you work in PR, you know there’s been a sea change. The old “push” tactics our industry once relied on no longer work well in the digital age. Today’s media people increasingly reject top-down, interruptive messages trying to sell a story. What they do crave is relevant content that draws them in, engages them, and helps them write the stories they want to write. You know you need to provide that. What you don’t know is where to begin.

The first order of business is to shift your mindset.

Here’s the problem: Most PR firms are still outbound organizations trying to survive in an inbound world. Other fields have figured out that the way people buy has changed. PR pros need to figure it out, too. This is the mental shift that will change everything and make you relevant again.

Think about your own buying process. When you’re making a purchase, you do your own research. You compare vendors and prices online. You seek advice from friends and peers on social media. You certainly don’t seek out salespeople or ads.

In response, many marketers have switched to an inbound approach. Rather than pushing messages on customers, they entice them with multichannel techniques that earn their attention and trust via relevant content. They create and foster meaningful dialogues. And it works: People come to these marketers on their own.

It’s time PR embraced this philosophy too, and many firms already have. They’ve figured out how to turn media influencers from strangers to visitors by providing fresh, engaging content that takes them through four stages: Attract, Convert, Close, and Delight. In the process, they’ve figured out how to solve PR’s biggest weakness: measurement.

If you’re ready to make this paradigm shift, I suggest you start with these seven crucial steps:

1. Get crystal clear on your vision and positioning.

The firms that succeed at inbound PR are the ones that undergo a complete transformation of their business model. It often means choosing to go “digital” and ditching your outbound tactics (that don’t work anyway). Then and only then can you get 100 percent focused on your positioning, both externally and internally. That means figuring out what you do best — your niche — and then specializing in that area alone.

Your positioning is crucial. It helps existing and potential clients know what you do and what you stand for, and it ensures that employees know your values and can align their work with your mission.”

2. Become your own best client.

Before you offer services to your clients — content creation, PR, social media, and so on — you must first deliver them to your own business. Why? Because you must prove to yourself that inbound PR works. First of all, you need to learn the methodology inside and out; second, you don’t want to experiment on your clients; third, you want to be perceived as credible and trustworthy, and the way to do that is to practice what you preach.

Becoming your own best client has the added benefit of positioning you as a thought leader in your field. In the digital era, that happens with content. A previous agency client at HubSpot has hundreds of videos on YouTube. They do webinars, blogs, live video, Snapchat, and more. They generate 100 percent of their new business through their own marketing and PR and they’ve managed to triple their revenue in a year.

3. Hire the right people (at the right time).

If you want to build a scalable agency, you need people not just with the right skills (because skills can be taught) but with the desire to learn and grow. Your timing is also crucial, because once you make the decision to become an inbound agency, the clients will come, and you must be ready to service them all. So be sure to plan in advance, and begin your recruiting process as soon as you decide to transform your business.

You need enough great people to make your clients happy and drive results. As an agency owner, you shouldn’t have to get bogged down in project management or service delivery, nor should employees be working 24/7 to handle the workload!

4. Build a strong, clearly defined agency culture.

This should be based on your core values — so first make those so abundantly clear that employees can recite them. These will guide everything they do and the way they deliver work. They will also guide how you teach and train your people. Having defined your values will also determine your hiring standards; you’ll be able to better decide if the person you’re evaluating will be the right fit for your team

5. Learn to say “no.”

A key step when becoming an inbound PR firm is the ability to say “no” to the wrong clients. You don’t want to be working with companies that don’t have the budget or the willingness to grow, or those that don’t trust your expertise and want things done their way. These clients are not worth your time or effort. The agencies that choose to say no early on are the ones set for success. Remember too, that being able to say no applies to your team. You may also need to make the hard decision and let the wrong employees go.

6. Offer top-notch ongoing client service.

It’s not enough to create a great service plan to get clients through the door. You’ve also got to deliver those services and drive real results throughout the campaign. Inbound PR is all about showing ROI, so having very, very clearly defined processes on servicing clients throughout the agreed engagement is crucial. It also entails spending more time with your clients. Build and document your processes for onboarding, retaining, and renewing and learn to be efficient at them.

7. Relentlessly learn and share the knowledge.

The drive to learn inbound PR and to share it with your team, your clients, and your advocates is what will ultimately position you as an expert in your area. You shouldn’t be afraid of competition — in fact, it should motivate you even further.

Inbound PR can be a wake-up call that will transform your agency. It is a mindset change that will allow PR to reinvent itself and earn a seat at the table as a truly value-driving disciple. Don’t wait another moment to embrace it and see what it can do for you.

 

Iliyana Stareva is the author of “Inbound PR: The PR Agency’s Manual to Transforming Your Business With Inbound“. She is Global Partner Program Manager at HubSpot, focusing on aligning HubSpot’s expanding global teams to better service the agency partners and smoothly roll out changes to the program. She spends her free time dancing salsa or writing about inbound PR, inbound marketing, and agency business, expertise gathered from years of agency experience and agency business consulting across Germany, the UK, and Ireland.

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Source: http://www.youngupstarts.com/2018/07/20/is-your-pr-agency-dying-on-the-vine-seven-steps-to-make-you-relevant-again/

4 Ways Startups Can Use Their Blog To Get New Customers

When you are a startup, you are doing everything you can to gain new business and may be especially interested in how to make money online with your online content. Bringing in new customers through the internet seems to be an ideal way to attract a large audience and keep costs low. In this article, we are going to talk about 4 ways you can use your blog to bring in new customers.

Before you start trying to make money online with your blog, you need to define your goals. When you start blogging, is your only goal to bring in sales through your content or are you going to be patient and implement some long term marketing strategy with content that would cater to searchers that are fresh to the discovery process and closer to the beginning of the buying cycle?

Understanding how you want to operate before you start putting content on your blog is going to allow you to work with purpose and that is going to make you much more effective. If you are simply posting content on your site for the sake of having content on your site, you are missing the mark.

1. Position Yourself As An Authority.

If you are a startup, most people have no idea who you are and do not know why they should listen to you. What credibility do you have? Who is backing you? If you do not have strong endorsements from influencers in your industry, you are going to make you own authority and the best way to do that is through your blog.

If you want to become a top authority in your niche, you want to blog about the most important topics in your industry. Find topics that people care about right now and questions that need answering. If you are able to answer people’s questions and help them find solutions to their problems, they won’t care if you are a startup or if you’ve been around for 20 years.

When you are writing your content, make sure you are going in depth and showing as much of your knowledge as appropriate. I made certain not to say “as possible” since that could be a very long article for your users to read and if there is a lot of lingo and jargon, you could confuse them. Your main goal should be to give them an answer to their question and a step to take in the right direction.

2. Search Engine Optimization.

For every blog post or any other piece of content that you put online, you want to make sure it is optimized for the search engines. This means that you should have your keyword research done and keywords that you are targeting in the important areas like the title tags and headings in your blog.

When you start getting traffic from the search engines, you will be able to gain leads and when you gain leads, if you are marketing to them properly, you can gain customers. When your site is showing up in the search engines, you get “free” traffic so you don’t have to buy ads unless you want to put more fuel on the fire.

3. Map Your Content for Buyer Intent.

If you want to help your potential customer through the sales process, you need to map your content for buyer intent. When you do this, you can help your visitors walk through the sales process as you are answering the questions that are coming to mind. Each stage is going to require a different piece of content so making sure that you are providing content for each of these staging is important.

According to HubSpot the three stages are awareness, evaluation, and purchase. While awareness might need a tip sheet or how to video, the evaluation stage might find a webinar more helpful and for those that are ready to purchase they need a free trial, demo,  coupon or something of that nature.

When you are creating your content, make sure that you have all three of these stages in mind. If you create content only for the buyer, you are missing out on a large number of people that would purchase, but they simply are not sure if you are the right one for them.

4. Build a Custom Landing Page for Guest Blog Visitors.

When you guest blog, you have the opportunity to send visitors to a link on your site. You can make a custom landing page for people that are visiting when you do guest blogs. Thank them for coming to the site, but also make sure that you point them to your most popular content so that you can keep them reading. Asking to stay in touch through an opt-in form is totally acceptable as well.

Conclusion.

Your blog can be a lot of things to a lot of people so knowing what content to put where is very important. You also need to make sure that you navigation stays clean and easy to read as you are adding all of the content to your site. If no one can find what they want to read, all of the content you can write won’t do any good. Putting these tips into practice right away will help you get up the momentum you need to start seeing results with your blog so make sure to take action.

Was this article helpful and informative? Leave us a comment with your thoughts in the section below.

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Source: http://www.youngupstarts.com/2018/07/20/4-ways-startups-can-use-their-blog-to-get-new-customers/

How To Personalize The Shopping Experience For eCommerce Customers

If you ever wished that you had the old mom and pop stores to visit where everyone knows your name, ecommerce personalization is getting pretty close. Besides for the perk of getting a personalized experience on ecommerce stores you have visited before, you don’t have to leave the house to get them.

If you are learning about how to best personalize your ecommerce store, there is a lot to learn which means you have a lot of room for improvement and that’s a good thing.

Name Usage.

When we visit websites and apps that have our names in different places with “hello, Steve” or “hi, Mary”, we know the website isn’t talking to us, but it still feels good to see our names and it makes your customers feel good when they see their names too. Having people’s names displayed throughout the store in appropriate places will allow you to personalize the user experience so they feel at home on your site.

Showing Relevant Offers.

When you go online to shop at Amazon, as you are searching, you see related products. If you look back at your purchase history, you are likely to see that you purchased products from the section of Amazon that was the related product to something you were looking at purchasing. We all want to have a better experience when we are shopping and if we don’t have to go search for a product that we want, but instead have it delivered on a silver platter, it makes life easier.

Show Promotions Depending On Location.

Make sure that you have your location targeting set properly and are working with the best tools. There is nothing more embarrassing than showing hot yoga classes in Phoenix to an elderly man with a cane who lives in Florida. Besides for being embarrassing, it most likely isn’t going to convert well. Instead, you would want to show the hot yoga classes to a stressed out mom in Phoenix who is looking for a little me time and show the elderly gentleman his favorite cigar shop from down the road in Florida.

Send Email According to User Behavior.

If your customer was searching online for a product or service on your website, you can send an email that will show them relevant products or services that they might be interested in buying. This is a simple technique, but if you are able to get in front of a hungry buyer, it can also be a high converting technique.

Discount Codes They Want to Use.

If you are like me, you have discount codes flowing into your inbox all of the time. Some of them make you raise your eyebrow wondering, “What were they thinking?” and “Why did they send me a coupon code for a bikini when I was looking at one pieces with cover ups?” If you are close to what someone ones but a little off base, you may get a conversion but most of the time you are going to get a near score but still fall short. This is why it is important to set up your site with professional software that will help you personalize your customer’s ecommerce experience.

Data Segmentation.

When you are building your email list, you need to make sure that you are segmenting your data. Everyone should not go into a catch all where you are marketing an irrelevant messages to people. Learning how to segment your lists is essential to personalizing the user’s experience. You will be able to send them emails that will make them wonder if you read their mind if you do things properly.

Using Targeting Data to Personalize.

There are a lot of third party vendors that are happy to give you information about people that have come to their websites. Some vendors are better than others and if you are new at targeting and retargeting, you might want to learn something simple. Even learning how to target audiences on Facebook might be complicated for some people. If you are one of these people, this may be a good place to learn since the audiences are put together in such a way that it is easy to choose who you want to target.

Predictive Recommendations.

Predictive recommendations are one of the more magical personalization “tricks” you might see online. If you like this… you might like this… with a list of relevant products that might be what you would want to buy along with a product you just bought or something that the demographic you are in normally would want to buy. These are extremely helpful to the customer and they also garner sales for the ecommerce store so it is a win-win situation.

Why Personalization Is Important In eCommerce.

If you aren’t sure that personalizing your ecommerce store for your customers is that important, let me show you otherwise. According to Foundr personalization is the future and if you aren’t getting in the game and working on your personalization skills for your ecommerce store, you may not be winning in a year or two even if you are winning now.

People want a seamless experience across all of the different websites and apps that they use to make life easier. Whether it is a food ordering app that remember their favorite menu items or their bank accepting their face as a password, people want it personalized.

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Source: http://www.youngupstarts.com/2018/07/20/how-to-personalize-the-shopping-experience-for-ecommerce-customers/

Denmark’s Startups Are Ready To Switch To The Circular Economy Model

As of May this year, Denmark ranks 6th in the top most competitive business nations, according to the World Competitive Yearbook 2018, and this growth really comes as no surprise, considering that the Nordic country has been a destination for young entrepreneurs for a while now.

However, the latest moves on the Danish business scene also reveal another key strength: the eagerness of local startups to embrace the circular economy model. Focusing on the importance of reusing and recycling materials instead of throwing them away, the circular economy is the main long-term strategy for reducing waste and Denmark, one of the greenest countries in the world, has reported great results in implementing it.

Apart from public recycling programs, the preference for a waste-free future can also be seen in recent business practices. According to a 2017 survey conducted by the Danish Environmental Protection Agency, 9 out of 10 small and medium-sized companies think the circular economy is beneficial and want to be part of the change.

Key survey findings.

  • The data revealed by the Danish Environmental Protection Agency survey (ran on 610 small to medium-sized companies) is mostly encouraging and shows not only that circular economy is welcome in Denmark, but also that business owners are ready to base their entire operations on it:
  • Nearly 30% of interviewed companies were familiar with what circular economy entails – that’s a sharp increased compared to the previous year, when less than 10% had heard of it.
  • More than half of Danish companies have cut down on waste by reducing the number of raw materials used in the production process.
  • 88% of companies agree that the circular economy is important for a sustainable future
  • Half of the interviewed companies want to learn more about the circular economy. To this end, the Environmental Protection Agency has launched an online portal, Cirkulær Virksomhed, where small and medium size business owners can read about the practices of the circular economy and how they can incorporate it into their business.
  • 53% of companies believe that the circular economy adds business value

Notable Danish startups that set an example.

Reusing and recycling are two core components of the circular economy. For businesses, applying these values involves cutting down the number of raw materials and sending trash to specialized waste reduction facilities where it can be recycled. Most Danish companies already have recycling bins or industrial scale Pappressere (cardboard balers) where they collect waste and an increasing number of businesses take part in local recycling and waste reduction programs.

https://www.youtube.com/watch?v=h5oGRCzVo4c

Denmark is #3 in the world on the Environmental Performance Index 2018 by Yale University thanks to the diligence with which it implements sustainable solutions. The nation’s goal is to become 100% carbo-neutral by 2050 and many startups align their mission statements to this goal. Larger companies such as Coop, Urtekram, Friland and Thise are already acknowledged for their green efforts, several smaller startups stand out as well:

Sprout – a company which created the world’s first plantable pencil. At the top of the pencil, instead of an eraser, they placed a seed capsule, which can be planted once the pencil becomes too short to write with. The company produces almost 15 billion plantable pencils each year, with seeds ranging from vegetables to trees.

land – a startup that connects farmers directly to customers and facilitates commerce with organic produce.

Closay – an ethical company that set up an online platform where users can lend clothes, shoes and jewelry to reduce clothing waste and irresponsible shopping.

CHP Containers – they take old shipping containers that are no longer used and transform them into modular housing units.

Wastecontrol – this company was selected for the Green Tech Challenge 2016 program. They have created sensors for waste containers that automatically notify waste disposal companies when a container is full.

NordSense – they collaborate with municipalities and help them optimize garbage collection routes through state-of-the-art IoT tracking and sensing solutions.

The 2017 edition of the Green Tech Challenge in Copenhagen was won by Lyras – a company that replaced the old technology for pasteurization of liquid foods with a technology that guarantees better product quality and 90 percent lower energy consumption.

Waste reduction seems to come easy for Danish citizens. In no more than five years, Denmark reduced food waste by 25%, thanks to the Stop Spild Af Mad initiative, started by Selina Juul, a Russian woman who moved to Denmark when she was 13 years old.

The “Danish way” of reducing waste started in 1978; Denmark was, in fact, the first country in the world to introduce a law on recycling, stating that at least 50% of all paper and beverage packaging should be recycled. Four decades later, Denmark leads the way in waste management and recycling, offering businesses of all sizes the tools they need to implement sustainable solutions.

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Source: http://www.youngupstarts.com/2018/07/20/denmarks-startups-are-ready-to-switch-to-the-circular-economy-model/

5 Mistakes That Young Business Owners Have To Avoid When Applying For A Loan

Even if you have an idea that can change the world, there comes a time when you need money for that idea to come to life. This is when most entrepreneurs decide to take a business loan and try their luck. After all, who dares, wins.

And as the approval rates for loans are steadily increasing, more and more business owners choose to take this step in order to get an infusion of capital and get their business off the ground.

However, even though now it is easier to take out a loan than ever before, it is important to be aware of some common mistakes and avoid them. That is how you will reduce the risk to a minimum and improve your chances of qualifying for a loan.

Here are the five most common mistakes that young entrepreneurs should avoid when they are applying for a business loan.

1. Not knowing your credit score.

When was the last time you checked your business credit score? You probably know your personal credit score, which can be helpful when applying for a business loan. But your business credit score also plays a very important role.

That is why you need to check your business credit score before you apply for a loan. Luckily, it is rather easy to do it ‒ to get a free copy of your credit score at one of the major credit bureaus (Experian, Equifax and TransUnion), you only need to show them your employer identification number

Then, if you are not happy with what you see, you need to take some steps in order to increase your score, which, in turn, will improve your chances of getting a better loan. Some things you could do is reduce debt, pay bills on time and have vendors and suppliers report positive history.

Even if you have bad credit, there are many ways to get a business loan with bad credit. However, it is always better to improve your credit score first and then apply for a loan because you will get a much better deal this way.

2. Rushing into it.

In spite of the fact that the lending market is becoming more flexible, there are a number of lenders that offer loan terms that are far from favorable. Always take some time to read all loan terms carefully and never hesitate to ask for clarification if you don’t understand something.

Knowing the actual APR on the loan, paying attention to hidden fees, staying away from predatory loans ‒ all these are things that you need to check before signing your name on the contract. Because once you sign, there is no way back.

Also, if you decide to apply for loans online, you need to know how to protect your personal information online. This means that you should beware of scam websites, use encryption software, protect your passwords and be careful on social media.

Finally, you definitely don’t want to share your Social Security number with everyone, so make sure the lender is completely legit before providing them with your sensitive information.

3. Having no collateral.

One of the most common reasons why banks deny loans to small businesses is lack of collateral. If you want to be sure that you will get a business loan, you need to think about your potential collateral.

Lenders want to be certain that you will repay the entire loan, so they will ask you to provide a second source of repayment in case your business fails to generate enough cash flow. Why should they give you money if you are not ready to put up your own money in the first place?

Luckily, lenders will accept different types of collateral like cash, real estate holdings, equipment and so on. When it comes to business loans, collaterals are usually necessary. That is why you have to think carefully about what could serve as collateral before applying for a loan.

4. Not explaining the loan purpose.

When you are applying for a business loan, you need to indicate how you will spend the money. This is necessary because lenders want to see that you know precisely what your business needs are and how the loan will help you meet those needs. In other words, the company that lends you money wants to be sure that you will use the money to grow your business and earn enough to pay back the loan.

Make sure that you know all restrictions as to how the money can be used and research all details before applying. When filling out the application, write in detail what you are going to spend the money on.

5. Not borrowing enough money.

How many times in your life have you spent the exact amount of money that you had anticipated to be enough? This happens very rarely, almost never. You will most often need more money than you initially think you need because unexpected costs always arise.

That is why your business plan should indicate a good idea of how much money you will need. If you are running a startup, a rule-of-thumb advice is that you should ask for enough money to keep your business going for the first six months.

The last thing you want to do is have to talk to your lender again because you underestimated your costs. So, be wise and always ask for more money than you think you will need.

Bottom Line.

Taking out a business loan is not as difficult as it used to be. With the number of startups only increasing, lenders are smart enough to see a great opportunity to grow their businesses by helping young entrepreneurs cover their business costs.

If you follow the tips we listed, you will stand much better chances of taking out an affordable loan. When you avoid these five common mistakes, you will be able to find a loan that will cover all the costs that you planned as well as those that you could not anticipate.

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Source: http://www.youngupstarts.com/2018/07/20/5-mistakes-that-young-business-owners-have-to-avoid-when-applying-for-a-loan/