Beyond the Exam Room: How a Top Chicago Cosmetic Surgery Practice Manages Payment for Care

Most cosmetic surgery practices operate far from primary care’s recurring billing models. Patients come and go and are often one-and-done, creating a practice that’s more transactional than built on repeat business. But, the care these surgeons provide is anything but transactional. It’s highly personal, often reflecting on a patient’s sense of self and worth.

With this in mind, how can cosmetic surgery practices keep payments as personalized as the care they provide while operating a transactional business model?

Lori Pascal is the office manager and patient coordinator for Dr. Thomas Mustoe and Dr. Sammy Sinno, two of Chicago’s most prominent cosmetic surgeons. Having spent over 17 years in patient coordination for cosmetic surgery practices and the past four-plus years managing Mustoe’s and Sinno’s, Pascal offers some insights to help other medical practices add a personal touch to their payment procedures.

“Patients don’t think of medicine as a business, but whether you’re a heart surgeon or a dermatologist, it’s still a business,” says Pascal. “If the practice isn’t well run, patients will pick up on that, and that’s what makes them feel less like a person and more like a transaction.”

Create a Structured Financial Policy

Pascal’s first recommendation for any medical office operating on a transactional billing model is to have a structured financial policy in place. “For our practice, this means having set procedures for how we present financial information, and we present that information in a highly transparent way,” says Pascal.

“Patients don’t get on a surgical schedule without a surgery deposit,” she says. “This policy prevents our surgeons from having gaps in their surgical schedule. The deposit is refundable. To cancel or reschedule, patients need to give us notice no later than four weeks before their surgery date. I’ve found that with windows shorter than four weeks, surgeons have less chance to fill those surgery times and we don’t want our surgeons to have holes in their surgical schedule.”

Without a structured financial policy, practices like the one Pascal runs might quickly be in trouble. “From an office standpoint, we have to think about how we’re going to create an efficient schedule for the physicians. We want to make the surgeons’ time useful, and that includes thinking about how many new patients can be seen on a weekly basis. A transactional practice like ours has people waiting for consults and surgery. If there weren’t any penalties, we’d end up with an empty flight which wouldn’t leave us in business very long. ”

But there always has to be room for leeway, and it’s not all about penalties and cancellations. Discussing financial information may make or break a transactional practice. Here’s how Pascal makes payments personal for patients while maintaining a high level of professionalism.

Making Payments Personal

In practices like the one Pascal manages, procedures typically cost thousands of dollars. Insurance rarely comes into play, which means the burden of payment rests with the patient.

“There has to be an appreciation that this is a lot of money,” says Pascal. “Naturally, having the wrong person discussing finances with patients could make a patient uncomfortable.”

At Pascal’s office, she’s the single point of contact for all financial discussions with patients. As the single point of contact, Pascal may also offer flexibility on a case-by-case basis.

“When people need a little bit of leeway, I’m the only one negotiating that flexibility. Being the single point of contact for finances helps the patient have a smooth surgical and in-office experience. Whether it’s receiving a final payment a few days later than our financial policy dictates or paying cash to save a bit of money, I’m always going to try to accommodate the patient.”

Pascal is committed to keeping a structured financial policy to maintain the human touch in the practice she manages. In Pascal’s office, patients and the practice are equally important.   This allows both to work towards the same goal: incredible outcomes that generate referrals because of the excellent work throughout the patient experience.


Inspiring Black Business Owners: Loretta Harrison, “The Praline Queen of New Orleans”

Overcoming a hurricane of a problem

For more than four decades, Loretta Harrison, “the praline queen of New Orleans,” has been turning sugar, cream, butter and pecans into savory treats.

She learned the recipe for pralines from her mother at age 8. Together, they made candy on Sundays for visitors to their home. It was a bustling place, filled with sweet smells and Harrison’s 11 siblings. “We didn’t have much money, but we had plenty of love,” she says.

In 1984, she became the first black person to own a praline shop in New Orleans. Loretta’s Authentic Pralines has become an iconic business, and Harrison is an iconic figure in the Big Easy. She appears often on local TV and radio shows, charming viewers and listeners with her positive, down-to-earth personality.

“You can’t tell the history of New Orleans without the history of pralines,” she says. “They’re like red beans, rice and gumbo!”

Her enthusiasm was tested, but not broken, by Hurricane Katrina, the August 2005 storm that devastated the city. It caused an estimated $125 billion in damage (not adjusted for inflation). Nearly 1,000 people died. More than one million people in the Gulf Area were displaced.

Looters and Leaks

Harrison suffered as well. Her house collapsed. Looters ravaged her store in the city’s French Quarter. A leaky roof ruined the warehouse where she cooked most of her products. The electricity, gas and water stopped functioning for weeks.

After nearly three months, she was able to reopen the store at the end of October 2005. It still wasn’t easy. None of her employees returned to the city. Her aunt and three sons pitched in to help where needed . Ever upbeat, she cheerfully describes this situation as “free labor!”.

It’s about having passion and a belief in your products. God will never put you in a position that you can’t handle. But you also need to seek wise counsel, and not be afraid to go up to anyone and ask dumb questions.

In the aftermath of the storm, tourists and even locals stopped coming to her store. Her business was buoyed by her steadfast belief that anything which can be destroyed can be rebuilt. She took immediate action, changing her business model to become a restaurant for reporters and emergency workers

“People weren’t buying a whole lot of candy, so we started serving lunch,” she says. “It was an opportunity to help my business, my city, and people who needed help. The city of New Orleans has been good to me, and taken care of me, and I just had to stand up and take care of it.”

She takes pride that her shop became a meeting place. “We lost a lot of people we love and we lost a lot of material things, but we pressed on — it was the only thing we could do.”

Passion and Belief

inspiring-black-business-owners-lorettas-authentic-pralines
Source: tripadvisor.com

After the storm, she had trouble getting a Small Business Administration loan, or the payment for her business interruption insurance claim for the $80,000 in business she lost during the three-month stoppage. Undeterred, she secured a $2,500 grant from a local small-business incubator. That allowed her to buy shipping supplies for the following Christmas season, expanding her online business and ability to service hotels and retailers.

Asked about her perseverance, she explains: “It’s about having passion and a belief in your products. God will never put you in a position that you can’t handle. But you also need to seek wise counsel, and not be afraid to go up to anyone and ask dumb questions.”

Even though Katrina happened 14 years ago, Harrison is reminded of the storm daily. She says while the business section of the city was repaired, the area around her home still needs renovation. When customers come in, especially tourists, they often want to talk about the storm. Ever chatty, she is happy to oblige, so she and her business will likely be tied to it forever.

In the past decade-and-a-half, the biggest challenge she’s faced is the inability to find workers who want to learn the art of candy making. “And it is an art,” she says. “We put ads in the paper, but people don’t stay; maybe the younger generation doesn’t appreciate this kind of art.”

That slight down note lasts only a few seconds. Harrison seems genetically wired to be upbeat. At the moment, Harrison and one of her sons are the company’s sole candy makers. However, she is confident that younger candy makers will appear soon. “I start positive, and don’t see a point in becoming negative,” she says.

And when she hires those new candy makers, Harrison says she will have more time to do what she loves best — create more types of candies. In particular, she takes delight in her twist to the New Orleans staple, beignets, a pastry made of fried dough. Her recipes have included praline beignets, crab beignets and the hamburger beignets.

“The new products are taking off,” she says. “When someone eats one of my beignets, I see how happy they are, and that makes me happy,” she says.

Check out this behind the scenes look into Loretta making her pralines

Source: WWLTV


Editor’s Note: Loretta’s story is one of a six-part series celebrating black small business owners throughout the month of February.  Check out the other inspiring stories in the series: Turning Shakespeare into Rap into Revenue, From Mechanical Engineering to Marketing Consultancy – Building Businesses Through Analytics, and Pioneering Metrics of Diversity and Inclusion.


Business Owners Share: How I Will Grow My Business This Year

To be more successful , business owners often look back at all they accomplished in the past year. What did they do well? What strategies and changes did they make that resulted in growth? And what should they consider doing differently in the coming year to reap even bigger rewards?

We asked small business owners what resolutions they’re making in order to build on their past successes, and this is what they told us.

1. Identify goals that affect your bottom line.

Looking back on 2018, Francis Rusnak of Windy City Solutions discovered it’s possible to set goals for external purposes that don’t necessarily move the business forward. He calls these kind of goals, “vanity goals.” These are designed primarily to look good on paper and impress others; however, he says, vanity goals aren’t nearly as important as “production goals,” which have a direct impact on the business’s bottom line.

For 2019, Rusnak resolved to maintain a 20% ROI on each house his company flips, rather than focusing as much on the total number of homes he flips.

2. Create year-long action plans for company goals.

As a business owner, it can be tempting to focus on short-term wins instead of focusing on big-picture goals throughout the year. Paul Davis, CEO of creative agency Paul Davis Solutions, LLC recommends putting consistent effort towards his firm’s annual goals. The key to achieving them he says is developing specific, measurable action plans for how to achieve them. If your goal is generating $1 million in sales, for example, it’s critical that you then determine what you need to do to attract that amount of business. That might mean making 10,000 sales calls over the next 12 months, or 40 sales calls each work day, he says.

In 2019, he resolved to make those big goals a reality by breaking them down into daily action-oriented tasks and tracking them.

3. Base business decisions on data and analytics, not gut-feel.

Many business owners develop a sixth sense about opportunities that may help guide their business. Matthew Ross, co-owner and COO of RIZKNOWS, which operates several internet properties, realized, “Sometimes I act ‘impulsively,’ just because I want to move on to the next thing.”

Though money does love speed, Ross has resolved to rely more on data and past performance metrics in order to aid business decisions.

4. Document standard operating procedures.

To be able to hand off tasks to others, it may be helpful to stop and document how certain tasks should be completed. Dustyn Ferguson of coupon and rebate site Dime Will Tellsays that until now, he didn’t feel his company needed to build standard operating procedures (SOPs) in order to get things done.

To grow beyond its current size, Ferguson now sees how documented systems and SOPs will be necessary for the company. “Our New Year’s resolution was to start creating standard operating procedures for the main areas of our business … which should lead to more growth, better organization, and overall better business processes.”

5. Reduce workplace interruptions.

The worst enemy of productivity is interruptions, says Cristian Rennella, CEO of el Mejor Trato. Throughout 2019, he intends to do something about reducing workplace interruptions in the form of needless internal meetings by banning them.

“The objective is to eliminate interruptions at work as much as possible,” he says, explaining that a 30-minute meeting takes up much more than just 30 minutes — there’s the prep time and the time needed to refocus post-meeting, says Rennella.

6. Create efficiencies by delegating.

Jason Lavis of UK-based Out of the Box Innovations Ltd. recognized last year that he was trying to do too much himself. “It’s impossible for my company to grow unless I start to delegate.”

For 2019 Lavis resolved, “To look at every aspect of the business and see if it can be taken care of by someone else. Doing this will free up time for me to win new contracts and plan for growth.”

We’re so far into the new year that yet. As a business owner, you still have time to shift your focus to accomplish your business goals and to help ensure you end 2019 on solid footing. Take some time to set resolutions for your business that inspire you, and then take time to think through your approach on how to make them a reality.

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Are Credit Card Cash Advances Bad? 4 Reasons to Think Twice About Using Your Credit Card for Cash

Do you use your credit card to make withdrawals for your business? If so, you might be making an expensive mistake.

Whether it’s a business card or a personal credit card, it’s time to think twice about using your credit card as a debit card. Here’s what you need to know.

4 Costs of Taking Cash From Your Credit Card

Withdrawing money via your credit card could be costly for these four reasons.

1. Cash Advance Fee

It costs more to borrow cash from your credit card than to make a purchase using your card because of what’s known as a “cash advance fee.” Depending on the terms in your agreement, credit card issuers could charge you either a flat rate fee or a percentage fee of the withdrawal amount — whichever is greater.

2. No Grace Periods

Like personal credit cards, business credit cards usually offer a grace period. A grace period is the time period between the end date of a billing cycle and your next credit card due date. Cash advance transactions typically do NOT have a grace period. Instead, interest begins accruing immediately upon withdrawal, resulting in a higher total interest charge on cash advances than you’d see on a purchase transaction.

3. Higher Borrowing Rates

Another expense to consider with a credit card cash advance are the potentially higher interest rates. Interest rates on cash advances may be higher than the rate charged for purchases on the card. Refer to the fine print in your credit card agreement or contact your card issuer for more information.

4. Potential Unlimited Personal Liability

Does your business credit card have a personal liability clause?

If you’ve provided a personal guarantee for your business credit card, you’re personally on the hook for paying off that credit card debt if your business fails. That debt could include all the cash advance withdrawals from that credit card. This is the case even if the way you’ve incorporated your business (for example as an LLC) protects your personal assets against business litigation.

How to Calculate Your Credit Card Cash Advance Cost

If you’re wondering just how much a credit card cash withdrawal could cost, here’s how to figure it out

  1. Calculate the initial cash advance fee based on the withdrawal amount. For example, the fee on a $3,000 withdrawal from a card with a 3% cash advance fee is $90.00.Next, calculate the interest charges. Divide the annual percentage rate (APR) for cash advances on your card by 365. Then multiply that figure by the number of days you’ll carry the balance and the withdrawal amount. Based on the example above, a $3,000 advance at an APR of 21% for seven days, the calculations look like this: 21/365 = 0.00274 daily interest x 7 days = 0.019178 x $3,000 = $75.53.Add the interest charge to the credit card advance fee for a total cost of $165.53 (90 + 75.53) in charges and interest to take a $3,000 cash advance for seven days.

Alternatives to Business Credit Card Cash Advances

Luckily, there are less expensive ways to borrow money for your business.

  • A business credit line gives access to funds as needed, and you’ll only pay interest when and if your business uses it.
  • Short term loans and equipment financing often have comparatively low rates, especially when they’re secured against collateral such as real estate, equipment, or machinery.
  • Other business financing options include borrowing against your accounts receivables and invoices through revenue-based financing or invoice factoring.

Look into the other business financing options available to you before taking a credit card cash advance. Doing so could save your business a bundle.


How Concierge Physicians Keep Costs Simple

From new resolutions to new insurance plans, choices abound for the medical community when it comes to determining how to best serve their patients. Some physicians, however, eschew traditional insurance-based billing and opt for simplified concierge/direct primary care models. By eliminating the heavy administrative support insurance billing requires, concierge physicians may be able to provide a higher level of care.

Simple Costs, a Simple Goal

Dr. Alex Lickerman spent 21 years as a primary care physician before switching to a membership-based, concierge model. While his three-year-old concierge practice doesn’t accept insurance, it provides care the same way through a membership fee-based model. “We bill patients directly via a monthly membership fee,” says Lickerman. “All our services are covered by this fee. Meaning, whether a patient sees us only once a year for an annual exam or once a week for an acute medical issue, our fee is the same.”

Through this simplified billing model, Lickerman achieved a simple goal: To provide a higher level of care for a concentrated patient base.

“Our electronic medical records have transformed from insurance billing documents back into electronic medical records,” Lickerman says. “We’re no longer incentivized to bring patients in for visits they don’t need because we don’t get paid per visit. Our incentives are finally what they should be: take great care of patients, so they remain healthy and happy and want to stay with us.”

As a result, Lickerman’s practice can now schedule two-hour new patient appointments within a week of a patient joining. And they are able to schedule one-hour return visits the same-day or next-day. This generous approach to time-per-patient wasn’t an option under his previous insurance-centric practice.

Small Patient Loads, Big Benefits

Dr. Jennifer Gaudiani, the founder of the Denver-based Gaudiani Clinic, also chose a simplified, membership-based billing model for her eating disorder clinic. “Where most traditional medical offices have thousands of patients, each of our physicians carries a patient load of only about 70 patients,” says Gaudiani. “This simplified billing model allows our physicians to have space. They now have the ability to better coordinate care with other professionals, such as therapists, dietitians, and other physicians.  And finally, they’re able communicate directly with their patients via email, phone, and appointments.”

Practice, Perfected

With their concierge-model practices, both Gaudiani and Lickerman say they have seen a substantial transformation in costs and overall practice overhead.

“We don’t have to hire staff to ensure that insurance companies are paying us for our services. This has enabled us to reduce our expenses by 30-40% below traditional fee-for-service practices,” says Lickerman. In addition to similar overhead reductions, Gaudiani’s clinic has been able to make significant staffing and environmental reinvestments with the resources saved by bypassing insurance billing. “We’re able to use funds to pay for expert physicians, nurses, and operational staff.  In the past we had to hire multiple individuals to handle insurance billing, collections, and more,” Gaudiani says. “We’ve utilized funds to ensure that our office space is warm and welcoming for anyone who comes through our door.  Whereas before we didn’t have the ability to be thoughtful about our surroundings.”

Tips for Making the Simplicity Shift

For other physicians curious about making the shift to simplified, no-insurance billing models, both Gaudiani and Lickerman have some advice. Lickerman emphasizes setting an appropriate membership fee from the get-go, and not selling your services short. Gaudiani recommends establishing a business plan, detailing the number of staff and patients needed to make the practice a success. Potential direct primary care/concierge practices may also want to explore automated billing software.  This software provides ways to reduce billing friction and increase overall patient satisfaction.

For both professionals, however, the patient is at the center of the membership model decision.  Simple billing, more focused care, and a smaller practice size allows each to deliver a personalized level of care for each patient at every visit, every time.


Everything You Always Wanted To Know About Payables Turnover Ratio But Were Afraid To Ask

Editor’s Note: This is one of an eight-part series about key financial terms all entrepreneurs should know.

If you’ve never taken an accounting course, “Payables Turnover Ratio” might sound like a complex, intimidating term. Thankfully, that’s not the case. By the end of this article, you’ll understand what it means, why it matters, and how it can impact your ability to raise capital. Who knows … you may even find yourself calculating your business’s most recent payables turnover ratio just for fun.

What is a payables turnover ratio?

In simple terms, payables turnover ratio means how quickly a business is able to pay back its suppliers. The ratio is calculated by dividing cost of sales and dividing it by the average accounts payable amount during the period you’re measuring. Businesses looking to raise capital should be prepared to show payables turnover ratio on an annual basis for the past three years (assuming the company is three years old), and on a quarterly basis for at least the previous eight quarters. Some potential investors may also request monthly reports. The payables amount can be found on a company’s balance sheet under “current liabilities.”

Why does a payables turnover ratio matter?

In general, healthy companies are able to pay back their debts quickly because they’re generating income and operating in the black. The payables turnover ratio gives potential investors a quick look at how frequently a company is paying down its debt obligations. If a turnover ratio is increasing over time, a company may be paying off its debts faster. A decreasing ratio may mean pay back is taking longer, which could be a sign that a company’s financial condition is declining.

A decreasing ratio isn’t always a bad thing. For instance, if your company has one major supplier who provides many of your raw materials and you negotiate longer payment terms (moving from Net 30 to Net 60, for instance), your payables turnover ratio will decrease. Be prepared to explain any such change to a would-be investor, along with its benefits or challenges.

How can payables turnover ratio impact your financing options?

Alissa Bryden, author of 100 Entrepreneurs and a CPA at Virtual Heights Accounting says liquidity ratio is important as entrepreneurs seek funding for their businesses. “The payable turnover ratio is used by creditors and lenders to consider a company’s ability to pay off its current debts (specifically its trade or accounts payables),” Bryden explains.

“If a company can easily pay off its current accounts payable and continues to do so, then it indicates that the company will not burn through additional capital catching up on old debts.” That’s important, she says, because it “offers an indication that the additional capital can be used for future growth,” which is the kind of investment firms look for.

How can I improve my payables turnover ratio before seeking funding?

“To increase this ratio, a start-up can ensure it is paying down its debts prior to month or period end,” Bryden says. “This is because the average payables are based on an opening and closing month end calculation. Funders want to see you are putting their funds to good use.”

What does it mean to put funds to good use? Although the exact interpretation will vary by industry and company, Bryden says an across-the-board measure is minimizing costs that are not related to growth. “Reducing administrative costs and streamlining processes can assist you in increasing this ratio without affecting your future growth — or the lender’s future return,” she says.

Does the payables turnover ratio go by any other name?

Yes! You’ll sometimes see payables turnover ratio referred to as “accounts payable turnover” or “the creditors’ turnover ratio.” Each term means the same thing and can be used interchangeably.

What’s next?

Just like it’s easier to travel in a foreign country when you know the language, it’s easier to raise capital (or secure any kind of funding for your business) when you’re familiar with key financial terms and their real-life applications. Don’t forget to check out our previous installments on turnover ratiodebt to income ratio and current ratio.


Introverted Entrepreneur? Learn These 5 Techniques Successful Networkers Use

Editor’s Note: This is one of an eight-part series about key financial terms all entrepreneurs should know.

If you’ve never taken an accounting course, “Payables Turnover Ratio” might sound like a complex, intimidating term. Thankfully, that’s not the case. By the end of this article, you’ll understand what it means, why it matters, and how it can impact your ability to raise capital. Who knows … you may even find yourself calculating your business’s most recent payables turnover ratio just for fun.

What is a payables turnover ratio?

In simple terms, payables turnover ratio means how quickly a business is able to pay back its suppliers. The ratio is calculated by dividing cost of sales and dividing it by the average accounts payable amount during the period you’re measuring. Businesses looking to raise capital should be prepared to show payables turnover ratio on an annual basis for the past three years (assuming the company is three years old), and on a quarterly basis for at least the previous eight quarters. Some potential investors may also request monthly reports. The payables amount can be found on a company’s balance sheet under “current liabilities.”

Why does a payables turnover ratio matter?

In general, healthy companies are able to pay back their debts quickly because they’re generating income and operating in the black. The payables turnover ratio gives potential investors a quick look at how frequently a company is paying down its debt obligations. If a turnover ratio is increasing over time, a company may be paying off its debts faster. A decreasing ratio may mean pay back is taking longer, which could be a sign that a company’s financial condition is declining.

A decreasing ratio isn’t always a bad thing. For instance, if your company has one major supplier who provides many of your raw materials and you negotiate longer payment terms (moving from Net 30 to Net 60, for instance), your payables turnover ratio will decrease. Be prepared to explain any such change to a would-be investor, along with its benefits or challenges.

How can payables turnover ratio impact your financing options?

Alissa Bryden, author of 100 Entrepreneurs and a CPA at Virtual Heights Accounting says liquidity ratio is important as entrepreneurs seek funding for their businesses. “The payable turnover ratio is used by creditors and lenders to consider a company’s ability to pay off its current debts (specifically its trade or accounts payables),” Bryden explains.

“If a company can easily pay off its current accounts payable and continues to do so, then it indicates that the company will not burn through additional capital catching up on old debts.” That’s important, she says, because it “offers an indication that the additional capital can be used for future growth,” which is the kind of investment firms look for.

How can I improve my payables turnover ratio before seeking funding?

“To increase this ratio, a start-up can ensure it is paying down its debts prior to month or period end,” Bryden says. “This is because the average payables are based on an opening and closing month end calculation. Funders want to see you are putting their funds to good use.”

What does it mean to put funds to good use? Although the exact interpretation will vary by industry and company, Bryden says an across-the-board measure is minimizing costs that are not related to growth. “Reducing administrative costs and streamlining processes can assist you in increasing this ratio without affecting your future growth — or the lender’s future return,” she says.

Does the payables turnover ratio go by any other name?

Yes! You’ll sometimes see payables turnover ratio referred to as “accounts payable turnover” or “the creditors’ turnover ratio.” Each term means the same thing and can be used interchangeably.

What’s next?

Just like it’s easier to travel in a foreign country when you know the language, it’s easier to raise capital (or secure any kind of funding for your business) when you’re familiar with key financial terms and their real-life applications. Don’t forget to check out our previous installments on turnover ratiodebt to income ratio and current ratio.


Why you should consider going hyperlocal

Small businesses can often be better positioned than larger firms, thanks to their ability to pivot, anticipate trends and respond to their customer needs faster than larger competitors. That’s why many businesses are focusing on becoming hyperlocal.

A hyperlocal focus means a business targets a narrow geographic area, typically online and driven by search. Google near-me searches are no longer about just where to go, but about finding a specific thing, in a specific area, and in a specific period of time says Lisa Gevelber, Google’s VP of Marketing for the Americas in a piece for Think with Google.

Gevelber points out that online searches have changed; “near-me” mobile searches that contain a variant of, “can I buy,” or, “to buy” have grown more than 500 percent between 2015 and 2018. Many of the users were including location qualifiers like ZIP codes and neighborhood names in local searches because users assume, she says, the results will be automatically relevant to their location thanks to their devices.

These local search trends are important because learning how to be discovered at the hyperlocal level can help businesses grow a loyal, consistent customer base.

Here’s what small businesses can do to improve their hyperlocal traffic.

Grow Loyalty in Small Batches

Focusing on your city and region, as well as things of interest to your target audience can have a big payoff. Some large businesses create hypertargeted connections to create a virtual bridge to feel more local, even if they aren’t. The rationale is simple: dedicated customers who are embracing your product or service can help to grow your business on a hyperlocal level by creating a personal connection among their concentrated local sphere of influence.

Instead of going after mega-influencers who have thousands of followers on social media, many companies are looking for the “non-influencer” who has a lot of pull within a smaller, more intimate circle.

For example, Pedialyte, the toddler flu remedy, has widened its market with hyperlocal marketing as a hangover remedy.

According to Vox, “Pedialyte’s social media team started commenting on every single post that mentioned the brand, most commonly with, “You made our day!” and, “Stay hydrated,” paired with a sunglasses emoji. Then they started hopping into DMs, writing, “You’re a big fan of ours, it’s no secret. Well, we noticed and were wondering if you’d consider joining #TeamPedialyte? And we aren’t just asking anybody. … Only real-deals like yourself.”

Then Pedialyte sent out care packages and summer survival kits, recommended hashtags such as #TeamPedialyte and sharing an Amazon discount code.

What was surprising: “Almost none of these fans have more than 800 followers, and most have between 200 and 300. They’re not influencers, except in their very immediate social circles.”

A small business, such as a local coffee shop, can do this on a more intimate scale by reaching out to it’s social media followers and invite them to come in for a free cup of java or to try a new menu item as a public thank you for their loyalty coupled with a creative hashtag that can easily be tracked and followed.

Maintain Mobile Compatibility and Location Information

To connect on a hyperlocal level, it’s important to be easy to find.

Make sure your business is listed and verified on Google maps as well as BingYelpYahoo! Small Business’ LocalworksDexKnowsYellow Pages, and TripAdvisor, for travelers who are looking for a more local experience.

Double check to ensure your website is mobile optimized to make your business easily accessible, and ask for online referrals to help build traffic.

Be present on social channels like Instagram, Facebook, Twitter, and LinkedIn and make sure to add location tags into social media posts.

To help your ranking, make sure your basic information, sometimes also referred to as NAP— name, address, phone number— is listed, verified, and matches across as many services as possible to help with search rankings. For other search tips, review this post on Convince & Convert with Jay Baer.

Geotarget Potential Customers

Being in the right place at the right time can make a big difference. Offering a promotion to the correct audience can be even more important.

Small businesses can actively reach out on a hyperlocal level by geotargeting a specific group of influencers or potential customers based on a state, region or city, typically by using IP addresses.

Geotargeting can be done on a state, city or zip code level with IP addresses, through GPS signals or by geofencing, setting up a virtual perimeter where a promotion is valid. Although it’s not 100 percent accurate, the first three digits of a person’s IP address typically corresponds to the country code, while the remaining digits usually refer to specific areas.

Your company’s location will help determine how big or small of a geographic region you should create. Small businesses in more rural areas may want to set a larger target radius of 20 or 30 miles in diameter. For large urban areas, many businesses only target a one-mile radius, according to Adweek.

Create a Hashtag

Want things to trend locally or spread virally? The #MeToo movement has proven that a worthy hashtag and topic will go viral in a very short amount of time. That methodology can also help small businesses who might want to promote a trend, theme or sale on a hyperlocal level.

Not sure what hashtag to use? CreativeandCoffee blog offers a comprehensive list of hashtags for small businesses. Consider using local hashtags along with more general hashtags like #ShopLocal, #SmallBusiness, #Entrepreneur and #MakeItHappen to help align your business with others.


Introverted Entrepreneur? Learn These 5 Techniques Successful Networkers Use

Are you an introverted business owner who doesn’t know where to begin when it comes to networking? If so, you need a plan. Start by focusing on these five techniques commonly used by top networkers.

1. Be Community-Minded

It’s easier to network or get to know new people when you’re united for a common purpose or cause. Top networkers follow their personal interests to find volunteer opportunities, sports, and service organizations to join, expanding their circle of acquaintances.

Look for opportunities to give back to your community in a group setting. Volunteer as a board or committee member, or at your child’s favorite activity or school event. Focusing on completing a task or fulfilling a mission can help you ease into conversations when small-talk isn’t your strong suit.

2. Be a Listener

Don’t like to talk a lot? Don’t worry. The best networkers aren’t always gregarious, outgoing people. Instead, they ask questions, and then simply listen.

People love to talk about themselves, and this is how you’ll learn about an individual’s passions, skills, and other contacts. And pay attention – you never know who can help you down the road.

Start by approaching an individual who appears to be on their own. Encourage others to talk by asking open ended questions such as, “So why were you interested in coming to this event/meeting?” Or, “How did you get involved in this cause/organization?”

3. Keep Track of Who’s Who

Cultivating a network as a useful business resource requires keeping track of who’s who, as well as how to contact them.

Whether you track your contact list on your iPhone, your LinkedIn account, or a favorite app, the best networkers follow a systematic approach to organizing contact lists so individual information is easy to find when needed. Make a note of where/when you met, any pertinent details of conversations, and other acquaintances you may have in common. This can make it easier to find the individual in your list when you’re ready to connect again in the future.

4. Connect Others

Connecting with others isn’t always about who can do something for you right now. The most successful networkers look for opportunities to connect others to their mutual benefit. And then those individuals are more likely to help you when you’re looking for a favor down the road.

5. Network with a Purpose

When you’re an introverted business owner or entrepreneur, it may help to remind yourself of why you’re reaching out to people at an event or meeting. Maybe you want to get local exposure for your business, or get recommendations for professional services such as a new attorney or accountant.

Whether you’re attending a community event, or checking out a local business meetup, focus on getting to know just one personal at a time. Even if you make just three meaningful connections at each meeting, you’re expanding your network steadily and purposefully.


How the SBA May Help You Recover From Natural Disasters

Hurricanes, wildfires, earthquakes, volcanoes, mudslides — all can be devastating to the health of your small business.

In 2017, 40 percent of small businesses located within a FEMA-designated disaster zone reported natural disaster-related losses, according to the Federal Reserve. Forty-five percent of affected businesses reported asset losses of up to $25,000, while 61 percent reported revenue losses of up to $25,000.

Recovering from a natural disaster can be an uphill climb but the Small Business Administration offers relief in the form of Economic Injury Disaster Loans (EIDL). These loans can help you get your business back on solid ground.

How Economic Injury Disaster Loans Work

The EIDL program provides small businesses with funding to repair and rebuild following a natural disaster. As of 2018, qualifying businesses can borrow up to $2 million, which can be used for:

  • Replacing or repairing damaged equipment or machinery
  • Buying new inventory or replacing other assets, such as computers, that were damaged or destroyed
  • Repairing or rebuilding your physical premises if they were damaged or destroyed
  • Making improvements that could help reduce the risk of natural disaster-related damage in the future, such as installing generators or storm windows and doors

The main goal of the program is to help businesses that have been affected by a natural disaster get back to normal operations as quickly as possible. These loans are low-cost, with a maximum interest rate of four percent per year, with terms that can extend up to 30 years.

Who’s Eligible for a Disaster Loan?

In addition to small businesses, the EIDL program is also open to small agricultural cooperatives, small aquaculture operations and most private nonprofits.

It goes without saying that your business needs to be located in a federally declared disaster area to qualify. But, physical property damage to your business isn’t a requirement for eligibility.

There is one caveat, however. The program only offers these loans to small businesses if the SBA determines they’re unable to get credit elsewhere. If you’re able to get approved for an equipment or term loan, for instance, an EIDL wouldn’t be an option.

Covering the Gap When Insurance Falls Short

The SBA has a second program to help businesses that have physical property damages which aren’t covered by insurance. The Business Physical Disaster Loan program also offers up to $2 million to small businesses that need to repair or replace property, equipment, inventory or fixtures following a natural disaster.

The maximum interest rate is four percent if you’re unable to get credit elsewhere. If you have other borrowing options, the max rate tops out at eight percent. Like the EIDL program, repayment terms can stretch up to 30 years.

It’s possible to qualify for both an EIDL and a physical disaster loan — you’re just limited to borrowing $2 million total through both programs. You can submit an application for each loan program online to get the ball rolling on disaster relief for your business.


How to Plan for a Strong Fourth Quarter Finish

A strong economic outlook is driving consumer optimism, and as a business owner, you may be similarly inspired to pursue growth. Small businesses are looking towards the future with a bright outlook, according to the NFIB Research Foundation’s latest optimism index survey. The August 2018 report found a record number of business owners — 34 percent — have plans to expand.

As the fourth quarter approaches, consider what you can do now to wrap up the year on a high note.

Fill out the Ranks if Necessary

If you run a retail store or a service-based business that tends to be busier during the holidays, now’s the time to think about increasing your staff.

Review last year’s sales and run an estimated projection for this year’s numbers to get an idea of how strong customer demand is likely to be. That can help you gauge how many employees you need to hire and how to schedule them. Remember to give yourself enough time to fully on-board new hires ahead of the holiday rush.

Check Your Inventory Numbers

The business owners included in the small business optimism index report had an eye on boosting their inventory stock. Ten percent said they planned to increase inventory, the strongest numbers since 2005.

Go back to the sales projections you calculated earlier and compare those numbers to the inventory you have on hand. If certain items tend to be scarce around the holidays, get in touch with your vendors to see if you can pre-order those to avoid selling out when customer traffic peaks. Also, work out delivery schedules in advance so you know when new inventory will arrive.

Begin Your Tax Prep

The next payment deadline for quarterly estimated taxes is right around the corner in January. Yet another good reason to run estimates of sales projections through the fourth quarter is to ensure that you’re setting aside enough money over the next few months to cover your estimated tax obligation.

You can also use the fourth quarter to begin prepping for next year’s tax filing. Start looking for deductible expenses and add up business losses (if any) year to date. If you’re planning to spend capital on something big, such as new equipment, consider whether it makes more sense to do that now or defer your purchase until the beginning of the year.

Consider Financing Sooner, Rather Than Later

One thing small business owners aren’t optimistic about, according to the survey, is an improvement in credit conditions. With interest rates continuing to rise, borrowing may become more expensive.

If you think you may need an equipment or inventory loan, or just a working capital loan to finish up the fourth quarter, check your credit to see how likely you are to qualify. And of course, take time to compare borrowing options from different lenders to find the best fit for your financing needs.


Everything You Always Wanted to Know About Inventory Turnover Ratio but Were Afraid to Ask

Editor’s Note: This is one of an eight-part series about key financial terms all business owners should know.

Any entrepreneur who’s worked in retail knows that a misstep in inventory can cost the company money; and getting caught with obsolete inventory when consumer tastes change can spell major trouble for an otherwise-thriving business. Ask anyone whose company is sitting on inventory of fidget spinners or Snuggies. It’s no wonder, then, that would-be investors often take a close look a business’s inventory turnover ratio (ITR) before making funding decisions. Here’s a quick primer on ITR, why it’s important, and how one expert CFO recommends business owners keep the ratio in check.

What is inventory turnover ratio?

ITR is a measure of how efficiently a company is managing the goods in has in stock. ITR is calculated by dividing either sales or cost of goods sold (COGS) by average inventory — depending on your industry’s standard practice. The latter method does not take markups into account, so investors may consider it a more accurate representation of true cost. When divided by the number of days in a given period (month, quarter, year, etc.) a company can quickly tell how many days it is taking, on average, for inventory to “turn,” or sell.

Why is inventory turnover ratio important?

Having too much inventory on hand — or having the same inventory on hand for too long — may be detrimental for a business. Not only does it tie up capital, but it also creates a potential liability as inventory is less liquid than other assets.

Depending on the business, inventory may spoil (groceries or imported luxury food products), go out of style (fashion or fad items), become obsolete (tech products), or otherwise lose value based on how long it is stored. Plus, warehousing excessive inventory can be an expensive line-item. A business’s ability to forecast demand correctly and move through its inventory efficiently can be critical to success.

How can inventory turnover ratio impact your ability to raise capital?

The faster a company turns over inventory, the more successful (and often profitable) it is likely to be. Although there are industry exceptions (ultra-luxury purchases like high-end sports cars and real estate properties), investors often look for companies with products that are in-demand. If you’re considering raising capital in the near future, understand your inventory turnover before you enter into serious discussions. It may be prudent to offer a one-time sale or discount on existing inventory to improve your turnover ratio and decrease the amount of assets tied up in inventory.

Ask an Expert

Even if entrepreneurs have never heard of ITR before, they likely have an intuitive sense of how their inventory is turning. Strategic Funding asked Brad Shanahan, COO/CFO of VitaPerk, the world’s first nutrient coffee enhancer, why ITR is so important for business owners to keep an eye on at any stage.

Why is calculating the ITR — and keeping an eye on it — important?

ITR is important because a company often has a significant amount of money tied up in inventory. If the items in inventory do not get sold, the company’s money will not become available to pay its employees, suppliers, lenders, etc. It’s also possible that a company’s inventory will become less in demand, obsolete, or even deteriorate. If that occurs, the company’s money will be lost. Having slow-moving items in inventory also uses valuable space and makes the warehouse less efficient.

How often should businesses be calculating their ITR? Does it vary based on where the business is in its lifecycle?

In my opinion, a company should calculate their ITR on a quarterly basis (for a rolling 12-month time period), whether an early-stage startup or an established business.

What’s next?

A key to success as an entrepreneur is never being afraid to admit what you don’t know. Don’t know as many financial terms as you’d like to? No problem! We’ve got you covered with the next installment of this series, where you will learn everything you wanted to know about payable turnover ratio. And don’t forget to check out our previous installments on debt to income ratio and current ratio.


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