small business connections: marketing meets microfinancing-san francisco

Small Business Connections: Social Media & the World of Online Reviews

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Darnell Holloway

Manager of Business Outreach

@darnelljustin

#NYSEBigStartupwww.yelp.com/contact

The Social Media Landscape

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•Why is it important to have a strong online presence?

•What are the basics you should know about each major social media platform?

•How can you engage with existing customers and attract new business?

Now more than ever, consumers rely on online

reviews

Source: Search Engine Land Local Consumer Review Survey (2012)

85% of Consumers Use The Internet to Find Local Businesses

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LinkedIn is B2B Social Networking

Marketing Your Professional Skills

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Connecting With Other Professionals

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A Few Success Stories

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Develop a Following on Twitter

Anatomy of A Tweet

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The Sprinkles Example

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Get “Likes” on Facebook

Create a Facebook Page for Your Business

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Food Porn

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Demographic Information

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Use HootSuite To Streamline Your Efforts

Create A Free Account At:

www.hootsuite.com

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Aggregate Your Information

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Yelp is Transactional Social Media

$864

Yelp by the Numbers

$864

• Yelp mobile app is used on 8.2 million unique mobile devices (Q2 2012)• Approximately 45% of all searches on Yelp come from our mobile apps.

• Every second, a consumer generated directions to or called a business from a Yelp app.•A photo was uploaded at least every 30 seconds from the Yelp app.

Yelp Mobile

Consumers on Yelp are Affluent, Educated Adults

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Unlock Your Free Tools

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Biz.yelp.com

Claim your page here

Claim your page here

Log in hereLog in here

Understanding Yelp Metrics & Free Tools

Improve your business page. That’s FREE.

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Connect With Your Customers. It’s FREE too!

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Myth: Most Yelp Reviews are Negative

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80% of Yelp Reviews are Three Stars or Higher

Negative reviews play an important role too• A variety of experiences are consistent with real life• You can’t please 100% of your customers 100% of the time

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Quality Control: Why Some Reviews

Come Down

All businesses are equal in this regard.(Advertisers & non-advertisers treated equally; filtered reviews viewable.)

Keeping Our Content Useful For Consumers

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“Yelp runs its reviews through an anti-fraud filter, with impressive results; every fake review the Texan bought was flagged by Yelp’s algorithms, though his fraudulent reviews remain up on the seven other sites.”

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Engage Diplomatically

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Don’t: Freak Out

Don’t: Freak Out

Tip #1:

Post Public Comments You Can Be Proud Of…

Tip #2: Say ‘Thank You’, State Your Policy & Respond

Promptly

Initial Review: 1 Star

Review Update: 3 Stars

Public Comment from Business Owner

Paid Upgrades: Search Advertising and on Business

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Removal of Competitor’s AdsRemoval of Competitor’s Ads

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Summary

1. The most successful businesses on Yelp focus on providing

great customer service, not soliciting reviews. Word of

mouth will take care of itself.

2. Don’t over-focus on any single review.

3. Start using Yelp’s FREE tools today (biz.yelp.com). Your business page will look better, and this can drive new customers.

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Darnell Holloway

Manager of Business Outreach

@darnelljustin

#NYSEBigStartupwww.yelp.com/contact

Biz.Yelp.Com

November 2012

Access to Capital

Tips for Getting Funding

In

Today’s Environment

Ham’n ’Eggs

The Pig is

Committed

The Chicken is

Involved

• The minute you begin spending your capital – you are a Pig

• Get money squared away before you start

• Patience at the beginning will save a lot of pain later on

Raising Capital

• Entrepreneurs are motivated by “vision ”

– Spend their “free cash” early– Run up credit card balances– Miss a few payments when lack of cash

flow– Lower their FICO scores– Get stuck in the middle of the process

“But I’m passionate about this”

Then they go looking for capital

This is too late

Undercapitalization is the

Number 1 reason

new companies fail

Failure results from

a lack of understanding of the

total costs associated with launching and running your business

Understand Total Costs

Don’t run out of gas!

Raise all you need before you start

Questions to answer before you start

• How much money do you need?

• What will you use it for?

• How long will it take you to break even?

• What type of capital are you looking for?

• How much control are you willing to give up?

What might you need

Capital For?

• 1X Start-up expenses

• Ongoing costs until revenue comes

• Permanent working capital

• Stocking inventory

• Purchase of machinery and equipment

• Leasehold improvements

• Purchase of business or franchise

• Acquisition or construction of commercial business property

Capital Needs

What banks are looking for

What are the

5 C’s of Credit?

1. Coverage

2. Capital

3. Capacity

4. Character

5. Collateral

What banks are looking for

What is Coverage?

• The basic question is: Will the business earn enough revenue to pay all the bills and still have money left over to service the loan and leave profit for the owner

• Prepare a cash flow statement showing how the loan can be repaid from the operations of the business

Coverage

Coverage

What does this mean?

1.25 X Coverage Ratio

Coverage Calculation

(Revenue – Expense – Owner Salary) /

Interest Payment

Must be at least

1.25 or more

What is Capital?

• No lender will lend all of the money needed to operate the business

• The business owner is expected to contribute some of the money- this is called equity or owners capital

• Expect to provide approximately one-third of the funds needed to start a new business

Capital

What is Capacity?

• Lenders will always look to see if the business is in a position to succeed

• The will look at track record of the owner and the management team

Capacity

Direct Industry Experience

• Must demonstrate experience in the industry for which you desire a loan

• “Caterers” can no longer open restaurants

• Get a partner

• Get a committed advisory board

What is Character?

• Lenders are very interested in the type of person you are

• They are lending you money and, of course want to be repaid

• Do you honor your agreements?

• Credit reports are the major source of information on character

Character

FICO

Fair Isaac Corporation (FICO)

Industry standard for financial institutions

Know your FICO score before you start

www.myfico.com

Free trial is all you need

Work with a professional credit counselor if your FICO score is

below 640

What is the purpose of Collateral?

The Onion 04.30.08 | Issue 44•18

• While cash-flow is the primary source of loan repayment, lenders also want a “back-up” or secondary source of repayment should anything go wrong

• Collateral is anything of value used as security for a loan

• Examples: real estate, bonds, inventory, equipment, accounts receivables

Collateral

• Your Feasible Business & Marketing Plan

• Secondary Source of Income• Number of years in business• Loan size relative to the company’s

sales• Type of business

What else do banks evaluate?

Hmmm that is a REALLYgood Business Plan!

Shop Around

Find a lender that likes your type and stage of business

But remember

Fund Raising is Tough!

A referral Qualitative advice on your plan Quantitative advice on how to change the

numerical assumptions Information on the competition VALUE FOR YOUR BUSINESS

Don’t get a “No” but get:

Work with an Expert

For consulting services go to: o www.sfsbdc.org, acsbdc.org, or svsbdc.orgo Click Red Button and complete the online form:

Business Advisor assigned or referral madeQuality, one-to-one confidential consultationAction plan and scope of workOn-going relationshipFollow-up: milestone reporting & success stories

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Contact:Paula Groves

paula@acsbdc.org(510) 208-0411

Thank You!

November 2012

Opportunity Fund

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Finding the appropriate lender for your type and stage of businessTerm Loan

Line of Credit

AR or PO Financing

Equipment

Tenant Improvement

Product Development

Merchant Cash Advance

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Basic Loan PackageCredit: application

Cash-flow:

Profit and Loss Statements Bank Statements

Balance sheet

AR and AP Debt Schedule

Assets

Guarantee and collateral

Non-business income

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Presenting Your StoryDoes the paperwork reflect everything in the business

Are there hidden strengths that are not apparent?

How do you prove your story versus what your document says

Character Based Lending

Does your story make sense?

Can we work around the gaps, challenges, and contradictions?

How can I defend your loan request?

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Opportunity Fund

Business Term Loans: $1,000 - $100,000

EasyPay Loan for retail businesses

Rates: 8-12%

Terms: up to 60 months

Requirements

12 months in business

Credit must be on-time

Cash-flow to support loan amount

Alex@opportunityfund.org Phone: 408.516.4708