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Could 2012 be the year of the entrepreneur? Some believe it is. Check out these important links for more tips on your entrepreneurial journey.

Entrepreneurship

Is 2012 the year of the entrepreneur? Scott Gerber, founder of the Young Entrepreneur Council and co-founder of Gen Y Capital Partners, thinks so. Among other things, Gerber says the current economy and job market will push more people into the idea of providing an income for themselves through starting businesses. Bloomberg Businessweek

Always be a market leader. Whether you enter an existing market or create one yourself, always remember to be the leader. Entering popular markets just because they’re booming can lead to a game of catch-up your company will probably loose. Instead, take a step back and rethink your company. Feld Thoughts

Management

Building your management team. As your business starts to grow, a management team will be critical. Realizing you cannot do it all by yourself is an important first step. But how can you be sure that the team you assemble will be able to grow with your business? Some basic tips will help create a stable team that scales. A VC

Improving your business productivity. If you haven’t put much thought into your business’s productivity, you may be missing important tweaks that could increase efficiency and reduce cost. These are changes that could make your business more competitive and more adaptable in the future. You’re the Boss

Marketing & Sales

Creating a better business Website. Your Website says a lot about you and your business. If you’re like most entrepreneurs, you use it to educate others about your product, service, or company. Beware of a Website that gives a bad impression of your business and brand. What do you want your Website to say about you? Firefly Coaching

Sales tips for any business. Sales are, of course, a critical thing for any business, so you need a sales apparatus in place that can go after prospects and meet revenue projections. Here are some tips that may help. Expert Business Advice

Leadership

Losing your best talent. People define your company, and when they leave they take some of the creativity and experience with them that your business has relied upon. Is there a way you can stop this “brain drain” from impacting your business? How do you retain the talent you want instead? Ability Success Growth

What is small business leadership? Too often we use the term without fully defining it. In fact, this leadership isn’t simply about forging ahead and obliging those who work with you to follow. Leadership is about something else instead. BizCompare.com

Success Stories & Tips

Small business still draws support. One reason entrepreneurship remains strong is that grassroots support for such businesses exists everywhere. Here’s one story about how a small town came together to support their local hardware store. Yahoo! Finance

Five entrepreneurial tips. Starting or running your own business is a challenge. Here are some serious issues to consider. Think about implementing these tips this year, not just for you but for your business. Give yourself and your business the chance to take things to the next level. Small Business Trends

2012 the Year of the Entrepreneur

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100th Year Anniversary of the BBB

Jan 27th

Believe it or not, the Better Business Bureau (BBB) has been around for 100 years. Their latest infographic provides a highlight of their biggest events from the first BBB in Minneapolis, Minnesota in 1912 to the release of their app in 2011.

In 1930, BBBs developed Truth in Advertising Standards, something most consumers can appreciate. According to the inforgraphic, Harry S. Truman said of BBBs, “They have gone to work to clean out the shady areas in the commercial world.”

Eleanor Roosevelt said in 1951, “it’s a service I think we’ve all taken for granted.” In 2010 they helped resolve one million consumer complaints and provided four million reviews of businesses. With over 88 million instances of service in 2010, that statement may no longer hold true.

BBB 100th Anniversary [Infographic] compliments of Better Business Bureau

View full post on Business Pundit

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Implement Year Round Benefits Communication

Jan 19th

Many small businesses with limited staff use the open enrollment period as the one and only time they discuss benefits with employees. This activity, though necessary, can prove to be overwhelming for the staff to comprehend large amounts of benefits information all at once. Small businesses seeking more effective ways to support employees should implement a year-round benefits communication and education approach instead of limited, intense periods of information overload or otherwise infrequent communication. Doing so can help businesses provide employees with retainable information and make processes such as open enrollment smoother and more effective.

employee benefits package

Impact on Retention
Improving benefits communication efforts can have critical business results for smaller companies. To help understand a few revealing workplace realities, the 2011 Aflac WorkForces Report study found that when it comes to making benefits decisions, a mere 8 percent of workers agree that they are fully engaged in making those decisions, a sentiment their employers share. Some 63 percent of companies agree that workers need to be more engaged, and just half feel their employees take full advantage of the benefits they’re offered.

By proactively encouraging worker engagement when it comes to making benefits decisions, employers can help workers be better prepared and protected against an accident or illness, resulting in significant financial implications for both themselves and their employers.

When evaluating workplace benefits communication at small companies, 39 percent of workers agree they would be less likely to leave their jobs if they were well-informed about their benefits. The turnover cost alone is an incentive for employers to make changes in how and how often their organizations share benefits information.

Small businesses must acknowledge the possibility that communication needs improvement. For example, almost half (46 percent) of employees at small companies say their HR departments communicate too little about employee benefit plans, and just over half (52 percent) of HR decision-makers at small businesses believe they communicate very or extremely effectively with employees.

Reap significant rewards by developing more-effective benefits communications, including healthier, more-protected and more-engaged employees. Four best practices include:

1. Being a Valuable Resource
Without real information, employees often turn to less-than-reliable sources for insight and guidance. The majority of workers (62 percent) get their insurance advice/information from colleagues, friends and family. In fact, employees at small companies are the least likely to get their information/advice about employee benefits from company HR professionals (39 percent).

When employees don’t know better, they don’t do better in terms of adequately protecting their income and well-being, leaving many workers underinsured and vulnerable to the financial ramifications of an unexpected health event. Over time, unexpected health events can impact the productivity of a small business.

2. Using Surveys
Electronic communications have made it easier than ever to survey workers at minimal cost. Unfortunately, little more than half (52 percent) of organizations conduct surveys that increase their understanding of employee satisfaction with benefit offerings. Even fewer—just 43 percent—survey employee understanding of benefits communication.

By taking the time to understand the preferences and needs of workers, employers can increase employee satisfaction with benefits packages and help provide the peace of mind that comes from knowing their employees have adequate protection. Additionally, employers can use these surveys to identify unaddressed health insurance needs, enabling HR decision-makers to better address benefits communication needs and find ways to make benefits information more robust and accessible.

3. Helping Eliminate Common Benefits Mistakes
Roughly 77 percent of workers have admitted to making mistakes about benefits coverage during their open enrollment process, leaving many employees feeling negatively at the end of the year about the process, including being stressed, confused or regretful. A closer look reveals that nearly half of workers (47 percent) say they have made mistakes or have regrets, such as putting too little in their flexible spending account (FSA), or not electing available benefits coverage like voluntary, dental or vision; or chose benefits they didn’t need or chose the wrong level of coverage.

The brevity of annual benefits decisions requires a comprehensive, year-long education and communication program. Best practices include diversifying materials to encompass print, Web, email, and face-to-face meetings; hosting multiple in-person meetings throughout the year; and including spouses in the decision-making.

4. Consider Retaining a Benefits Consultant or Broker
Giving employees the opportunity to speak directly to a benefits advisor or a representative from a brokerage or insurance carrier can be incredibly effective in terms of education. In fact, 50 percent of workers at small companies agree they’d be more informed about benefits if they sat with a consultant or broker during enrollment.

Keeping up with complicated, ever-changing regulations is increasingly difficult, especially for small businesses. Partnering with brokers or benefits consultants can help companies bolster their insurance benefits with little impact on the bottom line. Brokers and benefits consultants can also advise and assist in developing effective communication strategies and enrollment processes.

According to Aflac’s study, companies that use brokers or benefits consultants are likely to offer more robust benefits packages than their competitors, believe their benefits packages are more competitive than those of industry peers, and communicate more often about their organizations’ benefits.

Conclusion
Developing effective benefits communications is difficult, particularly when it comes to educating workers about their insurance options. However, using reinforced, year-round communication, small business HR decision-makers can make information sharing simpler for employees, enabling them to make better choices for their families, and generating stronger retention and greater appreciation for their total compensation packages.

Benefits Package Photo via Shutterstock

Implement Year Round Benefits Communication

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5 Trends to Shape Your Business This Year

Jan 19th

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Trendwatching firm, JWTIntelligence, recently released its seventh annual trend forecast, JWT 10 Trends for 2012. Which of the 10 are most likely to affect small business going forward? Here are my picks.

now

Navigating the new normal: With the current economic situation showing few signs of major change, JWT says companies in developed nations will start introducing new products and services at lower price points. “Stripped-down offerings and smaller sizes” are one way to take advantage of this trend, JWT notes.

Takeaway: Consider introducing different versions of your products or services. For instance, if you own a spa, you could offer a “quickie” version of popular treatments that takes less time and costs less. One sales tactic that works well is creating three levels of a product or service—value, midrange and premium—and marketing them accordingly.

Bonus: Studies have shown when you have three price choices, more people are likely to pick the mid-priced option—which could boost your sales considerably compared to having just one option.

Live a little: After years of navigating through a tough economy, people are tired of cutting back and, while they can’t afford to really let lose, they’re eager for little treats or luxuries that make them feel better.

Takeaway: These little luxuries can be different things for different people—from a gourmet cupcake to a fine whiskey or a manicure. Think of a way your business can offer customers a moment of respite and a quick escape from reality for an affordable price.

Marriage optional: More and more women are opting to delay marriage or skip it altogether. This could mean they are living with a significant other, living with roommates, living alone or even becoming single moms.

Takeaway: I’ve written in the past about how weddings are a huge market for entrepreneurs, and while that’s still true, you should also consider how to reach this new market. The delay of marriage means even women who are not planning weddings are going through many of the same transitions that newlyweds do—such as buying and furnishing first homes or apartments, buying products and services for children, and planning celebrations such as birthday parties and girls’ getaways.

Celebrating aging: JWT says people are taking an increasingly positive view of aging. I personally am a bit skeptical on this front—in America, at least, I think we still have a long way to go. Regardless, America is aging, and the baby boomers, in particular, have money to spend, so ignoring or patronizing this group is a big mistake.

Takeaway: As Americans over 55 become a bigger proportion of the population, you’ll need to attract them or lose market share. Keep in mind that boomers buy products and services not just for themselves, but also for their aging parents, their kids and their grandkids. And remember, the best way to lose a boomer customer is to treat him or her like a “senior”—so make accommodations if needed, but don’t make a big deal about them.

Objectifying objects: As the world increasingly goes digital, an interesting trend is occurring: New premiums are being placed on actual objects, since they’re becoming increasingly rare.

The takeaway: If you offer products or services digitally, think about tactile “extras” you could sell along with them, or ways your customers can use digital tools to create physical goods. For instance, the report mentions Postagram, an app that lets users turn digital photos into physical postcards. I’ve seen online cartoonists who sell physical greeting cards of their work and musicians who offer T-shirts or lyric booklets to accompany digital downloads. How can you make this work for your business?

There are five more trends to take a look at in the full JWT 10 Trends for 2012 report.

Now Photo via Shutterstock

5 Trends to Shape Your Business This Year

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Start The New Year By Applying for Contests and Awards

Jan 2nd

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This list of contests, competitions and awards for small businesses is brought to you every other week as a community service by Small Business Trends and Smallbiztechnology.com.

Also, if you’ve entered and won a contest or award listed here, let us know so we can share your news.

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Trusted Business – Earn a Green Shield
Ongoing

Be one of the first 50 to earn a “Green Shield” at TrustedBusiness.com, and you will win an autographed copy of the new book “Visual Marketing”, co-authored by Small Business Trends‘ CEO, Anita Campbell.

To earn a Green Shield you have to get at least 100 trust points for your business. Good while supplies last. More information here.

LegalZoom Free Commerical Contest
Enter through December 31, 2011

Contest participants are asked to create a 25-second commercial featuring their business, and upload the video to the LegalZoom Facebook page, where the contest winner will be selected through a voting system.

LegalZoom will purchase a minimum of $20,000 of airtime for the winning commercial to be broadcast to a national audience. That translates to a minimum of 50 free spots for the winning business owner.

2012 DREAM BIG Small Business of the Year Award
Enter by January 6, 2012

Nominate an outstanding business from your community or submit your own application for the 2012 DREAM BIG Small Business of the Year Award, sponsored by Sam’s Club.

All award winners will be honored during America’s Small Business Summit on May 22 in Washington, DC. Blue Ribbon Award® winners will receive one complimentary registration to attend the Summit, courtesy of Sam’s Club. Nominations are due January 6, and applications are due January 13. The winner will receive a $10,000 cash prize, courtesy of the U.S. Chamber of Commerce.

MacMall Medical Office Makeover Contest
Enter by January 16, 2012

The Medical Office Makeover Contest features a prize for larger offices with 11 or more employees valued at nearly $17,000, and a prize for offices with 1-10 employees valued at over $6,000. The highly sought after products featured in the contest include Ergotron carts; HP workstations, monitors and digital signs; Fujitsu scanners; Wasp time and attendance tracking; Nuance medical dictation, and other high-value hardware and software from Xerox, Plantronics, Fellowes, ioSafe, Meraki, and Dymo.

Vision 33 Small Business Makeover Contest
Enter by January 31, 2012

This holiday season, one lucky small business will win the SAP Business One Starter Package, 40 hours of professional services and maintenance from Vision33 for a year! There is no charge, no expectations and no purchase necessary to enter the Small Business Makeover Contest – all you have to do is fill out an online form and tell why you think your business deserves to win.

Tibbetts Awards 2012
Enter by January 31, 2012

The U.S. Small Business Administration is seeking nominations for its Tibbetts Awards, recognizing small-business research and innovation. The awards recognize companies that have taken part in the SBA’s Small Business Innovation Research and Small Business Technology Transfer programs. Three awards will be given, one for companies that have participated in the SBIR/STTR programs, one for individuals who advocate on behalf of the programs, and a third “Hall of Fame” award recognizing companies that have a track record of success in research, innovation and product commercialization within the SBIR or STTR program.

PA Tech Awards 2012
Enter by February 1, 2012

Nominations for winners in eight categories will be accepted on the event’s new website in a unique, open format. Every submitted nomination in every category can be viewed immediately by visitors to the site and shared to social media channels, delivering increased global visibility for all nominees. The annual gala on March 30, 2012 celebrates and honors the brightest technology leaders and innovators from across the state.

The Amazing Entrepreneur
Enter by February 29, 2012

The 2nd Annual Amazing Entrepreneur Business Plan Competition is an initiative by Gwinnett Chamber Economic Development and The University of Georgia Small Business Development Center (SBDC) to foster new business development in Gwinnett County, GA. The contest is open to individuals who own or manage a small business, which has been in operation less than 36 months, in Gwinnett County.

The Grand Prize winner will receive $2500 cash to be used solely for the business entering the contest, a trip to Sage Software’s Customer Conference in Nashville, TN (airfare, hotel stay, conference fees), one-year membership to Gwinnett Chamber of Commerce, one-year participation in the Chamber’s Gwinnett Business Institute program ($180 value), a consultation with an attorney from Arnall Golden Gregory ($2500 value), and research assistance from Chamber’s economic development department

To find more small business events, contests and awards, visit our Small Business Events Calendar.
If you are putting on a small business contest, award or competition, and want to get the word out to the community, please submit it through our Small Business Event and Contests Form (it’s free).

Please note: The descriptions provided here are for convenience only and are NOT the official rules. ALWAYS read official rules carefully at the site holding the competition, contest or award.

Start The New Year By Applying for Contests and Awards

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The Art of Setting Business Resolutions for the New Year

Jan 2nd

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The more I talk to business owners, the more unique I realize I am in that I write business resolutions each New Year’s. And yes, I know everyone thinks that resolutions are bunk; after all, they never come true, right?

resolutions

I have a very specific strategy when it comes to setting resolutions, both personal and professional. It’s a well-kept secret that I’m going to share. Ready for it?

Make Them Realistic

That’s it. Honestly. People get upset when they set unrealistic resolutions (I want to become a millionaire overnight! I want to lose 30 pounds without exercising!), and they blame it on the resolutions themselves. But resolutions (call them goals, if you like) are only the tools to organize your thoughts toward what you want to happen.

Make Them Auantifiable

Last year, I set a resolution to attend at least two local business events a quarter. That’s easily quantified, and easy enough to measure. There’s no vagueness in what I wanted, and I can only blame myself if I didn’t meet this goal. If your goals are about the number of new clients you want in 2012, or how much you want revenue to increase, assign a number to it. Go on. Don’t be afraid. Make it a number that’s reasonable to achieve, but still just a bit out of reach so that you have to stretch to achieve it.

Don’t Sit Around

Resolutions don’t just come true by themselves. You’ve got to create action items to achieve them. For instance, if I want to increase sales by 30 percent in 2012, what can I do to make sure that happens? Action items might look like this:

Increase marketing spend on social media, blogging and advertising by 30 percent.
Send marketing staff to a minimum of one trade show each quarter.
Guest blog on two new blogs each month.

Your list of action items will look different than mine. Just ask yourself: How can we achieve this resolution? Who’s involved? And make sure you assign the task to the person who will help get it done.

Don’t Expect Miracles

Every year, I list “hire a full time employee” on my resolutions for my company. So far, it hasn’t happened. But that doesn’t mean I can’t keep trying. This year, I added four freelancers–who, in all honesty, probably equal one full-time staffer. So I’m getting there. I’m not afraid to shoot for the moon, but when I fall short of my resolution, I dust myself off and start on next year’s list.

Here are a few of the resolutions I’m making for 2012:

Find four more small business blogging clients.
Delegate 20 percent more of my work to my writers.
(Really) stop working at 3 p.m. each day.

Do me a favor. Share at least one of your business’s resolutions for 2012 below in the comments. Let’s commit together to making them become realities!

Resolutions Photo via Shutterstock

The Art of Setting Business Resolutions for the New Year

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The Five Most Engaging Podcasts of the Year

Dec 30th

Posted by Home Wealth Project in Marketing Tips

The Five Most Engaging Podcasts of the Year

This content from: Duct Tape Marketing

marketing podcast I’ve been recording podcast interviews since some time in 2005 and it’s one of my favorite things to do. The show has opened some pretty cool doors and allowed me to meet some very cool people.

This year I met the likes of Harvey MacKay, Stephen Pressfield, Eric Reis, Derek Sivers, Kevin Kelly and Hugh MacLeod through my podcast and reconnected with old friends such as Seth Godin, Guy Kawasaki, Chris Brogan, David Meerman Scott, Peter Shankman and Scott Ginsberg.

The following five episodes make up what you my readers called my most engaging shows of the year.

1) Anything You Want

This week’s guest on the Duct Tape Marketing Podcast is Derek Sivers, founder of CDBaby and author of Anything You Want 40 Lessons (When you buy any version of the book you can grab 200 musical downloads as a gift from Derek too!)

2) The New New New Rules of Marketing and PR

My good friend David Meerman Scott stopped by the Duct Tape Marketing Podcast recently to talk about the release of the 3rd Edition of his mega best selling book The New Rules of Marketing and PR. This book changed the way many people think about marketing and has remained on many a “must read” list since it was first released.

3) 5 Google Plus Tips and Chris Brogan

For this week’s episode of the Duct Tape Marketing Podcast I grabbed a few minutes with Chris Brogan. Chris is the founder of Human Business Works, writes and speaks on all things related to social media and is a documented Google Plus fanboy.

4) 5 Types of Content That Every Business Must Employ

The creation and distribution of content has become such a significant aspect of effective marketing that it requires a high place in the strategy conversation in most every business.

Some might go as far as to suggest content marketing has become the most effective way to build a business.

5) Understanding the Most Fundamental Shift in Marketing

When I want to make marketing extremely easy to understand, I sit small business owners down in front of the above graphic and have them fill in some process, touchpoint, campaign, product of service in each of the seven blanks. The idea behind this graphic I call the Marketing Hourglass is that marketing is no longer a hunt and close business, it’s a be found, build trust, nurture, wow and refer business.

View full post on Small Business Marketing Blog from Duct Tape Marketing

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Small Business Story of the Year: The Rise of Alternative Lending

Dec 30th

Supporting small business was among the top economic stories of the year, and the rise in lending to those growing companies was the most important development in 2011.

pirate story

It’s a story we saw developing since the credit crunch tightened the spigots on funding for small businesses. When the big banks said no, small banks and non-bank lenders increasingly said yes. Over the course of 2011, big banks rejected loan applications about 90 percent of the time. Smaller banks approved nearly half of small business funding requests, while alternative lenders granted approvals more often than not.

Many people ask me, “Who are the alternative lenders?” They are comprised of credit unions, CDFIs, micro lenders and accounts receivable financers.

Credit Unions
A credit union is a cooperative, not-for-profit financial institution owned and controlled by its members. Credit unions are established and operated for the purpose of promoting thrift and providing credit at competitive rates and other financial services to their membership. They are locally focused and lend at reasonable rates, which accounts for their tremendous growth in small business lending in 2011.

Credit unions are becoming more aggressive in soliciting deposits and are seeking to double the 12.5 percent cap on small business lending set by the government. The National Association of Federal Credit Unions (NAFCU) provides a list of its members online.

Community Development Financial Institutions (CDFI)
Community Development Financial Institutions are financing entities that have a primary mission of community development. Established by the Reigle Community Development and Regulatory Improvement Act of 1994, CDFIs are certified by the Treasury Department, which provides funds to them through a variety of programs. Biz2Credit has helped numerous small business owners in New York to get funding from the New York Business Development Corporation (NYBDC).

The organization helps provide term loans to small businesses that sometimes are unable to meet the requirements for traditional financing. In many cases the financing incorporates multiple participations, SBA guarantees, flexible amortization and long-term payouts.

NYBDC also manages the Empire State Certified Development Corporation (“The 504 Company”), which is licensed by the Small Business Administration (SBA) to provide SBA 504 Loans that are designed to stimulate economic development and spur job creation for eligible New York State businesses.

Micro Lenders
Micro lenders provide small loans designed to spur entrepreneurship in economically disadvantaged areas. Often they are granted to women and minority entrepreneurs and to companies that have been established in economic empowerment zones. Often the startup businesses in these neighborhoods are created by individuals who lack collateral or a long credit history and therefore are unable to meet even the most minimal qualifications of traditional creditors.

ACCION USA is a microfinance organization that lends with the mission of empowering business owners with access to working capital and financial education. ACCION offers business loans up to $50,000 and financial education throughout the U.S. and specializes in working with small business owners who cannot borrow from the bank due to business type, a short length of time in business, or an insufficient credit history.

Accounts Receivable (AR) Lenders
Accounts Receivable (AR) financers — often known as “factors” — purchase a company’s accounts receivable, at a discount, to provide them with working capital when they need it. With factoring, financing is provided to the seller of the accounts in the form of a cash “advance,” often 70-85% of the purchase price of the accounts. The balance of the purchase price is paid upon collection, often as a percentage of credit card transactions. Interest rates generally are higher with factoring.

However, the lender is assuming a higher level of risk, which justifies the return. Many times, small business owners who have little or no credit history or who need a lot of money quickly turn to AR financers. In the past few months, my company has connected a number of entrepreneurs with lenders such as Cash Advance Network (CAN), the largest lender in this category.

In November, so-called alternative lenders approved 62 percent of small business funding requests in November, a rise from the 61.8 percent during October, according to the Biz2Credit Small Business Lending Index, an analysis of 1,000 loan applications.

Among alternative lenders, credit unions granted 57 percent of small business funding requests, up from 56.6 percent in October. Meanwhile, loan approvals by small banks were 47 percent in November and approvals by large banks reached 10 percent in November — for the first time since April.

Overall, I believe optimism is returning in the credit marketplace. We have seen a steady increase in loan applications, a good sign for the economy. We can all hope that this momentum in the fourth quarter of 2011 bodes well for the coming year.

Money Story Photo via Shutterstock

Small Business Story of the Year: The Rise of Alternative Lending

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The Greatest Hits of the Entire Year

Dec 28th

Posted by Home Wealth Project in Marketing Tips

The Greatest Hits of the Entire Year

This content from: Duct Tape Marketing

For this year end post I thought I would rummage through the entire stock of posts from the year and pick 11 for 2011. I picked the top 11 that you the readers reacted to most through your tweets, likes, comments and shares.

Lists and how to info are still very popular, social media topics still draw lots of links and this year you responded to some of my more personal musings about purpose and meaning in business.

I love what I do and particularly love the interaction I have with you my readers.

Keep letting me know both when I lift you up and let you down and we’ll all try to figure this thing out together.

Peace! – John

Will 2012 Be the Year to Sell Your Small Business?

Dec 19th

For a few years now, small business owners have been waiting for the long-discussed economic recovery to finally happen. While these owners certainly look forward to the uptick in business, stronger top-line revenues and improved profitability could also spur them to finally consider selling their businesses. The fact remains that many proprietors still see their business’s current value as too low to plan a financially successful exit.

for sale

We’ve seen some slight improvements in the business-for-sale market recently, but not enough to cause a significant jump in the number of businesses for sale. Many sellers who’ve been waiting for the right time to exit have weathered the downturn and are now ready to sell.

Will 2012 be the year to do it?

The short answer is “perhaps.” BizBuySell’s quarterly insights data continues to show year-over-year increases in the number of closed transactions reported (although these are still down 30 to 40 percent compared to the boom in late 2007 and early 2008). Banks continue to slowly improve lending options, and both sellers and buyers are more aware of financing solutions to help close a deal. So with some optimism ahead, what should potential sellers be doing to prepare?

Start Planning Now

Business buyers are going to do their research before signing off on a sale. That means as the seller, you need to prove your business is valued correctly. First on the list is to review and set straight all your financial records. Be able to provide at least three years of documents, including tax returns, expense records and key data like customer lists and lease agreements. These will not only support your asking price, but also help bolster the buyer’s confidence that you, the current owner, have operated a well-managed business. Eliminating any ongoing business concerns will also help build this confidence. Issues like short-term leases, a reliance on one or a few key customers, and pending legal issues can endanger the sale; they should be resolved before listing your business for sale.

Remember to keep up the physical elements of your business as well. When a potential buyer visits, the physical appearance of your building or equipment will make a big impression. If it appears that the business assets need updating, the buyer will likely use that as a reason to lower the offer. So make sure to clean up, upgrade inside and out, and invest in any building or equipment improvements you’ve been considering. The less work a new buyer has to put in, the more you can expect from your final selling price.

Research the Market

Knowing where your business stands in the market will be the key to setting an effective asking price. No one wants to undervalue their business and end up netting less money than it is really worth. On the other hand, being too confident and asking for a price well above the actual value (or the value of comparable businesses) will result in a long, drawn out sales process. The economy is showing signs of improvement, a 0.4 percent decrease in unemployment for November 2011, and business values are beginning to rise, but don’t make the mistake of asking pre-recession prices. Buyers will often have no problem paying for a strong business, but they will still scoff at overvalued listings.

So how do you find the right price? The best way is to simply compare your business to others. Do some research for similar businesses for sale. Business-for-sale marketplaces allow you to search businesses by industry, size and location. Finding what comparable business are listed and have sold for recently will be a good starting point in setting the price of your business. You can also purchase a low-cost valuation report from BizBuySell (Disclosure: I am the Group General Manager of BizBuySell) which will allow you to see the results (selling price and multiples of cash flow and revenue that the businesses sold for) of recently sold businesses in your industry and location. These can provide great insight into the best estimated value of your small business.

Bottom line, be honest with yourself. Go over financials and determine what buyers will notice. If revenue or profits are down, take that into consideration. Your overall pricing goal should be to attract multiple buyers, creating maximum demand and an auction-like atmosphere. Overpricing your business will kill any chances of that happening.

Spread the Word

After you determine a fair listing price, the next step is to find potential buyers. As the economy improves, this will prove even more essential. With more business owners looking to sell and more buyers on the market due to ongoing high unemployment and increased bank lending, grabbing the attention of potential buyers will be tougher than ever. Business owners who can show buyers that their business is superior to the competition should enjoy a successful sales process and outcome.

The best way to do that is to hire an experienced business broker to help you market the business. Check references to make sure the broker is accomplished in selling businesses in the area and in your industry. Also, make sure to investigate references outside of the ones he or she provides.

If you choose not to hire a broker, be aggressive with your marketing plans. Post your listing on websites to reach buyers actively searching for businesses to buy. Also utilize your trade association and appropriate trade publications who might run the information. And finally, don’t forget to reach out to your network of family, friends and work contacts who might know of interested buyers. If maintaining confidentiality about your potential business sale is important to you, then a business broker may be your best option to successfully market your business while keeping the sale under wraps.

Expect to Offer Financing

We’ve noted that the economy is improving but banks still almost always require seller financing as part of any deal they fund. This means you won’t simply be handed a large check and be done with the sale. Most likely, you’ll get some portion of the sale amount upfront and the rest (likely 20 to 40 percent) will be paid over time, with interest. The upshot is that you will remain connected to your business after sale helping to ensure a smooth transition. This is usually a three- to 12-month period where you effectively transition the operations to the new owner and help train him or her how to be successful managing the business. Potential buyers will also be encouraged to hear you’re willing to stay on. They’ll be more likely to make an offer, and you’ll be able to make sure the buyer continues to turn a profit, ensuring they can make the long-term payments.

If you’ve been considering a sale in 2012, take your time and do it right. Plan ahead, research your market and stand out from the competition. Knowing the sales process is half the battle. With proper preparation, you can ensure a stress free transition and a financially successful exit from your business.

Image from Andy Dean Photography/Shutterstock