Small Business Loan Requirements – and How to Meet Them

Small Business Loan Requirements - and How to Meet Them

Reeling from these tough economic times, you may be considering a loan for your business for the first time.

How do you get a small business loan? Should you apply to an online lender? Try to get a loan through a bank? Go through the Small Business Administration (SBA) for financing?

Many loan requirements are the same for the application process. Lenders and the SBA have specific conditions you must meet in order to get a loan. But with some loans and lenders, there is a protection program to ensure that you are safe.

An SBA loan may have special requirements that differ from the requirements of traditional loans. Every lender uses certain evaluations to determine your ability to repay.

Lenders look at bank statements, assets in the business, financial statements, debt service coverage ratio, and personal and business credit score (present and history). Lenders also want you to have a sound business plan.

Get Your Ducks in a Row

Did you ever change the business name, physical address, or phone number? Are these changes on past bank statements, tax forms, incorporation papers, utility bills, and websites?

In other words, Joanie’s Pet Sitting is not the same as Joanie’s Pet Sitting LLC. Joanie’s Pet Sitting, Virginia Beach is not the same as Joanie’s Pet Sitting, Norfolk.

If a business name, address, or phone number changes, the change should be made on every license and document related to the business. You can’t rewrite former financial records. But you can include documentation that supports the business history. You can include a letter of explanation as well.

The main concern of a lender is to determine your ability to repay the loan. Here’s a look at the key pieces of the loan application puzzle.

Top 8 Small Business Loan Requirements

Here are the top 8 small business loan requirements and how to qualify for a loan:

Personal Credit Score

Your personal credit score carries a lot of weight in the business loan application process. For many types of business loans, when you as the owner of the business sign on the dotted line, you are guaranteeing payment of the loan.

This is especially true with fledgling small businesses that are still building a history of tax returns. Don’t worry if your business is relatively new. You may still get a loan if you have an excellent personal credit score and all the business owners have good credit scores. If your business has multiple owners, the lender may want to see a credit score from each. The loan amount will be closely tied to those scores.

Some lenders may require the business to be operational for a minimum of 2 years. If the business has 2 or more years behind it, lenders may look at a business credit score. That score comes from a business credit bureau, such as Dun & Bradstreet.

Action to take: Before applying, business owners should check their personal credit score to make sure all the information is correct. Get credit scores from each owner. Clear up any inaccuracies. Some credit report monitoring services have suggestions for improving your score, and you may be able to bump your score up a bit if you have time. In borderline cases, it could be enough to net you a better interest rate or other terms.

Work to improve your credit score. Schedule payments to make sure you make them on time, reduce your debt, open a business credit card and keep you utilization of available credit low.

Bank Statements and Ratings

What do lenders look for when they examine your bank records? Lenders look at seasonal fluctuations in income, debt to income ratio (see below), and tax obligations.

When you’re borrowing from a bank, the bank will assign a rating. The rating is the total amount of borrowing capacity you have from that bank.

The date you opened a business bank account is used as the start date for your business. The longer your business has been established, the more likely you are to qualify for a loan.

There are contributing factors to favorable bank ratings. Ideally, your average daily balance should be above $10,000 for 3 months. Manage your bank accounts to keep the average daily balance as high as possible. Avoid overdrawing your account, and set up overdraft protection.

It’s not enough to just have the money sitting there. Your business should be generating a steady volume of regular deposits.

You also should have a bank reference, who is the person you work with at the bank. In other words, a person who will vouch for you as bank officials consider your loan.

Revenue/Balance Sheet

Of course, revenue is important. A business must make money to stay afloat, and pay the requested loan.

But revenue is just one of the important numbers that help businesses get loans. Revenue is part of a balance sheet.

The balance sheet includes assets, liability and owner equity. The assets of businesses are subtracted from the liabilities of businesses. The calculated amount of owner equity is added to that number. That number is an estimate of what the business is worth. That number must be reasonable in comparison to the loan amount sought.

Action to take: Chip away at the amount of liability every chance you get. It’s a lot like paying off a credit card. Just paying interest keeps you treading water. Applying even a small amount of money monthly to principal debt will show a positive change and attention to the health of the business.

Debt-to-Income Ratio / Cash Flow

Think of the balance sheet as a snapshot of your business. The debt-to-income ratio, or cash flow, is a monthly snapshot.

Each month, after expenses are paid, how much money is left? This number shows the lender how much of a loan payment you may be able to handle monthly.

Lenders may also do a comparison of accounts receivable to accounts payable. You won’t be able to “pick your best month” as an example. The lender will do that comparison the month you are asking for a business loan.

What’s the number that a lender wants to see for a debt service coverage ratio? A lender typically wants to arrive at a calculation that is less than 1.25 or 1.35 times your expenses. That calculation of expenses will include the payments you’d be making on the loan you are seeking.

How does the lender get to that debt service coverage ratio number? Typically, the lender divides the annual net operating income by the total principal and interest of all debt obligations.

Here are the highlights of what a lender will analyze: gross margin, cash flow, debt to equity ratio, accounts payable, accounts receivable and earnings (before interest, taxes, depreciation and amortization).

Lenders prefer to see financial statements that have been audited by a certified public accountant. You can have financials reviewed by a CPA – which is faster and cheaper – but some lenders require audited financials. Find out what the lender requires.

Action to take: Accounts receivable will only include goods or services that have already been invoiced. Make sure you are invoicing promptly. And of course, make sure you are paying your bills promptly. Proving that you are up to date with sending out bills and paying bills shows the lender that you have a good process in place for money management.

2+ Years in Business

For a Small Business Administration lump-sum loan, your business has to have been running for 2 years. There are SBA loans that don’t have that requirement, such as many of the line-of-credit loans and the SBA microloans.

To get a business loan from the SBA, you’ll need to present tax returns for the past two years that prove the existence of the business.

Action to take: Organize your tax returns. Put them on a disc or into another format that is easy to provide to a lender. Provide a business credit report. Provide the applicant’s credit report and get copies of the credit scores of all owners.

Type of Industry

To get an SBA loan, businesses must meet the requirements according to the SBA’s definitions of small business. Those definitions vary by type of industry.

The SBA definition of small business is two-part: by the number of employees or by the average annual receipts (gross income).

The gross income is averaged over 3 to 5 years. If the business hasn’t been around for more than a year, the gross income is calculated by the average weekly income times 52.

The number of employees is calculated as the average number of employees per pay period. This includes part-time employees. The average is calculated using a 12-month period.

For a look at the SBA requirements under the type of industry, go to https://ift.tt/38iRGnY. It’s an interesting read and may make you realize just how big or small some small businesses are.

For example, a cheese manufacturer can have up to 1,250 employees, and be considered, well, small cheese. A flower or nursery stock wholesaler may have no more than 100 employees.

Businesses can make a lot of money and still be considered small. For example, a home health company can have yearly revenue of up to $16.5 million. A baked goods store can make up to $8 million.

Action to take: If you think your business is too big for a small business loan, think again. Check the Type of Industry chart to learn the requirements. You may be pleasantly surprised to find out you can apply for a small business loan. Get familiar with the numbers for employees by the type of business. Since part-timers are also counted, you might be getting close to going over the requirements. To qualify for an SBA loan – with better rates and longer payback terms – you may consider combining part-time positions to full time.

Collateral or Assets

Not all lenders require that you put up collateral to get a loan for business use. But for those lenders that do, you may have to list assets on your loan application.

Lenders like to see assets that they can easily use (seize) if needed to cover your loan obligation if you fail to repay.

Assets include business real estate, inventory and business equipment. It’s important to know that collateral can also include funds from accounts receivable. That can include monies that have been invoiced but haven’t yet been paid to the business.

If you can’t pay the loan, the lender can seize the assets. For real estate and equipment loans, a UCC (Uniform Commercial Code) statement may be filed to claim accounts receivable and other collateral.

If you don’t have sufficient assets, a lender may require personal guarantees. This is not a good option. This type of loan backing puts your personal assets at risk as well as the assets of the company.

Action to take: Yikes! Imagining a future where you lose business real estate and inventory may give you pause as you list those items on your loan application. Scary stuff. But it’s a given that those who are confident enough to start and operate a business have already demonstrated determination and boldness. Taking out a business loan is a risk, but growth doesn’t come without risk.

Business Plan

Lenders don’t often ask to see a business plan from those seeking loans for businesses. But adding information about the plan to your application may make your business stand out from others looking for a loan.

It’s like adding a brilliant cover letter to your resume. Of course, the application information includes bank statements, information about the owner’s (or owners’) credit score.

You may also include information about the nuts and bolts of your company. Let the lender know what you do and how you make money.

Also, include information about how the loan fits into your plans for the business. Let the lender know how you place the spend the proceeds of the loan. Provide realistic financial projections for future growth

If applicable, include market information and details on the status of your business niche. Describe how demand for your products and services is growing. Make projections to predict future growth.

Action to take: As you prepare to apply for the business loan, gather the paperwork needed to document your business plan. Include bank statements, information about personal credit/credit score and business expenses. These are the black and white proof of your ability on paper to pay the loan.

Add the missing piece to make your application for a business loan stand out from others. The average person on a lender review team may have no knowledge of what your business is.

For example, let’s use a business that makes something called a Skid Plate. Piece of metal that goes under a car, huh? Would a lender want to grant a business loan for a company expansion? What if the lender knew that the Skid Plate was a patented new product, in huge demand in the race car industry, primarily NASCAR?

By adding an explanatory description of the business, you will be more likely to get a business loan.

FAQs About Qualifying for a Loan

Let’s review some quick facts about the application process for business loans.

Who Can Apply for a Small Business Loan?

Any small business can apply for a loan. You should be making a profit and have a good credit score. You should not be involved in any default action by any entity, including the US government. People in the loan business don’t like that kind of stuff.

If the business owner is going for a loan through the SBA, the requirements are different. The SBA requires that your business operates within the United States and has been operating for a minimum of 2 years. If you can’t meet those qualifications, don’t bother going through the application process.

Are Small Business Loans Hard to Get?

The business loans are not hard to get if the company has owners with good personal credit and has been making money.

If you or any of the company owners (20% ownership or more) have a bad credit score, you have little chance of getting loans through the SBA. The SBA won’t give loans to a businesses which aren’t making money. A startup entity may try for a microloan.

You may find although you were stressed out about how to land a business loan, the process was easy. If you’re already running a company, you’re good with paperwork. Or you’ve hired somebody who’s good with paperwork!

One of the main requirements for getting loans is being organized. Get your paperwork stuff together and go for it. Today you have more options than ever for getting business loans.

For more information see the Small Business Credit Survey1.

What Documentation Must I Provide?

Lenders require documentation for business loans and it varies by the type of loan. At a minimum, you will need to provide income tax returns, your credit score, bank account information, a business financial statement, and personal identification such as a driver’s license. For more information about loan paperwork, go to Business Loan Documents to Provide.

What is the Minimum Credit Score for a Small Business Loan?

Most lenders require a minimum credit score of 600-680 for a small business loan. That’s a minimum requirement for business loans from most lenders.

People who get a business loan from an online lender may be able to get around that qualification. Online lenders considering loans often value business revenue more highly. Do some shopping, as the loan amount is typically smaller with varying interest rates.

How Much Can I Borrow on a Business Loan?

The amount of money lenders award is directly connected to how much you can afford. It won’t be how much you think you can afford. It will be how much the lender determines you can afford.

That’s a good thing. A reputable lender has your back and doesn’t want you to fail.

Summing Up

It’s no shame to need a loan for your business. In fact, obtaining a loan for future expansions or growth is a standard part of nearly every business plan.

Getting a loan to expand the business is not a one time venture in a business plan. Often business owners take out and pay off a series of loans during the course of doing business. You can use the loans to finance purchases, such as real estate, equipment or fleet vehicles.

Business owners historically have borrowed about $600 billion each year, according to a study by the SBA. Typically about 40% of small company owners borrow money each year. And that doesn’t mean that business owners are landing huge loans.

The average size of a business loan, since 2016, has been about $600,000. But many of those applying for a loan borrow much less. More than half of the business applied for loans of less than $100,000.

It’s important to understand what lenders are reviewing when you apply for a loan. Understanding what’s important to get a loan will help you improve your chances, now and in the future.

Although additional paperwork is required for an SBA loan, you may be pleased to find that it is easier to qualify for one of their options. In fact, business owners often get SBA loans after being turned down for a traditional loan.

Yes, it can take some time to complete the application and get the loan. On the plus side, terms range from five to twenty-five years for paying off the loan. Loan interest rates are priced according to risk, which is also standard practice with conventional commercial loans.

No matter what type of business you have, it stands to reason that someday you’ll need a loan for improvements and growth. Take steps now that will help you qualify for a small business loan.

Information Sources

1 Fed Small Business. “Small Business Credit Survey

Image: Depositphotos.com

This article, "Small Business Loan Requirements – and How to Meet Them" was first published on Small Business Trends



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Small Business Loan Requirements – and How to Meet Them

Small Business Loan Requirements - and How to Meet Them

Reeling from these tough economic times, you may be considering a loan for your business for the first time.

How do you get a small business loan? Should you apply to an online lender? Try to get a loan through a bank? Go through the Small Business Administration (SBA) for financing?

Many loan requirements are the same for the application process. Lenders and the SBA have specific conditions you must meet in order to get a loan. But with some loans and lenders, there is a protection program to ensure that you are safe.

An SBA loan may have special requirements that differ from the requirements of traditional loans. Every lender uses certain evaluations to determine your ability to repay.

Lenders look at bank statements, assets in the business, financial statements, debt service coverage ratio, and personal and business credit score (present and history). Lenders also want you to have a sound business plan.

Get Your Ducks in a Row

Did you ever change the business name, physical address, or phone number? Are these changes on past bank statements, tax forms, incorporation papers, utility bills, and websites?

In other words, Joanie’s Pet Sitting is not the same as Joanie’s Pet Sitting LLC. Joanie’s Pet Sitting, Virginia Beach is not the same as Joanie’s Pet Sitting, Norfolk.

If a business name, address, or phone number changes, the change should be made on every license and document related to the business. You can’t rewrite former financial records. But you can include documentation that supports the business history. You can include a letter of explanation as well.

The main concern of a lender is to determine your ability to repay the loan. Here’s a look at the key pieces of the loan application puzzle.

Top 8 Small Business Loan Requirements

Here are the top 8 small business loan requirements and how to qualify for a loan:

Personal Credit Score

Your personal credit score carries a lot of weight in the business loan application process. For many types of business loans, when you as the owner of the business sign on the dotted line, you are guaranteeing payment of the loan.

This is especially true with fledgling small businesses that are still building a history of tax returns. Don’t worry if your business is relatively new. You may still get a loan if you have an excellent personal credit score and all the business owners have good credit scores. If your business has multiple owners, the lender may want to see a credit score from each. The loan amount will be closely tied to those scores.

Some lenders may require the business to be operational for a minimum of 2 years. If the business has 2 or more years behind it, lenders may look at a business credit score. That score comes from a business credit bureau, such as Dun & Bradstreet.

Action to take: Before applying, business owners should check their personal credit score to make sure all the information is correct. Get credit scores from each owner. Clear up any inaccuracies. Some credit report monitoring services have suggestions for improving your score, and you may be able to bump your score up a bit if you have time. In borderline cases, it could be enough to net you a better interest rate or other terms.

Work to improve your credit score. Schedule payments to make sure you make them on time, reduce your debt, open a business credit card and keep you utilization of available credit low.

Bank Statements and Ratings

What do lenders look for when they examine your bank records? Lenders look at seasonal fluctuations in income, debt to income ratio (see below), and tax obligations.

When you’re borrowing from a bank, the bank will assign a rating. The rating is the total amount of borrowing capacity you have from that bank.

The date you opened a business bank account is used as the start date for your business. The longer your business has been established, the more likely you are to qualify for a loan.

There are contributing factors to favorable bank ratings. Ideally, your average daily balance should be above $10,000 for 3 months. Manage your bank accounts to keep the average daily balance as high as possible. Avoid overdrawing your account, and set up overdraft protection.

It’s not enough to just have the money sitting there. Your business should be generating a steady volume of regular deposits.

You also should have a bank reference, who is the person you work with at the bank. In other words, a person who will vouch for you as bank officials consider your loan.

Revenue/Balance Sheet

Of course, revenue is important. A business must make money to stay afloat, and pay the requested loan.

But revenue is just one of the important numbers that help businesses get loans. Revenue is part of a balance sheet.

The balance sheet includes assets, liability and owner equity. The assets of businesses are subtracted from the liabilities of businesses. The calculated amount of owner equity is added to that number. That number is an estimate of what the business is worth. That number must be reasonable in comparison to the loan amount sought.

Action to take: Chip away at the amount of liability every chance you get. It’s a lot like paying off a credit card. Just paying interest keeps you treading water. Applying even a small amount of money monthly to principal debt will show a positive change and attention to the health of the business.

Debt-to-Income Ratio / Cash Flow

Think of the balance sheet as a snapshot of your business. The debt-to-income ratio, or cash flow, is a monthly snapshot.

Each month, after expenses are paid, how much money is left? This number shows the lender how much of a loan payment you may be able to handle monthly.

Lenders may also do a comparison of accounts receivable to accounts payable. You won’t be able to “pick your best month” as an example. The lender will do that comparison the month you are asking for a business loan.

What’s the number that a lender wants to see for a debt service coverage ratio? A lender typically wants to arrive at a calculation that is less than 1.25 or 1.35 times your expenses. That calculation of expenses will include the payments you’d be making on the loan you are seeking.

How does the lender get to that debt service coverage ratio number? Typically, the lender divides the annual net operating income by the total principal and interest of all debt obligations.

Here are the highlights of what a lender will analyze: gross margin, cash flow, debt to equity ratio, accounts payable, accounts receivable and earnings (before interest, taxes, depreciation and amortization).

Lenders prefer to see financial statements that have been audited by a certified public accountant. You can have financials reviewed by a CPA – which is faster and cheaper – but some lenders require audited financials. Find out what the lender requires.

Action to take: Accounts receivable will only include goods or services that have already been invoiced. Make sure you are invoicing promptly. And of course, make sure you are paying your bills promptly. Proving that you are up to date with sending out bills and paying bills shows the lender that you have a good process in place for money management.

2+ Years in Business

For a Small Business Administration lump-sum loan, your business has to have been running for 2 years. There are SBA loans that don’t have that requirement, such as many of the line-of-credit loans and the SBA microloans.

To get a business loan from the SBA, you’ll need to present tax returns for the past two years that prove the existence of the business.

Action to take: Organize your tax returns. Put them on a disc or into another format that is easy to provide to a lender. Provide a business credit report. Provide the applicant’s credit report and get copies of the credit scores of all owners.

Type of Industry

To get an SBA loan, businesses must meet the requirements according to the SBA’s definitions of small business. Those definitions vary by type of industry.

The SBA definition of small business is two-part: by the number of employees or by the average annual receipts (gross income).

The gross income is averaged over 3 to 5 years. If the business hasn’t been around for more than a year, the gross income is calculated by the average weekly income times 52.

The number of employees is calculated as the average number of employees per pay period. This includes part-time employees. The average is calculated using a 12-month period.

For a look at the SBA requirements under the type of industry, go to https://ift.tt/38iRGnY. It’s an interesting read and may make you realize just how big or small some small businesses are.

For example, a cheese manufacturer can have up to 1,250 employees, and be considered, well, small cheese. A flower or nursery stock wholesaler may have no more than 100 employees.

Businesses can make a lot of money and still be considered small. For example, a home health company can have yearly revenue of up to $16.5 million. A baked goods store can make up to $8 million.

Action to take: If you think your business is too big for a small business loan, think again. Check the Type of Industry chart to learn the requirements. You may be pleasantly surprised to find out you can apply for a small business loan. Get familiar with the numbers for employees by the type of business. Since part-timers are also counted, you might be getting close to going over the requirements. To qualify for an SBA loan – with better rates and longer payback terms – you may consider combining part-time positions to full time.

Collateral or Assets

Not all lenders require that you put up collateral to get a loan for business use. But for those lenders that do, you may have to list assets on your loan application.

Lenders like to see assets that they can easily use (seize) if needed to cover your loan obligation if you fail to repay.

Assets include business real estate, inventory and business equipment. It’s important to know that collateral can also include funds from accounts receivable. That can include monies that have been invoiced but haven’t yet been paid to the business.

If you can’t pay the loan, the lender can seize the assets. For real estate and equipment loans, a UCC (Uniform Commercial Code) statement may be filed to claim accounts receivable and other collateral.

If you don’t have sufficient assets, a lender may require personal guarantees. This is not a good option. This type of loan backing puts your personal assets at risk as well as the assets of the company.

Action to take: Yikes! Imagining a future where you lose business real estate and inventory may give you pause as you list those items on your loan application. Scary stuff. But it’s a given that those who are confident enough to start and operate a business have already demonstrated determination and boldness. Taking out a business loan is a risk, but growth doesn’t come without risk.

Business Plan

Lenders don’t often ask to see a business plan from those seeking loans for businesses. But adding information about the plan to your application may make your business stand out from others looking for a loan.

It’s like adding a brilliant cover letter to your resume. Of course, the application information includes bank statements, information about the owner’s (or owners’) credit score.

You may also include information about the nuts and bolts of your company. Let the lender know what you do and how you make money.

Also, include information about how the loan fits into your plans for the business. Let the lender know how you place the spend the proceeds of the loan. Provide realistic financial projections for future growth

If applicable, include market information and details on the status of your business niche. Describe how demand for your products and services is growing. Make projections to predict future growth.

Action to take: As you prepare to apply for the business loan, gather the paperwork needed to document your business plan. Include bank statements, information about personal credit/credit score and business expenses. These are the black and white proof of your ability on paper to pay the loan.

Add the missing piece to make your application for a business loan stand out from others. The average person on a lender review team may have no knowledge of what your business is.

For example, let’s use a business that makes something called a Skid Plate. Piece of metal that goes under a car, huh? Would a lender want to grant a business loan for a company expansion? What if the lender knew that the Skid Plate was a patented new product, in huge demand in the race car industry, primarily NASCAR?

By adding an explanatory description of the business, you will be more likely to get a business loan.

FAQs About Qualifying for a Loan

Let’s review some quick facts about the application process for business loans.

Who Can Apply for a Small Business Loan?

Any small business can apply for a loan. You should be making a profit and have a good credit score. You should not be involved in any default action by any entity, including the US government. People in the loan business don’t like that kind of stuff.

If the business owner is going for a loan through the SBA, the requirements are different. The SBA requires that your business operates within the United States and has been operating for a minimum of 2 years. If you can’t meet those qualifications, don’t bother going through the application process.

Are Small Business Loans Hard to Get?

The business loans are not hard to get if the company has owners with good personal credit and has been making money.

If you or any of the company owners (20% ownership or more) have a bad credit score, you have little chance of getting loans through the SBA. The SBA won’t give loans to a businesses which aren’t making money. A startup entity may try for a microloan.

You may find although you were stressed out about how to land a business loan, the process was easy. If you’re already running a company, you’re good with paperwork. Or you’ve hired somebody who’s good with paperwork!

One of the main requirements for getting loans is being organized. Get your paperwork stuff together and go for it. Today you have more options than ever for getting business loans.

For more information see the Small Business Credit Survey1.

What Documentation Must I Provide?

Lenders require documentation for business loans and it varies by the type of loan. At a minimum, you will need to provide income tax returns, your credit score, bank account information, a business financial statement, and personal identification such as a driver’s license. For more information about loan paperwork, go to Business Loan Documents to Provide.

What is the Minimum Credit Score for a Small Business Loan?

Most lenders require a minimum credit score of 600-680 for a small business loan. That’s a minimum requirement for business loans from most lenders.

People who get a business loan from an online lender may be able to get around that qualification. Online lenders considering loans often value business revenue more highly. Do some shopping, as the loan amount is typically smaller with varying interest rates.

How Much Can I Borrow on a Business Loan?

The amount of money lenders award is directly connected to how much you can afford. It won’t be how much you think you can afford. It will be how much the lender determines you can afford.

That’s a good thing. A reputable lender has your back and doesn’t want you to fail.

Summing Up

It’s no shame to need a loan for your business. In fact, obtaining a loan for future expansions or growth is a standard part of nearly every business plan.

Getting a loan to expand the business is not a one time venture in a business plan. Often business owners take out and pay off a series of loans during the course of doing business. You can use the loans to finance purchases, such as real estate, equipment or fleet vehicles.

Business owners historically have borrowed about $600 billion each year, according to a study by the SBA. Typically about 40% of small company owners borrow money each year. And that doesn’t mean that business owners are landing huge loans.

The average size of a business loan, since 2016, has been about $600,000. But many of those applying for a loan borrow much less. More than half of the business applied for loans of less than $100,000.

It’s important to understand what lenders are reviewing when you apply for a loan. Understanding what’s important to get a loan will help you improve your chances, now and in the future.

Although additional paperwork is required for an SBA loan, you may be pleased to find that it is easier to qualify for one of their options. In fact, business owners often get SBA loans after being turned down for a traditional loan.

Yes, it can take some time to complete the application and get the loan. On the plus side, terms range from five to twenty-five years for paying off the loan. Loan interest rates are priced according to risk, which is also standard practice with conventional commercial loans.

No matter what type of business you have, it stands to reason that someday you’ll need a loan for improvements and growth. Take steps now that will help you qualify for a small business loan.

Information Sources

1 Fed Small Business. “Small Business Credit Survey

Image: Depositphotos.com

This article, "Small Business Loan Requirements – and How to Meet Them" was first published on Small Business Trends



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67% of Companies Expect Work From Home to Be Permanent or Long-Lasting

Work from Home Permanently Survey

About two-thirds of businesses that have adopted remote work policies as a result of COVID-19 plan to keep at least some of those policies in place long-term or permanently, according to a recent study.

The pandemic has forced more businesses than ever to rapidly adopt a work from home model. And though some may have struggled to adjust at first, many are now reaping the benefits of such policies — and that may lead to a permanent shift in working conditions across industries.

Work from Home Permanently Survey

Moe Vela, Chief Transparency Officer of TransparentBusiness, a remote workforce management solution, said in a phone interview with Small Business Trends, “This is truly an unprecedented situation that has led businesses to have no choice but to adopt a remote workforce model. But then what companies are seeing is that it works. Everybody wins with a remote workforce model.”

For small businesses, the benefits are numerous. You get to save money on office space, equipment, supplies, and utilities by allowing employees to work remotely. You can also enjoy improved morale and productivity by giving your team the flexibility to set their own schedule, while still keeping them on task using remote workforce management tools.

Remote work also opens up the talent pool wider than ever for small businesses. Instead of only looking at candidates in your immediate area who have the ability to travel to and from an office each day, you can consider pretty much everyone. That includes single moms who couldn’t otherwise work outside the home, people with disabilities and mobility challenges, those who can’t drive or afford transportation, and people who live outside your geographic area.

Not only does this lead to a more diverse workforce, but it also gives businesses access to more talent than ever.

Then there are the employees, many of whom appreciate the flexibility of their new schedules and the ability to save time on their daily commute. In fact, 98% of remote workers in Buffer’s annual State of Remote Work Survey said they would like to continue working remotely.

So with more and more people getting a taste of remote work, there may be an even larger call for businesses to adopt these policies to attract top talent. Vela even believes that remote work opportunities may become a part of many companies’ benefits packages going forward.

Ready for Remote Work?

Of course, remote work currently is mainly suited for information and computer based workers. Other businesses may not have the ability to support a remote workforce at the moment. And others still may want to slowly transition to fully remote work by letting employees work from home part time or just letting certain people telecommute.

Vela says that employees at these companies that aren’t fully on board with remote work just yet shouldn’t be afraid to speak up — just be prepared to back up your requests.

He says, “For employees who want the ability to continue working remotely, don’t be afraid to ask your employer, respectfully and gratefully of course. Just be prepared to show them that you’ve been effective. Give them evidence that you can be productive so they have no excuse or reason to not let you do it.”

The study that found two thirds of companies are considering adopting long-term remote work policies was performed by 451 Research, a unit of S&P Global Market Intelligence. The organization polled 575 decision makers across industries. It also found that 80 percent of organizations have expanded work from home policies due to COVID-19.

Work from Home Trend Growing

This is just one in a long line of recent studies that has found the business community trending toward remote work. And major companies like Square and Twitter have announced remote work policies that will continue post-COVID-19. So it seems clear that even once businesses are widely able to reopen, the workforce may look entirely different — and not necessarily in a bad way.

READ MORE: 

Image: Depositphotos.com

This article, "67% of Companies Expect Work From Home to Be Permanent or Long-Lasting" was first published on Small Business Trends



via Small Business Trends Business Feeds

67% of Companies Expect Work From Home to Be Permanent or Long-Lasting

Work from Home Permanently Survey

About two-thirds of businesses that have adopted remote work policies as a result of COVID-19 plan to keep at least some of those policies in place long-term or permanently, according to a recent study.

The pandemic has forced more businesses than ever to rapidly adopt a work from home model. And though some may have struggled to adjust at first, many are now reaping the benefits of such policies — and that may lead to a permanent shift in working conditions across industries.

Work from Home Permanently Survey

Moe Vela, Chief Transparency Officer of TransparentBusiness, a remote workforce management solution, said in a phone interview with Small Business Trends, “This is truly an unprecedented situation that has led businesses to have no choice but to adopt a remote workforce model. But then what companies are seeing is that it works. Everybody wins with a remote workforce model.”

For small businesses, the benefits are numerous. You get to save money on office space, equipment, supplies, and utilities by allowing employees to work remotely. You can also enjoy improved morale and productivity by giving your team the flexibility to set their own schedule, while still keeping them on task using remote workforce management tools.

Remote work also opens up the talent pool wider than ever for small businesses. Instead of only looking at candidates in your immediate area who have the ability to travel to and from an office each day, you can consider pretty much everyone. That includes single moms who couldn’t otherwise work outside the home, people with disabilities and mobility challenges, those who can’t drive or afford transportation, and people who live outside your geographic area.

Not only does this lead to a more diverse workforce, but it also gives businesses access to more talent than ever.

Then there are the employees, many of whom appreciate the flexibility of their new schedules and the ability to save time on their daily commute. In fact, 98% of remote workers in Buffer’s annual State of Remote Work Survey said they would like to continue working remotely.

So with more and more people getting a taste of remote work, there may be an even larger call for businesses to adopt these policies to attract top talent. Vela even believes that remote work opportunities may become a part of many companies’ benefits packages going forward.

Ready for Remote Work?

Of course, remote work currently is mainly suited for information and computer based workers. Other businesses may not have the ability to support a remote workforce at the moment. And others still may want to slowly transition to fully remote work by letting employees work from home part time or just letting certain people telecommute.

Vela says that employees at these companies that aren’t fully on board with remote work just yet shouldn’t be afraid to speak up — just be prepared to back up your requests.

He says, “For employees who want the ability to continue working remotely, don’t be afraid to ask your employer, respectfully and gratefully of course. Just be prepared to show them that you’ve been effective. Give them evidence that you can be productive so they have no excuse or reason to not let you do it.”

The study that found two thirds of companies are considering adopting long-term remote work policies was performed by 451 Research, a unit of S&P Global Market Intelligence. The organization polled 575 decision makers across industries. It also found that 80 percent of organizations have expanded work from home policies due to COVID-19.

Work from Home Trend Growing

This is just one in a long line of recent studies that has found the business community trending toward remote work. And major companies like Square and Twitter have announced remote work policies that will continue post-COVID-19. So it seems clear that even once businesses are widely able to reopen, the workforce may look entirely different — and not necessarily in a bad way.

READ MORE: 

Image: Depositphotos.com

This article, "67% of Companies Expect Work From Home to Be Permanent or Long-Lasting" was first published on Small Business Trends



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86% of Consumers Want a Local Business to Continue Pandemic Services Like Curbside Pickup

Curbside Pickup

New research is finding Americans like social distance services like curbside pickup. And they want them to continue even after the pandemic is over.

The State of Local Business survey from Podium reports that 84% of respondents have used tech-enables services like contactless payments too. The vast majority (86%) expect they will continue.

Small Business Continues Pandemic Shopping Experience

Over half of the consumers polled said they stayed away from local businesses that don’t have these services. There’s a big shift local SMBs need to pay attention to among women and people over 60 too.

Contactless Services

A full 55% of women appreciated pickup, curbside and contactless services. That’s a big difference from the 43% of men who responded in the same way. The numbers for people over 60 might be the biggest surprise. Only 3% considered these services before the pandemic. Once it hit that number grew to 41%.

Eric Rea, co-founder and CEO at Podium, says what was once an option has become the only way to sell goods and services during COVID 19.

“While previously just a nice way to do business, offering options like contactless payments, texting and curbside pickup have become the only way for local businesses to operate,” he said in a press release.   “There has been steady movement towards digital transformation among local businesses in recent years. That accelerated over the past few months. Consumers have become accustomed to the new forms of communications and services. There’s no going back.”

New Customers

Social distancing measures actually helped local businesses get new customers. The survey reports that 57% said services like contactless payments and curbside pickup were behind them making a purchase from local business for the first time.

The research also points to some other interesting trends small businesses need to pay attention to. Like the fact that since the pandemic, there’s a trend towards Americans texting with businesses. In fact 41% said the pandemic made them more interested in communicating this way.

Texting

Texting is the favored way to communicate, according to the research. Only 23% of respondents favored calling and emailing only ranked with 18%. Using a website chat was far third at 15 percent.

The breakdown of the social distancing services Americans like best is:

  • A full 80% preferred curbside pickup. Even after pandemic restrictions are eased.
  • Grocery delivery was popular was 79% of respondents.
  • Contactless payment options was a close third with a 78% positive rating

The survey also highlighted a few red flags that small businesses need to watch for. Twenty nine percent had a bad curbside pickup experience. That shows businesses need to be organized.

Unorganized?

In fact, 49% of the respondents who complained said the service was unorganized. A slightly  lower number (42%) complained it was slow. Another group reported a lack of coordinating communication options.

The national online survey was conducted in May. One thousand Americans aged 18 and over were polled. Podium is a messaging platform designed for customers. It has headquarters in Lehi, Utah. It serves over 55,000 local businesses in Australia, Canada and the United States.

READ MORE: 

Image: Depositphotos.com

This article, "86% of Consumers Want a Local Business to Continue Pandemic Services Like Curbside Pickup" was first published on Small Business Trends



RSS Business Feeds

86% of Consumers Want a Local Business to Continue Pandemic Services Like Curbside Pickup

Curbside Pickup

New research is finding Americans like social distance services like curbside pickup. And they want them to continue even after the pandemic is over.

The State of Local Business survey from Podium reports that 84% of respondents have used tech-enables services like contactless payments too. The vast majority (86%) expect they will continue.

Small Business Continues Pandemic Shopping Experience

Over half of the consumers polled said they stayed away from local businesses that don’t have these services. There’s a big shift local SMBs need to pay attention to among women and people over 60 too.

Contactless Services

A full 55% of women appreciated pickup, curbside and contactless services. That’s a big difference from the 43% of men who responded in the same way. The numbers for people over 60 might be the biggest surprise. Only 3% considered these services before the pandemic. Once it hit that number grew to 41%.

Eric Rea, co-founder and CEO at Podium, says what was once an option has become the only way to sell goods and services during COVID 19.

“While previously just a nice way to do business, offering options like contactless payments, texting and curbside pickup have become the only way for local businesses to operate,” he said in a press release.   “There has been steady movement towards digital transformation among local businesses in recent years. That accelerated over the past few months. Consumers have become accustomed to the new forms of communications and services. There’s no going back.”

New Customers

Social distancing measures actually helped local businesses get new customers. The survey reports that 57% said services like contactless payments and curbside pickup were behind them making a purchase from local business for the first time.

The research also points to some other interesting trends small businesses need to pay attention to. Like the fact that since the pandemic, there’s a trend towards Americans texting with businesses. In fact 41% said the pandemic made them more interested in communicating this way.

Texting

Texting is the favored way to communicate, according to the research. Only 23% of respondents favored calling and emailing only ranked with 18%. Using a website chat was far third at 15 percent.

The breakdown of the social distancing services Americans like best is:

  • A full 80% preferred curbside pickup. Even after pandemic restrictions are eased.
  • Grocery delivery was popular was 79% of respondents.
  • Contactless payment options was a close third with a 78% positive rating

The survey also highlighted a few red flags that small businesses need to watch for. Twenty nine percent had a bad curbside pickup experience. That shows businesses need to be organized.

Unorganized?

In fact, 49% of the respondents who complained said the service was unorganized. A slightly  lower number (42%) complained it was slow. Another group reported a lack of coordinating communication options.

The national online survey was conducted in May. One thousand Americans aged 18 and over were polled. Podium is a messaging platform designed for customers. It has headquarters in Lehi, Utah. It serves over 55,000 local businesses in Australia, Canada and the United States.

READ MORE: 

Image: Depositphotos.com

This article, "86% of Consumers Want a Local Business to Continue Pandemic Services Like Curbside Pickup" was first published on Small Business Trends



via Small Business Trends Business Feeds

80% of Small Business Owners Say Pandemic Hurt Business – 55% Feel Positive About Future

Small Business Owners Say

The coronavirus has affected most small businesses in one way or another. So if your small business has been suffering due to the ongoing coronavirus situation, you are not alone.

According to the latest survey from Tech.co, 80% of small business owners accepted that COVID-19 has hurt their businesses. However, a good thing is that 55% of small businesses are feeling positive for the future.

COVID Hurt Small Business, Majority Remains Optimistic

Needless to say, most small businesses operate on a limited operating budget. And the pandemic has caused supply disruption, an increase in supply cost, and lower demand for products/services. As a result, most small businesses have been suffering badly amid the COVID-19 crisis.

Though local authorities are easing lockdown restrictions, things are improving at a slower pace as there is no effective treatment of the disease yet and the confirmed cases of the disease are still rising

Key Findings of the Survey

The impact of coronavirus on small businesses is huge. With reduced incoming cash, most small businesses have found it difficult to stay afloat during the pandemic.

So there is no surprise that 80% of small business owners reported that the COVID-19 has had a negative impact on their businesses.

However, small business owners utilize the time of lockdown in learning new skills to grow their business. 76% of small businesses, as the survey reports, upskilled during the lockdown.

Search engine optimization, data analytics, social media, and learning a new language were the most common new skills small business owners tried to learn during the lockdown.

The trying times of coronavirus have not weakened the spirit of small business owners. They are optimistic about the future. Upskilling during the lockdown may have a small role in that. 55% of small businesses are positive about the future, the survey reports.

Tips to Reopen Your Small Business

With local authorities easing lockdown restrictions, more and more small businesses are going to open their operations, In fact, 53% of small businesses expect to reopen soon.

Being a small business owner yourself, you should make use of the available coronavirus resources to make a strategy to reopen your small business.

Following is a coronavirus reopening checklist for small business owners, which can help you safely resume your business activities:

  • Prepare a timeline for resuming your business operations to stay on the track
  • Invest in protective gears and sanitization stations to make your office and customer zones safe
  • Implement a strict cleaning policy to keep the spread of germs in check
  • Make a plan to support your employees emotionally to bust their stress

Also, you should draft an aggressive communication strategy to let your customers and prospects know that you are reopening your business with safety measures prescribed by the local authorities.

Furthermore, you should guide your sales and marketing team to address the challenges your audience is facing due to the pandemic. People remember businesses that go the extra mile to serve their customers.

About the Survey

Tech.co surveyed small businesses to get insights into how they have retained customers during the lockdown. The survey included 100 small business owners. Click here to know more about the findings of the survey.

Image: Depositphotos.com

This article, "80% of Small Business Owners Say Pandemic Hurt Business – 55% Feel Positive About Future" was first published on Small Business Trends



RSS Business Feeds

80% of Small Business Owners Say Pandemic Hurt Business – 55% Feel Positive About Future

Small Business Owners Say

The coronavirus has affected most small businesses in one way or another. So if your small business has been suffering due to the ongoing coronavirus situation, you are not alone.

According to the latest survey from Tech.co, 80% of small business owners accepted that COVID-19 has hurt their businesses. However, a good thing is that 55% of small businesses are feeling positive for the future.

COVID Hurt Small Business, Majority Remains Optimistic

Needless to say, most small businesses operate on a limited operating budget. And the pandemic has caused supply disruption, an increase in supply cost, and lower demand for products/services. As a result, most small businesses have been suffering badly amid the COVID-19 crisis.

Though local authorities are easing lockdown restrictions, things are improving at a slower pace as there is no effective treatment of the disease yet and the confirmed cases of the disease are still rising

Key Findings of the Survey

The impact of coronavirus on small businesses is huge. With reduced incoming cash, most small businesses have found it difficult to stay afloat during the pandemic.

So there is no surprise that 80% of small business owners reported that the COVID-19 has had a negative impact on their businesses.

However, small business owners utilize the time of lockdown in learning new skills to grow their business. 76% of small businesses, as the survey reports, upskilled during the lockdown.

Search engine optimization, data analytics, social media, and learning a new language were the most common new skills small business owners tried to learn during the lockdown.

The trying times of coronavirus have not weakened the spirit of small business owners. They are optimistic about the future. Upskilling during the lockdown may have a small role in that. 55% of small businesses are positive about the future, the survey reports.

Tips to Reopen Your Small Business

With local authorities easing lockdown restrictions, more and more small businesses are going to open their operations, In fact, 53% of small businesses expect to reopen soon.

Being a small business owner yourself, you should make use of the available coronavirus resources to make a strategy to reopen your small business.

Following is a coronavirus reopening checklist for small business owners, which can help you safely resume your business activities:

  • Prepare a timeline for resuming your business operations to stay on the track
  • Invest in protective gears and sanitization stations to make your office and customer zones safe
  • Implement a strict cleaning policy to keep the spread of germs in check
  • Make a plan to support your employees emotionally to bust their stress

Also, you should draft an aggressive communication strategy to let your customers and prospects know that you are reopening your business with safety measures prescribed by the local authorities.

Furthermore, you should guide your sales and marketing team to address the challenges your audience is facing due to the pandemic. People remember businesses that go the extra mile to serve their customers.

About the Survey

Tech.co surveyed small businesses to get insights into how they have retained customers during the lockdown. The survey included 100 small business owners. Click here to know more about the findings of the survey.

Image: Depositphotos.com

This article, "80% of Small Business Owners Say Pandemic Hurt Business – 55% Feel Positive About Future" was first published on Small Business Trends



via Small Business Trends Business Feeds

Why Marketers Should Implement User-Generated Content: 23 Stats to Know

As a Boston-based young professional, the biggest product I've had to invest in was an over-priced apartment.

And this year, with apartment tours going fully virtual, I've found it even harder to do the extreme research needed before committing to a lease. Now, as I research apartment after apartment online, my new process feels like an intense buyer's journey.

In my research phase, I spend hours on end scouting listings, looking up addresses on Google Maps, researching neighborhoods, skimming through Yelp reviews of prospective property managers, and analyzing photos or video tours for potential problems that an unseen apartment could have.

Ultimately, I've found that the apartment listings I'm most drawn to have links to video tours filmed by current tenants.

When I've watched tours filmed by tenants, they'll explain what they like about their apartment, note major pros and cons, and give tiny -- but authentic -- details that the average salesperson might not offer. For example, in one video, a tenant honestly revealed one pro and one con about a bathroom by saying, "The bathtub has a great jacuzzi, which makes up for the lower water pressure."

After viewing a pleasant and seemingly trustworthy virtual tour, I feel like I've gotten an in-depth and authentic look at the product, as well as thoughts from a previous customer who is an expert on the product. Additionally, because the tenant often voluntarily offers their time to host the create video or virtual tour, I also get the sense that they are willing to help a trusted landlord find a new tenant.

Ultimately, I'm more likely to respond to an apartment listing with a great tenant-generated virtual tour than a listing with over-produced images or videos edited by an outsider.

When it comes to smaller purchases, I feel the same way about promotional content created by customers. This content shows me what the product is like in real life and proves that customers are delighted enough about their experience to promote a trusted brand.

And, I'm not the only consumer (or marketer) who thinks this. An estimated 90% of consumers say user-generated content (UGC) holds more influence over their buying decisions than promotional emails and even search engine results.

Below, I'll highlight more stats, facts, and figures that demonstrate the benefits of user-generated content.

23 User-Generated Content Stats to Know in 2020

Benefits of User-Generated Content
  • Consumers find UGC 9.8x more impactful than influencer content. (Stackla, 2020)
  • 79% of people say UGC highly impacts their purchasing decisions, (Stackla, 2020)
  • 48% of marketing professionals believe that content created by customers can help humanize their marketing. (TINT, 2018)
  • 34% of TINT users surveyed and 45% of marketing professionals agreed that UGC helps increase key social media KPIs. (TINT, 2018)
  • 42% of marketers say user-generated content is a vital component of their marketing strategy. (TINT, 2018)
  • Ads featuring UGC garnered 73% more positive comments on social networks than traditional ads. (Jukin Media, 2018)
  • 31% of consumers say advertisements that feature UGC content are more memorable than traditional ads without it. (Jukin Media, 2018)
  • 28% of consumers say ads with UGC content in them are also more unique than ads without this type of content. (Jukin Media, 2018)
UGC ads are more memorable than traditional ads.

Image Source

UGC Tactics

  • 50% of marketers have utilized user-generated content in email marketing, (TINT, 2018)
  • Meanwhile, 58% of marketers have implemented UGC in ad campaigns. (TINT, 2018)
  • Nearly half of marketers use UGCto support their overall marketing campaigns. (TINT, 2018)
  • 41% of marketing professionals ranked content engagement as their top KPI for tracking user-generated content. (TINT, 2018)
  • The most common types of UGC are photos, videos, social media content, customer reviews or forums, and content created with branded AR filters. (IAB, 2019)
Brand Authenticity
  • 60% of consumers believe UGC is the most authentic marketing content. (Stackla, 2017)
  • 75% of marketers believe user-generated content feels more authentic than other types of content. (TINT, 2018)
  • Although 92% of marketers think they're creating authentic content, 51% of consumers think their favorite brands offer authenticity. (Stackla, 2020)
  • 57% of consumers think that less than half of the content brands create resonates as authentic. (Stackla, 2017)
  • Consumers are 2.4x more likely to say user-generated content is authentic compared to brand-created content. (Stackla, 2020)
  • 56% of internet users say they find out about products from friends or acquaintances while 32% rely on customer reviews. (Statista, 2020)
  • On average, 20% of consumers have unfollowed a brand on social media because they felt their content was inauthentic. (Stackla, 2017)
  • 70% of the time, consumers are able to distinguish between consumer-created content and brand-created content. (Stackla, 2017)
top user generated content strategies

Image Source

UGC Audiences
  • Demographically, more Gen Z YouTube viewers prefer UGC to professional videos more than older generations. (YouTube, 2020)
  • Globally, Gen Z and millennial generations watch more user-generated content than Gen X and Boomer generations. (YouTube, 2020)
  • More than 30% of millennials have unfollowed a brand due to inauthentic content. (Stackla, 2017)
consumers unfollow brands due to inauthentic content

Image Source

Defining a User-Generated Content Strategy

As you can see from the stats above, user-generated content not only saves you production time, but it can also make your brand more authentic and trusted.

If the data above has persuaded you to implement UGC in your marketing strategy, here are a few next steps you can consider:

  • Get inspiration from other brands: Seeing successful examples of UGC from brands in a similar industry will give you an idea of which customers to reach out to and how to amplify their positive thoughts about your product. For a few great UGC examples, check out this blog post.
  • Determine how you'll get the content: Will you encourage fans to send you videos on social media, host a content-related contest, or directly ask your clients to promote a product via email? For tips on this step, read this post,
  • Be authentic: Remember, the biggest strength of user-generated content is that it allows audiences to see an authentic view of your product. Don't be afraid to promote UGC that might be lower quality but highlights all the best features of your brand or product.

To learn more about how to leverage user-generated content in your marketing, click here.



via Business Feeds

How to Create a Social Media Report [Free Template]

Social media is an undeniably powerful channel for marketing in 2020.

In fact, social networks are the biggest source of inspiration for consumer purchases, with 37% of consumers finding purchase inspiration through social channels.

However, if you're using social media as a tool for organic exposure and brand awareness, rather than just a channel for paid ads, it can be difficult to track the success of your efforts.

As any social media manager knows, successful implementation of a social media strategy is contingent on countless factors — and all companies prioritize different channels, metrics, and criteria for success.

For example, is paid more important than organic to your business, and if so, to what extent?

Is more importance placed on audience engagement, or audience growth?

Has a posting cadence been directly tied to revenue?

With so many areas of focus for social media marketers, it's crucial to choose, analyze, and report on your key social media metrics with a social media report.

A social media report can help you clearly convey what factors your social media team prioritizes, why those factors matter, and how you're performing against those goals.

In this post, we'll highlight the importance of a social media report, list the metrics you should consider including in one, and walk through a step-by-step process for building a social media report yourself.

For a quick and easy solution to your reporting woes, click here to download HubSpot's Free Social Media Reporting Template.

Why Use a Social Media Report?

A social media report is the best way to distill the key metrics your social media team is tracking on a daily, weekly, monthly, quarterly, and/or annual basis.

Since social media encompasses so much, gathering and reporting on the data and channels that you've determined are most important for your business provides a lens of focus for your social media marketing team, and delivers a necessary high-level overview for leadership.

Social media doesn't just affect marketing. Prospects ask questions, customers write reviews, and thought leaders follow you for company news. Because social media coincides with nearly every aspect of your organization, gathering and distributing the state of your social media channels is a move that shows transparency and encourages cross-company alignment.

You can also use a social media report to report on campaign-level analytics. If your social media account is serving as a cog in a larger company initiative, this report shows to what extent social media contributed to the project's success.

Featured Resource: Free Social Media Report Template

social-media-report-hubspot

HubSpot's free social media report template has pre-made slides for you to report on all of your predominant social media metrics. Download the template today and simply plug in your own metrics to customize a social media report for your organization.

Social Media Metrics to Report On

Your business likely values some metrics over others when it comes to social media reporting. Likely, these metrics also vary between your channels — since LinkedIn doesn't let you retweet, and Twitter doesn't let you click a cry-face button.

Before you start reporting on your social media channels' performance, read through this list of options of social media metrics so you can determine which ones you should include in your report.

1. Audience Size and Growth

This metric tells you how large your reach is and how quickly that reach is growing. This is typically seen as the core social media metric, as it shows how large of an audience you can leverage with your posts and content.

2. Cadence of Posts

A rather self-explanatory example, this metric represents how many times you posted in a given time period. This metric is usually compared alongside other metrics — such as engagement rates — to help you determine the right cadence for your audience.

This metric should also be channel-specific, because it makes sense to post more frequently on some channels than others.

3. Post Engagement

Post engagement measures how your fans and followers are reacting to your posts with likes, comments, and shares. A healthy post engagement suggests you have a loyal audience — and that your content is reaching them.

You can also track engagement as a percentage of your audience to determine engagement rate.

4. Mentions

One metric you have a little less control over is mentions. You can track mentions from customers, prospects, and even news outlets to gauge perception of your business and brand online.

5. Clickthrough Rate

When a post links to a page on your website, you can measure how many people and what percentage of your audience clicked through to the page. A strong clickthrough rate shows you're sharing website pages that your audience finds relevant.

6. Conversions & New Contacts

Conversions comes into play if you're using social media to generate leads, subscribers, or even customers. If you want to attribute contacts to your social media team's efforts, make sure you're using proper tracking and setting reasonable goals, as it's rare in some industries to go straight from social media to becoming a customer.

7. ROI

Directly tracing ROI (return-on-investment) to social media efforts can be tricky. However, if you determine it's worth reporting on this metric, make sure you have proper expectations set and attribution models established.

8. CPM / CPC

This metric is essential for monitoring the performance on your social media ads. If you're solely reporting on organic social metrics, you can ignore this one.

9. Competitor Metrics

To provide a benchmark, consider analyzing the aforementioned metrics for your competitors. Obviously, these metrics can vary drastically based on publicity, paid budget, and the size of the company, but it's still worthwhile to make the comparison.

How to Make a Social Media Report

Step 1: Choose Your Presentation Method

For consistency and clarity, make sure you're using a social media report presentation, spreadsheet, or memo template. This way, each time you update your metrics, you'll simply need to copy over your most up-to-date metrics onto that template rather than reinventing the wheel every time.

We suggest using a PowerPoint or Google Slide Deck template, because you can share it with your team via email, use it for an in-person meeting or presentation, or both.

Need a template to get started? Try this one.

Step 2: Determine the Metrics You'll Be Reporting On

Like we've established, different companies and different social media teams value different social media metrics.

It's your job to choose the metrics that matter most to your team and your organization.

Using the list from the section above, narrow down the essential metrics you believe are worth presenting to your team at large. Remember, you can change which metrics you report on for each of your organization's social media platforms.

If your social media report is campaign-specific, reach out to the project stakeholders to see if they're hoping to see reporting on any certain metrics in the social media report.

Pro Tip: For your first few ongoing social media reporting presentations, ask your peers which metrics they'd like to see, or which ones they need clarification on. Making these changes sooner rather than later helps you keep your team informed and engaged.

Step 3: Gather Your Data

Once you know what you're reporting on and how you're reporting it, it's time to start collecting data.

When you're first setting up your social media reports, create bookmarks for your data sources. Make a folder for the analytics page for each social media channel you're analyzing and/or your social media reporting software for an all-encompassing view.

If you're tracking click-throughs to your website, make sure you're analyzing from a single master location, such as your tracking URL builder or your traffic tracking tool like HubSpot or Google Analytics.

Step 4: Add in Some Visuals

A chart of numbers on a slide deck is, well, pretty boring.

While a numerical chart is important for sharing as much info as possible in an organized way, using visuals is a better way to convey the growth and success metrics of your social media performance. Try incorporating one or all of the following into your social media reports:

  • Linear graphs to show followers over time.
  • Pie charts to show clicks to different pages of your website (blog pages vs. case studies, for example).
  • Bar graphs to show number of engagements on each platform.

These examples are more eye-catching than numbers on a slide and further illustrate what you want your team to walk away with. If data visualization is new to you, check out our Guide on Data Visualization for Marketers.

Step 5: Think of Your Story

A running social media report should always remind people about where you came from and where you plan on going. That said, make sure your reports make reference to how your numbers have changed since the last period of time on which you presented, in addition to why numbers have changed.

Did follower growth as a percent increase drop last month? Maybe that's because one of your posts from the month before went viral and resulted in unprecedented growth that was impossible to match. Make that clear and add context to the numbers.

Additionally, each report should contain clear action items about how you plan to continuously improve your social media performance. Social media is constantly evolving, so your approach and strategy for it should, too.

Now that you're equipped with the knowledge to build, design, and share your social media report, download your social media report template and get to work!



via Business Feeds