Marketing Local Businesses Online

Location based marketing is one the biggest trends for digital marketers across the globe in 2016. In fact, it’s high on the agenda for most marketers as 77% state it’s an important focus for them this year. Even if you don’t sell a product or service online, location based marketing is an incredibly important channel for promoting your business, especially with the rise of mobile technology.

Today’s article will help you understand what location based marketing is, how to use it to promote your physical location and examples of relevant location based marketing campaigns.

 

What is location based marketing?

This is essentially where you can use geographic based data to specifically target potential customers and promote a message tailored to their physical location. Generally, this data is collated from a user’s GPS signal using mobile technology.

Promotion technique 1 – online check ins:

Social media channels such as Facebook allow consumers to check in and tag your business via their profile, sharing the fact that they’ve visited your restaurant or bar. This creates social proof and word of mouth marketing via social media, as an online check in acts as a strong personal recommendation.

However, you really need to offer an incentive to encourage people to do this. It could be a discount, a fun prize or an exclusive reward. Whatever you decide, make sure it truly engages your customers and appeals to them.

 

Promotion technique 2 – location based beacon technology:

If you’re a retailer, this fact may completely change the way you think about location based marketing – timely in store messages can cause a consumer to be 20 times more likely to make a purchase. With the use of in store beacon technology, users can receive alerts and notifications as they walk past certain areas of your shop. This could include updates about special offers, new product lines or events happening nearby.

This allows you to deliver incredibly targeted messages, delivering useful information to your consumers straight to their personal mobile device. You can influence their behaviour once they’re in store, increasing their likelihood to purchase and more importantly, your levels of sales.

 

Promotion technique 3 – Google Places:

This is a simple but very effective location based marketing tool. When users are visiting search engines such as Google, there are certain terms that deliver location based results. So they could be online searching for their nearest Italian restaurant for example and they’re delivered a list of the closest pizza takeaways.

On your part, you can just register for a ‘Google My Business’ page and customers can easily find you via Google Search, Maps and Google +. Location based search optimization provides customers with your phone number, location and directions, so they can easily find and contact your business.

As you can see, there’s a whole host of location based marketing techniques that are effective when marketing your physical store. This is one the most exciting marketing technologies and will continue to develop. If you have any questions, please feel free to get in touch and we’ll be happy to help.

What is the Illinois Equity Crowdfunding Law

Have you heard of the Illinois Intrastate Crowdfunding Law? If you’re a small or medium sized business in Illinois, it may be a great opportunity to grow your capital. Recently approved by the House and the Senate unanimously, signed in to law by the governor this is an exciting announcement for entrepreneurs, investors and venture capitalists.

In today’s article we’ll discuss what the Illinois Intrastate Crowdfunding Law is, what the Bill means for SME’s and how you can use it as an opportunity for your business.

What is the Illinois Intrastate Crowdfunding Law?

This Bill essentially allows businesses in Illinois to actively solicit crowdfunded capital from local residents, in exchange for equity in their business. The maximum allowed investment from each investor is $5,000, whilst a company can raise $1 million in a year, with the potential for $4 million if they provide a financial statement for investors.

This differs substantially from popular existing crowdfunding websites like Kickstarter because the capital they raise is no longer from ‘accredited investors’, it can be from anyone who lives in Illinois. Illinois residents also receive debt/equity from the company they invest in, which isn’t usually the case with traditional crowdfunding websites.

What the Law means for SME’s & precautions

If you’re a business owner and you’re looking for investment, this is truly a great opportunity for you. This Bill could give you access to millions of dollars of new capital, growing your business via local residents who are passionate about entrepreneurialism in Illinois.

It is important however to understand that there should be some element of caution with this Bill. Investors may have expectations in terms of influencing how the business is run or returns on their investment. Businesses should also ensure they are complying to the Bill’s legislative requirements before soliciting local residents.

Additionally, if you are soliciting investment from local residents, you may have to disclose certain elements of your businesses’ performance and financial data. If you do this, understand that as you’re approaching local residents they are members are of the general public and therefore your competitors or other key stakeholders may also find out. Subsequently, only disclose information regarding your company that you are comfortable about being public.

How you can use the Law as an opportunity for your business

This may be a better alternative than receiving investment via a huge funding firm because you’re giving ownership to potential customers who can offer insight, feedback and new ideas. They’re passionate about living in the state, they want to see their local area invested in and they can now have a vital role in the growth of Illinois. It’s essentially empowering local residents to make a difference and improve the state of Illinois, whilst investing in a business they love, creating a sense of public spirit.

Summary:

As you can see, the Bill is a great opportunity for SMEs in Illinois to gain investment from potential customers passionate about developing their local area. If you have any questions about the legislation, please feel free to ask and we’ll be happy to help. Receive a FREE Guide on Illinois Equity Crowdfunding – Here

Illinois Intrastate Investment Crowdfunding

On Jan. 1st 2016 the Illinois equity crowdfunding law became effective. In a state with a reputation for being unfriendly to business and overprotective of its citizens, Illinois legislators passed the most aggressive intrastate crowdfunding law in the country. Title III of the Jobs Act which legalized investment crowdfunding limits companies to raising $1mm in a 12 month period and has strict limits on the amounts that both accredited and unaccredited investors can invest. In some cases limiting investors to $2,500 in aggregate (all investments) in a 12 month period. The Illinois crowdfunding law allows companies registered and operating  in Illinois to raise up to $4mm a year. Illinois residents who are unaccredited can invest up to $5,000 per deal while accredited investors have no limit to the amount in which they can fund offering companies.

Although the Illinois law became effective on January 1st, companies and investors have been waiting for the Illinois Secretary of State to release the administrative rules and applications for capital raises to being. The delay does not come without a potential payoff. The Secretary of State will have the ability to update the rules and regulations within the law as they gauge what is needed to allow this new market to flourish. We are excited to announce that we fully expect the rules to be released by April 1st.

As we await these rules we are beginning to find news stories and landing pages for Illinois crowdfunding portals. Portals are the mandatory internet intermediaries that must host any Illinois company looking to raise capital using the crowdfunding exemption (which operated under federal rule 147). So far we have come across many developers offering to create internet portals including crowdforce and crowdfundconnect. We have seen that truCrowd (who also operated an intrastate portal in Texas) say they will be entering the market and VestLo who will be operating a custom created Illinois portal operating out of 1871 (famous Chicago startup co-working space). VestLo will be working with the author of the Illinois crowdfunding law, attorney Anthony Zeoli and Axia Law, one of the leading law firms for Chicago based tech startups.

We are very excited to watch this new fundraising mechanism put to use in Illinois as it will quickly become the most powerful tool in the Invest Local Illinois movement. The law (Illinois HB 3429)is designed to allow and encourage investment in local communities by the customers who frequent the businesses looking to raise capital and grow.

Presentation explaining the Illinois equity crowdfunding law.

Sign-up for more information on Illinois Equity Crowdfunding

Many Ways to Support Local Business

There are a lot of ways to invest in the modern world. Many people opt to invest in big name companies on the stock market. With recent trends towards shopping local and growing local though this doesn’t make since. Why would you invest local in Illinois? Almost every city and even state has businesses that could use investors.

One of the biggest reasons to invest local is that you are helping out your own economy. The changes that your investments made can be both seen and experienced firsthand. As people start to invest in their own cities they will start to see an overall improvement in quality of life. Streets become safer and businesses can grow.

Think about all of the local businesses you go to. If you think about it almost every small business has areas they need funds in order to improve. Your contribution can make that business better so they can afford to pay their employees more, offer lower prices, expand if they need to, or even upgrade to meet modern times.

How Can You Invest?

There are a variety of different ways that you can invest in your community. Each type has its own benefits for you and the business. Here are some of the ways that you can invest.

Loans

Loans come in a variety of forms, large and small for example. They also come with different repayment terms. Some lenders dictate how the loan should be applied, for example, they might say it is for upgrading your storefront.

Common Stocks

Common stocks are what most people think of stocks. When you invest in common stock it gives you partial ownership in the business and a level of control. The only difference in this case is that you are owning part of a local business.

Preferred Stocks

These stocks are more up the street of people who want to earn returns but don’t want to spend the time controlling a part of the business. Preferred stocks give you regular returns but offer no control or voting power over the business.

Royalties

Royalties is essentially the process of earning money based on the sales of a business. The amount of money you earn can be statically based on business or can be changed based off of the season and the level of business being done.

Pre-Sales

Pre-sales is when you get a portion of the advanced sale of goods. Sometimes this will even be for more than the amount that you originally invested.

Who Can Invest?

While the ideal answer would be anyone can invest, the time has not arrived when just anyone can invest in local businesses. The Security Exchange Commission has established a set of rules that determine who can invest in local businesses and how. These criteria are different depending on what type of investment you are talking about.

These rules for investing were not originally set up to limit investors. They were set up to protect investors. The federal government put these rules into effect when it noticed that people were starting to fall for investment scams. They prevent people from just falling into a pit of lost money.

There are some exceptions to the rules for investing. The most important and biggest exemption is the friends and family exemption. This allows most people to ask their friends and family for money for businesses or projects. There are still a few regulations for this exemption but it gives people wide latitude.

Accredited investors also have an exemption. These investors are high-wealth or large income individuals who are not considered to need the protection against losing money. They make enough money that should they lose a little it wouldn’t cause a severe detriment to their life. In most cases an individual has to have made over $200,000 for the last two years. If they are married they have to have over $300,000 a year in those last two years.

There are a few more exemptions but they get a little more difficult to navigate.

Where To Find Investment Opportunities?

There are a lot of options out there for investing in your community. You don’t have to be a major investor in order to help out and get a little money back. Here are some easy ways for you to invest local in Illinois or anywhere else in the world.

Co-Ops

A great place to find investment opportunities is in a Co-Op. The simplest way to explain a Co-Op is that they are a member owned business. You have probably heard of REI, which is similar to a Co-Op as it is a member owned food. The business is run for the benefit of those who are members. Members often can vote and have a say in how the business is run.

At the end of the financial year members can a percentage of the profit from the business. Members also tend to get special deals and benefits when they shop at the Co-Op. Co-Ops tend to be for food and farms but you can occasionally find Co-Ops for other purposes such as learning.

Friends, Family, and LIONs Clubs

If you have any friends that are starting a business or want to start a business ask if you can invest. This will help them start a business while allowing you to make some money. When you go about it this way you have less restrictions to worry about.

LIONS or Local Investing Opportunities Networks connect investors with small businesses in the area. They do it in such a way that the two parties create a community and friendship that will alst beyond the investment. It is more than just helping people fund their businesses, in most cases LIONs are made by community members to better the area they live in. Because LIONs clubs connect investors and businesses in a social environment you do not need to be an accredited investor. There are no third parties pressuring you to invest or instructing you on how to do it.

Pre-Pay For Local Goods

The process for prepaying has been around for a long time but recently it hasn’t been utilized by as many people. The name pretty much says it all, you prepay for your local goods in advance and it helps the store gain the money it needs to operate. If you invest at a certain level you often are able to earn interest on your prepayment. There are a number of websites out there that can help you find locations with prepayment options. Credible is a website that allows you to prepay at local stores through their website. Currently Credible is only for food locations.

Look For Local Stocks

Many small businesses are starting to restructure to become public because it is a great way for them to get investors and spread the knowledge of their business. Recent changes to laws around the country have made this easier. As time continues the laws are predicted to change even more to make it easier for local stores and small businesses to go public.

GoFundMe and Other Crowd Funding

While not the most typical form of investing you can look on websites such as GoFundMe for local businesses. These websites allow users and businesses to post requests for funds. With GoFundMe users are typically only donating money but with websites like KickStarter and Indiegogo allow companies to offer perks for different tiers of investment.

Credit Unions

You may like your big bank but if you truly want to support the community you should consider moving all of your financial accounts to a credit union. These credit unions are set up as non-profits and instead of big bankers benefiting the members of the union benefit. The most important thing about credit unions is that they aim to help the community. For those that need it they provide financial counseling, scholarships, grants, and other forms of outreach to the community. Not only are you helping the community but most credit unions have no fees, better APRs, and better ways to save.

Alternative Investments (Investing In Yourself)

Some people suggest alternative methods of investing locally, they suggest investing in yourself. For example, investing in solar or wind power can not only power your house but it can feed back into the power system to provide extra power for your neighbors and community. When you produce enough power to send power back into the system you can usually get money back from the utility company. Make sure to first get rid of credit card debt, student loans, and any kind of money you owe. You can’t afford to help the community until you are prepared to do so.

Invest in your community today to make an investment in yourself. Not only are you earning money back by investing locally, you are making the place you live better. Often times this will also raise your property value too. It is an all-around win. Help yourself, help your neighbor, and help your community, invest local Illinois.

How to Invest Local

If you’re interested in investing locally, you’ve probably explored credit unions and community banks. The money in community banks goes back out into the community in the form of small business loans. But what are some other options for investing locally?

  1. Angel Investor – If you’re one of the 1% of investors that have a lot of net worth from a successful company or business venture, you can help a start up by becoming an angel investor. Like the name suggests, “angels” invest their own money to make a small business owner’s dream a reality. You are their guardian angel. Most angel investors prefer a focus like food or minority led companies. The sky is the limit.
  2. Community Developed Loan Funds – This is one of the best kept secrets of local investing. Community Developed Loan Funds target under-served and low income neighborhoods. What better way to help a community grow in a positive way than to bring in new business and job opportunities?
  3. Cooperatives – First developed after the industrial revolution, cooperatives are groups of people with similar job sets like ranchers, farmers, brewers, grocers, etc that cooperate or co-op to protect their local interests. They provide loans to the co-op members. By investing in local co-ops, you’d be serving a wide range of businesses at once.
  4. Crowdfunding Local crowdfunding is a hybrid of social media and investment. Most people are familiar with crowdfunded projects like music, tech gadgets, and movies, but a lot of local businesses are turning to crowdfunding to get their product or service to a wider audience. A quick search on any number of popular crowdfunding sites will give you several investment opportunities.
  5. Local Investment Groups –There’s power in numbers. If you want to give a substantial amount of monetary support to local businesses, it may be a good idea to join (or form!) a local investment group. By banding together, your group can help local businesses on a higher scale than you may have been able to just by yourself.
  6. No interest loans – No interest loans fall somewhere between investing and donating to a local business.   The website Kiva popularized the trend of people requesting microloans from potential investors for such things as business supplies and other expenses. The investors get their principal back without interest. Now that dairy farmer can buy more cows thanks to you!
  7. Peer to Peer LendingPeer to Peer (P2P) Lending is gaining popularity. It’s similar to a bank loan except investors loan the person or business the money directly instead of the bank issuing a loan. By cutting out the middle man, the local person or business sees lower interest rates and the investor sees a higher rate of return.  Lending Club and Prosper are two well known P2P sites.

No matter how you decide to invest locally, the important thing is you are giving back to your community members and businesses.   By investing locally, you’re creating a strong foundation of prosperity that everyone benefits from.

Evaluating Local Investment Opportunities

Deciding to invest locally can be an exciting and daunting decision. There are so many factors you need to consider beyond just which business you want to support. When you do pick a business to invest in, what happens next? Do you just cut them a check, shake hands, and hope for the best? Not if you want to be a savvy local investor. Cutting a check is more like a donation. If you want to invest, you need to make sure you follow through with due diligence. Due diligence is evaluating risks in order to make better investment decisions and, in turn, improve positive outcomes for you and the local business.

Step one in the due diligence process is deciding your own needs, goals, and the risk on investing in the particular company.   You may need to consult with a financial adviser for this step. Look at your current investments, income, and expenses. Do you have enough to pay your bills? Can you cover an emergency if needed? If your current situation is meeting all your needs, then investing locally is a great idea. If you’re unsure if you’re ready to take the big step into investing in small businesses, invest in yourself. You are your own business. Pay off your credit cards, pay down your mortgage, buy a house if you currently rent, go solar. There are a lot of ways to invest in yourself before moving on to a higher community impact project like investing in a small business.

After you’ve done your due diligence, you can move on to step two which includes researching and evaluating the local business you hope to invest in.  You may want to look over the business plan, read through financial statements, ask for profit projections, and talk to their current investors (if they have any).   The important thing to remember is you need to do as much research and gather as much information as you personally need to make a decision regarding the potential investment. Are you comfortable supporting the business? If so, great. If not, figure out why or move on to doing due diligence on your next investment opportunity.

Step three is deciding on contract terms. Make sure you get all terms from investment amount to time frame on return in writing. The contract should be drafted by a lawyer and signed by both parties. After that, it’s cutting a check time! Once that’s out of the way, don’t just walk away from the investment. Stay engaged. It’s better to be hands on (unless you’ve agreed to be a silent partner).

If there is any part of the due diligence process that you are unfamiliar with, you may want to consider teaming up with several like minded local investors. This is usually referred to as a “club” or “network.” Local investment clubs are a great way to play off the strengths of the other members. Maybe you’re great with understanding contracts but not so great with reading profit projection reports. Team up! Everyone wins when you’re well informed on all aspects of the risk process.

The number one piece of advice to remember when evaluating local investment opportunities, is to trust your instincts. If there is anything at all that makes you uncomfortable about the deal, don’t sign.   Expressing interest means just that – you’re interested. You only commit when you are ready.

Investing locally is a wonderful way to support your community.   Have fun with it, though never lose sight of the fact that it is an investment, not a donation. Do your due diligence so everyone involved – you, the business, and the community – can be winners.

WHY INVEST LOCAL?

With so many crowdfunding projects and options available, it’s tough to choose what to support. Do you want to help that new tech gadget get made? What about that movie or video game? Creative arts are great, but why not try looking in our own community for investment opportunities.   Moving money from Wall Street to Main Street is becoming more and more popular. Here are some great reasons why you should consider investing locally too.

  1. Growth Potential – Local businesses make up 50% of US economy but receive almost none of the investment. Most are highly profitable.   Recent data from the IRS shows that start ups with one owner are often as much as eleven times more profitable than corporations. Out of date laws that kept the 99% of Americans that aren’t billionaire investors out of investing, are now changing. This makes it easier for everyone to support local causes and small businesses.

 

  1. Multiple Returns – By investing in local businesses, you get two points of return – money in your portfolio and positive growth and changes in your community. It’s great to see a monetary return on your investment, but it’s even better to know you are doing your part to build a strong, stable community. Every dollar you invest in a local business goes back out into the community through new jobs, higher wages, maintaining parks and recreation centers.

 

  1. Superior Access – Investing locally allows you to get to know the business from the inside. You can meet the owner, talk to the staff, sample the goods and services, learn about how they run the business and what they plan to do with any investment money. You effectively become your own investment analyst.

 

  1. New Tools – As investing locally becomes more and more popular, a wealth of tools to make it easier for you the investor have cropped up. With investment clubs, networks, and investment public offerings at your disposal, investing locally has never been easier.

 

Now take the time to look around your community. You probably already have some favorite restaurants or stores. You might already be friendly with some of the owners. By becoming a local investor, you open numerous opportunities and doors. Your favorite businesses benefit from your faith in their product or service. Helping others is one of the greatest feelings you’ll ever experience. Now you can do it on a grander scale by investing in local businesses. Happy helping!

Amazon Best-Seller: Invest Local by David Barnett

Invest Local BookBack in 2006, I started a new business as a finance broker. I would help small businesses obtain leases, bank loans and finance receivables via a tool called factoring.

I had studied business in university. My education, unfortunately, was all about big companies. In the real world, most businesses are quite small. I had to learn about small business finance ‘in the trenches.’

Over the years, I learned from my finance partners how they made decisions about where to invest their money. I learned about the documents you need to have in place and how to determine the risk involved in a particular loan or lease to a small business.

Eventually, I took the plunge and started doing my own deals with my own money. Loans and leases are the easiest way to invest in a small business that you don’t own or control.

The problem with being a shareholder in a small business is that profits can be affected based on how the controlling owner or manager decides to run things. A fancy new pickup truck can mean no money left to pay dividends to any minority shareholders.

The beauty of a loan or a lease to a small business is that you can define the payments, calculate your rate of return, and create a contingency plan in case things don’t go so well. For example; in a loan to a business you can have physical collateral. In a lease situation; the property is actually in the investor’s name, they hold the title.

These are the exact reason that when Wall St. invests in small businesses, they do so via loans and leases. I’ve never heard of a Wall St. bank wanting to buy stock in a corner store or local dry cleaner.

Since it’s a proven strategy, it’s the one I follow in my own investing.

To learn more about investing in local small businesses, ready my 2014 Amazon Best-Seller: Invest Local. I describe the different investing scenarios that I’ve been in and the different ways to make smart local investments at superior rates of return while controlling risk.

You can find it on Amazon here: http://amzn.com/1497371198 To buy a .pdf copy, learn more about local investing, buying and selling small businesses, personal finance or to sign up for my FREE weekly small business e-mail, visit my blog site; www.InvestLocalBook.com

David Barnett spends his days helping people buy, sell and finance businesses privately.
This Guest Post was to provided by the books author, David Barnett.

TOOLS FOR GRASS ROOTS INVESTORS

Investing locally is a great way to build a strong community.   You live in your particular town, why not invest in it too? By supporting local businesses, you’re not only helping them – you’re helping your community stay strong. As an added bonus, every time you invest in a local business, you’re allowing an entrepreneur realize their dream of owning their own business. It’s a win win for everyone. The only problem is, unless you’re one of the top tier 2% of investors that securities regulators consider accredited, you may be told your investment options are limited. That’s not true. Here are the tools you need to invest local if you’re in the 98% of unaccredited investors.

  1. Invest In Yourself – The best rate of return happens when you invest not only locally but in yourself. Get rid of your credit card debt, buy a home, grow your own food, and generate your own heat and electricity with solar energy.   You are your best local investment.
  1. Create Targeted CDs – Many banks and credit unions are wary of loaning small businesses money without the guarantee of full collateral. To invest local and help out small businesses, you can put your money into a special certificate of deposit that offers full collateral to local businesses. If your bank or credit union currently doesn’t offer this program, ask them to create it.
  1. Pre-purchase Good and Services – This is an approach that works well on crowd funding sites like Indiegogo and kickstarter. The business creates a page and usually a video explaining the product they are trying to create. You decide if you want to support them.   The reward on your investment depends on the level of support you’ve given. By purchasing the goods or services before they’ve been produced, the business raises capital without all the sticky red tape. Type in your town’s name in the search box to find local campaigns to invest in.
  1. Form A Local Investment Club – If you find it difficult to get in to a more established investment fund because you’re an unaccredited investor, form an investment club! Gather community minded individuals together and form a club to pool your assets together. The more funds, the more you can do for your community and local businesses. A new option is participating in equity crowdfunding with a focus on your state or metro area.
  1. Put your money in local banks/credit unions – Forgot using big chain banks. If you are serious about investing local, you need to put all your checking, savings, credit cards, and loans in a local bank or credit union. Credit unions are responsible for 30% of small business loans to companies that may not get a big, chain bank to give them a second look. By moving your assets to a local bank or credit union, you are also showing your support to invest locally.

By investing locally, you’re sending a powerful message to the local, state, and national government. You’re saying ‘I care about Main Street – not Wall Street.’ Make your community special by supporting local businesses.