2017 Biz2Credit Latino Small Business Credit Study: Latino Owned Small Businesses See Revenues Up 26% But Credit Scores Falling

Latino owned businesses are rising on the tide of the improved national economy with improved revenues. However, they need to leverage business credit better to keep their credit scores from dipping.

2017 Biz2Credit Latino Small Business Credit Study

Last year’s falling Latino credit scores (down from 595 to 592) were in contrast to the higher revenues for 2016 (averaging $258,702). These were the big takeaways from the annual Biz2Credit Latino Small Business Credit Study.

The study also found there were some common industries where Latino business ownership seemed concentrated. These were services, retail, construction, food services and accommodation as well as transportation and warehousing. The states leading in loan applications from Latino businesses included California just over 25 percent and Texas at 20.4 percent.

Rohit Arora, CEO of Biz2Credit, told Small Business Trends there was a reason for the credit drop beyond the payment history.

“Latinos have not had great access to business credit, thus they leverage their personal credit. They may be putting costs on credit cards that come with higher interest rates than loans,” he said.  “The problem is that once you go about 50 percent utilization, your credit score drops — even if you are paying on time.”

Latinos own over four million businesses now in the U.S., according to the report. They contribute over $668 billion to the American economy every year according to the U.S. Latino Chamber of Commerce.  Arora says having Latinos apply through traditional business credit channels is important.

“A lot of Latino-owned businesses are in construction and transportation/logistics, and retail food businesses.  The key is Latino-owned businesses need to apply for more formal business credit. Construction and retail are not traditionally funded by banks, and many of the business owners do not have a lot of experience in dealing with formal business credit,” he said.

The study looked at 2000 Latino owned businesses and 25,000 other companies with less than 250 employees and annual revenues less than $10 million.

Business Owners Photo via Shutterstock

This article, "Latino Owned Small Businesses See Revenues Up 26 Percent But Credit Scores Falling" was first published on Small Business Trends

RetailNext Retail Performance Pulse September 2017

Retail sales at brick and mortar stores continue to slump moving  into fall. That’s just one of the insights from in-store analytics firm RetailNext’s year over year numbers in the Retail Performance Pulse report for September.

But not all was doom and gloom in the reports as some regions showed more positive numbers than in August.

RetailNext Retail Performance Pulse September 2017

Sales declined by 7.2 percent and traffic by 7.3 percent year over year, the report shows. The numbers also indicate both traffic and transactions peaked earlier in the month. Toward the end of September, sales hit their highest numbers in the brick and mortar stores monitored.  The lowest days for the month were around the Labor Day weekend.

Both sales and traffic were at their lowest points on September 5 with transactions hitting their lowest points on September 3. For returns, the lowest point came on Saturday September 2.

The Retail Performance Pulse report for September also looks at the regional numbers to decipher patterns and trends. The Northeast suffered the biggest decline in a few metrics, most notably sales. Sales in the region dropped about 9.3 percent, the report indicates. While still not positive, those are better numbers than the August drop in sales of 11.5 percent.

The South’s traffic and sales had the smallest declines of any region. The Shopper Yield for the South was up 4.0 percent for September. That’s a big jump from last month’s minus .8 rating.

The Midwest had large increases in several metrics. This is despite the fact the region’s September numbers saw the biggest traffic declines nationally.

Sales (4.3 percent) and traffic (6.1 percent) also decreased for the West in September by 4.3 percent and 6.1 percent respectively. However, those are better than the 8.8 percent and 7.4 percent declines seen for August.

RetailNext analyzed a total of seven million shopping trips nationwide to compile its data for the report.

Image: RetailNext

This article, "In-store Retail Continues Slum In Fall But With Some Positive Signs" was first published on Small Business Trends

NFIB Small Business Optimism Index September 2017

The optimism coursing through many small businesses earlier this year is not as easy to detect right now.

NFIB Small Business Optimism Index September 2017

According to the September NFIB Index of Small Business Optimism report, the dip in sentiment is fueled by a large drop in expected sales.

The results, according to NFIB, have nothing to do with the bad luck many small businesses experienced in the wake of a series of recent hurricanes.

The number of small business owners expecting better sales fell a full 12 points in August. Likewise, small businesses that felt it was a good time to expand fell a full ten points. 

Still, the report isn’t predicting the downward numbers to trend for too long. Experts says it’s more of a momentary realignment of expectations.  

NFIB Chief Economist Bill Dunkelberg says small businesses lost some of their optimism for proposed policy changes in Washington.  While they are still up beat overall, the September slip in numbers echoed this.

But the report found on the NFIB website still reflects an overall positive mood.  

“The Index remains very high by historical standards,” Dunkelberg says.  “Small business owners still expect policy changes from Washington on health care and taxes, and while they don’t know what those changes will look like, they expect them to be an improvement.”

The report also says hurricane relief spending will provide a significant boost next year and reduce the chances for recession. 

Still six of 10 NFIB indexes fell in September. Inventory plans was one of the bright spots rising five points since business owners are looking for a stronger fourth quarter. 

The NFIB Research Center has been collecting Small Business Economic Trends data from National Federation of Independent Business members since 1973.

Image: NFIB

This article, "Small Business Optimism Drops, But Not For Long, Says NFIB" was first published on Small Business Trends

P2P Insurance Offers Small Business an Affordable Alternative

Small business owners need to find secure insurance policies that are affordable. Traditionally, their market has been underserved by both carriers and brokers. That’s where Peer-to-Peer (P2P) Insurance could fill the gap.

P2P Insurance for Small Businesses

The idea is simple. Small business owners use pooled resources to cover the things they need to run their businesses. These costs can include medical costs, vehicles and of course other items needed for operations. When the year is over, the companies with claims can get some of their money back or lowered premiums when there’s a surplus.

An Idea that Sprung from the Digital Age

At first, it might seem like an idea that sprung from the digital age. However, Kyle Hoffman, Vice President of Customer Success at Insureon, told Small Business Trends the origins go further back.

“The core concept being used by P2P insurers is not new,” Hoffman said, “but new players like LemonadeGuevara (now shuttered) and others are innovating with online direct to consumer channels, automation, AI and modern CX concepts.”

Mutual Insurance Design

P2P insurance is built on that older mutual insurance company design with a technology twist.

Leveraging the latest in innovation is one of the ways these P2P insurers distinguish themselves from more traditional carriers. These companies return more profits back to policyholders like small businesses. That makes them more attractive to small businesses but there are some drawbacks.

Lots of Claims?

If you’re a small business that makes a lot of claims, this insurance model might not be for you. Also small businesses need to keep in mind how policies are more limited with the P2P model. It’s a trade-off for the small business. What you get in a lower premium costs in the scope of policies available. P2P insurers keep the costs low by limiting what they offer.

Hoffman says these P2P insurers offer coverage for smaller business that might not qualify otherwise. However, there are a few caveats small business owners need to be aware of.

A Licensed Insurance Agent

“They should read the policy in-depth, consult with a licensed insurance agent, and ask lots of questions to make sure they understand what they’re getting and what they’re not,” he says. Long story short here is this is an option for small businesses, but one you need to look at carefully. Considering just the cost might not get you the coverage you need for a small business like a delivery company.

If you’re a small business owner thinking this might be the way to go, there’s another consideration to mull over. P2P insurance works best with a specific size of small business.

Large and Growing Segment

“Microbusinesses – companies with less than 10 employees – are the perfect target for P2P insurers because it’s a large and growing segment of the market that has traditionally been underserved by brokers and carriers,” Hoffman says.

He also says these smaller small businesses are favored by these insurers because they are easier to underwrite. If you’re the right size and think you might benefit from this insurance model, Hoffman also says you shouldn’t wait.

He predicts the P2P insurance industry will become more sophisticated with time. When that happens, he says the insurers will likely start serving larger businesses for more returns.

Doctor Photo via Shutterstock

This article, "P2P Insurance Offers Small Business an Affordable Alternative" was first published on Small Business Trends

Half of All Small Businesses Using Old WiFi Technology Nearly a Decade Old

Small businesses are using older WiFi that doesn’t fit their needs on several fronts. A new Linksys sponsored survey says half of the small businesses polled are using WiFi technology that’s over eight years old. Beyond not being able to keep up with mobile expansion, business owners are concerned over the lags in security and speed.

Problems with Small Businesses Using Old WiFi Tech

These findings are important to small businesses still using older WiFi technology. Smaller enterprises that work online need to be both flexible and fast to respond to changing client needs. Your download and upload speeds are the flux to beat the competition to sales. Beyond that, they make for quicker networking with everyone from visitors to mobile employees.

Other Technologies

Mobile is quickly making landline and other technologies a thing of the past.  The Wave 2 MU-MIMO Wi-Fi Opportunity for Channel Partners, an IDC InfoBrief, sponsored by Linksys, reports most ( 75 percent) of suppliers expect a 25 percent increase in the number of WiFi connected small business customers this year. It’s critical to stay on top of these trends to attract both clients and talent.

Finally there are big security concerns. Almost half (48 percent) of the small businesses responding called security one of the “pain points.” A small business can be ruined if employee and client data gets hacked.

Strain of Laboring Under Old WiFi

Ray Boggs, vice president of Small and Medium Business Research at IDC said in a recent press release small businesses feel the strain of laboring under old WiFi platforms.

“And they feel the connectivity strain of supporting more and more mobile devices even as they benefit from a more productive workforce,” he said.

Latest WiFi Platforms

The report also points to the latest WiFi platforms  as a solution. Wave 2 and MU-MIMO are the latest in cutting edge technology aimed at the small business market. The report even suggested small businesses look to hubs, switches, routers and the necessary cloud services that work with Wave 2 and MU-MIMO.

MU-MIMO technology has several big advantages to the small business. For example, using this technology, an entire office can join one video conference in a secure environment.  Large files can be sent from the cloud and a large email downloaded without buffering, to name just a few of the benefits.

Faster Router

The technology makes a small business router faster. That way, it takes less time to get the information needed to make business decisions. The technology is developing and needs a USB Adapter or enabled router.  Most WiFi routers operating on older technologies won’t work here.

Linksys was the first company to market this technology in 2016. They currently have a variety of MU-MIMO technology designed for small business like the Linksys USB MU-MIMO Adapter.

WiFi on Latte Photo via Shutterstock

This article, "Half of All Small Businesses Use WiFi Technology Almost a Decade Old" was first published on Small Business Trends