TikTok – Small Business Advice You Can Use December 9th, 2022

Most consumers are lazy. Rather than do their own research, many consumers look to see what others have said about a product or service before making a decision to buy. This concept is known as Social Proof, and every small business owner should provide social proof to help a prospect make buying decisions.

When you give something to another person, it creates a desire in the person to repay the favor in some way. This is known as Reciprocity, and it is a powerful force for small business salespeople to understand and master.

Every product on the market has a predictable age cohort that is most likely to buy them. The study of associating the age of the consumer with a product category is known as Demand Curves. Businesses need to become aware of a product’s demand curve to properly target their marketing.

There are six characteristics that define a corporation:

1. Associates,
2. Dividing Gains
3. Limited Liability
4. Centralized Management
5. Free Transferability of Interest
6. Continuity of Life

However, if you are an LLC, you can only pick four.

There are three options for an entrepreneur to get into business:

1. Buy an Existing Business
2. Buy into a Franchise Concept
3. Start from Scratch.

Each option along the continuum adds additional risk to the company’s likely success.

Lenders balance risk with reward using three levers:

1. Interest Rates
2. Down Payment Amount
3. Term of the loan.

Once adjusted for risk and reward, the lender can adjust each lever up and down to maintain the overall desired risk and reward level required to make the loan.