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SBA Loan Basics

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Creating or maintaining a small business allows people to grow personally and within a community, bettering both. However, funding a small business can seem like a daunting, or even impossible task. There are numerous methods to achieve funding for a small business, with differing level of risks and requirements. One method that offers many positives, with less "drawbacks" than alternatives, is funding your business through the Small Business Administration (SBA) and their loan program. Small businesses are able to build, grow, and scale based on funding from the SBA loan program(s).

What is a SBA Loan?


SBA Loans are loans provided through the Small Business Administration and are a form of government guaranteed loans. SBA Loans are dispersed and handled through a specific bank, or "third party". This third party provides the funds to the small businesses. On the other hand, the government provides assurances to the third party in terms of repaying and backing the loan. There are several types of SBA loan programs based off of numerous factors. For example, the SBA 7(a) Loan Program is the SBA's most popular loan. The SBA 7(a) loan provides funding based off of perceived financial need, spanning from $350,000 - $500,000. The SBA loan programs allow for more assurances, and less worries, for all parties involved. Subsequently, SBA loans offer a great path for funding the start, growth, of scaling of any small business.


SBA loans offer many benefits in comparison to other forms of funding for small businesses. For example, SBA loans offer extended loan terms and amortization rates. Successively, this clears up and improves cashflow amongst business owners. Furthermore, SBA loan programs reduce the initial down payments and collateral amounts for the loan. In turn, this also clears up cashflow for business owners to improve their business currently, make payments towards other bills, or any number of alternatives. Many benefits of SBA loans stem from their guaranteed basis, which allow third-party lenders (banks) to be more lenient than usual -- this leniency is reflected in increased cashflows for business owners.

SBA loans offer more benefits than just those that lead to increased cashflow. For example, many SBA-sponsored lenders provide extensions of credit when it often is unavailable elsewhere. Furthermore, SBA lenders consider the entire project for financing, as opposed to other lenders. Often, outside lenders will not include aspects such s soft costs when considering financing. Finally, SBA loans will cover collateral "shortfalls", in which someone could not provide the industry standard/typical amounts of collateral.

Eligibility Rules and Exclusion(s)

A few rules and regulations around SBA loans exist, such as exclusions and eligibility rules. There are not a ton of exclusions, but it is important to know and recognize what they are prior to applying for a SBA loan. The same thought-process applies to general eligibility rules; you do not want to wait till the application process to find out that you are not within the parameters of an exclusion, but are also missing a necessary asset to fit within the eligibility boundaries. Some of the rules are as follows:


Some basics to be aware of in order to be eligible for a loan from the SBA include, but are not limited to, the following:

  • Owners assets may be required to secure a loan. Being said, this means be ready to present a summary of eligible assets that you may have in order to leverage collateral for a loan. Furthermore, this will show the bank that you are prepared.
  • Background Checks in order to assure the background of any applicant, including making sure that a person is who they say they are. Furthermore, this allows the bank to weed out any criminal affairs or potential problems prior to the loan process.
  • Individual business owners must be US Citizens, or legal Permeant Residents. The SBA is only allowed to sponsor loans to legal US-residents and citizens, based on prior rules.


Some exclusions are self explanatory based off of eligibility requirements. However, some other stipulations that could lead to exclusion  from SBA loans are:

  • A loan cannot be used to pay delinquent taxes. This means that someone cannot receive SBA-sponsored loans with the intention of using them to pay back- and delinquent-taxes.
  • A loan cannot flow directly back to the business owner or key-employees of the business. This means that the funds from a(n) SBA Loan cannot be used to directly fund key members of the business -- this stops business owners from taking out loans for personal or non-ethical reasons.
  • Non-residents or non-US Citizens are unable to acquire an SBA Loan, based off of the eligibility requirements found above pertaining to residency status of applicants.

Interested in finding out more? Reach out to a PASBDC consultant today!


Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.



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Legal Formation 101

Legal Formation event graphic

Many people are confused when the topic of business entities and legal formation arise. For most people, the question begins with "what even is a business entity, and why is it important to have one?" From there, people often wonder if the process is as long and dubious as other legal process, and if so, how they will take on this gargantuan task. In terms of legal formation, there are Limited Liability Company (LLC), General Partnerships, and Limited Partnerships (amongst many more). However, while legal formation is not simple, it also does not have to be this hazy, complex, and misunderstood concept. This guide will break down the basics and essentials of legal formations and becoming a business entity.

Importance of Legal Formation

Legal formation can occur in a few different ways, depending on the kind of business someone is in, the legal precautions they choose to take, and a few other factors. However, regardless of the kind of legal formation someone chooses to undertake, they should take some sort of formation. Legal business formation "will determine the personal liability of the founders, how taxes are paid, and other important details"(Cite #1).

Legal Formation Basics

There are five main legal structures  for businesses, in most cases. These structures differ greatly in what they encompass, and are as follows:

  • Sole Proprietorship, in regards to business formation, is someone who owns an unincorporated business by themselves. This type of enterprise is owned and run by one person and there is no legal distinction between the owner and the business entity.
  • Partnership is "the relationship between two or more people to do trade or business. Each person contributes money, property, labor or skill, and shares in the profits and losses of the business" (cite #2). In terms of business formation, this means two or more participants taking ownership of the business.
  • Limited Liability Company (LLC) is a legal status that relieves "business owners of personal responsibility for their company's debts or liabilities and establishes the business as its own legal entity" (cite #3).
  • Corporation, in this sense, is similar to an LLC in the fact that it relieves business owners of personal liability due to business logistics. However, a corporation is owned by shareholders, as opposed to an LLC.
  • Non-Profit is a business that has been classified as a legal entity and "has been incorporated under state laws to operate for purposes other than making profits"(cite w/ #4).

An LLC is the legal formation that fits most situations of legal formation the best, at least in terms of for-profit businesses. However, make sure to seek further counseling before deciding which form of legal formation to pursue for your business!

Documents and Essentials

Initial Documents and Information

A small business owner needs some essential information prior to embarking on the journey to legal formation. Potential first steps and questions to consider in the legal formation process are:

  • Solidify name of your business
  • How much start-up cash will you/did you need to begin?
  • How many employees will you/did you have during your first year of business?
  • What US State will you form in?
  • Will you have any "partners" who have ownership stake in your business?

These questions and considerations are not all encompassing. However, they do lay down a good framework for small businesses and start-ups to begin their journey to legal formation, while minimizing mistakes and roadblocks.

Employee Identification Number (EIN)

An Employee Identification Number (EIN) is the equivalent of a Social Security Number (SSN), but for your business. Whereas people have SSNs, business entities and legal formations register with the IRS with their EIN. An EIN will allow the IRS to identify your business. Furthermore, an EIN is an essential item before next steps within the business process, such as creating a business bank account, gaining a small business loan, etc.

Bank Account

Other essentials, such as an EIN, are required before being able to start a bank account for your business. Therefore, meeting all prior requirements (business name, EIN, business license, etc.) is of the utmost importance when considering obtaining a bank account specifically for your business. This business will aid in legal formations as it takes a step to further clarify the divide between personal and business finances.

Lawyers and Logistics

In terms of legal formation, a lawyer is not essential -- none of the numerous processes outlined within this blog specifically or legally requires a lawyer to carry-out. However, legal formation is a cumbersome and thorough task, with much room for errors -- these errors are easily alleviated and/or avoided on the front-end, but can be costly to fix and reverse at a later-date. Therefore, it is suggested that you do not treat legal formation like a DIY-project -- instead, involve the help of a legal professional if possible.

There are a few focal points when searching for the aide of a legal professional that is right for your business and yourself. Aside from how the professional relates to you personally, it is important to find a lawyer that:

  • Has a lot of experience in the field of legal formation and business-law. As with anyone you seek to hire, experience stands out -- you do not want someone who is just learning the ropes of legal formations themselves handling the process of turning your small business into a business entity. Therefore, seek someone with tenured experience and quantifiable past-results when searching for a legal professional to aide in the legal formation process.
  • Can connect and communicate with you easily, clearly, and frequently.  Any professional, no matter how good or experienced they are, will not be able to assist you in the legal formation process if communication is foggy. Sometimes, people just do not see eye-to-eye about communication. Therefore, it is essential to find someone that you can easily communicate with in order to remove the possibility of miscommunications and avoidable errors.
  • Asks a lot of questions. This is another sign of an experienced, detailed-oriented professional. Furthermore, this trait shows the your legal professional has an interest in not only the legal formation process, but your business as well.

If you have any other questions related to business formation, starting a business, or anything else small-business related -- take the time to schedule an appointment with your local Pennsylvania Small Business Development Center today!

Works Cited



Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.

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How to Create an Exit Strategy

How to Create an Exit Strategy for Your Small Business

Buy or sell your business iconExit strategies are essential to the well-being of any small business. These exits can vary, from passing a business down through a family member to selling a business in it's third year of operation to a stranger. However, despite variances in the methodologies of how business owners exit their business, one thing holds true: at some point, every business owner must exit their business. Therefore, developing a proper exit strategy is essential to the success and longevity of any business.

What is An Exit Strategy?

An exit strategy is an actionable plan that allows a business owner to maximize the value of their business when selling it. An exit strategy encompasses many aspects of a business in regards to selling. These aspects include, but are not limited to, how much the business is worth, how you plan on selling the business, and who you plan on selling the business to when the time comes. For example, do you plan on passing this business down to a family member, or just any person with the funds and good intentions? Furthermore, how much should your business be sold for in the first place? All  factors of an exit strategy are important and must be treated as so. Exit strategies allow business owners to not blindly make important decisions regarding their business and legacy.

Pre-Sale Business Cleaning

A business is similar to a home or car in many ways. For example, owners often struggle with selling a long-owned car, vehicle, or home. Similarly, an owner is responsible for a few logistics prior to being able to sell their car or business. This stage focuses on making your business as attractive as possible for buyers. "Cleaning-up" regards the process of fine-tuning the logistics of a business prior to planning to sell. This stage of the exit strategy is somewhat preliminary, but vital. Owners can raise the value of their business, or handle unexpected mistakes, by cleaning-up their business. While there are many faucets of cleaning a business, there are key areas that cannot be overlooked when fined-tuning your business. These three areas are necessary for a successful exit strategy, and as follows:


This step of an exit strategy consists of refining the legal logistics of a business. Cleaning-up legal matters includes making sure that one's business has no outstanding legal issues. These issues could be something such as lawsuits that are pending against your business. Additionally, a business owner should ensure that all of their licenses and regulations are up-to-date. Many licenses are necessary for business operations but can sometimes go overlooked. In turn, any unresolved matter can cause problems for a business owner looking to sell. In many cases, legal issues will lower the value of a business in the eyes of buyers. Unresolved legal matters or issues can make it impossible (or at least, improbable) to sell a business. Cleaning-up any legal issues is a key step for any successful exit strategy.


The financial aspect of cleaning-up a small business for sale includes reviewing over and polishing all financial aspects of the business. For example, evaluation of prior income statements, balance sheets, and tax documentation are all parts of cleaning-up a small business. Business owners can get a better gauge of valuation by reviewing these financial documents, as well as fix any past errors. Cleaning-up the finances of a small business is compromised of the bookkeeping of past and present financial documents for your business.


Cleaning-up the marketing of a small business, in regards to an exit strategy, refers to boosting the business' public image. The value of a small business can often be boosted, or lowered, based on public opinion of the business. This phenomenon is visible daily in the rise and fall of various stocks based off of public opinions, and the business' or owner's actions. Therefore, a business owner can increase the value of the business that they are selling by improving or maintaining the business' public image. Good finances, logistics, and products can only get a business so far -- accordingly, cleaning-up the brand surrounding yourself and your business is essential when selling a small business. Having a good brand can only work positively for a business, and subsequentially the business-seller.

Asking Price

A reasonable asking price is a very important part of selling a small business. An adequate asking price will allow you to maximize profits on the sale of your business. For example, an overestimated asking price may minimize or scare buyers. On the other hand, asking too little can decrease the actual value of your sale. A business owner must complete an accurate valuation of their business in order to achieve a fair asking price. Valuating a business can depend on various factors, each of which are different from business to business. While there are many components of valuating a business, there are many factors that should not be included. For example, emotional attachment to a business not be a high-impact factor valuating your business. For more tips of valuating your small business check out the "Valuation" section of our blog on "Funding Your Purchase of a Small Business". 

Regardless of how a business owner comes to their asking price, it is essential that the price be fair. Do not be afraid to negotiate on your asking price! Compromise and negotiating are essential to creating a reasonable asking price, and in turn a profitable exit strategy.

How to Sell

There are a few options for how to sell your small business, and deciding the correct strategy or method differs from person to person. However, it is essential to a good exit strategy for a business owner to know who he wants to sell to. Some options include a business broker, someone the business owner knows personally, or the open market. Selling your business to someone you know may leave an owner more secure in the future of that business. On the other hand, selling on the open market may maximize the value of the business sale. A business broker is a good option for a seller who does not want to be as involved in the selling process or needs assistance--  a business broker can handle much of the legwork, and just present the seller with the final options.

While these options are some of the more frequently-taken routes, it is important to remember that these are not the only options. For example, many companies merge with other or larger businesses. This option allows the seller to possibly maintain levels of involvement within the new company. A seller must have a solid plan for how to sell, regardless of which option a they choose.

Execute and Announce

Finally, the exit plan ends with the execution and announcement of the business deal! This step is often a big sigh of relief for business sellers. However, the final step of your exit strategy should not be rushed. For example, it is important to not reveal your business deal to customers or the public until the deal is final. This aspect is important for a few reasons. Primarily, this makes sure to not confuse customers or the public if the deal was to fall through. Furthermore, this keeps other options open for other potential buyers if the deal falls through. A seller should take their time and be precise in the execution and announcement stage of the exit strategy; as the saying goes, do not count your chickens before they hatch.


Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.

The First Steps to Starting a Small Business

Starting a Small Business PASBDC Edition

Starting a small business can be a daunting task. Many people are deterred from creating a small business due to the fact that they do not even know where or how to begin. Starting a business is not small task, and takes much time and effort. However, the process of beginning a new business can be broken down into a few key steps.


Preliminary Evaluation

Any small business begins with a vision and dream -- this includes creating an idea that you are passionate about pursuing, and see as a viable path to creating income. Many people create a small business based upon what they love to do, are good at, or what they deem necessary or useful to the world around them. In the words Thomas Edison, "I find out what the world needs, then I proceed to invent it". This mentality, paired with ambition and passion towards a subject, embodies the first stage of creating a small business. Within the preliminary evaluation stage it is essential to see what target demographic and market your potential business would appeal to, and why. A vision or dream without backing, research, and calculations is just that: a dream.

An in-depth business plan and outline are not necessary during this stage of starting a small business. However, a general outline of how your business would function, who you would sell to, and how you can differentiate yourself from others within a given industry is key. The preliminary evaluation stage of starting a small business is creating and testing the feasibility of your business idea. Furthermore, anyone looking to start a small business should set goals, both short-term and long term-, after establishing feasibility of their business concept.


Business Formation

Business formation is the next step in starting a small business. Essentially, this portion of the process consists of three main elements. These elements are essential to the success of any small business.

Name and Form

After creating your business idea you are going to need a name. This name can be simple or complex, but is essential to the success of your business. Registering a name for your business is the beginning of building your brand. The name should reflect aspects about your business that differentiate you from competition.

Employer Identification Number (EIN)/ Tax Registration

An EIN is a unique nine-digit number that identifies your business for tax purposes. An EIN will allow you to make use of some key features for your business, such as creating a bank account. Furthermore, an EIN will allow for proper tax registration for your business with the IRS. There are numerous ways to apply for an EIN, including online or through the mail. A potential small business owner will need to contact the IRS about creating an EIN, regardless of the application method. Furthermore, an EIN will ensure that you do not fall into some very detrimental tax problems.

Bank Account

A bank account for your business is essential. A business account will allow you to differentiate personal and professional funds. This differentiation helps in numerous ways, predominantly with organizational and legal purposes. Furthermore, a business bank account will add a layer of professionalism to your business. Opening a business account can be a lengthy process, and differs from business to business. An in-depth guide to opening a bank account for your small business can be found here.


Business Plan

The business plan is an essential, and very critical, part of the process of creating a small business. A business plan can be viewed as the skeleton for your business in which you intend to later "hang the flesh". Fundamentally, a business plan forces you to do a few things. First, a business plan causes you to think about your business in an organized, specifics, and critical manner. Furthermore, a business plan allows for you to evaluate the financial feasibly of your business in a more in-depth manner.

Successively, a business plan will allow you to anticipate and address operational issues on the front end; this is always much easier than dealing with problems on the back-end, in a reactive manner. Finally, a good and thorough business plan allows a business owner to persuade potential clients and investors. For example, banks that you may need to work with to obtain a loan or other financing options.

For many reasons, creating a business plan is often seen as a very daunting task for new and potential business owners. However, despite many business plans very in-depth, there are a few key similarities between all business plans. Primarily, your business plan needs to disclose all assets and loans. In turn, these disclosures will give a well-rounded view of the financial standpoint of yourself, and subsequently your business. These standings will come in hand in the next stage of creating a small business, financing. The financial breakdown of your business in your business plan needs to be clear, concise, and most importantly honest. Honesty will result in the most accurate business plan.


Financing Decisions

Financing decisions are integral to starting a small business. After all, many people do not have the funds to begin their small business out-of-pocket. Therefore, securing the necessary resources to start your small business a critical aspect that cannot be overlooked. Financing for your small business can come from many places, but here are a few that many people utilize on their paths to success.

Commercial Banks

Commercial banks offer various forms of financing for starting a small business. One of the most utilized methods of obtaining financing from a bank, loans, allows you to put down collateral in return for large sums of money. This collateral can come from many different sources such as your home or car. Putting something important to yourself, such as your home, up for collateral can be a large leap of faith. Furthermore, these choices can be very scary. Therefore, it is essential that you are ready to take this leap of faith and are properly prepared before utilizing any assists for collateral. Preparation, such as a through and well-rounded business plan, will allow hep to mitigate some risk.

Along with collateral, many banks will want or need a potential loanee to have a percentage of the capital that you are looking to receive. This percentage can vary from person to person and bank to bank, but many commercial banks aim to see that a loanee has about 20% of a capital contribution. For example, if you are looking to take out a $100,000 loan, many commercial banks will ask that you have at least $20,000 of capital to put down.

Commercial banks also look at outside factors before granting people loans. These factors include a credit analysis that consists of aspects such as credit rating, credit capacity, and credit condition. While these some of the primary details about potential loanees that commercial banks inspect, they are not all-encompassing.

Non-Banking Options

A helpful option for people who do not want to utilize a commercial bank, or are unable to, are Small Business Association (SBA) loans. SBA loans are loans that have somewhat higher interest rates, but offer other benefits that are not common in commercial banking. For example, an SBA loan offer requires less collateral at 20% versus commercial banks' 100%. Furthermore, SBA loans often require a lesser capital contribution of around 10% versus commercial banks' 20%. Furthermore, the SBA is willing to take on higher-risk clients than most commercial banks. SBA loans are valuable resources in terms of financing a small business.

Another non-banking option for financing the start of your small business is to utilize investors. Investors can come from a variety of places. For example, family and friends that want to support you can often be great potential investors. Influencing investors comes from pitching the validity and feasibility of your small business. These traits are drawn from heavy preparation. Many times this preparation is linked to other aspects of starting small business, such as a meticulous business plan.

Aside from investors many people utilize personal savings and credit to finance their small business. These methods can be more risky, but are feasible options in many cases.



The final step in the process of starting a small business is execution. It is important to follow your business plan. However, know that your business plan is not a static entity--changes and adjustment based on the results are important. Continuous improvement and reviewal of a business plan will allow for an innovative small business. Furthermore, your local SBDC is always a viable and helpful resource for further consulting at any stage of your small business development!


Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.

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Effective Sales Channels for Small Businesses

Sales channels are the methodologies that businesses and corporations employ to conduct business. Whether businesses choose to sell directly, indirectly, through wholesale, or online, are all examples of different sales channels. Sales channels are commonly referred to as a touchpoint between a business and their customers. In laymen's terms, a sales channel is the ways in which a business delivers it's product or service to their customers.

Boosting sales through varying channels and methods can be a formidable task for small businesses. Utilize these tips to boost revenues and exposure!

The importance of sales channels cannot be overstated. Without proper sales channels it can be virtually impossible, and definitely problematic, to make revenues and profits. The backbone of any small business can be linked to well-thought and well-executed sales channels. Furthermore, sales channels emphasize and help to achieve the marketing goals of any organization. Marketing goals are often, if not always, linked to sales channels.

Online Sales Channels

There are many various online sales channels that are out there for small businesses. Increasingly, people are shifting their purchases from in-person to online. In particular, this has truly become the case after crises such as the COVID-19 pandemic. Therefore, the need for and utilization of online sales channels are growing daily, both in options and leverage. Here are a few examples of online sales channels that can be especially helpful for small or growing businesses:


Email Marketing

Email marketing functions as an excellent tool for small businesses in several ways. On the whole, it allows businesses to reach out to existing and new customers in order to gain further attention. In turn, this increased exposure can lead to higher sales for the business. Email marketing also is a direct way to link your potential customers to your business. Instead of needing to go through a third-party website, or a referral (online or in-person) your customer is able to directly go to the business page from the email. Furthermore, the customer can be linked directly to a specific product that caught their eye, as opposed to having to sort through the entire webpage.

Another positive aspect of email marketing for an effective sales channel for small businesses is cost. Email marketing, compared to other forms of adverting, is relatively low-cost. Sales channels that are low cost and can produce higher revenues can be essential for small businesses, especially those working with minimal funding. This is especially true in the digital era of today, where often spending more money can lead to much higher rates of exposure. Rather, email marketing provides the opportunity for businesses to have a large reach, while minimally spending.

Social Media Sales

This channel for sales and marketing offers many advantages for small businesses pursuing online revenues. Social media platforms offer a unique online sales channels for many reasons. Principally, social media platforms operate and depend on person-to-person interactions. These interactions are also applied to businesses and services in the form of "Word-of-Mouth"(WOM). WOM can be either detrimental or helpful to businesses, depending on the negativity or positivity of the review. People always have less skepticism when hearing a good review from a friend, coworker, or neighbor, than from a paid-advertisement.  Therefore when positive, WOM offers some of the most helpful and pure form of advertising for a small business.

Other positives for social media sales channels are present, aside from the positive increase in marketing/exposure. Namely, the opportunity to sell to different demographics of online buyers. People who purchase products and services from Amazon and Google searches are not always the same people searching for deals on platforms such as Facebook. Therefore, taking advantage of a differing user-base can also allow for more efficient and/or boosted sales. Utilizing social media platforms as a sales channel always small businesses to get closer to "covering all of their bases" in terms of customer populations. A few examples of specific social media platforms that function as great sales channels are Facebook, Instagram, and TikTok.

Search Engine Marketing

Search Engine Marketing (SEM) offers many similar advantages as email marketing in terms of boosting ability for customers to connect with a small business. SEM creates an advertisement that will lead a customer directly to your business. Often, similar to email marketing, specifically to one of your business's products. As mentioned, marketing and sales channels are intertwined; both strive to boost viewership to business pages and offer the crossing-point for customers and businesses. SEM ads are usually visually stimulating for customers, and excellent at grabbing their attention. Furthermore, SEM utilizes keywords to link customers to businesses based exactly upon customer's needs and preferences. In turn, SEM creates an excellent sales channel to lead customers to small businesses.

Retail Sales Channels


Commercial retail locations are one of the oldest and most effective sales channels. This may seem redundant, establishing a brick-and-mortar location in order to make sales. However, today's digital age has leg to an increase in many small businesses that are 100% online. Businesses such as these often have physical locations for logistics, but no actual storefront location as a sales channel. Therefore, it is important to evaluate if a storefront channel could offer a boost in sales and revenues for your small business.

On the other hand, not having a retail storefront can also save money for small businesses in some instances. This depends on what kind of business a person is in, among other factors. An example is if storefront sales are especially low for a small business that thrives on online sales. In this case, a r4etail storefront may not be the most efficient sales channel.

Wholesale Sales Channels

Previously-mentioned channels have targeted smaller sales demographics. In contrast, wholesale offers a channel for sales that targets larger quantity sales. Bulk sales have many advantages in compared with smaller online and typical retail sales. In particular, wholesale offers small businesses a sales channel that allows for large revenue sales. With wholesales, a business can sell five-hundred shirts instantaneously, as opposed to order by order, or sale by sale. This increased efficiency and revenues can be a huge boost to small businesses. Furthermore, wholesale offer a sales channel that often leads to recurring and sometimes longstanding relationships between businesses and consumers. Buyers want to return to a small business when things go well. This concept is amplified when applied to wholesales, seeing that buyers are obtaining much larger quantities.

Nonetheless, wholesale channels offer a downside as well. Customer service plays a large role in wholesales. Additionally, service can be much more difficult at the wholesale level. Orders are often larger and/or more frequent than what many small businesses can anticipate, or have the workforce to handle. Small businesses can struggle with large upscales, and should keep that on their radar. Another downside of wholesale can be that consumers often expect, if not demand, lower prices when buying in bulk. Sometimes lower prices work out for both parties; larger sales for the business, cheaper price per unit for the consumer. However, small business owners should analyze the tradeoffs afford the cost associate with lowering prices.

What Sales Channel is Best for My Business?

Deciding which sales channel would most effectively help your business is a hard question. There are a few key factors that any business owner should consider when deciding which sales channels to employ. One factor is the finances of your small business, and simply what sales channels your business can afford. For example, not all small businesses can afford the costs of upscaling that often comes with wholesale as a sales channel. Another financial consideration stems from the cost to utilize certain sales channels. The cost of email marketing can be much lower than SEMs due to the fact that SEMs often are pay-per-click. To boot, pay-per-click can often lead to a variable set of cost, as opposed to the standardized rate that comes with the rent of a storefront. All sales channels offer differing levels of financial costs, benefits, and utility for a small business.



Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.

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Web Analytics for Your Business

Web analytics are the "collection, reporting, and analysis of website data". The intent of web analytics are to create and identify measures and goals for your website, and then employ data from the website in order to achieve said goals. Essentially, web analytics are a two-fold process. Web analytics allow people to create goals for their webpage, and then to analyze data webpage in order to compare the results to their metrics. Web analytics are therefore useful to business owners in numerous ways. Primarily, these metrics allow business owners to set goals and standards. Goals and standards are essential to any business, large or small. Furthermore, web analytics allows businesses the opportunity to increase how they are doing in "key metrics". We will touch more on what these key metrics are, and how businesses go about forming and maximizing them.


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How do I increase interaction on my webpage? How do I get more people to actually buy once they are viewing my content?

Basics of Web Analytics

Web analytics are a topic that people have written whole books about. However, for the sake of brevity, web analytics can be broken down into three main steps:

Creating Business Objectives and Goals

Identifying what goals and objectives your business has on their webpage is critical to the success of utilizing web analytics and data. Goals and objectives act as a metric that will be the basis of your web analysis. For example, how can anyone (in a general sense) know how to measure success or failure if they do not have a standard to compare it to? Therefore, pre-set goals and objectives will act as a standard.

These goals vary greatly from business to business, and can be anything from improving website viewership to increasing how often people who interact with the webpage actually purchase items. Regardless of the goal itself, these objectives should ask hard questions of your business and webpage. These questions can be as vague as "what is the purpose of this business", or as specific as "how and why do we want to increase webpage viewership". It is essential that these questions are critical and are answered honestly in order to achieve the highest level of success for your webpage. In turn, these objectives and goals will stand as your metrics for success or failure.

A great tip when creating goals and objectives for your business' webpage is to make sure that they are DUMBNow, this does not mean that these goals are overly simplistic. Instead, it means that your goals should be comprised of four factors. These goals should be Doable, Understandable, Manageable, and Beneficial. This acronym breaks down your webpage and business goals into easy steps, and while somewhat over-simplified, can be extremely helpful.

Create Calls-To-Action 

Calls-to-Action on websites are something that many people are probably familiar with, but do not realize. Calls-to-Action are prompts on a website that tell users to take a specific action. A well-known example would be a "Read More Here!" prompt at the bottom of a webpage article. These prompts should align with the goals of your webpage. Therefore, if one of your goals are to boost how long viewers stay on your webpage, then a good prompt would be something along the lines of "Read More Now". However, if different goals require differing prompts. For example, if your business goals include boosting the amount of viewers that make a purchase than your call-to-action may be more along the lines of "Buy Now!". Regardless of the prompt, it is essential that they align with your objectives in order to propel your webpage forward.

Identifying Key Performance Indicators (KPIs)

KPIs are a metric that help webpage owners to understand how they are doing against their objectives. KPIs, similar to business goals, differ from business to busines and webpage to webpage. However, a similarity remains; one cannot gauge their success without a metric to gauge it against. These metrics can be something simple as webpage viewership. However, unlike the webpage goals/objectives, KPIs are more specific. Instead of wanting to boost viewership, which is a goal, a KPI would indicate that the webpage owner wants to increase the amount of clicks on their page from 1000 per month to 3000. In this example, "clicks per moth" are the KPI whereas increasing clicks per month is the goal/objective.

Useful Web Analytic Tools

Webpage analytics can seem like a very formidable challenge. However, the growing use of analytic tools and outsource make it easier than ever before!

Google Analytics

Google Analytics is one of the top rated webpage analytics tools on the market today. There are many perks of using Google Analytics for your small business webpage. For example, Google Analytics is both fully automated, but also customizable. This allows business owners to shape their analytics to fit their goals and KPIs, while also not having to constantly monitor the analytics. Another useful aspect of Google Analytics stems from how easy it integrates with other platforms. Google Analytics is downable and appears on your computer dashboard similarly to many other add-ons.

Not only is this platform very helpful, but it is also free! The utility of Google Analytics, in combination with no cost, makes it an essential tool for small business owners attempting to crack into web analytics. Also, there are also paid version of Google Analytics to fit the needs of anyone who feels the free version is not enough coverage. The ability to get free or paid coverage by Google Analytics is a very unique trait for small businesses, or those who intend to upscale.

Yahoo Analytics

Yahoo Analytics offers many of the same perks as it's counterpart, Google. However, Yahoo Analytics carries a much smaller "market share" than Google Analytics. This can be seen easily when examining that Google Analytics operates for over 13 million websites, whereas Yahoo Analytics only covers about 8,000. Despite the fact that Yahoo Analytics is not as large as it's counterpart, it still offers many similar features. While Google Analytics may be the better option (and in some cases the best), it is still worth the time to examine some of the pros and cons of Yahoo.


Useful Analytics to Track

Email Marketing

Email marketing is an excellent tool for grabbing the attention of new potential customers. In theory, quality email marketing tactics will allow for more viewership to be directed to your page. Increased viewership is good for numerous reasons. Primarily, increased viewership will allow you to have more data. This data will show you not only how many viewers you have, but how long they stay, what pages they exit on, and how many are converted to purchasers. Furthermore, many business owner's goals are simple to boost viewership--this means that email marketing would at least check off one goal or objective in itself.

Leveraging Social Media Channels

Keeping your social media pages up to date with fresh, concise, and relevant content will help to optimize the platforms. In doing so, business owners will help to draw viewership to their webpage through referrals from social media pages. People love to see social media pages that have new content every week or few weeks, especially when this content is relevant and interesting! On the other hand, social media pages with old, out-of-date, or irrelevant content can be detrimental to the optimization of ones' webpage. Therefore, business owners should work equally hard on their social media pages as their webpages. This includes staying updated on newer social media platforms, such as TikTok.


Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.

Woman holding a smart phone with TikTok logo on the screen

TikTok 101 for Small Businesses

Digital marketing is an essential and growing priority for any business. This is especially true for small businesses. For small businesses, online exposure can be the difference between growth and stagnation. TikTok is a relatively new platform that offers excellent opportunities for businesses to gain more exposure. For example, TikTok employs algorithms that allow content to not fade out with time, such as is the case with platforms such as Instagram. There are many success stories around businesses using TikTok to trampoline their brand to the next level. TikTok is an entertainment-first platform that allows users to interact with content that they may not have through other channels. The importance of TikTok to your small business can be broken down into a few key components.


The Importance of Tiktok to Your Business

The benefits of advertising on TikTok for your business cannot be overstated. TikTok is a unique platform in comparison to other platforms for a few reasons. Primarily, TikTok is a relatively new platform. Therefore, the room for growth of TikTok as a platform is larger than other alternatives. In turn, as TikTok becomes increasingly larger, so can your business' exposure on the platform. The sooner your business begins to utilize TikTok as a marketing channel, the more established your brand can become. You wouldn't want to be on the back end of the "TikTok boom", and fall behind competitors!

Another reason TikTok is important to your business stems from the advanced analytics and algorithms of the platform. TikTok also offers advanced analytics to business owners. These analytics allow small business owners to track their daily viewership, interactions, and potential income on the platform. Generally, algorithms on TikTok create a "echo chamber" that show consumers content related to what they already like to watch. Therefore, analytics function in two ways. First, these analytics locate and target people that may be interested in your product, service, or brand based on their viewership! In doing so, TikTok also allows you to track these viewers on your page.


Steps for Small Business Success on TikTok

Content Standards

The content standards for TikTok differ greatly from other platforms. When creating content for your TikTok page businesses should aim to grab the attention of viewers in the first one or two seconds. People often spend hours on TikTok, but will scroll past videos that do not capture their attention within seconds. For that reason, your TikTok videos should be structured in a manner that truly stands apart from other posts. When creating a TikTok video the emphasis should be on what the video is about, as opposed to how it is shot, etc. Business owners should focus on capturing the attention of their viewers with the content of their videos, not the quality.

Business owners should not be overly-critical of the quality of their TikTok videos. TikTok is a platform in which content is more raw, and less polished. The rugged style of TikTok videos make them not only feel more realistic, but also more personable. For this reason you can create a TikTok on any equipment, from a 4k camera to your cell phone camera. However, a point of emphasis should be made around keeping your TikTok videos vertically-oriented. This is important for many reasons. Primarily, videos that are not vertically-oriented often are cropped on TikTok. In turn, horizontally-oriented videos on TikTok appear unnatural, and often deter potential viewers. Remember, TikTok accounts often only have a few seconds to capture attention!


TikTok is a platform on which businesses should post lots of content. Other platforms, such as Instagram and Facebook, require more minimal posting-frequency. However, due to the nature of TikTok and its' algorithms, businesses should aim to keep pumping fresher content onto the platform. Therefore, users should look to post numerous times per week at least. If possible, some businesses attempt to post everyday. There is no exact rule on how often a business should post on TikTok. Some businesses find success with posting daily, whereas others believe that a few times per week is perfect. Careful analysis of how well certain posts do are essential to find the perfect frequency. You should evaluate what works best for your business and act accordingly. However, a generally effective rule of thumb is that a business should post on TikTok three to five times per week.


TikTok is a platform that emphasizes musical, cinema-graphic, and popular-culture trends. Business that stay on top of these trends tend to have more success than other businesses. Furthermore, businesses that are able to noticeable utilize create more original, organic, and personable content.

Competitors' Accounts

There are many resources of a competitors' TikTok that prove very valuable for a small business owner. Competition leads to innovation and creativity. Therefore, it is important to see what competitors within your industry are present on TikTok, and what kind of content they are creating. In doing so, your business can stay up to date on key industry trends.


Remember, starting to use a new social media platform can be daunting, but there are consultants at the SBDC to assist. Sign up for consulting to learn more.


Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.

Website Security for Your Small Business

Website security is becoming increasingly essential in the digital world of today. Hackers are as prominent as ever before, with even large companies falling victim to scams, cyber-breaches, and extortion. For example, in 2021 alone large, multinational companies such as T-Mobile, Colonial Pipeline, and Kroger were victims of hacking scandals. Protecting your business’ webpage is often an ethical and legal requirement.

Ethically, all business owners should strive to keep information safe. Both business owner's information and that of their clientele should be of the utmost importance at all times. However, rationales behind webpage security do not end solely with ethical arguments. Many laws dictate a necessity for security online measures for businesses. An example of a legal requirement would be Payment Card Industry (PCI) compliance. PCI compliances protect the card information of users on your webpage when making transactions. Requirements such as these function to improve webpage security, and in turn keep personal, business, and user-data unbreeched. 

Security Basics

"Don't lock the front door, but leave the window open"

Computer with backlit keyboard

Primary methods of securing your web page begins with controlling and maintaining safe, unique, and secure log-in information. You do not want to lock your front door, but leave the window open. An example of this would be frequently-used or simple log-in information. This is a very common security mistake. Another example would be having your log-in username as simple “admin” or the name of your business. Distinguishing your passwords with variations from other personal or business passwords is essential in the battle against hackers. 

Another method of staying on top of your web page security is to frequently update your software, including but not limited to programs such as WordPress, Apache, and other CRM software. Out of date software is dangerous software! On top of updating these software, a helpful tool for your web page security is a Security Socket Layers (SSL) certificate. SSL Certificates add a layer of protection when data, both user and admin, are in transit to and from your webpage. You may be familiar with SSL Certificates and not even know it! SSL Certificates are frequently used on more secure platforms, such as bank transitions, and appear as a tiny “lock” image in the left corner of your URL bar, besides the actual URL.

Phishing Emails

Awareness and diligence to threats such as phishing are also key factors in securing your website. Thirty-two percent of all hacking occurs through phishing emails. Phishing is the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information. This information can include passwords or credit card numbers. Therefore, phishing emails pose a great danger to webpage security for small businesses. These emails often consist of an seemingly-realistic contact from a "trustable" source, such as a bank. Anytime you come across an email that you are unsure about it is of critical importance to ensure that these emails are from a valid source. This can be done by contacting whoever you believe is reaching out to you through other methods, such as face-to-face or a phone call for confirmation.

Another way to spot phishing emails is to check the URL and sender information--often these identifiers are similar to real email addresses, but have slight differences. For example, a phishing email posing as a bank may say it is from In reality, the bank’s true email address  would be This example is crude and simplistic, but useful. Subtle changes such as these are often clear indicators of phishing emails.

Phishing emails are one of hackers favorite methods of stealing information.

Importance of Website Security


Website security is a matter that cannot be taken lightly. Infringement upon privacy is prominent within the digital world. Hackers are people who utilize various methods to obtain unauthorized access to data. One method, phishing, was touched upon above. However, hackers employ countless methods in order to steal information and credentials. Furthermore, these methods are always adapting in order to stay "ahead of the curve". It is important to frequently research methods of hacking for numerous reasons. Firstly, awareness will allow business owners to stay on top of the most popular methods to date. In turn, business owners can proactively combat hackers in the battle for webpage security. 

Disregard of caution and lack of awareness of hackers can lead to poor website. In turn, lack of security undermines much of a business-owner’s hard work. Awareness of these dangers, in combination with vigilance, will allow you to keep your website and business as safe as possible. Remember, in the words of Martina Navratilova:

"Security used to be an inconvenience sometimes, but now it's a necessity all the time"

Reach out to your local PASBDC with any further questions regarding securing your business’ webpage!


Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.


a glass jar with money rolled up in it

Funding Your Purchase of a Small Business

Many people strive for success in their own business. There are numerous ways to be the owner of a thriving business, whether it be from building the business from the ground-up, or purchasing an already established operation. Despite the same end-result, the different methodologies employed in creating versus buying a small business are very important. One especially important factor in buying versus starting a small business is the way in which you obtain your funds. After all, without proper financing it is almost impossible to be successful with your small business! This article outlines some of the key factors and processes of obtaining funding for your small business purchase.

Valuation and Calculation

Before you can go about sourcing funds to buy a small business, it is important to know a few things about the business. Aspects of the business such as a valuation are essential, as it will tell you how much the business is actually worth. This valuation is a culmination of a few factors, including the businesses debt, profits/revenues, and potential revenues in the future. Furthermore, it is important to look at the potential Return on Investment (ROA) that the potential business has. Other important metrics to keep an eye on when valuating a potential business are their tangible assets, cash flow method, and in-tangible assets.

Another area of importance is realizing a "breakeven point" for the purchase of a small business. The breakeven point is the amount of ROA on your investment that is necessary to "breakeven", or recoup the initial investment. Essentially, the importance of the breakeven point stems from it being an indicator of success or failure; if your investment falls below this point then you are losing money on the investment, and subsequently failing. There are other metrics of success, failure, and general valuation. However, the ones touched upon so far are some of the biggest indicators of if and how much you should spend when purchasing a small business.

Funding Methods

The funding your small business purchase can come from a variety of places. Therefore, which source of funding you determine best fits you is a personal preference involving a few key factors, such as personal finances, credit, and tolerable risk-level. For example, bank loans may be more risky for some people than others. On the other hand, some people deem utilizing personal finances and savings as something that they cannot afford to do at the time. There are many factors at play and options available when attempting to finance buying a small business, and here are just a few:

Personal Funds

Personal funds can be an excellent source of funding for your small business purchase. For example, this method allows you to purchase a small business without the incurrence of large sums, or sometimes any sums, of debt. However, it can be very scary to use all of your personal savings for a purchase. These savings could have been set aside for family, emergencies, or a home purchase. Therefore, it is essential that you take the necessary preparation steps before deciding to leap into buying a small business; this is especially true when spending money that you have worked long and hard for, as opposed to a loan. However, be mindful in the fact that bank loans have many pros and cons of their own!

Bank Loan

Bank loans are an option that many people pursue when financing the purchase of a small business. Despite being a popular and viable option, it is recommended that people are very careful before and while taking out a bank loan for a few reasons. Primarily, an ill-advised or ill-planned loan can result in lost funds, and in turn debt for the loanee. This debt can affect not only your business, but personal life, and cause major setbacks. For that reason, organizations such as the Small Business Administration (SBA) recommends working with an professional, such as an accountant and an attorney, to help you navigate this process. This navigation includes a viable and accurate business valuation and negotiating reasonable interest rates before accepting any and all loans.

Another important aspect to consider before taking out a loan for the purchase of your small business is the tax and personal finance requirements. Banks do not just lend out money to anyone that walks in their doors. Therefore, coming prepared to the bank by having your personal and any prior business finances in order will assist you in getting a loan at a quality rate. Furthermore, it is important to be acquainted with the finances of the organization that you are looking to purchase. Banks are hesitant to loan money to buy a business that they think lack of profitability or have prior debt.


Crowdfunding allows people to invest in your business expenditure without gaining a share of it. Unlike normal investors, who often ask for power or returns from the business, crowdfunding relays solely on people giving sums of money because they believe in your expenditure. For that reason, crowdfunding is one of the less risky sources of obtaining funds to buy a small business in many ways. Crowdfunding has the benefit of obtaining funds with no debt or risk to personal funds. Furthermore, this method leaves you with complete ownership of your new small business. Nevertheless, crowdfunding has consequences of it's own. For example, not all crowdfunding projects end up meeting the necessary financial goals. In these cases, relying solely on crowdfunding can leave people without the funds to actually buy a small business. Crowdfunding is a great source of obtaining funds, but should rarely be the only or primary source.

Seller Financing

Seller financing is an option that allows for a deal between yourself and whomever you are purchasing the business from. In this arrangement, the buyer puts down a smaller lump sum to buy the business initially. Subsequentially, the buyer agrees to pay the remainder of an agreed-upon valuation for the business through payments. These payments often stem from the profits of the new/renewed business, and are more gradual. There are many benefits for both the buyer and seller that utilize seller financing. For example, the seller could agree to get a slightly higher amount for their business than they would have for a total lump sump payment. On the other hand, the buyer is given time to make payments and able to leverage business funds to help the purchase "pay for it self".

If you are interested in buying a small business and do not want to take out a loan, seller financing is an excellent option to discuss with the current business owner!

Small Business Administration Loan

Small Business Administration (SBA) loans are another great source of obtain funding to purchase a small business. One of the more popular forms of loans from the SBA is the 7(a) loan. The SBA 7(a) loan can be utilized for many small business purposes. These include needing short- and long-term capital, refinancing current business debt, and obtaining new businesses or real estate. The SBA 7(a) loan is the most commonly utilized loan by small businesses. There are many benefits to this loan, as opposed to a traditional bank loan. Amongst these benefits are lower down payments, lower interest rates, and more lenient barriers for obtaining the loan.

Lender's Considerations

Lenders consider a variety of factors before deciding to dish out a loan. Many of these factors are related to two aspects of your life and potential business purchase: personal and business finances. Your personal finances include aspects of personal life and decisions such as credit score, outstanding debt, tax returns, and cash flow statements. Business finances include the finances of any prior businesses a person may own, as well as the finances of the business they hope to acquire. These finances include breakdowns of profit margins, balance sheets, and business tax returns. Much of the information that lenders consider at contained within, if not linked to, aspects of the business plan.




Written by Brian Kennerly, Pennsylvania SBDC Lead Office Marketing Team

Brian Kennerly is currently a Graduate Assistant at Kutztown University of Pennsylvania while pursuing his Master's in Business Administration. His hometown is Upper Darby, PA, and he attended the University of Virginia for his undergraduate career.