Business Information for Entrepreneurs by an Entrepreneur

Mobile text messaging may very well be the newest marketing tool for businesses everywhere. In this age of text messaging, it only makes sense that businesses begin to take advantage of a wildly popular form of communication.

Tremendous Growth in Text Messaging Potential

Called Short Message Service, or SMS for short, this marketing channel seems to be a highly effective way for businesses to communicate with their customers. The Wireless Industry trade group, CTIA, reports that SMS has nearly tripled since 2007 and is now more active than cell phone calls! It is important to recognize that the largest increase in SMS involves people under the age of 30.

Industry analysts note that SMS is a much more effective form of communication than emails. Research on this subject revealed that a whopping 97 percent of SMS marketing messages were opened, and that 83 percent were opened in just one hour.

This is likely due to the fact that many consumers have their phones with them 24/7 and generally respond to them at any give time. It therefore only makes sense that text messages will then be read by most mobile phone users.

How to Use SMS for Marketing

There are a number of ways to begin using SMS to market your business:

1. Hire a text-messaging company, such as MobiQponsis and 8Coupons. These web-based services can perform a number of advertising strategies, from sending out text coupons when consumers are in the vicinity of a business, to allowing consumers to text themselves coupons as they desire.

2. Consider a custom approach that allows you to register your own proprietary short code, thereby allowing dialers to access your text marketing campaign. Companies such as Mobile Commons and HipCricket allow you to share a short code.

3. Use your traditional marketing resources to inform customers about your texting campaign.

4. Consider offering customers "exclusive" access to something in return for their mobile phone number.

5. Don't irritate consumers by texting constantly; instead, focus on less than five times per month, or if you have a good reason for sharing information with them.

Indeed, you may be soon texting your way to more profits!

The fallout from the new credit card legislation has begun to show its face, and many small businesses received the short end of the stick. In February 2010, new credit card legislation will be implemented, and many credit card companies, have begun raising interest rates in an attempt to recoup future losses.

And it's not just consumers who are being hit with rising interest rates.

Business credit card interest rates are soaring as well, leaving many small business owners, many of which who are already struggling in this difficult economy, with a great deal of frustration and exasperation.

Dramatic Rise in Interest Rates and Fees

Some credit card companies have raised interest rates so much that they have more than doubled for some business owners. For example, a small business owner with a Bank of America business credit card saw his interest jump from less than 10 percent to 27 percent.

Not only are credit card companies raising interest rates on their small business owners, but they are also demanding higher minimum payments, sometimes doubling minimum payments. This has left many small business owners with little to no options and a credit rating on the brink of disaster.

Many banks, including Bank of America, contend that they raise interest rates or minimum payments on customers after periodically reviewing their external credit risk, and that they provide customers with notification of a pending increase. Customers then have the option of "opting out" of this increase. They can then pay off the balance with the lower interest rate (although their account would then be closed).

How You Can Fight Against Interest Rate Hikes

If you are a small business who has been notified of an increase in your card's interest rate and/or minimum payment, there are a number of things you can do:

• Call the lender and negotiate a reduction in your interest rate. Many lenders are willing to lower interest rates for a set period of time if you request this.

• Consider opting out of your credit card. This will involve closing your credit card account, but it will also afford you the opportunity to pay off your existing balance under your old interest rate.

• Consider transferring your balance to a new card, if possible. Beware, however, of balance transfer fees, as these can often outweigh the benefits of transferring to a card with a lower interest rate.

Carefully monitoring the fine print of your credit card statements will help you ensure that you are not victimized by surprising credit card rate hikes.

For those late on making tax penalty payments, small business owners can breathe a little easier. The Internal Revenue Service just announced through 2009, it shall extend a grace period granted to small business owners regarding payment of particular tax-shelter penalties.

The original September 30 deadline was quickly approaching while Congress worked towards passing legislation to shield small business owners from some of those tax-shelter penalties. The IRS then took measures to extend the deadline to the end of the year to give Congress time to pass the needed legislation.

Congress has yet to come to an agreement on the terms of the legislation, thereby holding up the passage of the legislation.

However, in an attempt to find a resolution to this problem, any efforts to collect these penalties will be temporarily suspended by the IRS, thereby allowing many small business owners to breathe a little easier.

Temporary Suspension of Collection Efforts Helpful to Small Business Owners

Efforts to collect any tax penalties will be suspended until December 31, 2009, at which time Congress should have the necessary legislation passed, provided they can work through a bipartisan bill in that period of time.

Many committees through the House and Senate have already indicated that they plan to pass legislation that will protect small business owners, and now it's just a matter of time. In the meantime, small business owners can get a bit of relief, even if only temporary, until Congress can come together to shield them from some of the penalties imposed by the IRS.

The tax shelter penalties in question involve "listed" transactions. For example, many small business owners bought employment retirement plans that were listed by the IRS. These plans would cost small business owners thousands of dollars in penalties, which they contend are unfair.

Although the IRS has not suspended all collection efforts regarding these listed transactions, they are suspending it for businesses that received a tax benefit of less than $200,000, or $100,000 for individuals.