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In this article:\nWhy the average cost of rent for a small business is not the most useful statistic\nThe best way to approach your landlord about your rent to income ratio\nWhat percentage of your business should be spent on rent\nThe “unit cost” method of determining what you should pay for rent\nIf you’re a current business owner wondering if your rent is too high, this article is for you. If you’re considering renting business or office space for the first time, or perhaps the owner of a growing business wanting to move to a larger commercial space, please refer our article: \nHow much does it cost to rent space for a small business?\n \nIt’s time to address that gut feeling that you might be paying too much in rent. In this article, we’ll explain why questions like “what’s the average cost of rent for a small business” aren’t as useful as using a ‘unit economics’ approach.\nWe’ll also show you how to use unit economics calculations to determine if you’re paying too much for your rent, and discuss the best ways to negotiate a lower rate.\nThe “average cost of rent for a small business” and the wrong way to negotiate your lease\nWhen you’re trying to determine how much your rent should be, it’s tempting to try to research the average rent for a small business.\nMuch like when a renter searches through \naverage rent reports\n for a specific city to find their city’s average rent, this is the wrong approach and doesn’t really tell you anything useful (we’ll explain why below).\nFurthermore If you “just know” you are paying too much in rent, and you try to renegotiate, the first thing your landlord will say is, “Show me the proof! Show me the numbers.”\n \nwoman arguing with business landlord for what should I pay in rent\n\nResponding with, “But… I just \nknow\n you’re charging too much!” is a shortcut to stalemate and could even jeopardize your relationship.\nIf you want to make a strong case and generate black-and-white numbers, you need to know the “unit economics” of your small business.\nAlan Wille, CEO of Klipfolio, a business performance metrics company, defines unit economics as looking at the direct revenues and costs associated with the most basic element of a company’s business model. In other words, unit economics breaks down everything about your business into individual pieces.\nUnit economics is a more accurate view than “how much is rent for a business”\n“Done properly, a unit economics analysis will highlight opportunities, expose gaps, and direct you to optimal strategies for maximizing your profit,” Wille says.\nBelow, we’re going to look at how unit economics applies to rent. Let’s dive in.\nExamples of unit economics vs. average rent for a small business\nFor the sake of simplicity, let’s avoid spreadsheets and jawbreaking financial acronyms to learn about unit economics. Here are examples boiled down to help busy people to make quick, smart decisions.\nOne product costs $5 to produce, stock, and sell. It sells for $10. Looking at the economics of this unit, you can tell there’s a 50% profit margin.\nTo acquire one customer, it costs $25, between the online marketing campaign and paying the hourly employees on the sales floor. One customer typically spends $65. Looking at the unit economics, you can analyze your cost to acquire a customer (CAC) might be a little high, but still positive.\nOne square foot of space costs $6/month. But in one month your average gross revenue is $48,000. If your store is 1,000 square feet, that’s $6,000 a month in rent. Run the calculation and your rent is 12.5% of your monthly gross income.\nLet’s dig into this last example to tell if you’re paying too much rent as a small business.\nbusiness closed sign for how much should you pay in rent\n\nLearning your unit cost can keep your small business profitable.\nWhat percentage of a business’s revenue should be rent?\nTo calculate this commercial price to rent ratio, we’ll look at two things: (1) your type of business and (2) your competitors. Keep in mind the following percentages are rough and not exact. Use them as a benchmark.\nRestaurants: \nWhen calculating a good rent percentage for restaurants, the general rule of thumb is your total occupancy cost (rent and additional fees for property taxes, insurances, etc.) should not exceed 6-10% of your gross sales. (\nsource\n)\nAuto shops:\n The typical full-service auto shop spends 12-13% of annual gross revenues on rent. (\nsource\n)\nRetail stores:\n Retailers should target a base rental rate that is no more than 5-10% of gross annual sales. (\nsource\n)\nLaw firms: \nAttorney offices should expect to pay 6-7% of gross revenue, and even up to 15% for a prestigious address. (\nsource\n and \nsource\n)\nHair salons:\n Rent and property taxes should range from 3% for a remote location to 10% in a well-trafficked mall. (\nsource\n)\nKnowing these benchmarks, the next figure we need is gross sales. Finding this number is easy. How much money did your business make last year? What was the total sales for each month? Some small business owners will know this figure off the top of the head.\nThe last figures you’ll need is your business’s square footage and rent cost. We’ll provide different sums for the sake of illustration.\nFinally, here’s the simple calculation to determine if you’re paying too much in rent.\nGross sales / square footage = sales per square foot\nIf average monthly gross sales are $50,000 for a 6,000 square foot restaurant (average size for a Ruby Tuesday), then sales per square foot is $8.33.\nIf rent is $2/square foot, divide it by sales per square foot to get your percentage of income that goes toward rent.\n2.00 ÷ 8.33 = 24%\nIf this number is greater than the benchmark for your industry — restaurants, in this example, at 6-10% — then you can see you are paying too much in rent.\nIn our example, the restaurant is paying far too much in monthly rent. For every $8.33 in revenue that a square foot generates, $2.00 or nearly one-fourth of that is going to the landlord. This is too much, according to the industry average.\nThis calculation shows the unit economics of your rent, broken down into the revenue and expense of a single square foot. Why is this important? The restaurant owner in our example can now use the unit economics of their space to negotiate a lower rent agreement with the landlord.\nCalculate how much your business should pay in rent\nUse unit economics to calculate the return on each part of your business by analyzing the revenue and expense incurred by a single unit. Units can be anything.\nIn this article we focused on rent and the basic unit of a square foot, but you can use unit economics to analyze the return per employee, per desk, per customer, per product, per hour, etc.

Local business owners: are you paying too much in rent?

In this 4-minute read:\nDon’t be afraid of skepticism\nHow to tell if a review is fake\nWhy do people post fake reviews?\nWhat’s being done about fake reviews?\nThe most common way to determine whether to shop at a new business is to look at their online reviews, whether those are from Google, Yelp, Facebook, or any other review platform. Sometimes, however, it can be difficult to tell if the reviews we read are real.\nWe’ve all heard of businesses paying for positive reviews, and many people create fake profiles online. So, how do you know if you can trust online reviews for the local businesses you research? \nSkepticism about online reviews is good\nFirst, don’t feel bad if you are skeptical of a particular review or set of reviews. \nFake reviews\n do exist, so you need to trust your instincts, and skepticism is constructive for helping you sort out the trustworthy reviews from those that aren’t. \nThere are all kinds of sketchy practices that businesses use to game the review system, so if you feel that something is off, it’s probably because it is. \nHow to tell if a review is fake\nIt can be difficult to tell is a review is trustworthy, but it all comes back to that skepticism. Be smart and trust your instinct. Pay attention to these signs to see if something feels off about the reviews you are reading:\nAfter not receiving reviews for months, there are suddenly 20 reviews within the span of 30 minutes\nA huge influx of new reviews at the time a new product is released\nRepetitive phrases throughout different reviews\nAnonymous profiles with no image or with images that aren’t of real people\nFalse information about the company\nRead \nhow to spot fake online reviews\n for a more in-depth look. \nYou can also try browser extensions like ReviewMeta and FakeSpot to see what trust ratings they give to the reviews you read. There are tons of resources created to help consumers like you to find good, honest reviews.\nWhy do people or businesses post fake reviews?\nOnline reviews have a powerful impact on businesses. They can help local businesses rank better in the search engines (so they can show up in front of customers like you), and they also have a huge impact on converting new customers to their products and services. \nMost of us read reviews before opting into a new service or committing to a new product. And this is why there is such a huge emphasis on online reviews. Some companies will do anything they can to get your business, even to the point of buying or creating fake reviews. \nWhen a company posts fake reviews or pays someone to post fake positive reviews on their own listings, they are just trying to get you to buy what they’re selling. It’s a “black hat” tactic that goes against most search engines’ guidelines. \nAnother type of fake review is when business owners or employees post fake negative reviews on their competitors’ listings to influence potential customers. This is also against most review platforms’ policies, and can create more confusion about the legitimacy of online reviews. \nWhat is being done about fake reviews?\nWith the amount of false information on the internet, is there even a way to trust \nany\n of the reviews that we read? Fortunately, the search engines and review platforms are dedicated to providing authentic experiences and they each have their own way of handling review scammers. \nYelp and Google both have the ability for any of their users to report suspicious reviews for possible removal by the platform administrators. To learn more, see our \ncomplete guide to removing fake reviews\n, and help report false reviews when you come across them. \nIn addition to the popular search engines and review platforms cracking down and trying to provide the best customer experience for their users, law enforcement and regulatory authorities are taking this type of false information seriously and have put laws into place to protect people from unjust review practices. \nPurposely misleading customers violates federal law and can be grounds for a lawsuit under the Lanham Act, which was enacted by Congress in 1946. The Lanham Act was put into place for trademark registration and protection, but it also covers deceptive advertising practices. \nIn recent years, the Federal Trade Commission (FTC) brought a case against fake paid reviews in which a company posted fake reviews on Amazon for a weight-loss supplement. This led to an investigation into their product and huge financial obligations. \nIt is the goal of the FTC to protect and educate consumers, so there are guidelines and laws in place that require these online review platforms to subject to trustworthy practices. As the problem of fake reviews increases, the attention from regulatory authorities and review platforms is also increasing.\nShould I just ignore online reviews?\nDefinitely not. Don’t discount all reviews because of the few that may be misleading. While it may seem there is a huge amount of deception out there, there are a lot of genuine reviews, too. You just need to know the signs to look out for and pay attention to the reviews that come from real profiles, with full names, and photos of real people. \nPay attention to business owners’ responses on Google and Yelp reviews. These can offer you more insight into fake negative reviews and give you more information about how businesses treat their customers. \nOnline reviews can tell you the good, the bad, and the ugly about the businesses you are researching, and that research is important for making sure you get the best customer experience possible. \nReal reviews are valuable to consumers and businesses\nWith more and more news coming out about the FTC and other organizations fighting fake reviews, most local businesses are trying to adhere to trustworthy review practices and provide their customers with feedback from real people. \nYou can help contribute to the solution by sharing your own honest experiences with the businesses you come across.

Can you trust online reviews for local businesses?

In this article:\nDo the Instagram accounts you follow have fake followers? Are you following fake Instagram accounts?\nWhy would someone want to buy fake Instagram followers or create a fake profile?\nAre the influencers you follow buying fake followers?\nHow to spot fake Instagram followers and profiles (4 ways)\nHow to report fraudulent or unauthorized Instagram activity\nA report from Cheq (a cybersecurity company) determined that fake social media accounts and influencers cost advertisers around $1.3 billion of an $8.5 billion market for global influencer marketing. That’s a lot to be spending on fraudulent accounts. And the problem isn’t getting easier to solve. \nThe number of fake Instagram profiles and followers is always growing. It makes people suspicious of those influencers who are actually working hard to reach their own followers and it can be difficult to tell which accounts are fake, leading to unsuspected scams on users and businesses. \nThroughout this article, we’ll discuss the whys and hows of fake Instagram accounts so that you can better determine which of the accounts you follow are legit.   \nDo the Instagram accounts you follow have fake followers? Are you following fake Instagram accounts or profiles?\nIt is very likely that you’re following one or more fake Instagram accounts or an account with fake followers at the very least. In every trending industry or topic of interest there are tons of new fake accounts created every day. Sometimes Instagram is able to weed out the fake accounts and remove them, and sometimes the users with fake accounts are a little sneakier and able to bypass the basic fake account checks. \nWhy would someone want to buy fake Instagram followers or create a fake account?\nBefore we dive into the reasons someone would create a fake profile or get fake followers, let’s discuss the difference between “bot” and “bought” followers. \nBot, or robot, followers are typically generated by a type of software that helps influencers and businesses automate their interactions on Instagram. You might find that bot accounts start following or request to follow you, skewing your own real follower numbers on Instagram. On the other side of that, influencers may use bot accounts to follow their own profiles and boost their numbers. These bot accounts are generally used to help increase a users’ engagement rates like comments and likes. Sometimes they are using them on their own accounts to make their content seem more legit (with fake reviews and recommendations about their products), and other times these bots are used to make their own account appear more responsive and engaging with their audience by liking and commenting on their followers’ posts. \nBought accounts are just that—accounts that the perceived “influencer” paid for to raise their follower numbers. Followers that are purchased are generally fake accounts that have been created for the purpose of being purchased by users seeking to increase their followers. These are often bot or inactive accounts. \nOutside of fake followers, a user may create a fake account or profile in general, which in turn they get fake followers on. \nNow that we’ve covered the difference between those types of fake Instagram accounts, let’s talk about the reasons why someone would use fake accounts and followers: \nTo scam people into buying their products or services\nSometimes these accounts might have legitimate products that they are trying to market and they fall into the trap of purchasing followers as a marketing strategy. But more often than not, it’s users who don’t have a good quality product (or no product at all) that try to dupe someone into paying them for their product. \nTo scam unsuspecting businesses into partnerships\nInfluencers can get paid good money from business partnerships. They can share a review on a business’s product and generally have good referral discounts that their followers can get through their partnerships with specific businesses. But if an “influencer” has thousands of fake followers, then the business isn’t really gaining any benefit from the money they are spending with that person. \nTo get more real followers\nSometimes, buying fake followers is a ploy to get more real followers. It can make a newer account appear more legit, thus getting others to follow them. But if you find yourself in this situation, know that you’re going to have much better outcomes if the majority (or all) of your followers are real. \nDo the influencers you follow buy fake Instagram followers? \nYou could definitely be following someone who has purchased fake followers. It’s likely some of these accounts have popped up into your suggested accounts to follow and upon first glance, they totally meet the type of account you want sending content to your feed. \nIt’s pretty easy to purchase fake followers and become an “influencer” from the point of sheer number of followers. Just check out this article from Hubspot about \nbuying Instagram followers\n. \nAnother marketing agency, Mediakix, conducted their own \nstudy\n to determine how easy it was for users to purchase fake followers and become Instagram famous quickly. They were able to purchase up to 15,000 followers at a time without their account getting flagged. And it’s relatively inexpensive to purchase followers too, around $3-$10 per thousand followers. \nAnother \nstudy\n, from London’s Institute of Contemporary Music Performance (ICMP), found that even some of the biggest stars in entertainment have large percentages of fake followers. Of Ellen Degeneres’ 74 million followers, about 58 percent were suspicious. Other stars included Kourtney Kardashian and her 80 million followers (of which 49% were suspicious), Taylor Swift with 119.5 million followers (again 49% were suspicious), and Ariana Grande with her 159 million followers (of which about 46% were suspicious). \nSo if you still don’t think that the accounts you follow are buying their followers, take a deeper look. The only way to know for sure if an Instagram account is real, or at least to have a better idea or whether the accounts you follow have fake followers, is to check them yourself. \nHow to spot fake Instagram followers and profiles (4 ways)\nSpotting fake profiles on Instagram doesn’t have to be difficult. More often than not, it just takes a couple of minutes to look deeper at someone’s profile to determine if the account is real or not. If you’re unsure about an Instagram account that you are following or want to partner with, run these checks on them. \n1. Check out their profile and/or followers’ profiles\nA real or fake account can be determined just by doing the glance check. Do they have a real photo of a person for their profile picture? Oftentimes a fake account will use an attractive person for their profile picture to draw in their followers (we’re not saying that all attractive profile photos are indicative of a fake account—it’s just one factor of a fake account). Likewise, they might be using a model or celebrity for their profile picture. \nAlso, look at their posts, photos, stories, and content. Does it seem like a real account? Or is it a lot of the same thing shared over and over again?\n2. Check the comments and engagement on their posts\nThe promise in their bio or content may also seem too good to be true. Check the comments on their product posts to see if anyone has ever said anything negative about their product. If everything is all unicorns and rainbows and there’s no indication of even one upset customer or any questions about the legitimacy of their products, that’s a definite red flag. \n3. Check their followers’ engagement numbers\nBeyond just checking what the actual content of the comments say, check to see how many people are actually engaging with this user’s posts. If they have hundreds of thousands of followers and only a few people are actually commenting on their posts now and then, a lot of those followers are probably fake. A common stat for engagements on Instagram posts is about 1 out of 10 followers will comment or like a post. \nIt’s also important to note however that likes on Instagram posts can be bought, too. So if you’re already suspicious of an account and they have a ton of likes with little to no other engagements, then they might have fake followers. \n4. Check their account with social media tools\nThere are several social media tools that you can use to run Instagram accounts through to do a quick check to see if they might be fake. Some tools, like \nSocial Blade\n, will run a report of when an account acquired their followers. If on a normal day that user gets 5-10 followers and then all of a sudden on one day they have 10,000 followers, then they probably paid for them. \nYou can also use tools like \nFakeCheck\n and \nSocial Audit Pro\n to run audits on followers to determine the number of fake followers an account has versus real ones. \nSo, the next time you follow or seek influence from an Instagram account with a large following, take the time to be a little suspicious and give them a good once over before determining that they are the real thing. \nYou can use the “report” feature on Instagram to flag scams and fraudulent activity\nInstagram doesn’t allow content containing the following, and all may be reported by clicking the three dots to the top right of a post and then using the “Report” feature:\nSpam\nNudity or sexual activity\nHate speech or symbols\nViolence or dangerous organizations\nSale of illegal or regulated goods\nBullying or harassment\nIntellectual property violation\nSuicide or self-injury\nEating disorders\nScam or fraud\nFalse information\nInstagram is said to review all reports within 24 hours, and an account may be pulled if it receives 3-4 reports. Of course, these are just estimates based on Instagram’s current rules, and are subject to change.\nIf you run a business, you need to pay attention to your online reputation and reviews\nOnline reviews and engagement are important for all businesses, whether they’re on Instagram or not. Most online platforms like Google My Business, Amazon, Yelp, and other review platforms have a way to report or flag reviews. If you’re pretty sure a review is fake, or it breaks the rules of the review platform, you can report it or flag it for review and the platform admin may decide to remove it. This can take several weeks, so don’t expect the review to disappear immediately.\nJust be careful about doing this too often, because your account can be suspended if you are unjustly flagging reviews. (Don’t flag legitimate reviews just because you don’t like what they say, for example.)\nGo deeper: read our complete guide to\n \nremoving fake reviews\n

How to spot fake Instagram followers, profiles, reviews (and how to report them)

In this article:\nHow to encourage customers to wear a face mask\nWhat to do when a customer refuses to wear a mask\nWhether or not to wear a face mask during a pandemic has become largely political across the country, and as such, you may find some customers refuse to wear face masks, even if this type of PPE (personal protective equipment) is required in your area for your type of business. We’re not here to discuss the politics, but rather the policies that your business has in place, and discuss ways of dealing with customers who refuse to follow those policies. \nHow to encourage customers to wear face masks\nOwning a public-facing business during a pandemic is not easy, and new local laws that require masking in public can make that even more difficult—particularly if your business has customers frequently coming through its doors. \nNot everyone is comfortable wearing a face mask, and because of this, you may need to provide some additional encouragement and support around this policy. \nHere are some ways that you can encourage your customers to wear face masks:\nPut up signs throughout your business (and especially at the entrance) that make it very clear that you require masks to be worn in your facilities, along with any exceptions you may have (like when sitting at one’s designated table in a restaurant, small children, people with certain medical conditions, etc.)\nShare updates to masking policies on your social media channels and website\nProvide free face masks to those who may not have them\nTrain and support your employees and provide them with the resources to help enforce your policies\nWhat can you do when a customer refuses to wear a face mask?\nIt’s no secret that many people are averse to wearing face masks for various reasons, and some may refuse to do so when they enter your business. This may happen even if masks are required by law in your area (or if you have chosen to make them mandatory in your business where they aren’t required by law). So, what are some effective ways of dealing with a customer that won’t wear a mask?\n(Image)\n\nMake a plan\nIt’s always better to be prepared in advance, rather than getting surprised on the spot. Make a plan with your staff for how to handle customers who refuse to wear a mask. If you already have policies in place for dealing with upset customers, great, use them!\nWhat would you do if a customer tried to come in without a shirt or shoes? The premise is similar with masking. \nTalk to your employees about what to do in this situation and be a support to them as they handle angry customers. The next few steps can help you in your planning. \nHave extra disposable masks on hand\nGive your customer the benefit of the doubt by first offering them a mask before escalating the situation. Maybe they don’t have one, left theirs at home, or didn’t know about your mask-wearing policies. Keep extra masks on hand for your employees to hand out should they need them. \nKeep your emotions in check\nWhen dealing with any upset customer, but especially one who thinks their rights are being infringed upon, it is important to keep emotion out of it. If you can’t talk to the customer without getting angry and letting them hear all about it, then designate another employee who can stay rational and calm while talking to the customer. \nKeep your tone calm and professional as you speak with all customers, even those who are being belligerent. \nDon’t debate with or shame your customer\nDon’t try to debate with or shame your customer into wearing a mask. That may only escalate the situation. Simply give them the facts. They must wear a mask to enter the premises or they will need to leave. You don’t need to explain to them why they need to wear a mask other than it is your business’s policy (or the local ordinance). Trying to argue the effectiveness of masks or convince people to change their position is generally not an effective approach.\nRefuse service to those who don’t comply with your policy\nYou have every right to refuse service to a customer who won’t wear a mask, unless the customer has a legitimate medical excuse or physical condition that prevents it.\n“As long as businesses are enforcing that in a nondiscriminatory manner and they are requiring everyone to wear the mask, they have the right on their premises to say if you want to shop here you have to wear a mask,” David Senseman, a Minneapolis attorney, told \nKare 11\n. “Unfortunately, there is a lot of misunderstanding about what rights we have and who we have them against. That is not something the constitution gives you a right to prevent. You can exercise your right by not shopping at that particular store.”  \n(Image)\n\nProvide alternative service or delivery methods\nSome people may feel less upset about your policy if you inform them they can still get the goods or services they want in other ways. For retail, restaurant, or other businesses that deal with the sale of goods, setting up curbside, drive-through, and/or delivery options can defuse tempers and still allow people to get the things they need.\nConsulting businesses or other service providers can get creative in the use of Zoom or other not-on-site ways of interacting with customers, or set up meetings outside where masks may not be required and where proper social distancing can be practiced to help ensure the safety of all parties.\nCall security or law enforcement if necessary\nIf you have customers who refuse to wear a mask, refuse to leave, and start to cause a disturbance, you may need to call your security team or local law enforcement to help de-escalate the situation. \nKeep yourself, your employees, and your other customers safe by engaging the help of people who are trained to handle these types of situations. You do not need to put yourself or anyone else in danger to deal with a customer who is causing trouble. Encourage your employees and other customers to keep their distance from the upset customer until security or law enforcement arrives. \nThis should also be part of your crisis plan, and be thoroughly discussed and reviewed with all employees beforehand, and refreshed regularly in training.

4 articles found in “News and trends”

Local business owners: are you paying too much in rent?

Can you trust online reviews for local businesses?

How to spot fake Instagram followers, profiles, reviews (and how to report them)

How to deal with customers who won’t wear a face mask

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