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One of the most effective ways to leverage the impact of community relations for small business is through charitable activities.

Any business that's looking to expand their influence shouldn't underestimate the power of building community relations. Not only can this get the word out about your business, but it gives you the opportunity to demonstrate your commitment to the people who will be the backbone of your customer base. In order to get the most out of community engagement though, you need to make sure the efforts are focused and aligned with your business objectives.

Developing a Small Business Community Integration Strategy

Nina Pfister is the founder and principal of Mooring Advisory Group, an agency based in Hingham, Massachusetts. Community credibility is tremendously important for small business owners who are looking to grow in their local market, says Pfister, who recommends that small businesses "know and understand your target audience, and get educated on the initiatives they care about so you can insert yourself into the conversation." Once these steps have been taken, she says, small businesses can develop "a community engagement plan that might include social media groups, events, and partnerships with other credible organizations and local reporters and editors who would be interested in sharing your story.”

It's a strategic approach that will generate maximum results, agrees Gail Bower, a revenue strategist for mission-driven organizations and president of Bower & Co. Consulting, LLC, based in Philadelphia. "Businesses must take a strategic approach and not simply dabble," she says. Bower works with companies to get them focused on a mission and helps them determine how they want to participate in their communities in ways that will have some measurable impact.

A Community Relations for Small Business Example

GreenPal, which CEO Bryan Clayton describes as the "Uber for lawn care" is the perfect example of a community engagement success story. Based in Nashville, the company was looking for a way to better engage with the local community. "Being a bootstrapped startup we needed to look for outside-of-the-box ideas," says Clayton.

So, what did they come up with? A program that identifies individuals who could benefit from free lawn mowing. "Once a month we will go and mow a stranger's home whose grass has gotten to two to three feet tall because they are in a jam," says Clayton. Recommendations for those who may need this type of assistance are generated through one of the company's "few hundred lawn care professionals," says Clayton. Not only is this a great way to give back, but it also benefits from engaging the GreenPal team in the process.

Key Elements for Success

Lee Hammer, the CEO and founder of Rising Tide Media in Chandler, Arizona, advises getting involved early. "This creates a bond where [people] will be more open to introducing you to other contributors or sponsors which is powerful for networking," he says. If you have the funds, Hammer recommends, become a sponsor for key events.

But even small businesses without a lot of funds available can still make an impact.

“Partnering with other local businesses that complement your own brand is an easy and effective way to gain local visibility and demonstrate that your brand is dedicated to supporting your local economy," says Pfister. "This partnership could be with a charitable non-profit that aligns with initiatives you support, and/or for-profit businesses who are willing to offer referral discounts to your clients."

Importantly, stresses Bower, whatever efforts you undertake must be sincere. Given the many types of charities and not-for-profit organizations that exist today, finding the right niche — one that aligns both with your business and your personal interests — should be achievable.

Taking Advantage of Tax Breaks

Charitable contributions can take the form of monetary contributions, donations of property (including business inventory) and expenses incurred through volunteering, such as mileage, according to the Small Business Administration. However, you must deduct the value of anything you received as a result of your contribution. For instance, if you bid $500 on a silent auction item for a local charity and the item had a face value of $300, your tax-deductible contribution would be $200.

You'll want to make sure you do all of the necessary research, though. The IRS offers a guide to what may or may not qualify as a legitimate tax deduction that you should reference before filing for any tax breaks.

Identify KPIs to Track Success

Small businesses should take steps to track the actual impact of their contributions. As Bower suggested, the starting point is to identify up-front the value you hope to attain. Then you need to track that value through key performance indicators, or KPIs.

KPIs, says Pfister, should focus on two things: exposure and revenue growth. "Is your community engagement increasing your visibility as a local industry luminary through press coverage and social media sharing? Is your community engagement driving new business leads to your sales funnel and converting them into new clients? Or perhaps your community engagement is helping you retain clients as well because their trust is growing in your brand over time? Those are the metrics that we would pay attention to, to ensure the ROI is measurable."

Community relations for small business definitely pays big benefits: for your business, but also for your community. Work with an experienced business bank to track your business growth.

This material is presented for informational purposes only and should not be construed as individual tax or financial advice. KeyBank does not provide legal advice.

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