In a small business you (the small business owner) and your management staff are making most of the decisions. But ultimately you are the one that usually held responsible for all the decisions that are made. This can create a great deal of pressure, especially in hard times. But you have to remember that you are not alone, that’s why you hired other managers in the first place — to help you run the business and making it in to a success — together!

So what to do? Why do many beginning business owners fail? What things are preventing your business from growing?

Management Staff

The first thing that you have to remember is that not all business owners and managers have the skills or experience to deal with all problems. Take a closer look at your management staff and you’ll see what I mean. Some managers for instance are good with people and others know the ins and outs of what is done on the work-floor. What I mean is that every manager has it’s own kind of skill set and if those skills don’t complement yours, you need to do something about it.

Of course, you can take drastic measures and fire the managers that has the same skills as you, but a better way is send them to seminars or a course to learn new and better management skills (and of course those skills that you think your business needs.) (Sometimes seminars can help you to come-up with new business ideas.) Also you need to tell them that you want him/her to learn certain skills and that you think it will help them to become a better manager.

Another good way is to advice certain books that teach them better management skills. You can only do this of course if you read the books yourself and that is the other point I want to make, you need to keep learning yourself, because in the end, you are responsible for all business decisions!

Lack of Finance

Another internal area that could prevent the business from growing is a lack of finance. In most cases a business need certain funds to expand, for instance the business needs more capital for better equipment, more supplies or even more staff. Once that you are convinced that a lack of funding is the problem, look for external sources of finance. But you need to be really convinced that this is the problem, because also managers have to habit of trowing more money at a problem!

Lack of Focus

Another area that could prevent your small business from growing is a lack of focus. Every business , including the small, need some sort of focus strategy. With a focus strategy I mean a short-term goals, long-term goals and a plan on paper to implement these goals.

The best thing to do is writing a plan (one or two sheets should be enough) with your management staff (and if it’s a very small business, with all your employees) that is setup like so:

• Short-term goals
• Long-term goals
• Implement plan (what things need to change)
• Some measuring dates (to see what goals you have reached and to see which things you need to change (again) to reach the goals.)

Product or Service

Another thing that could hinder the business from growing is a poor products or services. Or simply that there’s no demand for the products or services. These things in itself are not that bad. Don’t get me wrong, they aren’t good for the business either or are easy solvable, but it are things you can do something about.

The thing I want to talk about is what we call small business owner tunnel-vision. This is a problem we see over and over again and its very hard to detect for every small business owner.

Example: You have worked so hard on your product or service. At some point you begin to think that its the best product/service out there and that everybody can’t live without it. But after two months, the sales are very low and the customer responses are no good.

The response of most business owners is that they say that the problem is not their product or service, it was probably their marketing campaign or something else. And they immediately try to fix the problem or even worse throw more many at the problem.

They have such a firm believe in their businesses product that they can’t see that the problem is the product or service. We have seen business owners go in bankruptcy before they would admit that the product was the problem.

So remember, sometimes the problem of no business growth is simply a bad product and the best thing to do is to cut your losses and try again from the start.

Original post by MoneyAside.com

Don’t Prevent Your Own Small Business Growth!

1. Hire only the Best

People build companies, so make sure that you only hire the best people. Don’t settle for the best out of a bad bunch. Sure the best may cost a more, but good people will help you build a successful and profitable company.

2. Have urgency in everything you do

A lot of business owners want to treat their business after the hectic start-up phase as a nine-to-five job. You can’t do this. If you want the business to grow you have to put in the time. Always do everything you can today, don’t put it of too tomorrow.

3. Repeat Customers

The road to profitability is through repeat business. Your business will only grow if you add regular new customers on top of existing regular customers. So try to do everything you can to keep regular customers satisfied.

4. Make Quick Decisions

Companies can’t stand still, they need to adapt or die! This is especially true for new businesses. So don’t take to much time to make your business decisions. Sometimes it’s even better to lose some money, but still moving on than standing still.

5. Over Deliver

Always try to deliver more than you promised. If you tell a customer that you do it in 6 days, deliver in 5 days. You can do the same with products or services. Over deliver if the best and cheapest form of marketing.

6. Price yourself for profit

If your business is small than you should never be the cheapest. Large companies can make up in volume what they lack in margin. Small businesses can’t do this.

7. Spending

Never spend a dollar you don’t have to. Many beginning business owners think that they have to spend a lot of money on for example new office furniture, because they think that image is very important. Sure image is important, but cheap office furniture can also look good! The money you save can be used to do help your business to make more profit.

8. Big Vision

Aim for the stars should be you motto! Building a business is a ten-year plan, not a one-year plan, so you have the time to realize your big visions.

9. On Marketing

Spending a lot of money on image or brand advertising doesn’t make sense when you’re business is not yet profitable. Also never let an advertising sales rep teach you anything about marketing. They are talking to you because they want to sell ads, remember that! Besides that, you know what a good ad is. You don’t need an advertising sales rep for that. A good ad will make its money back in profit.

10. Learn to Sell

There’s nothing worse than a business owner who isn’t willing to sell or even want to learn to sell. Don’t rely on someone you hire to do the selling for you. If you want a growing profitable business, you need to learn how to make a sale.

11. Simpler than you think

A lot of people make things very complex (than it really is.) They over-complicate the process of doing business. Doing business is very simple: Sell at a profit! If your business seems too complex than it probably is.

12. Never bet the ranch on one deal

If you are new entrepreneur then you’ve a lot to learn, so in the beginning you’ll make mistakes. This is no problem, because mistakes will teach you valuable lessons. Just try to make them small ones at the start. Don’t make one huge mistake that will cost you your business!

Original post by MoneyAside.com

Getting Past Your Business Start-up

1. Micro-loans

It all depends on how much credit you’ll need, but for small businesses with a reasonably good credit history seeking a micro-loan may be the thing. As long as the credit of the small business is good your business can get a micro-loan (up to $50,000) from a micro-lender. Micro-lenders, such as for instance “The Fox Valley Micro loan” give out loans to businesses, even if a traditional bank has rejected them.

2. Assets Lending

Although banks have pulled back on lines of credit, there is an increase in asset-based lending to small businesses. For instance you can secure a line of credit against eligible receivables in which the lender fronts you a percentage of the total. Example: they front you 85 percent of the total, then forwards the remaining 15 percent after your customer have paid in full.

3. Big Banks

If your business is profitable and has a good credit history then there are still big banks (and local smaller banks) that are willing to give a credit line. But you’ll need to prepare yourself by taking a closing look at your business balance sheet. The banks also look closer than ever before, so make sure your number are correct and realistic.

4. Search the Web

Sometimes you need a very small amount of working capital for your business. Then you could try so called peer-to-peer lending networks, which connect lenders and borrowers online. Sites such as for instance lendingclub.com, prosper.com and loanio.com allow entrepreneurs to search for lenders and borrow up to $25,000 with widely ranging rates.

5. Sweet-talk

Sweet-talking your vendors for a line of credit is often an overlooked source of credit. Most vendors are motivated to keep their customers business going, because they depend on your business. Often they are willing to work out a payment structure to help their client’s. Of course if they themselves have a credit problem, they most likely won’t be able to help. But you should definitely give it a try.

Original post by MoneyAside.com

Raising Money in this Unstable Financial Climate

To be successful you need to have to network. Without a large network around your business, you’re not successful. Of course with everything in life there’s a balance to be maintained between hitting the refresh button to check your stats 24/7 and hitting the trade show circuit so often you forget what your house looks like.

But if you choose to fly completely under the radar then you (and your business) are missing out on some serious potential to make money online.

1. Twitter

Yes, yes we know that you aren’t interested in the breakfast habits of most people, this why we don’t tweet about it. But if this is the reason why you don’t use twitter then you are missing out on a great business tool.

Twitter is a great tool to come and keep in contact with other professionals in your industry. You see what they are interested in and you can “talk” with them by leaving replies. And if they like what you are doing maybe they follow you.

And this is the power of twitter. People only follow you if they have read something interesting that you’ve wrote. Think of the potential. You can update news to your followers, for instance of a new product or service. Or you can ask for certain information on about a product. You can let them know what new content you’ve places online and so on.

Follow us on Twitter!

2. Facebook

People are relying on search engines for almost everything these days. But search engines don’t tell you who the people are behind a certain website or online business. People like to know with whom they are dealing. On Facebook you can create a personalized how-to guide to your life and interest.

Why do you need to care? Most partnerships or business relations don’t form over a common love of anti-socializing. Forming common interests and connecting on a personal level will strengthen your business ties.

Little warning: more and more business look on sites like Facebook to determine who a person is. For this reason you should never upload information that can harm your image in the long run. For instance: photographs of a party where you had a little much to drink or text like “I hate all animals.” These things can lose you business opportunities.

3. LinkedIn

A lot of people use this site, from students to employees, from small business owners to corporate executives. This site is the most professional online network and it is providing one of the biggest opportunities for finding a direct contact of a specific company. You can join a group or search for connections. For instance if you are interested in a job opportunity or you need some business information that you couldn’t find on your own.

4. Trade-shows or Conventions

Trade-shows or conventions can be a great way to network and to meet people in your industry. Sure they can also be a pain, such as booking, living in hotels, walking the floors, difference in time zones and so on. But still, they are completely worth it!

The people you meet can be the person you’re doing big business with a year from now. So give it a go!

5. Forums

Forums are a great way to meet people and to ask for help. Sure in the very beginning all communication will be “semi-anonymous”, but after a while you will learn and meet certain people. (In most cases these contacts result in direct e-mail contact.)

For instance you can find some great freelancers for decent prices on forums. Another great thing of forums is that you can ask for feedback, for instance on a new landing page or about a new service.

Conclusion

Don’t dismiss the social media sites for networking opportunities right away. They are a great way to meet other people from your industry, so try them out for a couple of months. You never know who you meet and end up doing business with.

Original post by MoneyAside.com

5 Good Places to Connect and Network

Many of the small businesses leave cash they don’t need for working capital in lower-interest accounts just in case they need it for an emergency. Up to %40 of the small businesses have $10,000 to $100,000 in cash in low-interest accounts.

This is not a smart thing to do, because over the last couple of years all banks have created so called at-call accounts where you can get a much high-interest on your money. There are banks that offer up to 8 percent for a minimum of $5000 for six months.

The good thing is that you still have access to this money, in case of an emergency for instance. If the business wants to access the money (or pull out all the money) they can simply pay the break-cost fee. (You pay some money if you don’t uphold your contract.)

But this fee is peanuts compared to the gains of getting more money on money you’ll only need in rare circumstances such as an emergency.

You as a business owner should ask yourself the following questions to determine if the business has excess cash:

• After you have paid your creditors, do you have money to invest?
• Can you pay staff and bills on time?
• Can you take advantage of opportunities in the market such as discounts on materials?
• Have you had to use money for any emergency in the past 12 months?

One of the keys to making cash work harder is to plot the business operating cycle and, by using this information to forecast your future cycle. This way you’ll have a better understanding of the cash peaks and which money is sitting idle! This money can be moved (without much risk) to a high-interest account.

A business operating cycle plan can help you with the following things:

• Make educated decisions on aspects of your business
• Determine the best times to purchase stock
• How much stock to order at any particular time
• How to avoid having too many debtors and creditors at the one time
• How to avoid excessive borrowing
• How to prevent over-investing

So take another look at your business financial and at what bank-accounts your business is using. With a little effort from you there is money to be made for your business! It is also a good idea to make a business operating cycle plan which can help you to make certain decisions and make the business cash work harder.

Original post by MoneyAside.com

Put idle Small Business Money to Work

Smart business owners get this, but they often respond to this imperative by spending too much time on the design of their business website. Ok, looking good is important, but a good design is only a small part of a visitors online experience.

Equally or sometimes even more important are:

• How content is organized for each group of the business target audience.
• The type of content you provide.
• How well it delivers on the business brand promise.
• How it drives them to a deeper level of engagement with your brand.

For small businesses — with often limited resources — the business website is crucial, because it has to do the bulk of the work. In most cases it is the primary tool to make sales, do marketing and it often also a large part of the online business work flow management.

Everything that you say and do makes up your brand promise. This is why your business website must reflect your brand through and through.

What Does This Mean?

Your business website is an extension of your business strategy and not just a marketing item or tool. This is why you should have and make a web strategy for your business website.

A web strategy helps you to tie your brand and business goals for that year and it helps you in your website development process. It helps and gives you all the tools to build, adapt and manage your business online brand experience. So what sort of things you describe in a web strategy plan? Some example:

• Describes what the competitive landscape looks like.
• What user need and want from your website.
• Should tell you who the users are.
• It maps out exactly what type of experience your site should deliver.
• What to measure (online and offline analytics) based on your goals and objectives.
• How you should deliver value to your customers.
• Outlines search engine and social media strategy.

So stop changing your business website look for one moment and think about the front door to your company’s brand experience. Remember looking good is important, but a good design is only a small part of a visitors online experience.

Make your goal for today to write down your business web strategy!

Original post by MoneyAside.com

Your Business Website Is Your Brand!

Below you will find six strategies that you at least should apply. These strategies can help you to save your small business if you start preparing and disaster proofing today!

1. Map Out a Disaster Plan

Many business owners haven’t given it a thought, but every business should have a disaster plan. It’s not only smart, but in many countries it is also required by law to have such a plan (even it is a home-bases business!) So, work up a detailed plan in which you try to take into account as many variables as you can imagine. Whether it as simple as a fire in the business or something that is even harder to prepare for such as a natural disaster of some sorts.

Things you should think about and described in the disaster plan are:

• How much employees do you have and at what times are they in the building.
• Where will the employees gather incase of an evacuation. (Pick an easy to recognize place that is a save distance from the business.)
• Do you need employees that help incase of an emergency? (Mostly done in large businesses with a lot of people. These employees get special training, such as first aid and basic reanimation techniques.)
• Do we need to hold evacuation drills and how many times a year?
• Where are the gas shut-off valves located in the business?
• Where can we shut off electricity in the building?
• Where can we move merchandise to safety? (Talk with other business owners in the same town and make a plan to help each other out in case of a disaster.)
• What papers and people do we need to call? What are the phone numbers? (For instance the insurance agent.)
• And every other thing you can think of.

Write the plan and discuss it with the local fire brigade or city officials.

Tip: make a laminated card with the five most important guidelines what an employee should do in case of an emergency in the business. Give this card to every employee and important to remember is to also give it to new employees!

2. Back Up of Computer Files

Most businesses these days rely on computers and the files/records that are on these computers. Everybody knows that you need backup these files on a regular basis. But many business owners forget that they need to keep these backups in a different place than there business. It is a must! If you don’t do and a fire breaks out in your business, you would not only loose all computers, but also all your backups. A simple thing such as taking them home could save your business one day. (Better is it to hire backup space from a company that specializes in offsite storage space!)

Tip: don’t forget to ask for instance your accountant or attorney how they backup their files. They also could have files that are essential to your business survival in case of a disaster.

3. Physical Papers

Not only backups should be stored on an offsite location, but also physical papers and records need to be stored on an offsite location. You need to at least have copies of you most important physical papers stored in a different location. For instance you could hire a safety deposit box at the local bank to store such things as printed client lists, bills and receipts.

Tip: keep the originals in one map, so you (or an employee) can take them outside easily if a disaster hits your business.

4. Insurance

Keep you insurance up to date. For instance your business has bought a new very expensive piece of equipment. Then you need to make sure that your fire insurance is adequate enough to cover the loss of this piece of equipment. Meet with your insurance agent on a regular basis to make certain that your coverage is up to date. This is especially necessary if you own a home-base business, because your normal insurance may not cover business equipment and/or supplies.

Tip: Spend the extra money to get guaranteed replacement coverage!

5. Tell your Disaster Strategy

Your disaster plan is not a state secret, so let others know what the plan is. After the disaster plan is written you need to discuss it with your employees (on a regular basis.) Maybe they find something that isn’t right in the plan or something that in the past was right, but know the situation changed, thus your plan needs to be adjusted to this new situation.

Tip: Also let your clients know what you will do in case of a disaster. You can even take it a step further and use it in your marketing plan. For example: a hosting company can tell their customers that they have a disaster plane in place and that they make sure that the backup of the clients files are stored offsite.

6. Emergency Cash Reserve

Personal financial experts tell us for years that every family should set money aside for emergencies. This money should be enough for three to six months of living expenses in emergency situations. You should try to do the same for your business. Build a financial business emergency fund that can cover normal business expenses for a couple of months. This will give you the time to again setup your business after a disaster has struck.

Original post by MoneyAside.com

Disaster Proofing Your Small Business!

Now that you’re an adult with your own business and a strained budget, you should remember what they tried to teach you in the past, “It’s good to share!” Business owners who are trying to manage a business on their own can rack up considerable costs. Try to find other small businesses to share the large expenses for things such as equipment costs, office space costs or sometimes even advertising costs. This is a way to save large sums of money for the business and of course you as the business owner.

Below you will find some known budget savers:

1. Save Money on Sharing Business Space

If you’re looking for (new) office space then you shouldn’t try to find it on your own. Instead, try to find a broker and ask the broker if they know anyone with office space to share. Sharing office space can give you and the other business owner the ability to share the rent, conference facility and office equipment such as a copier or large multi-functional printer. All at a fraction of the cost if you and the other business owner(s) would have rented an office space on your own.

2. Income by Renting out Office Space

Of course, the other way around works also, you can lease your leftover office space to other small businesses. Let brokers know that you are in the market for businesses to lease vacant office space. Let them know that you are searching for businesses that are willing to setup a collaborative budget for office supplies and equipment.

3. Saving Money by Sharing Support Staff

You can even take it a step further for instance by sharing support staff with other businesses that are in the same building. If there are many businesses in the same office complex you can for example share the receptionist or other similar support positions. This could save you a lot of money on labor costs.

4. Save Money on Office Equipment

If you share office space or you are one of many small businesses in an office complex then try to share the costs of office equipment such as copiers, printer and fax machines. Not only is less expensive, but you could also buy or lease more sophisticated copier. For instance one that is capable of handling jobs that normally would have been done by a pricey printing shop. You can have this for a fraction of the normal costs, because the businesses share the bill!

5. Save Money by Buying in Bulk

Many small businesses buy office supplies on their own, but it make much more sense to setup a consortium of small businesses to harness the buying power in one group. By forming a buying consortium you could approach the outlets directly and asking them for a large discount if you bring the business of the buying consortium to their business. This can save each business in the consortium thousands of dollars each year on the office supplies bills.

6. Save Money by Group Advertising

After every one in the buying consortium see the advantage of this consortium you should put in a suggestion that the consortium should be expended to advertisement field. By buying print advertisement or broadcast advertisement as a group the consortium and of course its member can save a lot of money.

For example the consortium advertising campaign could look as follows: A business complex with all the businesses form a consortium and they buy advertising time from the local radio station. Each week they boost the entire complex with ads on the radio. Every other week this ad space is replaced with publicity for a couple of individual businesses from the consortium. This way they all get air time for a fraction of the costs.

7. Save Money on Printing Costs

As with the buying in bulk or the group advertisement the consortium could also print en mass. Try to get a large discount from a printing sales representative by telling him or her that the consortium is willing to print all their flyers, brochures and sales materials by their company. Most sales representatives will jump on such a deal and are most likely willing to give a very large discount to get this deal. We’ve seen small businesses save 20% on printing costs by getting such a deal!

In Conclusion

These are just some examples, but you can see the power of forming a consortium of small businesses. They have a much better bargaining position than one individual small business, thus they can get much larger discounts on things. We hope that you’ll see that the savings your businesses can make are worth the costs of sharing.

One last tip: make that all agreements are put in writing and that the consortium comes to getter regularly to talk things through.

Original post by MoneyAside.com

Saving Big Money by Sharing Business Costs

But there are some ways to value your business and determining the asking price. For example you could find a similar business that has been sold recently and finding out the selling price. You can use this selling price as a starting point for your business.

Another example of a way to finding out a business selling price is to contact the national trade association for your industry and asking them for statistics on business selling prices that are similar to your business. Again use this price as a starting point for determining your business selling price.

You could also hire a professional business appraiser. These business appraisers determine the business selling price in a similar way as described in the previous two examples, although they have other methods (see below.) The plus point of hiring a professional business appraiser against determining the selling price yourself is that it may have more credibility to your initial asking price. This in turn will keep the sale-price negotiations to a minimum.

Some common valuation methods used by business brokers are:

1. Market-based valuation

This method is often used by business brokers. The method is based on the business broker past experience of selling similar businesses. The business broker recommends an asking price based on the sale of similar businesses in your industry. It is a common practice to use this method for the sale of small businesses, when the valuation must be quick and inexpensive.

2. Asset-based valuation

This method is based on the financial figures of the business. They look at the book value and liquidation value of the business. Although this method will give a good insight into the business financial state, this method is almost never used as the sole path to determining an asking price.

3. Earnings-based valuation

This method also looks at the financial figures of the business. They look at the historical financial figures, cash flows (such as past, present and projected cash flow) and revenues of the business. In most cases this method is combined with asses-based valuation to get a more complete appraisal.

Things to Include in the Selling Memorandum

If you are planning to sell your business you need to present the most up-to-date information to prospective buyers. In most case this information is written in a so called selling memorandum. The following things you should be written down in a selling memorandum:

• History of the business
• The various products and/or services the business provides.
• How well the business is known in the industry.
• Who the competition is.
• Operational procedures
• Management
• Employees (and job descriptions.)
• Marketing Materials used in the past and already made for the future.
• Financial forecast.
• Things that you (as a seller) find important to pass on to the buyer.

Original post by MoneyAside.com

Determining Your Small Business Selling Price

In an economic downturn a lot of people are laid off — or just the possibility of losing a job — often causes people to focus on how they might start their own business. This focus is not that strange, because people can’t find new jobs, thus they think we have to do something for ourselves to make an income.

But people have to remember start starting a business brings a financial risk. Of course there are ways you can minimize this risk, for instance by planning everything in detail. This is why we talk today about the financial decisions people have to make before business start-up. Below you’ll find the five biggest financial decisions someone has to make before starting their own business:

1. Enough Savings to Live From?

Starting a business costs money and not every business owner can raise enough money to pay themselves a salary from day one. But the bills got to be payed; this is why you should have enough savings to live from for at least six months. If you haven’t this kind of money on the bank than you should really think about postponing the business start-up. The number of bills will more likely to increase when starting a business than decrease. Postponing can give you time to save some additional money or time to search for funding. Postponing doesn’t mean that you can’t work on for example business plans, business systems or process maps.

2. Willing to go into Debt?

Business loans can fund business expansion and improve the overall profit ratio. However, business debt is often personal debt for most small business owners. Many people fund a business start-up by lending money to their business or by deferring any salary payments for their own labour. Many small business owners will tell you that lenders are willing to lend you money, but these lenders often require that you personally guarantee the loan. If the business is going sour, you are personally in debt! So think about how deeply you are willing to go into debt before you start your enterprise.

3. Health Insurance

In many countries there is no guarantee of health coverage for everyone. Or there is a national health system, but business owners are excluded. Whatever the system is in your country, you should really think about how you will fund the health insurance for you as a business owner and for any employee you may hire. Remember without you there is no business start-up, thus no income. So you need health insurance to pay for potential medical bills! Find out what the policies are in your own country or ask a specialist for advice!

4. Lines of Credit

Banks or other lenders are more willing to lend money to people that have a job with a steady paycheck than to people that are self-employed. You can probably get a home equity or other secured loan with a minimal amount of paperwork if you have an excellent credit rating. (Check your credit rating before asking for a loan. Try to improve the credit rating if is not that good.)  Once you’re self-employed, you’ll probably have to provide at least the most recent tax return and other documentation before getting approval.

5. Disability Insurance

In most countries people get disability insurance through their employer. But as a future business owner you need to make sure that you are covered against not being able to run the business.

Note: in most cases it is not possible (unlike health insurance) to transfer disability insurance from an employer insurance to an individual insurance. Make sure that you protect yourself (and your family.)

Try to get your own disability policy while you still have a job, thus before you leave to start your own business. Once you have the policy established and are paying the premiums, you should be able to keep the policy when you go out on your own.

As with other financial matters, insurances are a difficult and sometimes tricky field, so make sure to check with your insurance agent to make sure that any policy will remain in force after you leave a job. Talk your plans through with your insurance agent; they can give you valuable advice.

Additional Tips

If you are not very good at financial matters then you should take a financial course before thinking about starting a business.

Whether you are good in financial matters or you’ve still need to take financial course, it’s always wise to talk every financial business decision through with a CPA or other financial specialist, before you make the final decision. They can help you to keep the business on track!

Original post by MoneyAside.com

5 Financial Decisions before Business Start-up