|Small Business Information|
Survival Tips For Small Businesses
You may be in Mail Order, Direct Mail, or you may be a local merchant with 150 employees; whichever, however or whatever---you've got to know how to keep your business alive during economic recessions. Anytime the cash flow in a business, large or small, starts to tighten up, the money management of that business has to be run as a "tight ship."
Some of the things you can and should do include protecting yourself from expenditures made on sudden impulse. We've all bought merchandise or services we really didn't need simply because we were in the mood, or perhaps in response to the flamboyancy of the advertising or the persuasiveness of the salesperson. Then we sort of "wake up" a couple of days later and find that we've committed hundreds of dollars of business funds for an item or service that's not essential to the success of our own business, when really pressing items had been waiting for those dollars.
If you are incorporated, you can eliminate these "impulse purchases" by including in your by-laws a clause that states: "All purchasing decisions over (a certain amount) are contingent upon approval by the board of directors." This will force you to consider any "impulse purchases" of considerable cost, and may even be a reminder in the case of smaller purchases.
If your business is a partnership, you can state, when faced with a buying decision, that all purchases are contingent upon the approval of a third party. In reality, the third party can be your partner, one of your department heads, or even one of your suppliers.
If your business is a sole proprietorship, you don't have much to worry about really, because as an individual you have three days to think about your purchase, and then to nullify that purchase if you think you don't really need it or can't afford it.
While you may think you cannot afford it, be sure that you don't "short-change" yourself on professional services. This would apply especially during a time of emergency. Anytime you commit yourself and move ahead without completely investigating all the angles, and preparing yourself for all the contingencies that may arise, you're skating on thin ice. Regardless of the costs involved, it always pays off in the long run to seek out the advice of experienced professionals before embarking on a plan that could ruin you.
As an example, an experienced business consultant can fill you in on the 1244 stock advantages. Getting eligibility for the 1244 stock category is a very simple process, but one with tremendous benefits to your business.
The 1244 stock encourages investors to put equity capital into your business because in the event of a loss, amounts up to the entire sum of the investment can be written off in the current year. Without the "1244" classification, any losses would have to be spread over several years, and this, of course, would greatly lessen the attractiveness of your company's stock. Any business owner who has not filed the 1244 corporation has in effect cut himself off from 90 percent of his prospective investors.
Particularly when sales are down, you must be "hard-nosed" with people trying to sell you luxuries for your business. When business is booming, you undoubtedly will allow sales people to show you new models of equipment or a new line of supplies; but when your business is down, skip the entertaining frills and concentrate on the basics. Great care must be taken however, to maintain courtesy and allow these sellers to consider you a friend and call back at another time.
Your company's books should reflect your way of thinking, and whoever maintains them should generate information according to your policies. Thus, you should hire an outside accountant or accounting firm to figure your return on your investment, as well as the turnover on your accounts receivable and inventory. Such an audit or survey should focus in depth on any or every item within the financial statement that merits special attention. in this way, you'll probably uncover any potential financial problems before they become readily apparent, and certainly before they could get out of hand.
Many small companies set up advisory boards of outside professional people. These are sometimes known as power Circles, and once in place, the business always benefits, especially in times of short operating capital. Such an advisory board or power circle should include an attorney, a certified public accountant, civic club leaders, owners or managers of businesses similar to yours, and retired executives. Setting up such an advisory board of directors is really quite easy, because most people you ask will be honored to serve.
Once your board is set up, you should meet once a month and present material for review. Each meeting should be a discussion of your business problems and an input from your advisors relative to possible solutions. These members of your board od advisors should offer you advice as well as alternatives, and provide you with objectivity. No formal decisions need to be made either at your board meeting, or as a result of them, but you should be able to gain a great deal from the suggestions you hear.
You will find that most of your customers have the money to pay at least some of what they owe you immediately. To keep them current, and the number of accounts receivable in your files to a minimum, you should call them on the phone and ask for some kind of explanation why they're falling behind. if you develop such a habit as part of your operating procedure, you'll find your invoices will magically be drawn to the front of their piles of bills to pay. While maintaining a courteous attitude, don't hesitant, or too much of a "nice guy" when it comes to collecting money.
Something else that's a very good business practice, but which few business owners do is to methodically build a credit rating with their local banks. Particularly when you have a good cash flow, you should borrow $100 to $1,000 from your banks every 90 days or so. Simply borrow the money, and place it in an interest bearing account, and then pay it all back at least a month or so before it's due. By doing this, you will increase the borrowing power of your signature, and strengthen your ability to obtain needed financing on short notice. This is a kind of business leverage that will be of great value to you if or whenever your cash position becomes less favorable.
By all means, join your industry's local and national trade associations. Most of these organizations have a wealth of information available on everything from details on your competitors to average industry sales figures, new products, services, and trends.
If you are given a membership certificate or wall plaque, you should display these conspicuously on your office wall. Customers like to see such "seals of approval" and feel additional confidence in your business when they see them.
Still another thing often overlooked: If at all possible, you should have your spouse work in the business with you for at least three or four weeks per year. The important thing is that if for any reason you are not available to run the business, your spouse will be familiar with certain people and situations about your business. These people should include your attorney, accountant, any consultants or advisors, creditors and your major suppliers. The long-term advantages of having your spouse work four weeks per year in your business with you will greatly outweigh the short-term inconvenience. Many couples share responsibility and time entirely, which is in most cases even more desirable.
Whenever you can, and as often as you need it, take advantage of whatever free business counseling is available. The Small Business Administration published many excellent booklets, checklist and brochures on quite a large variety of businesses. these publications are available through the U.S.Government printing office. Most local universities, and many private organizations hold seminars at minimal cost, and often without charge. You should also take advantage of the services offered by your bank and local library.
The important thing about running a small business is to know the direction in which you're heading; to know on a day-to-day basis your progress in that very direction; to be aware of what your competitors are doing and to practice good money management at all times. All this will prepare you to recognize potential problems before they arise.
In order to survive with a small business, regardless of the economic climate, it is essential to surround yourself with smart people, and practice sound business management at all times.
Dominic Ferrara - Owner of Small Business Marketing Secrets. Do you need help for your business? We can help at http://www.small-business-marketing-info.com
Carwash Franchisor Case Study
There are only a handful of car wash franchises in the world. This might offer some insight on how car wash franchises come into existence. This is a crazy story. It is the history of our company and how we ended up in the Carwash Franchise business. One of our franchisees of our mobile car wash business; The Car Wash Guys, was in Idaho, was the son of a wheat farmer, the areas largest farm family land holder in Idaho's banana belt. About a month before he called us I put up this web site called www.detailguys.com and said what the hell, I will put up a form in case someone wants to buy a franchise for only auto detailing and not mobile car washing we can make a sub franchise out of it. Previously I did a couple of trade shows. The Black Expo and a BizOp/franchise show, great results and really I did not need any leads. But what I learned was their were significant people wanting low-priced franchises. So I put up the website and put a form on it and the very next day I get a lead from Phil the farmer in Idaho, looking for a simple business. He wanted to start a business, but stick more with auto detailing on a mobile bases, which was slightly different than that of our mobile care wash franchise. So he wanted a franchise ID. But heck I was in CA and ID seemed like another World at the time. It was. Things went good, because we made it work and Phil then bought a car wash guys mobile truck and later an auto detailing trailer and hired on some more workets.
How Is the LEGAL SYSTEM Dishing Out JUSTICE in Your Town?
Thankfully, most of us will never find out. That is a GOOD thing! However, if YOU are a small business owner it's something worth knowing before one day you get kicked in the back-side.
Leverage The Power of Publicity For Your Small Business
Your business is only as good as the number of people who knows about it. For your venture to grow, you need to start spreading the word about your business. You may have the best products your field, but you cannot expect your business to breach the million-dollar mark in sales if only the people in your street know about it. Some entrepreneurs start doing promotions only when their businesses are up and running, while some market their business even before the products or services are fully launched.
How to Find a Microenterprise Loan for Your Business
If you're looking for start-up capital for your business, but you don't have the credit, collateral or background needed by your bank to get a business loan, then microenterprise might be your best bet.
Franchising Pros and Cons
Last week's question from Anthony R. on how to choose the franchise that would best fulfill his life-long dream of owning his own business sparked a number of emails from other readers wanting to offer their two cents on the subject.
Get In Touch With Your Competition!
We all know that competition is an ugly word but competitors are a fact of life in business. If your business can't compete with other businesses, don't start it. You have to have some type of an edge.
Small Business Failures in America - Cash Flow Issues
We are noticing an increase in the length of time it takes Large corporations to pay on their invoices to our team. Fortune 500s are tending to pay their vendors more slowly, which will hurt the already strapped small businesses in America. These same small businesses employ 2/3 the population and do a great service in supplying the needs of corporations.
Most Franchises Are Small Home Businesses
Many of our nations 400,000 franchisees run their businesses out of their homes and therefore their home addresses and phone numbers are listed in the Unifrom Franchsie Offering Circular's, attachments. Uniform Franchise Circulars, UFOC, are for franchise buyers and they explain the investment involved. It is required by law that they be given out to potential buyers in advance of any sale by 10 business days. How can a franchisor be assured that someone sending an email or filling out a form is a real entity? Most franchise sales people see email addresses all the time that do not match the names they are purporting on the forms. They are suspect.
What Help is there for Veterans Starting a Business?
Some of the very qualities that attract people to the military life are what make them good candidates for an internet based home business. What are these qualities? A sense of adventure, an attraction to signs of leadership and the ability to discern what constitutes a good leader, courage and idealism and an understanding of the joy of testing one's own limits.
The Beauty of Focus and Plan B
Did you ever have one of those days or weeks when you said "What in the world am I doing running this business?!"
Starting an Aircraft Washing Service
To wash an airplane there are many items you will need to keep in mind. The first is safety while working on the tarmac of an airfield. When moving any vehicle on the tarmac the driver should always maneuver the vehicle in square turns. The reason for this is so that the pilots of the other airplanes can predict the movement of your vehicle. A person should never drive their car or truck under the wing of larger planes. This can be dangerous because the top of the vehicle can catch a part of the plane and cause damage or if the plane is starting up. If a pilot does not see the vehicle when starting up his plane some loose part from the vehicle could come off and hit the prop or be sucked into the jet engine and besides it's just not safe.
Obtain Maximum Results For Your Small Business Through Better Time Management
Most small business owners are faced with so many responsibilities and an unbelievable workload throughout the day. Mainly because of the many different roles that we have to play. On any given day a small business owner must be a customer service representative, collections specialist, marketing specialist, public relations representative, and the list continues. It's enough to drive the average person crazy. But we small business owners are made of a different stock yet still we succumb to normal, everyday pitfalls caused by poor time management. Poor time management can severely negatively impact your business through lost sales and disgruntled customers. A small business owner can't afford either.
Dynamics of Daylight Savings Time on Service Businesses in the United States
The Dynamics of Daylight Savings Time changes the way we live and do business. What are the true dynamics of daylight Savings. It was to improve the efficiency of energy supply and demand issues originally. Does it still work for that purpose. To some degree yes. But, not as much as you think. As a matter of fact until people readjust a little it actually hurts energy costs for those cities burning coal. Some cities use fuels to power up. Nuclear is best next to hydroelectric power. Wind sounds great, but we have not perfected that and the tax write off scandalists made a mockery of what could have been great technology and environmentally sound energy. Solar, may work better more now than previously due to the Infrared knowledge and more efficient solar cells due to nano tech. Solar sounds good since it is coming from the sun or space, stuff that happened billions of years ago now reaching us in other spectrums too.
The Virtual Assistant
As a small business owner, outsourcing work to Virtual Assistants is fast becoming a popular and intelligent decision. The business owner saves enormous amounts of money by cutting the costs of offices and equipment overhead as well as expensive benefits packages.
Recognizing Employees? Contributions Can Go a Long Way
Every employee would like to earn as high a salary as they can at their job but surprisingly it's not the number one motivating factor for them in the workplace. Human resource surveys indicate that wages are not even among the top five motivating factors for an employee. What does rank as one of the highest factors is being recognized by their employer for their contributions.
Find Your Niche & Follow It - Part 1
In this series of articles I'm going to show you how to find out if there's a hungry crowd for your information product BEFORE you write a single word.
Mobile Car and Truck Washing Vehicle Placement
To maximum potential profits and dollars in a mobile washing business it pays to set up in your mind in advance the best and most strategic place to park, before stopping to wash. You will obviously want to park your rig in a location that allows you to do as many cars as possible without moving the vehicle. For instance; let us say that your hose for water is one hundred plus feet but your vacuum hose is only forty feet, so if you have four cars in close proximity and one is a vacuum, park closest to that car. This way you can wash all four cars without moving the truck or rolling up the hoses, thus maximizing efficiency.
Five Simple Software Tips for Small Business Owners
The start of a new year is a time for a clean start. Resolutions are made, you clear your files of last year's paperwork, and you swear you are going to start the year off keeping your financial house in order.
A Key to Success: Be Consistent
Over the years I heard the best way to learn something is to to teach it. Well, this week's topic, practicing consistent behavior, is definitely something I need to learn and practice more effectively.
Canon City, Colorado - Good for Small Business
Canon City, Colorado is known for it's 6 Prisons; State and Federal, women's prison and juvenile. It is also home to the First Colorado Territorial Prison. Pictured here. Most of the people work for the prison system and it is the main employer of the town. This helps the local business community with high paying jobs. The small town has 7 new car dealerships and six used dealerships. Canon City is surrounded by several other smaller towns, which add quite a bit of people to the area.
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