Tag: Owners

The 5 Worst Pieces of Advice for Small Business Owners #small #scale #business

#small business advice

#

Mashable

The 5 Worst Pieces of Advice for Small Business Owners

When you’re starting a business, there’s no shortage of people eager to hand out advice. It seems that everyone, even someone you’ve just met, has an opinion on how you should be developing your product, running your marketing, handling your finances and much more.

I’ll be the first to admit that I’ve met some very smart people and have had great mentors over the years. Their contributions have been invaluable to my success. Yet after launching two companies over two decades, I’ve come across some terrible advice.

Below are the top five bits of advice that I could have done without.

1. “Hire people you know.”

I’ve had countless people tell me that it’s always better to assemble a team of “known quantities” — friends, colleagues or former employees whom you know and trust. But I’ve discovered that for me, the best hiring decisions are based on the specific positions I need to fill at that moment in time. In other words, I need to focus on the specific expertise and skill sets the company needs, rather than trying to piece together how Jill, Sally and Joe will fit into the new business.

In addition, if things aren’t working out between an employee and your company, you need to part ways (and usually, the sooner the better). You may be more reluctant to let friends go, even if you know they aren’t good fits.

2. “There’s no room for you in the market.”

When my husband and I launched a legal document filing company the second time around, the field was quite crowded, with several big names and established players. Many people told us to find a new space because there simply wasn’t room for us to compete.

However, the key to business success doesn’t always hinge on finding a completely empty field; rather, it’s how you define your company and its place in the market. Starbucks wasn’t the first company to sell coffee, but they did revolutionize the coffee shop by selling an experience along with a caffeine fix. Still, numerous boutique coffee shops are able to open and thrive today, even though there’s a Starbucks around the corner.

Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. Figure out the best possible way to fill that need and run with it. You don’t always have to blaze a new trail, but you need to know who you are.

3. “You have to be cheaper than the other guys.”

I admit that my husband and I fell into this pricing trap with our company. We felt that the only way we could compete with the “big guys” was to undercut them on price. So, we dropped our prices. Our business grew, customers were happy, more customers came in, yet we were nearly losing money with every new order.

Many young companies feel the pressure to discount their prices heavily in order to win business. While customer acquisition is important, attracting customers at unsustainable price levels will just result in a race to the bottom. I’ve learned that you’re better off in the long run to focus on how to bring more value to customers, rather than simply slashing your prices. After all, someone will always be able (or willing) to absorb a lower cost than you. You’ll need to find a new way to stand out, and then work as hard as you can to be exceptional in those differentiating areas.

4. “Social media is free.”

Over the past several years, I’ve had people tell me that starting a small business today is much easier than a decade ago, because of all the free marketing on Facebook. Twitter and Yelp. Sure, you don’t have to spend a dime to join Facebook, create a Twitter account or start a blog. But, I think a more apt comparison is that social media is free like a puppy. It may not cost much to bring a shelter puppy home, but from day one, it’s an endless whirlwind of training, toys and treats.

Likewise, social media is far from free once you factor in the blood, sweat and tears it demands. From developing fresh content to keeping up conversations, social media requires nonstop commitment once you start. Unless you consider your time (or the time of your employees) worthless, then there’s a significant cost involved with social media.

5. “You have to spend money to make money.”

This cliché never applied to our business, particularly at the beginning. We set up shop in our apartment and did everything we could to keep expenses down. Sometimes we thought things would be better if we just had the money for X, Y or Z. But it’s risky to think that throwing money at a problem is your silver bullet. Sometimes, creative thinking and strategy work far better than a checkbook.

We had to learn the difference between spending money and investing in the business. Certainly, money can scale a business faster, but only when you spend money on those things that will produce more money in return.

Final Thoughts

People will always give you advice — some good, some bad. The key is to never forget that you are running the show. Other people’s opinions should always be viewed through the context of your own experiences, convictions and value system.

Final decisions are always up to you, so there’s no blaming someone else for bad advice.

What’s New

What’s Rising

What’s Hot





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The 5 Worst Pieces of Advice for Small Business Owners #business #promotional #products

#small business advice

#

Mashable

The 5 Worst Pieces of Advice for Small Business Owners

When you’re starting a business, there’s no shortage of people eager to hand out advice. It seems that everyone, even someone you’ve just met, has an opinion on how you should be developing your product, running your marketing, handling your finances and much more.

I’ll be the first to admit that I’ve met some very smart people and have had great mentors over the years. Their contributions have been invaluable to my success. Yet after launching two companies over two decades, I’ve come across some terrible advice.

Below are the top five bits of advice that I could have done without.

1. “Hire people you know.”

I’ve had countless people tell me that it’s always better to assemble a team of “known quantities” — friends, colleagues or former employees whom you know and trust. But I’ve discovered that for me, the best hiring decisions are based on the specific positions I need to fill at that moment in time. In other words, I need to focus on the specific expertise and skill sets the company needs, rather than trying to piece together how Jill, Sally and Joe will fit into the new business.

In addition, if things aren’t working out between an employee and your company, you need to part ways (and usually, the sooner the better). You may be more reluctant to let friends go, even if you know they aren’t good fits.

2. “There’s no room for you in the market.”

When my husband and I launched a legal document filing company the second time around, the field was quite crowded, with several big names and established players. Many people told us to find a new space because there simply wasn’t room for us to compete.

However, the key to business success doesn’t always hinge on finding a completely empty field; rather, it’s how you define your company and its place in the market. Starbucks wasn’t the first company to sell coffee, but they did revolutionize the coffee shop by selling an experience along with a caffeine fix. Still, numerous boutique coffee shops are able to open and thrive today, even though there’s a Starbucks around the corner.

Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. Figure out the best possible way to fill that need and run with it. You don’t always have to blaze a new trail, but you need to know who you are.

3. “You have to be cheaper than the other guys.”

I admit that my husband and I fell into this pricing trap with our company. We felt that the only way we could compete with the “big guys” was to undercut them on price. So, we dropped our prices. Our business grew, customers were happy, more customers came in, yet we were nearly losing money with every new order.

Many young companies feel the pressure to discount their prices heavily in order to win business. While customer acquisition is important, attracting customers at unsustainable price levels will just result in a race to the bottom. I’ve learned that you’re better off in the long run to focus on how to bring more value to customers, rather than simply slashing your prices. After all, someone will always be able (or willing) to absorb a lower cost than you. You’ll need to find a new way to stand out, and then work as hard as you can to be exceptional in those differentiating areas.

4. “Social media is free.”

Over the past several years, I’ve had people tell me that starting a small business today is much easier than a decade ago, because of all the free marketing on Facebook. Twitter and Yelp. Sure, you don’t have to spend a dime to join Facebook, create a Twitter account or start a blog. But, I think a more apt comparison is that social media is free like a puppy. It may not cost much to bring a shelter puppy home, but from day one, it’s an endless whirlwind of training, toys and treats.

Likewise, social media is far from free once you factor in the blood, sweat and tears it demands. From developing fresh content to keeping up conversations, social media requires nonstop commitment once you start. Unless you consider your time (or the time of your employees) worthless, then there’s a significant cost involved with social media.

5. “You have to spend money to make money.”

This cliché never applied to our business, particularly at the beginning. We set up shop in our apartment and did everything we could to keep expenses down. Sometimes we thought things would be better if we just had the money for X, Y or Z. But it’s risky to think that throwing money at a problem is your silver bullet. Sometimes, creative thinking and strategy work far better than a checkbook.

We had to learn the difference between spending money and investing in the business. Certainly, money can scale a business faster, but only when you spend money on those things that will produce more money in return.

Final Thoughts

People will always give you advice — some good, some bad. The key is to never forget that you are running the show. Other people’s opinions should always be viewed through the context of your own experiences, convictions and value system.

Final decisions are always up to you, so there’s no blaming someone else for bad advice.

What’s New

What’s Rising

What’s Hot





Tags : , , , , , , , , ,

The 5 Worst Pieces of Advice for Small Business Owners #local #business

#small business advice

#

Mashable

The 5 Worst Pieces of Advice for Small Business Owners

When you’re starting a business, there’s no shortage of people eager to hand out advice. It seems that everyone, even someone you’ve just met, has an opinion on how you should be developing your product, running your marketing, handling your finances and much more.

I’ll be the first to admit that I’ve met some very smart people and have had great mentors over the years. Their contributions have been invaluable to my success. Yet after launching two companies over two decades, I’ve come across some terrible advice.

Below are the top five bits of advice that I could have done without.

1. “Hire people you know.”

I’ve had countless people tell me that it’s always better to assemble a team of “known quantities” — friends, colleagues or former employees whom you know and trust. But I’ve discovered that for me, the best hiring decisions are based on the specific positions I need to fill at that moment in time. In other words, I need to focus on the specific expertise and skill sets the company needs, rather than trying to piece together how Jill, Sally and Joe will fit into the new business.

In addition, if things aren’t working out between an employee and your company, you need to part ways (and usually, the sooner the better). You may be more reluctant to let friends go, even if you know they aren’t good fits.

2. “There’s no room for you in the market.”

When my husband and I launched a legal document filing company the second time around, the field was quite crowded, with several big names and established players. Many people told us to find a new space because there simply wasn’t room for us to compete.

However, the key to business success doesn’t always hinge on finding a completely empty field; rather, it’s how you define your company and its place in the market. Starbucks wasn’t the first company to sell coffee, but they did revolutionize the coffee shop by selling an experience along with a caffeine fix. Still, numerous boutique coffee shops are able to open and thrive today, even though there’s a Starbucks around the corner.

Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. Figure out the best possible way to fill that need and run with it. You don’t always have to blaze a new trail, but you need to know who you are.

3. “You have to be cheaper than the other guys.”

I admit that my husband and I fell into this pricing trap with our company. We felt that the only way we could compete with the “big guys” was to undercut them on price. So, we dropped our prices. Our business grew, customers were happy, more customers came in, yet we were nearly losing money with every new order.

Many young companies feel the pressure to discount their prices heavily in order to win business. While customer acquisition is important, attracting customers at unsustainable price levels will just result in a race to the bottom. I’ve learned that you’re better off in the long run to focus on how to bring more value to customers, rather than simply slashing your prices. After all, someone will always be able (or willing) to absorb a lower cost than you. You’ll need to find a new way to stand out, and then work as hard as you can to be exceptional in those differentiating areas.

4. “Social media is free.”

Over the past several years, I’ve had people tell me that starting a small business today is much easier than a decade ago, because of all the free marketing on Facebook. Twitter and Yelp. Sure, you don’t have to spend a dime to join Facebook, create a Twitter account or start a blog. But, I think a more apt comparison is that social media is free like a puppy. It may not cost much to bring a shelter puppy home, but from day one, it’s an endless whirlwind of training, toys and treats.

Likewise, social media is far from free once you factor in the blood, sweat and tears it demands. From developing fresh content to keeping up conversations, social media requires nonstop commitment once you start. Unless you consider your time (or the time of your employees) worthless, then there’s a significant cost involved with social media.

5. “You have to spend money to make money.”

This cliché never applied to our business, particularly at the beginning. We set up shop in our apartment and did everything we could to keep expenses down. Sometimes we thought things would be better if we just had the money for X, Y or Z. But it’s risky to think that throwing money at a problem is your silver bullet. Sometimes, creative thinking and strategy work far better than a checkbook.

We had to learn the difference between spending money and investing in the business. Certainly, money can scale a business faster, but only when you spend money on those things that will produce more money in return.

Final Thoughts

People will always give you advice — some good, some bad. The key is to never forget that you are running the show. Other people’s opinions should always be viewed through the context of your own experiences, convictions and value system.

Final decisions are always up to you, so there’s no blaming someone else for bad advice.

What’s New

What’s Rising

What’s Hot





Tags : , , , , , , , , ,

Small business owners: what does the King v #import #export #business

#small business owners

#

Blog Post

What is the King v. Burwell lawsuit?

Earlier this summer, in mid-June, the Supreme Court upheld the Affordable Care Act, confirming that the purpose of the Affordable Care Act (ACA) is to improve the healthcare market and not leave people uninsured.

Small business owners and health insurance

If the Supreme Court had sided with the plaintiffs, the federal subsidies that make insurance affordable for millions of people in the United States would have been erased. Some of these subsidies are worth thousands of dollars a year. According to the Huffington Post report, this would leave about 8 million people without insurance.

This is a relief for those who have purchased health insurance through the Obamacare health insurance exchanges because they won’t be losing their coverage anytime soon.

What if I don’t purchase insurance through the ACA Exchanges for myself or employers?

Small business owners are not required to purchase their insurance through the Marketplace. However, it is required that you purchase some variation of health insurance for yourself and your employees. If purchasing insurance for your employees still seems to costly, check into the possible tax credits the ACA offers.

If you do not purchase coverage, you could be fined:

  • 2 percent of your yearly household income
  • $325 per person (and $162.50 per child) for the year

You can learn more about that on HealthCare.gov s Fees Exemptions page.

Are you a small business that offers health insurance?

Remember, health insurance law doesn’t require you to provide health insurance for your employees unless you have 50 or more full-time employees. But, as a business owner, providing insurance for your workers is a major plus because it gives you employees a perk and a reason to stay.

Without health insurance, they may be inclined to look for a new job with a large corporation that can afford to provide insurance for all it’s employees.





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6 Smart Budgeting Tips for Small Business Owners #business #plan #writer

#small business tips

#

6 Smart Budgeting Tips for Small Business Owners

If you run a small business, it s likely that you re operating on a relatively limited budget. Whether you bootstrapped your business or are trying to pay back loans you took out to cover your startup costs, it s in your best interest to conserve money wherever you can.

Without a thorough budget plan, however, it can be difficult to track and manage your finances. This is especially true for any unexpected business expenses that may come up, as they often do. A 2015 survey by small business credit provider Headway Capital found that although 57 percent of small business owners anticipated growth this year, nearly 19 percent were concerned about how unexpected expenses would impact their business.

If you want to keep your business operating in the black, you ll need to account for both fixed and unplanned costs, and then create and stick to a solid budget. Experts offered their advice for small business owners looking to keep their finances in order. [4 Tips for Reducing Startup Costs]

Define and understand your risks

Every business venture has a certain degree of risk involved, and all of those risks have the potential for a financial impact on your company. Paul Cho, managing director of Headway Capital, said that small business owners need to consider their long- and short-term risks to accurately plan for their financial future.

How will changes in minimum wage or health care requirements impact your workforce? Cho said. Do you operate in a geography at high risk of a natural disaster? Do you rely heavily on seasonal workers? Understanding the potential risks facing you on a short- and long-term basis is important for all small businesses. Once you ve mapped out the threats to productivity, a clearer picture can be built around emergency planning, insurance needs, etc.

Overestimate your expenses

If your business operates on a project-to-project basis, you know that every client is different and no two projects will turn out exactly the same. This means that often, you can t predict when something is going to go over budget.

Every project seems to have a one-time cost that was never anticipated, said James Ontra, CEO of presentation management company Shufflrr. It usually is that one unique extra item [that is] necessary to the job, but [was] not anticipated when bidding the job.

For this reason, Ontra advised budgeting slightly above your anticipated line-item costs, no matter what, so that if you do go over, you won t be fully unprepared.

I go by the cost-moon-stars theory, he said. If you think it will cost the moon, expect to pay the stars.

Pay attention to your sales cycle

Many businesses go through busy and slow periods over the course of the year. If your company has an off-season , you ll need to account for your expenses during that time. Cho also suggested using your slower periods to think of ways to plan ahead for your next sales boom.

There is much to be learned from your sales cycles, he said. Use your downtime to ramp up your marketing efforts while preventing profit generation from screeching to a halt. In order to keep your company thriving and the revenue coming in, you will have to identify how to market to your customers in new and creative ways.

Plan for large purchases carefully and early

Some large business expenses occur when you least expect them a piece of equipment breaks and needs to be replaced or your delivery van needs a costly repair, for instance. However, planned expenses like store renovations or a new software system should be carefully timed and budgeted to avoid a huge financial burden on your business.

Substantial business changes need to be timed carefully, balancing the risk with the reward and done with a full understanding of the financial landscape you re operating within, Cho told Business News Daily. An up-to-date budget and data-driven financial projections are important components that help guide when to make large investments in your business.

Remember that time is money, too

One of the biggest mistakes small businesses make is forgetting to incorporate their time into a budget plan. Ontra reminded business owners that time is money, especially when working with people who are paid for their time.

Timing underestimation directly increases costs, Ontra said. For us, the biggest underestimation is allotting time for client feedback. It is a Herculean effort sometimes to meet a deadline with lots of people focused on a single task. Then, the client needs to give feedback for us to proceed. If the client is distracted with other issues, feedback planned for a three-day turnaround, can become a week or longer. Not only do you start to lose time to the delivery schedule, your team also loses momentum as their collective thought shifts focus to another project.

Ontra recommended treating your time like your money, and set external deadlines later than when you think the project will actually be done.

If you believe the project will finish on Friday, promise delivery on Monday, he said. So, if you finish on Friday, deliver the work early and become a star. If for some reason time runs over, deliver on Monday and you are still a success.

Constantly revisit your budget

Your budget will never be static or consistent it will change and evolve along with your business, and you ll need to keep adjusting it based on your growth and profit patterns. Cho suggested revising your monthly and annual budgets regularly to get a clearer, updated picture of your business finances.

Regularly revisiting your budget will help you better control financial decisions because you will know exactly what you can afford to spend versus how much you are projecting to make, Cho said. Take into account market trends from the previous year to help you determine what this year may look like. Once you have a clear understanding of your business s budgetary needs, you can accurately forecast what can be set aside for an emergency fund or unexpected costs.

Nicole Fallon Taylor

Nicole received her Bachelor s degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. She currently serves as the assistant editor. Reach her by email. or follow her on Twitter .

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  • Women Business Owners – Women Small Business Loan – Wells Fargo Small Business #business

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    Women Business Owners

    Commitment
    Wells Fargo celebrates the strength, vision and innovation of women business owners. Through our financial solutions, outreach efforts and educational resources, we help sustain the success of women-owned businesses; and we are honored to support their role in shaping the future of small business.

    As America’s #1 small business lender 1. Wells Fargo is dedicated to helping you succeed financially — in business and personally. We stand ready to help you grow your business, achieve your vision and safeguard your financial success.

    Financial Solutions

    With expert guidance from our local bankers who will get to know your goals and needs, Wells Fargo will help your business grow and prosper.

    Wells Fargo Works for Small Business

    Discover our comprehensive resource library, offering guidance and information and information to help you start, run and grow your business at wellsfargoworks.com .

    Diversity at Wells Fargo is a business imperative. Aligning with our customer base, engaging our communities, and attracting and retaining talented individuals are critical to our success. To integrate supplier diversity into all aspects of our business we focus on three areas: education and awareness, partnership development and measurement and accountability.

    1 Based on 2010 Community Reinvestment Act government data.

    Contact Us





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    The 5 Worst Pieces of Advice for Small Business Owners #registering #a #business

    #small business advice

    #

    Mashable

    The 5 Worst Pieces of Advice for Small Business Owners

    When you’re starting a business, there’s no shortage of people eager to hand out advice. It seems that everyone, even someone you’ve just met, has an opinion on how you should be developing your product, running your marketing, handling your finances and much more.

    I’ll be the first to admit that I’ve met some very smart people and have had great mentors over the years. Their contributions have been invaluable to my success. Yet after launching two companies over two decades, I’ve come across some terrible advice.

    Below are the top five bits of advice that I could have done without.

    1. “Hire people you know.”

    I’ve had countless people tell me that it’s always better to assemble a team of “known quantities” — friends, colleagues or former employees whom you know and trust. But I’ve discovered that for me, the best hiring decisions are based on the specific positions I need to fill at that moment in time. In other words, I need to focus on the specific expertise and skill sets the company needs, rather than trying to piece together how Jill, Sally and Joe will fit into the new business.

    In addition, if things aren’t working out between an employee and your company, you need to part ways (and usually, the sooner the better). You may be more reluctant to let friends go, even if you know they aren’t good fits.

    2. “There’s no room for you in the market.”

    When my husband and I launched a legal document filing company the second time around, the field was quite crowded, with several big names and established players. Many people told us to find a new space because there simply wasn’t room for us to compete.

    However, the key to business success doesn’t always hinge on finding a completely empty field; rather, it’s how you define your company and its place in the market. Starbucks wasn’t the first company to sell coffee, but they did revolutionize the coffee shop by selling an experience along with a caffeine fix. Still, numerous boutique coffee shops are able to open and thrive today, even though there’s a Starbucks around the corner.

    Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. Figure out the best possible way to fill that need and run with it. You don’t always have to blaze a new trail, but you need to know who you are.

    3. “You have to be cheaper than the other guys.”

    I admit that my husband and I fell into this pricing trap with our company. We felt that the only way we could compete with the “big guys” was to undercut them on price. So, we dropped our prices. Our business grew, customers were happy, more customers came in, yet we were nearly losing money with every new order.

    Many young companies feel the pressure to discount their prices heavily in order to win business. While customer acquisition is important, attracting customers at unsustainable price levels will just result in a race to the bottom. I’ve learned that you’re better off in the long run to focus on how to bring more value to customers, rather than simply slashing your prices. After all, someone will always be able (or willing) to absorb a lower cost than you. You’ll need to find a new way to stand out, and then work as hard as you can to be exceptional in those differentiating areas.

    4. “Social media is free.”

    Over the past several years, I’ve had people tell me that starting a small business today is much easier than a decade ago, because of all the free marketing on Facebook. Twitter and Yelp. Sure, you don’t have to spend a dime to join Facebook, create a Twitter account or start a blog. But, I think a more apt comparison is that social media is free like a puppy. It may not cost much to bring a shelter puppy home, but from day one, it’s an endless whirlwind of training, toys and treats.

    Likewise, social media is far from free once you factor in the blood, sweat and tears it demands. From developing fresh content to keeping up conversations, social media requires nonstop commitment once you start. Unless you consider your time (or the time of your employees) worthless, then there’s a significant cost involved with social media.

    5. “You have to spend money to make money.”

    This cliché never applied to our business, particularly at the beginning. We set up shop in our apartment and did everything we could to keep expenses down. Sometimes we thought things would be better if we just had the money for X, Y or Z. But it’s risky to think that throwing money at a problem is your silver bullet. Sometimes, creative thinking and strategy work far better than a checkbook.

    We had to learn the difference between spending money and investing in the business. Certainly, money can scale a business faster, but only when you spend money on those things that will produce more money in return.

    Final Thoughts

    People will always give you advice — some good, some bad. The key is to never forget that you are running the show. Other people’s opinions should always be viewed through the context of your own experiences, convictions and value system.

    Final decisions are always up to you, so there’s no blaming someone else for bad advice.

    What’s New

    What’s Rising

    What’s Hot





    Tags : , , , , , , , , ,

    Small business owners: what does the King v #online #business #loans

    #small business owners

    #

    Blog Post

    What is the King v. Burwell lawsuit?

    Earlier this summer, in mid-June, the Supreme Court upheld the Affordable Care Act, confirming that the purpose of the Affordable Care Act (ACA) is to improve the healthcare market and not leave people uninsured.

    Small business owners and health insurance

    If the Supreme Court had sided with the plaintiffs, the federal subsidies that make insurance affordable for millions of people in the United States would have been erased. Some of these subsidies are worth thousands of dollars a year. According to the Huffington Post report, this would leave about 8 million people without insurance.

    This is a relief for those who have purchased health insurance through the Obamacare health insurance exchanges because they won’t be losing their coverage anytime soon.

    What if I don’t purchase insurance through the ACA Exchanges for myself or employers?

    Small business owners are not required to purchase their insurance through the Marketplace. However, it is required that you purchase some variation of health insurance for yourself and your employees. If purchasing insurance for your employees still seems to costly, check into the possible tax credits the ACA offers.

    If you do not purchase coverage, you could be fined:

    • 2 percent of your yearly household income
    • $325 per person (and $162.50 per child) for the year

    You can learn more about that on HealthCare.gov s Fees Exemptions page.

    Are you a small business that offers health insurance?

    Remember, health insurance law doesn’t require you to provide health insurance for your employees unless you have 50 or more full-time employees. But, as a business owner, providing insurance for your workers is a major plus because it gives you employees a perk and a reason to stay.

    Without health insurance, they may be inclined to look for a new job with a large corporation that can afford to provide insurance for all it’s employees.





    Tags : , , , , , , ,

    6 Smart Budgeting Tips for Small Business Owners #stock #market #info

    #small business tips

    #

    6 Smart Budgeting Tips for Small Business Owners

    If you run a small business, it s likely that you re operating on a relatively limited budget. Whether you bootstrapped your business or are trying to pay back loans you took out to cover your startup costs, it s in your best interest to conserve money wherever you can.

    Without a thorough budget plan, however, it can be difficult to track and manage your finances. This is especially true for any unexpected business expenses that may come up, as they often do. A 2015 survey by small business credit provider Headway Capital found that although 57 percent of small business owners anticipated growth this year, nearly 19 percent were concerned about how unexpected expenses would impact their business.

    If you want to keep your business operating in the black, you ll need to account for both fixed and unplanned costs, and then create and stick to a solid budget. Experts offered their advice for small business owners looking to keep their finances in order. [4 Tips for Reducing Startup Costs]

    Define and understand your risks

    Every business venture has a certain degree of risk involved, and all of those risks have the potential for a financial impact on your company. Paul Cho, managing director of Headway Capital, said that small business owners need to consider their long- and short-term risks to accurately plan for their financial future.

    How will changes in minimum wage or health care requirements impact your workforce? Cho said. Do you operate in a geography at high risk of a natural disaster? Do you rely heavily on seasonal workers? Understanding the potential risks facing you on a short- and long-term basis is important for all small businesses. Once you ve mapped out the threats to productivity, a clearer picture can be built around emergency planning, insurance needs, etc.

    Overestimate your expenses

    If your business operates on a project-to-project basis, you know that every client is different and no two projects will turn out exactly the same. This means that often, you can t predict when something is going to go over budget.

    Every project seems to have a one-time cost that was never anticipated, said James Ontra, CEO of presentation management company Shufflrr. It usually is that one unique extra item [that is] necessary to the job, but [was] not anticipated when bidding the job.

    For this reason, Ontra advised budgeting slightly above your anticipated line-item costs, no matter what, so that if you do go over, you won t be fully unprepared.

    I go by the cost-moon-stars theory, he said. If you think it will cost the moon, expect to pay the stars.

    Pay attention to your sales cycle

    Many businesses go through busy and slow periods over the course of the year. If your company has an off-season , you ll need to account for your expenses during that time. Cho also suggested using your slower periods to think of ways to plan ahead for your next sales boom.

    There is much to be learned from your sales cycles, he said. Use your downtime to ramp up your marketing efforts while preventing profit generation from screeching to a halt. In order to keep your company thriving and the revenue coming in, you will have to identify how to market to your customers in new and creative ways.

    Plan for large purchases carefully and early

    Some large business expenses occur when you least expect them a piece of equipment breaks and needs to be replaced or your delivery van needs a costly repair, for instance. However, planned expenses like store renovations or a new software system should be carefully timed and budgeted to avoid a huge financial burden on your business.

    Substantial business changes need to be timed carefully, balancing the risk with the reward and done with a full understanding of the financial landscape you re operating within, Cho told Business News Daily. An up-to-date budget and data-driven financial projections are important components that help guide when to make large investments in your business.

    Remember that time is money, too

    One of the biggest mistakes small businesses make is forgetting to incorporate their time into a budget plan. Ontra reminded business owners that time is money, especially when working with people who are paid for their time.

    Timing underestimation directly increases costs, Ontra said. For us, the biggest underestimation is allotting time for client feedback. It is a Herculean effort sometimes to meet a deadline with lots of people focused on a single task. Then, the client needs to give feedback for us to proceed. If the client is distracted with other issues, feedback planned for a three-day turnaround, can become a week or longer. Not only do you start to lose time to the delivery schedule, your team also loses momentum as their collective thought shifts focus to another project.

    Ontra recommended treating your time like your money, and set external deadlines later than when you think the project will actually be done.

    If you believe the project will finish on Friday, promise delivery on Monday, he said. So, if you finish on Friday, deliver the work early and become a star. If for some reason time runs over, deliver on Monday and you are still a success.

    Constantly revisit your budget

    Your budget will never be static or consistent it will change and evolve along with your business, and you ll need to keep adjusting it based on your growth and profit patterns. Cho suggested revising your monthly and annual budgets regularly to get a clearer, updated picture of your business finances.

    Regularly revisiting your budget will help you better control financial decisions because you will know exactly what you can afford to spend versus how much you are projecting to make, Cho said. Take into account market trends from the previous year to help you determine what this year may look like. Once you have a clear understanding of your business s budgetary needs, you can accurately forecast what can be set aside for an emergency fund or unexpected costs.

    Nicole Fallon Taylor

    Nicole received her Bachelor s degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. She currently serves as the assistant editor. Reach her by email. or follow her on Twitter .

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  • The 5 Worst Pieces of Advice for Small Business Owners #business #technology

    #small business advice

    #

    Mashable

    The 5 Worst Pieces of Advice for Small Business Owners

    When you’re starting a business, there’s no shortage of people eager to hand out advice. It seems that everyone, even someone you’ve just met, has an opinion on how you should be developing your product, running your marketing, handling your finances and much more.

    I’ll be the first to admit that I’ve met some very smart people and have had great mentors over the years. Their contributions have been invaluable to my success. Yet after launching two companies over two decades, I’ve come across some terrible advice.

    Below are the top five bits of advice that I could have done without.

    1. “Hire people you know.”

    I’ve had countless people tell me that it’s always better to assemble a team of “known quantities” — friends, colleagues or former employees whom you know and trust. But I’ve discovered that for me, the best hiring decisions are based on the specific positions I need to fill at that moment in time. In other words, I need to focus on the specific expertise and skill sets the company needs, rather than trying to piece together how Jill, Sally and Joe will fit into the new business.

    In addition, if things aren’t working out between an employee and your company, you need to part ways (and usually, the sooner the better). You may be more reluctant to let friends go, even if you know they aren’t good fits.

    2. “There’s no room for you in the market.”

    When my husband and I launched a legal document filing company the second time around, the field was quite crowded, with several big names and established players. Many people told us to find a new space because there simply wasn’t room for us to compete.

    However, the key to business success doesn’t always hinge on finding a completely empty field; rather, it’s how you define your company and its place in the market. Starbucks wasn’t the first company to sell coffee, but they did revolutionize the coffee shop by selling an experience along with a caffeine fix. Still, numerous boutique coffee shops are able to open and thrive today, even though there’s a Starbucks around the corner.

    Rather than struggling to come up with a brand new idea, take a look at your target industry and see where there’s a void to be filled. Figure out the best possible way to fill that need and run with it. You don’t always have to blaze a new trail, but you need to know who you are.

    3. “You have to be cheaper than the other guys.”

    I admit that my husband and I fell into this pricing trap with our company. We felt that the only way we could compete with the “big guys” was to undercut them on price. So, we dropped our prices. Our business grew, customers were happy, more customers came in, yet we were nearly losing money with every new order.

    Many young companies feel the pressure to discount their prices heavily in order to win business. While customer acquisition is important, attracting customers at unsustainable price levels will just result in a race to the bottom. I’ve learned that you’re better off in the long run to focus on how to bring more value to customers, rather than simply slashing your prices. After all, someone will always be able (or willing) to absorb a lower cost than you. You’ll need to find a new way to stand out, and then work as hard as you can to be exceptional in those differentiating areas.

    4. “Social media is free.”

    Over the past several years, I’ve had people tell me that starting a small business today is much easier than a decade ago, because of all the free marketing on Facebook. Twitter and Yelp. Sure, you don’t have to spend a dime to join Facebook, create a Twitter account or start a blog. But, I think a more apt comparison is that social media is free like a puppy. It may not cost much to bring a shelter puppy home, but from day one, it’s an endless whirlwind of training, toys and treats.

    Likewise, social media is far from free once you factor in the blood, sweat and tears it demands. From developing fresh content to keeping up conversations, social media requires nonstop commitment once you start. Unless you consider your time (or the time of your employees) worthless, then there’s a significant cost involved with social media.

    5. “You have to spend money to make money.”

    This cliché never applied to our business, particularly at the beginning. We set up shop in our apartment and did everything we could to keep expenses down. Sometimes we thought things would be better if we just had the money for X, Y or Z. But it’s risky to think that throwing money at a problem is your silver bullet. Sometimes, creative thinking and strategy work far better than a checkbook.

    We had to learn the difference between spending money and investing in the business. Certainly, money can scale a business faster, but only when you spend money on those things that will produce more money in return.

    Final Thoughts

    People will always give you advice — some good, some bad. The key is to never forget that you are running the show. Other people’s opinions should always be viewed through the context of your own experiences, convictions and value system.

    Final decisions are always up to you, so there’s no blaming someone else for bad advice.

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