Category Archives: Small Business

Three Hurdles Every New Business Must Face

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90% of new businesses fail within the first five years. Contrary to what you may believe, most of the failures are not because of faulty products.

The reasons that many businesses fail have to do with a host of other issues, hurdles that every new business must face. Here are a few of those issues spelled out and how your company can face those challenges successfully.

Budgeting properly for the initial advertising campaigns

Your initial ad campaigns may not bring in the money to make your company solvent. This is not something to be afraid of; on Silicon Valley, this is par for the course.

It is expected that successful companies will require many rounds of funding in order to get into the black. Amazon has yet to turn a profit!

The initial ad campaigns are to raise awareness and create buzz for the brand. The challenge is to keep the business afloat while there is no money coming in. This requires a good relationship with your banker or other investors. It also requires proper budgeting that lowers your cost per conversion.

Keep budgets low, but let your financial partners know exactly what you need. Planning is more important than being cheap for no reason.

Finding the right partnerships

Unless you are doing all of your manufacturing, post-production, marketing and distribution in house, you will need other partnerships in order to make your business successful.

Finding the right partners can be just as challenging as coming up with the initial idea for your business. You may have to go through a few bad eggs before you find the people whom you can really trust.

You will need to do a great deal of research into the backgrounds of businesses that you need. You also need to ignore the solicitations of businesses that you do not need.

As soon as word hits the street that you have a line of credit with a reputable financial institution, there will be a line of businesses who will be trying to take that money from you. Say no three times as much as you say yes – this is the general rule of creating partnerships for yourself.

Creating the proper infrastructure

Perhaps the most important aspect of your business in its initial stages is finding the right team. You will need a management team that sticks through the tough times.

You will need a technical team that can handle being overloaded with work. You will need an administrative team that can organize files and financial records. For most small business startups, these three aspects of business will all fall on the same heads.

In short, you need people who are willing to give up outside activities and lots of sleep in order to handle all of the monotonous aspects of a new business. These people will also need to work incredibly well together, as they will be spending a great deal of time in the same room if the business is to work.

There will need to be decisions made on financing, taxes, hardware, health insurance, marketing, promotion and everything else that a business needs in order to operate.

Three Small Changes That Can Make A Big Difference For Your Business

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If you are running a small business, then you are always looking for ways to save a bit of money. There are many small habits that can help you to create more leverage for your business if you look hard enough.

Here are some small business spending habits that you can take advantage of to save money for your company.

Any spending that is in the short term is potentially harmful.

If you are not investing in the long term aspects of your business, then you are harming your bottom line. There are many different ways that you can take advantage of the notion of investing to give yourself a leg up in the marketplace.

Start by investing in the niceties of your office. You can save yourself and your employees thousands of dollars per year as well as plenty of manhours if you simply buy a espresso machine.

This will keep your employees in the office during break time, creating more inter-office bonds and raising productivity – no one has to go anywhere for their next cup of coffee. They can stay, continue to discuss business strategy, and keep their ideas coming in continuance.

Make sure that your interior design is conducive to productive team based thinking and synergy.

As the business owner, you have the ability and the responsibility to create an environment that is geared towards group thought and camaraderie.

One of the easiest ways that you can do this is to arrange the furniture so that people can easily find and speak to each other about ideas that they have come up with. You can also create a group room that will allow ideas to grow as they are created by individuals that are in your company.

If you are not the boss, then you should ask for an environment like this. The best companies in the world create environments like this for their employees. Tell your bosses to look up companies such as Google and Apple to see the things that they do for their employees that are done in literally no other companies around the entire world.

These changes are not expensive; they simply require remodeling for the benefit of the employees. They can also save the average business a great deal of money in solutions that do not work when it comes to bringing people together inside the company.

Consider virtual solutions rather than hardware solutions in order to save money.

Many of the most competitive companies around the globe have based their cost curve on having a virtual office rather than an office that is full of hardware that breaks down and is always in need of protection. The virtual office spreads the responsibility of security and maintenance around to larger companies who are much better equipped to handle the burden.

Putting your information in the cloud is a good start. Instead of having to rely on hardware options that can break down at any time, you gain the cutting edge solutions of the cloud that will give you more leverage to invest in true research and development rather than in safety and maintenance of your ideas.

Photo: Mick Baker / CC 2.0

Without These Five Products, Your Startup is Doomed

 

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Deciding to start your own business is exciting and scary. You may have dreams of becoming the next big thing in your niche, but if you go into it unprepared you will crash and burn quickly.

Most start-ups fail due to lack of funding, but without a solid foundation and clear understanding of your customer base, a start-up can never get off the ground.

An often overlooked part of a solid foundation are essential business products that help with preparedness. Without these five products, your start-up is doomed from the get-go.

A Business Plan Kit

When I started my own business a few years back, I had no idea business plan kits existed.  I also had no idea why I would need one. Because I never put a clear vision for my business on paper, I restarted and changed direction three times, costing me valuable time and money.

A business plan kit helps you define company values, set forth a funding plan, marketing plan, launching plan, and more. All start-ups and established companies need a business plan regardless of business type.

Accounting Software

I remember taking my receipts and putting them into a pile thinking it would be easy to figure out my income and expenses once tax time came. It only took one time of sifting through mounds of unorganized receipts for me to understand what a mistake I had made.

You do not need to be an expert in accounting, but you do need to understand the basics. Luckily basic accounting software can teach you those basics and keep your finances organized. Choose a program that is accessible on both your computer and a mobile device. That way you can enter expenses on the go. When first starting out, there are several excellent free products out there. You can always upgrade to a paid version down the road.

All-In-One-Printer

Printers that can do it all are not expensive, and they are a necessity for any new business. You want to be able to print, scan, copy, and fax when needed. You also want to be able to choose black and white or color.

When a new business is just starting out, money is tight. Being able to print your own business cards and letterhead can provide professional quality business essentials while saving lots of money.

Social Media Products

Part of launching a successful new business is creating buzz around the business. Many new entrepreneurs have a great idea that could make them a lot of money, but once they launch, all they hear is crickets. Why? They didn’t market their business properly through social media.

Free products like Hootsuite can help you identify the people with the most influence in your niche. Once you know who they are you can begin to build a relationship through social media. You can also schedule your own tweets and posts to go out regularly through the day. A shout-out by someone with influence in your niche can sometimes bring more business than paid advertising ever could.

Email Marketing Products

Without an email marketing plan, it is difficult to be successful. Basic plans are inexpensive and bring a lot of value for the cost. Not only do they give you a database for communication with potential customers, but also they give you an avenue for marketing funnels and more advanced methods as you grow.

There are free products out there but beware. If you do not have a program with a double opt-in and auto responder, you could easily violate anti-spam laws. You usually need a paid version to add these features.

There are many other products you can utilize to prepare for a successful start-up, but these five are essential. As you grow, you will learn more successful ways to market your business while keeping accurate records.

In the end, all that matters is delivering what the customer wants. Learn as much as you can about their desires and fears, and then utilize social media and other means of marketing to get the word out that you have what they need. Most importantly, deliver on your promise, and you will be a success story among the many start-ups doomed from the start.

Four Companies That Should Be Role Models For Your Startup

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All the famous companies that we are all very proud of today and those that every unemployed person wants to work for were once start-ups.Today in the stock markets some of them are considered as blue chip companies while others are rated among Fortune 500 companies.

Some of the companies that have now grown to become global brands had to start somewhere. A number of them some of which are now worth billions are said to have been launched from makeshift headquarters, coffee shops, and relatives’ garages as well university living rooms.

Some of the incredible examples of companies that start-ups should look at include;

Apple

Steve Jobs and Steven Wozniak were good friends in high school. They both happened to have a strong interest in electronics. Jobs and Wozniak had this desire to come up with personal computers that they would sell to their friends and close relatives.

It all started in the year 1976 when Woz designed what would come to be referred to as Apple 1. Jobs was excited by the idea and being the marketing genius that he was he took Apple 1 to the marketplace. The reception was incredible.

The story of Apple is an interesting one especially the fact that it had to deal with already established names in the industry like BIG Blue.

The age of Jobs and Wozniak too should offer motivation to start-ups and show them that they should not wait until it’s too late to try and make an idea a reality.

Google

Google is the leading search engine globally. It was founded by Stanford University students Larry Page and Sergei Brin in the year 1998.

It was while they were at Stanford in 1996 that Page and Brin began the process of developing a search engine called BackRub. In the year 1998, they set up their first data center in Page’s room.

Page and Brin were motivated by the fact that their fellow Stanford alum David Filo had founded Yahoo years earlier, they made a decision to start a company as well as looking for investors.

Today Google is used by almost every internet user globally and is rated as one of the most successful companies globally.

Starbucks

It started small in Seattle in the early 70’s. Howard Schultz while on a trip to Milan Italy visited the espresso bars and was greatly impressed. He decided to implement the model in Seattle, and immediately everybody become coffee crazy.

Starbucks has since expanded from a single coffee shop and has now opened thousands of its retails all over the world.

Nokia

It was founded in the year 1865. Gradually is has grown to become one of the biggest communication and information technology companies in the globe.

However, Nokia started small producing leather footwear called Galoshes. It’s in the year 1987 that they introduced Mobira Cityman 900 their first handheld phone.

There are other compelling stories of companies like Facebook that was started by Mark Zuckerberg while he was still in the university. Some of the other companies that startups should look at include; Alibaba, Yahoo, and even Toyota.

In general, the challenges that faced entrepreneurs like Steve Jobs, who was a co-founder having to leave Apple and go and try out other start-ups like Next and Pixar, demonstrates to start-ups the need to forge forward even when they experience failure.

The prosperity of such companies has been associated with the fact that they make products that are well thought, superior quality, and designed to be simple to use, which should be the guiding principles for any start-up out there.

Photo: Marco Pakoeningrat / CC 2.0

From Nothing to Something: My Small Business Success Story

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Jurissa Ayala

Running your own show is no picnic. You have no one to report to, sure. You can work in your pajamas while eating too many pancakes. Any time you feel like it, you can take a yoga break. Or a Big Bang Theory break. I won’t lie, that’s all pretty awesome.

There are some downsides to owning a small business, however. When you are self-employed, you report to you. Which means that sometimes your boss is a lazy slob who won’t demand that much of you. Who might make excuses for your poor behavior or let you cut work more often than you should. Plus, your boss has only as much experience as you do, and that can really hogtie you.

It took me more than seven years after graduating college to consider myself a “success.” This is partially due to a lack of determination to get there, and partially to a number of mistakes I made. By sharing them with you, I hope to reduce the time it takes you to find your own success. Ready for a crash course in small business life? Put on your helmet and let’s get started.

Mistake #1: I Went to College Too Soon. Then I Did It Again

I was always a good student, and the occasional C in Chemistry didn’t stop me from getting into one of the top programs in my state. Because school came easy, I never really tried that hard. Nor did I question whether it was “worth it” to spend time and money on college when I was still finding myself. Too bad for me.

When I graduated with a degree I would never use, I shrugged my shoulders and found jobs that didn’t thrill me: first in insurance sales, then at a bank. I used the money to pay rent and party, and started looking for another path only when banking made me so miserable it was starting to ruin my life. I chose teaching, and got another expensive degree that didn’t pan out due to a bad economy. Then I went to school for journalism. Finally: something I loved. It only took me an extra four years and untold student loans to get there.

Mistake #2: At First I Didn’t Stick With Anything

Even after receiving my master’s degree in journalism, I found it hard to settle down. School was so easy for me: I got better grades than most of my peers with my eyes closed. Naturally I assumed this would translate to my career, and was spectacularly disappointed when it didn’t.

No one cared that I was smart, or that my teachers liked me. They just wanted to see results, and I didn’t have any. My dreams of being a world-famous writer and author soon evaporated. I was crushed and lost, and only after a year of soul-searching did I finally settle into the less-glamorous but better-paying world of freelance copy writing. I had finally found something I was good at and loved … and it paid the bills too. Add two years to the clock.

Mistake #3: I Thought Success Came Before Hard Work

At the beginning, I was convinced I had to find a glorious gig to in order to really apply myself. Once I took care of my ego, I reasoned, the hard work would feel natural and the success would come.

The opposite turned out to be true. Once I took a deep breath and accepted that there would be no glory for a long while – perhaps ever – I was able to settle into my day job with a joy and willingness I’d never before experienced in life. It came naturally, fitting into the flow of my life well enough that I was able to care for my tow children at home and keep up full time work. My world became perfect. It only took one more year.

Key Takeaways:

  • Consider waiting on college until you’re sure you know what you want to do
  • Prepare yourself for hard work at the outset, and do not expect success before you put in a lot of long, inglorious hours
  • Stick with it, even when it sucks
  • Consider talking to someone in the line of work you hope to go into to find out what it will be like and ensure you’re prepared
  • Have a positive attitude! No, really! It will totally help

As a small business owner, I now write for clients all over the world. I set my hours, I sleep in, I play with my kids … and I work hard. I’ve transitioned from the nothingness of endless ego drain to the true fulfillment of hard work and a quiet personal success.

Next up? I might take a sewing class. But it probably won’t be glorious.

 

3 Financial New Year Resolutions You Should Make This Year as a Small Business Owner

6551534889_9c8ae52997_zAs you know, running a small business requires you to wear multiple hats. Many small business owners do not have the time to be on top of their finances as much as they should.

And it’s easy to understand why. There’s a lot to handle from making sure you’re deducting your expenses correctly, taking care of payroll, to ensuring your accounting is organized for tax season.

But here are some important resolutions you should make this New Year if you want a significant improvement in your wallet.

I Resolve to Take Control of My Business Cash Flow

Your cash flow controls the flow of your business, so delays can quickly halt the progress of your business.

If you’re dealing with cash flow problems due to the way you are accepting payments, you may have to come up with an alternative that works with your customers or clients.

If you’re spending too much on inventory at once and can’t come up with a decent budget for marketing, it’s a good idea to try to restock twice rather than all at once.

The point here is that you need to manage your cash flow to ensure that your business runs smoothly and isn’t at risk of taking a financial hit. Cash flow will be vital for paying your employees on time, having a budget for marketing, and paying for inventory, so even the slightest of delays can hurt your business.

I Resolve to Make the Best of My Inventory

If your business is based on physical goods, then it’s time to take a serious look at your inventory this year. You want to really go through your inventory to see which products are costing you money, which products to order less of on the next run, and which products you need to order more of.

Evaluating inventory has always been one of the best ways for small businesses to save money, but it is also a good way to spot opportunities.

For example, a product that you didn’t think much of may be popular with customers or a product that’s not seeing much volume might have a high profit margin and may be worth marketing to customers.

I Resolve to See My Business Tax Professional Early

Working with a tax professional that specializes in business tax can translate into a significant amount of savings for your business.

You’ll be able to get information on what you can deduct, avoid tax violations that can get you into trouble, prevent your business from being audited, and learn various ways to save even more money.

But it’s very important that you consult with a business tax professional far earlier than when your taxes are due. This will give you the time to run your numbers back to back for accuracy, better organize your tax records, and ensure that all your deductions are accounted for.

Those are just some of the finance resolutions you should make for your small business this New Year. It sounds simple enough, but each of the three on the list does require a respectable amount of your time.

So rather than trying to spread yourself thin trying to put all three into place, start with one until you feel that you’ve gotten that aspect of your small business finances in order.

Once you see some success, you’ll quickly gain the motivation to put the other two financial resolutions into action.

Photo: 401(K) 2012 / CC 2.0

Things To Consider Before Applying For A Small Business Loan

7303255278_7ccd3fc0d6_bWhether you require financing for home improvements or to purchase a new home, banks and credit unions are available to lend you money.

Of course, not everybody qualifies for a loan. Getting a loan is often determined by the applicant’s credit score and income.

Before walking into a financial institute and completing a loan application, it is important to educate yourself on the best options for obtaining a small business loan. This can enhance your chances of being approved for a low interest rate loan.

Credit History

Before you apply for a loan, get a credit report and use the information in the report, to identify factors that may cause the loan to be denied.

Your credit score determines if a lender will extend credit. In addition, a low credit score attracts higher interest rates. It’s also important to maintain a decent payment history.

Finances
In addition to assessing your credit history, lenders consider your personal income and finances.

They will request employment information, and if you do not have a steady income or employment, you may not qualify for financing.

Having few or no debts makes your loan application appealing to lenders and makes you look reliable, and having a personal savings account and down payment can also enhance your chances of approval and help you obtain a lower loan rate.

Collateral and Co-signer

Lenders may ask for collateral. This is an asset that you can use to secure a loan. To qualify, the dollar value of the collateral must match or be comparable to the dollar value of the loan.

Lenders require different types of collateral including, vehicle titles, jewelry, electronics or equity.

If your credit score makes it difficult to obtain a loan, consider using a co-signer. A co-signer is essentially somebody with great credit who guarantees to pay your debt if you are not able to satisfy the contract.

In other words, they assume full responsibility for the debt. This is a risky situation for the co-signer. However, it helps individuals who are not able to gain financing by themselves.

Loan Application Process

Select a lender. The first financial institute to contact should be the one with whom you have an established financial relationship. Local financial institutes prioritize their clients when processing loan applications.

Itemize your expenses for the small loan. For example, give an itemized breakdown of the machines you wish to purchase for a home improvement project. Give precise totals and estimates for each expense.

Grant the lender permission to acquire a copy of your credit report from one or several credit reporting bureaus. Small personal loans may not require an asset as collateral. However, lenders treat applicants who are creditworthy favorably.

Fill in required paperwork. This includes an application for a small loan. Check the accuracy of the information provided in the application forms before turning the application over to the lender. When applying for a small loan, you must include your legal name, Social Security number and year of birth.

Inquire the terms of your small loan. One such term is the repayment period of the loan. Work with the lender to come up a repayment plan that works for your budget.