There are a number of ways that you can find tax
services companies. The yellow pages is a good place to start for
companies in your area but, depending on where you live, the list of
names may be extremely long. It is a good idea to ask your friends,
colleagues and business partners to recommend the tax services that they
have found helpful and efficient in the past. Then you can call the tax
services professionals that you have on your list and discuss your
requirements.
The first step in finding the best tax services for your needs is
deciding what level of help you require. Perhaps you simply need someone
who can file a simple tax return but has to wade through your slightly
disorganised accounting documents, or maybe you have a number of
employees and need
assistance sorting out their tax withholdings or you may even want
all of these tax services, and more. The size of the tax services
company may also be an issue. You may want one person to be able to
perform all of your tax work, especially if you are only a small
business owner or you may want a team of tax professionals and you want
to find tax services that have a number of specialists available. Once
you have identified the type of tax services then you can begin your
search more easily. Your available tax services budget is obviously
going to be an issue but you should try to allocate as much money as
possible to ensure that you can afford the best possible tax services.
Remember that you can incur heavy fines if you have incorrectly filed
your tax return or are late paying any type of tax that your business is
liable for.
Apart from professional qualifications and references one of the
most important points to consider when assessing which of the tax
services companies you want to use is whether you feel comfortable with
the person you are dealing with. At the end of the day you are going to
trust them with your financial records and it is essential that you feel
that you can depend upon the person.
Every business, at some time, needs the help of some type of tax
services at some stage. Large organisations usually have their own tax
services department with accountants and tax lawyers but small companies
often have to hire tax services on a regular basis to help keep their
tax returns and other issues in order. It is important to know how to
find the best tax services, no matter what type of business you are
involved with.
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vineri, 16 noiembrie 2012
Business laws basics
A professional degree in Juris Doctor relates to a
higher grade of studies in law. With business houses expanding in size
and the legal issues gaining higher importance for day to day working of
large corporates, demand for Juris Doctor professionals has been
increasing. As the business interacts more with the society and their
other counterparts need to resolve legal matters emerge simultaneously.
All this has given an impetus to students aiming for career in law
field. But a purely law background without any corporate experience may
not be well accepted by business industry. Top ranked services in
companies also demand a graduate in business organization along with
lawyer’s degree.
As demand for combined degree in JD and business is being a preferred combination to build a rewarding career in law. Business and law schools at various places have joined hands to impart students with best career courses. At many places Law Schools providing degrees of Juris Doctor and business school providing Master in business administration present a cooperative program for the convenience of aspiring students. This opportunity to avail concurrent degrees in both fields is a stepping-stone for success of students. Students who cannot travel to different places at the same time have a best prospect of finding excellent professional training under one roof.
Surviving in the law field gets tougher from the day one tries to enter the school of law. Getting admission requires fulfilling entire formalities along with earlier creditable basic high school record, clearing the admission test for the law school and even recommendations from people. The same is applicable for business studies a student is required to prove his quantitative skills and efficiency in microcomputers to get admitted. A dedicated and hard work during the courses ensures students with excellent results which in turn to provide better career opportunities.
A law person has various prospects for different types of career that he would like to accept. Depending on his caliber and willingness to work hard a lawyer can decide upon practicing law in an exclusive law firm or he may choose to be an in house lawyer. An exclusive law firm requires an extensive knowledge of one particular area in law where as an in house lawyer is required to deal with entire aspects of legal issues that relate to the particular company in which he is involved.
While undergoing training in one of the law schools a student would learn about different aspects of law like civil law, criminal procedures, constitutional law, contracts, property, professional responsibility, basic federal income taxation, legislative and administrative interpretation and many others. The syllabus is cautiously devised to ensure that students receive exhaustive training to deal with maximum situation in the professional front. Similarly Masters Degree in Business administration imparts education in business for global society, corporate finance, managerial accounting, information resource management, strategic management, master’s project and other similar relevant courses. Anyone pursuing both law and business studies simultaneously has an advantage of studying some courses that are counted towards both degrees and hence a considerable amount of work is reduced for these students.
As demand for combined degree in JD and business is being a preferred combination to build a rewarding career in law. Business and law schools at various places have joined hands to impart students with best career courses. At many places Law Schools providing degrees of Juris Doctor and business school providing Master in business administration present a cooperative program for the convenience of aspiring students. This opportunity to avail concurrent degrees in both fields is a stepping-stone for success of students. Students who cannot travel to different places at the same time have a best prospect of finding excellent professional training under one roof.
Surviving in the law field gets tougher from the day one tries to enter the school of law. Getting admission requires fulfilling entire formalities along with earlier creditable basic high school record, clearing the admission test for the law school and even recommendations from people. The same is applicable for business studies a student is required to prove his quantitative skills and efficiency in microcomputers to get admitted. A dedicated and hard work during the courses ensures students with excellent results which in turn to provide better career opportunities.
A law person has various prospects for different types of career that he would like to accept. Depending on his caliber and willingness to work hard a lawyer can decide upon practicing law in an exclusive law firm or he may choose to be an in house lawyer. An exclusive law firm requires an extensive knowledge of one particular area in law where as an in house lawyer is required to deal with entire aspects of legal issues that relate to the particular company in which he is involved.
While undergoing training in one of the law schools a student would learn about different aspects of law like civil law, criminal procedures, constitutional law, contracts, property, professional responsibility, basic federal income taxation, legislative and administrative interpretation and many others. The syllabus is cautiously devised to ensure that students receive exhaustive training to deal with maximum situation in the professional front. Similarly Masters Degree in Business administration imparts education in business for global society, corporate finance, managerial accounting, information resource management, strategic management, master’s project and other similar relevant courses. Anyone pursuing both law and business studies simultaneously has an advantage of studying some courses that are counted towards both degrees and hence a considerable amount of work is reduced for these students.
Thinks You Should Know Before You Bid On A Business
Whatever your reason for going out on your own, you
must keep your reason in the forefront of your mind. If you forget your
reason for starting your own home business, you will not be working for
yourself for long.
Self-motivation is the key to success when you start a home-based business. You need to possess the ability to push yourself ahead. Your drive and determination will be reinforced with every new sale.
Remember --- your own business is a lot like a real job. Some people go to work to play, some go to socialize, and others --- most often those who are paid in a commission or tip environment --- go to work to work and to make money. When you work for yourself, your salary is directly proportional to your productivity.
In every home business, there are certain processes that we do over and again, please factor in the most important element concerning the cost of your promotions.
What element is that? Your time!
Value your time at a certain dollar amount, and figure in your time into the cost of your promotional accounting. Because too many promoters lose sight of this concept and spend 20 hours to generate one sale while using free advertising.
The level of success that you will achieve greatly depends on the time and effort you are willing to plow into your new home business. Your organization, planning and marketing skills, will all be put into practice when you embark on your liberating journey.
Most people have a misconception about having to spend lots of money in order to advertise their home business. When you start out, you honestly will not have much money available for advertising, and if you do, you should still spend it wisely.
It is important to understand what you expect to gain from your advertising
In order to make good decisions concerning how to spend your advertising budget, you must first have a good understanding of the different types of advertising and promotion available and what can be expected to be achieved by each.
However you choose to spend your advertising dollars, you should always track the results of your promotional efforts. No business can survive the long run without some form of consistent advertising.
Self-motivation is the key to success when you start a home-based business. You need to possess the ability to push yourself ahead. Your drive and determination will be reinforced with every new sale.
Remember --- your own business is a lot like a real job. Some people go to work to play, some go to socialize, and others --- most often those who are paid in a commission or tip environment --- go to work to work and to make money. When you work for yourself, your salary is directly proportional to your productivity.
In every home business, there are certain processes that we do over and again, please factor in the most important element concerning the cost of your promotions.
What element is that? Your time!
Value your time at a certain dollar amount, and figure in your time into the cost of your promotional accounting. Because too many promoters lose sight of this concept and spend 20 hours to generate one sale while using free advertising.
The level of success that you will achieve greatly depends on the time and effort you are willing to plow into your new home business. Your organization, planning and marketing skills, will all be put into practice when you embark on your liberating journey.
Most people have a misconception about having to spend lots of money in order to advertise their home business. When you start out, you honestly will not have much money available for advertising, and if you do, you should still spend it wisely.
It is important to understand what you expect to gain from your advertising
In order to make good decisions concerning how to spend your advertising budget, you must first have a good understanding of the different types of advertising and promotion available and what can be expected to be achieved by each.
However you choose to spend your advertising dollars, you should always track the results of your promotional efforts. No business can survive the long run without some form of consistent advertising.
You May Have A Successful Small Business Idea
You surely know that a small idea can lead to a
great business success. The first movement is to think of an idea that
would be suitable for the business market. After coming up with the
idea, the next step is to put that idea into action. Of course, this is a
very difficult step and having the idea is only the start of the
journey. After that you will have to face many obstacles before being
able to carry on with your business project. This is just the beginning
of this process and there is a lot of questions you will have to answer
before even start.
Some of the main aspects you have to concentrate on when you have business ideas are the abilities and gifts you can pour into the business. It is very important for you to be identified with your business project. Those ideas should be based on activities and actions you take pleasure in doing. For example, if we suppose that you dislike working in the open, landscaping business would not suit you. On the other hand, if you like working with children, setting up baby-sitting or tutoring business would be an excellent idea. In this case, without any doubt you business will be more successful because you will have put your mind, effort and also your heart on it.
Another vital step is to analyze the needs of a specific product or service in your region before setting up your business. Do people of your area need your product? Are there other business like the one you are planning to start? You should ask yourself whether or not you are the only one offering that service or product. If you are not, you will have to analyze the competence you will have to face. You have to think whether the service you are offering is one that customer would repeat, or if it is a one-time specialized service. Obviously, the former are more likely to succeed than the latter.
There are other aspects you have to take into account. These aspects are described below:
- One of them is that if the idea is unique, you will reign the market. But if there is much competition, it will be difficult to enter into the market.
- A second point would be if you can offer quality from the very beginning, otherwise, you won't succeed.
- Finally, you have to think about your capital to start your own business. There are many business ideas that require little investment and bring great profit. Some demand research, such as daycare service, and others need a large amount of money to begin the business. So take this recommendation into account before investing all your money in a small business idea.
Some of the main aspects you have to concentrate on when you have business ideas are the abilities and gifts you can pour into the business. It is very important for you to be identified with your business project. Those ideas should be based on activities and actions you take pleasure in doing. For example, if we suppose that you dislike working in the open, landscaping business would not suit you. On the other hand, if you like working with children, setting up baby-sitting or tutoring business would be an excellent idea. In this case, without any doubt you business will be more successful because you will have put your mind, effort and also your heart on it.
Another vital step is to analyze the needs of a specific product or service in your region before setting up your business. Do people of your area need your product? Are there other business like the one you are planning to start? You should ask yourself whether or not you are the only one offering that service or product. If you are not, you will have to analyze the competence you will have to face. You have to think whether the service you are offering is one that customer would repeat, or if it is a one-time specialized service. Obviously, the former are more likely to succeed than the latter.
There are other aspects you have to take into account. These aspects are described below:
- One of them is that if the idea is unique, you will reign the market. But if there is much competition, it will be difficult to enter into the market.
- A second point would be if you can offer quality from the very beginning, otherwise, you won't succeed.
- Finally, you have to think about your capital to start your own business. There are many business ideas that require little investment and bring great profit. Some demand research, such as daycare service, and others need a large amount of money to begin the business. So take this recommendation into account before investing all your money in a small business idea.
Is Incorporating Your Small Business Best For You?
There comes a point in time when every small business person
contemplates on whether to incorporate their business or not. A
lot of times small businesses start out sole proprietorships,
and then become incorporated as the business expands and
develops. Small business incorporating can be a difficult
decision, and with this article you’ll gain a little bit of
knowledge on the advantages and disadvantages.
There are many advantages to incorporating your small business,
but limited liability is one of the biggest advantages. When
you have sole proprietorship to the company all the liability of
the company is on the owner. When incorporating the business,
your only liability is to however much you invest in the company.
With sole proprietorship, all of your personal belongings, such
as car and home, can be turned over to help pay the debt of the
business. As a shareholder in the business, you have no
responsibility whatsoever for the debts of the business, that is
of course unless you give a guarantee.
Another advantage to incorporating a small business is the
ability to raise money so much easier. With the ability to
raise money much easier, this increases the odds of the
corporation growing and expanding. Yes, you’re saying any sole
proprietorship can borrow money and incur debt like any
corporation. However, with a corporation you can sell shares
and raise equity capital, which is a big advantage in that you
generally don’t have to repay equity capital and it has no
interest.
There are many tax advantages with becoming a corporation that
you can take a look at as well. Some of these advantages
include income splitting, potential tax deferral and more.
Along with the reasons above, a corporation can have an
unlimited life. The life of a corporation is not dependent on
particular individuals, but the company as a whole. With this,
the company has the opportunity of lasting forever just as long
merges with another company or goes bankrupt.
Now that I’ve buttered up the idea of incorporating your small
business, let’s take a look at some of the possible negatives.
As you incorporate your small business, there now will be two
tax returns to file each year, one for your personal income and
one for the corporation. This may not be a huge deal, but
unlike a sole proprietorship a corporation cannot deduct its
losses from the personal income of the owner. Plus, having
another tax return is the last thing another business owner
wants to deal with.
As a corporation is much larger and more complex then a small
business, therefore the cost to create one is much higher. Just
to set up the corporation will cost a lot more, then you have to
tack on the increased maintenance fees, accounting fees, and
more.
As with everything else, a larger business means more paperwork
that must be taken care of. Corporations must keep a minute
book, which contains the corporate bylaws and minutes from
corporate meetings. Reports and tax returns must be completed
neatly and in a timely fashion. All of the business bank
accounts and records have to be kept separate from personal
accounts and assets. That may sound like a load, but that is
just the start of the increased paperwork that comes with the
territory of incorporating your small business.
While there are many advantages and disadvantages to
incorporating your small business, the decision ultimately goes
to you. It is a decision that could make or break your
business, therefore much more research is recommended. However,
small business incorporating should be a thing that suites you
and others associated with you best.
contemplates on whether to incorporate their business or not. A
lot of times small businesses start out sole proprietorships,
and then become incorporated as the business expands and
develops. Small business incorporating can be a difficult
decision, and with this article you’ll gain a little bit of
knowledge on the advantages and disadvantages.
There are many advantages to incorporating your small business,
but limited liability is one of the biggest advantages. When
you have sole proprietorship to the company all the liability of
the company is on the owner. When incorporating the business,
your only liability is to however much you invest in the company.
With sole proprietorship, all of your personal belongings, such
as car and home, can be turned over to help pay the debt of the
business. As a shareholder in the business, you have no
responsibility whatsoever for the debts of the business, that is
of course unless you give a guarantee.
Another advantage to incorporating a small business is the
ability to raise money so much easier. With the ability to
raise money much easier, this increases the odds of the
corporation growing and expanding. Yes, you’re saying any sole
proprietorship can borrow money and incur debt like any
corporation. However, with a corporation you can sell shares
and raise equity capital, which is a big advantage in that you
generally don’t have to repay equity capital and it has no
interest.
There are many tax advantages with becoming a corporation that
you can take a look at as well. Some of these advantages
include income splitting, potential tax deferral and more.
Along with the reasons above, a corporation can have an
unlimited life. The life of a corporation is not dependent on
particular individuals, but the company as a whole. With this,
the company has the opportunity of lasting forever just as long
merges with another company or goes bankrupt.
Now that I’ve buttered up the idea of incorporating your small
business, let’s take a look at some of the possible negatives.
As you incorporate your small business, there now will be two
tax returns to file each year, one for your personal income and
one for the corporation. This may not be a huge deal, but
unlike a sole proprietorship a corporation cannot deduct its
losses from the personal income of the owner. Plus, having
another tax return is the last thing another business owner
wants to deal with.
As a corporation is much larger and more complex then a small
business, therefore the cost to create one is much higher. Just
to set up the corporation will cost a lot more, then you have to
tack on the increased maintenance fees, accounting fees, and
more.
As with everything else, a larger business means more paperwork
that must be taken care of. Corporations must keep a minute
book, which contains the corporate bylaws and minutes from
corporate meetings. Reports and tax returns must be completed
neatly and in a timely fashion. All of the business bank
accounts and records have to be kept separate from personal
accounts and assets. That may sound like a load, but that is
just the start of the increased paperwork that comes with the
territory of incorporating your small business.
While there are many advantages and disadvantages to
incorporating your small business, the decision ultimately goes
to you. It is a decision that could make or break your
business, therefore much more research is recommended. However,
small business incorporating should be a thing that suites you
and others associated with you best.
Is It Necessary To Have a Business Plan?
Are you planning to start a new business? Or are
you considering expanding your current business and require a bank loan
or investment from outsiders?
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
What it Takes to Succeed in Business
Business if tough in today’s world! Most small
businesses go bankrupt or are closed abruptly in the first five years.
Over the course of the next five years many of the remainders also “pack
up” shop and lock their doors. Why do so many businesses fail?
The reasons lie in three main spheres. Those spheres of influence can be labeled personal, customer, and operations.
The Personal Sphere deals with the owner’s personal motivation to start a business. For example, if an owner wants to start their own business, but isn’t willing to make the sacrifices necessary to make it thrive, then they are at a disadvantage when compared to other motivated businesspeople. When a business starts for the first time often it doesn’t have a lot of money. Owners are required to sacrifice time, money, and happiness to succeed. If you can’t do that, it is unlikely that such a business will flourish. Many times owners thought they could handle the hardship but once the novelty of “being your own boss” wears off they close the door.
The Customer Sphere is one of the most important components of your business. Without customers you do not have sales, without sales you do not have money and without money you do not have a business. Many factors go into generating a good customer base. In the beginning you must have a cost effective marketing strategy that targets your intended buyers. This can be done by developing a psychological profile of your customer and then advertising in those places that they frequent. Because it is more expensive to get a new customer than it is to keep one you must make sure they are satisfied with your business and product. Keep in touch with them by sending them a follow-up letter with a survey.
The Operations Sphere is only second to the Customer Sphere. In operations you must have an appropriate method of reducing costs, keeping track of paperwork, and maintaining improvement. Operations can also take into effect the tax paperwork, accounting, scheduling of workers, benefits or any non-producing functions.
If all of these three components are well thought out and are appropriately designed you will increases your chances of survival. Failure to understand the integral details of your business and what it takes to succeed may mean failure in the long run. If you are having difficulty putting all the pieces together then consider a small business consultant.
The reasons lie in three main spheres. Those spheres of influence can be labeled personal, customer, and operations.
The Personal Sphere deals with the owner’s personal motivation to start a business. For example, if an owner wants to start their own business, but isn’t willing to make the sacrifices necessary to make it thrive, then they are at a disadvantage when compared to other motivated businesspeople. When a business starts for the first time often it doesn’t have a lot of money. Owners are required to sacrifice time, money, and happiness to succeed. If you can’t do that, it is unlikely that such a business will flourish. Many times owners thought they could handle the hardship but once the novelty of “being your own boss” wears off they close the door.
The Customer Sphere is one of the most important components of your business. Without customers you do not have sales, without sales you do not have money and without money you do not have a business. Many factors go into generating a good customer base. In the beginning you must have a cost effective marketing strategy that targets your intended buyers. This can be done by developing a psychological profile of your customer and then advertising in those places that they frequent. Because it is more expensive to get a new customer than it is to keep one you must make sure they are satisfied with your business and product. Keep in touch with them by sending them a follow-up letter with a survey.
The Operations Sphere is only second to the Customer Sphere. In operations you must have an appropriate method of reducing costs, keeping track of paperwork, and maintaining improvement. Operations can also take into effect the tax paperwork, accounting, scheduling of workers, benefits or any non-producing functions.
If all of these three components are well thought out and are appropriately designed you will increases your chances of survival. Failure to understand the integral details of your business and what it takes to succeed may mean failure in the long run. If you are having difficulty putting all the pieces together then consider a small business consultant.
How To Write A Quick and Relatively Painless Business Plan
If you've never written a business plan before, the idea alone can be overwhelming.
It doesn't have to be the nightmare of your imagination.
Traditionally, a business plan is used to secure funding from a lender or a potential investment partner. It serves as something akin to your business's resume, outlining the purpose and scope of your business, identifying the goals, marketing and management, and establishing a basic balance sheet.
Now, even if you aren't going to seek additional funding, even if you're going to grow your business by yourself from your office at home, you'd be wise to put together a business plan. Simply going through the process has value. It'll help you develop a clearly defined vision of what you intend to do with your business and how you intend to do it.
These are some of the questions you should already have asked and answered before you sit down to write your business plan:
== What "want" does your business fill, and what service or product will you be providing to fill that want?
== Who will be your potential customer (this should be an established, niche market with die-hard buyers).
== Why will people purchase from you as opposed to the business down the street (in other words ... what's your Unique Selling Position)?
== How do you intend to reach your customers? A storefront? An ad in the phone book? Direct mail? An Internet campaign? Selling door-to-door? A combination of these?
== Will you need additional funding and if so, how much will you need and how do you intend to secure it?
Okay, so let's take a look at what you'll want to include in your business plan.
Most business plans are structured to examine four primary areas:
1. Executive Summary - a decription of the business
2. How you intend to market the business
3. How the busines finances will be arranged and handled
4. How the busines will be managed
Let's take a further look at these.
Executive Summary: what the business will do, its Unique Selling Position, the business goals, its ownership and legal structure, your skills and knowledge and how they will benefit the business.
Marketing The Business: describe your product or service, identify your market niche, how big it is, and how you plan to reach it. Define your customer, identify your competition, detail your pricing plan, outline how you intend to attract and convert customers.
Financing The Business: estimate your start-up costs, project your monthly operating budget for the first year, outline your ROI (return on investment) and cash flow for the first year, project your income and expense balance sheet for the first two years, explain how you're going to compensate yourself, establish who will maintain the accounting records and how they'll be maintained, and if you're in need of funding, explain how much you need and how it'll be used by the business.
Managing The Business: how will the business be managed day-to-day, what the hiring and personnel procedures will be, how the products or services will be developed and how they'll get into the hands of your customers. You'll also need to account for equipment the business will need, and how insurance, rental agreements, etc. will be handled.
That's it. In a nutshell.
If you'd like to see some free sample business plans to get a better idea of how they're structured and how they read, here's a good source for you: http://www.bplans.com/sp/businessplans.cfm
It doesn't have to be the nightmare of your imagination.
Traditionally, a business plan is used to secure funding from a lender or a potential investment partner. It serves as something akin to your business's resume, outlining the purpose and scope of your business, identifying the goals, marketing and management, and establishing a basic balance sheet.
Now, even if you aren't going to seek additional funding, even if you're going to grow your business by yourself from your office at home, you'd be wise to put together a business plan. Simply going through the process has value. It'll help you develop a clearly defined vision of what you intend to do with your business and how you intend to do it.
These are some of the questions you should already have asked and answered before you sit down to write your business plan:
== What "want" does your business fill, and what service or product will you be providing to fill that want?
== Who will be your potential customer (this should be an established, niche market with die-hard buyers).
== Why will people purchase from you as opposed to the business down the street (in other words ... what's your Unique Selling Position)?
== How do you intend to reach your customers? A storefront? An ad in the phone book? Direct mail? An Internet campaign? Selling door-to-door? A combination of these?
== Will you need additional funding and if so, how much will you need and how do you intend to secure it?
Okay, so let's take a look at what you'll want to include in your business plan.
Most business plans are structured to examine four primary areas:
1. Executive Summary - a decription of the business
2. How you intend to market the business
3. How the busines finances will be arranged and handled
4. How the busines will be managed
Let's take a further look at these.
Executive Summary: what the business will do, its Unique Selling Position, the business goals, its ownership and legal structure, your skills and knowledge and how they will benefit the business.
Marketing The Business: describe your product or service, identify your market niche, how big it is, and how you plan to reach it. Define your customer, identify your competition, detail your pricing plan, outline how you intend to attract and convert customers.
Financing The Business: estimate your start-up costs, project your monthly operating budget for the first year, outline your ROI (return on investment) and cash flow for the first year, project your income and expense balance sheet for the first two years, explain how you're going to compensate yourself, establish who will maintain the accounting records and how they'll be maintained, and if you're in need of funding, explain how much you need and how it'll be used by the business.
Managing The Business: how will the business be managed day-to-day, what the hiring and personnel procedures will be, how the products or services will be developed and how they'll get into the hands of your customers. You'll also need to account for equipment the business will need, and how insurance, rental agreements, etc. will be handled.
That's it. In a nutshell.
If you'd like to see some free sample business plans to get a better idea of how they're structured and how they read, here's a good source for you: http://www.bplans.com/sp/businessplans.cfm
Managing Your Home Based Online Business – 2
In the first part of this series of articles, on
managing your online business at home, I wrote about the many management
responsibilities and functions you have rolled into one if you have
your own sole proprietor business, with no staff. Your management task
is perhaps the most difficult of all. You have to manage yourself, in
all those different areas of your business such as finance, marketing,
purchasing and computing.
I believe that if you think of your new home business as having different areas of management for you to concentrate on, you are more likely to succeed long term. If you can adopt some of the techniques of good management, you will end up with a more sound business that will stand the test of time. You will be a better decision maker, and it is decisions that dictate the progress or downfall of any business. Decision making needs to be unemotional and as scientific as possible, but as much as anything needs to be based on common sense. Good management is often a matter of common sense, and that is why I believe you, whatever your background, can run a successful business limited only by your ambitions.
The other virtue you will need in abundance is patience, and this an area where you definitely need to manage yourself. Impatience brings emotion into your decision making. It also brings self criticism, or criticism of others, when none is either deserved or necessary. Patience, realism and common sense combined will contribute greatly to making you a good business manager. With those three attributes, you will be well placed to learn the skills of management in the context of your own small business. You will be able to learn how the different functions of a business relate to each other and interact.
That is not easy, but over time, if you apply yourself, it will all fall into place. This is where patience is vital. Your age or background do not necessarily matter. I know that in my late 20’s I did not really understand business and how it all fitted together. At 30, I knew I needed some sort of professional qualification, and I decided on management accountancy. The syllabus was tough, with 18 exams over 2 and a half to 5 years. What surprised me was the variety of subjects to cover. There were exams in company law, business law, economics, corporate planning, marketing, production, decision making, cost accounting, management accounting, mathematics and statistics. Each subject was very different. Then, at the end, I suddenly realized that all of them knitted together. The ones I hated (law) and loved (marketing) all had a place in the scheme of things.
You, of course, have no need to study or be an expert in all of those things. But it does help to at least be aware that some of them are, in their own way, critical to your success. If you are taking a long term view of things, which you should be if you are serious about having your own home business, you have plenty of time to learn about those subjects that are most critical for your business:
Finance
Whatever your business, this is a very critical function for you to understand and manage, so when it comes to learning all you can, financial management is a priority. Much of this is again common sense, and realism, and there are many tools around to help you keep good financial records. But as I mentioned before, it is decisions that dictate the progress or downfall of any business. All decisions you make will have a financial impact on your business. However, good financial records alone will not bring the reward of better decision making. If you want to maximize the profits of your home business, you may find it helps to have other, non-financial records to aid your decisions. I will discuss this more in part 3 of this series of articles.
Marketing
Marketing is what I love most about business, and it is equally important to finance in all free enterprises. With an online business, the marketing side is an ever moving area of expertise. Offline, marketing has long since stabilised. Online, it has not stabilised at all; it is still developing and evolving. You need to be aware of what’s happening in the world of internet marketing, what has happened, and what is likely to happen. Always remember, though, there will always be a financial impact of your marketing decisions. You are obviously prepared to take risks, as you have started or are starting an online business at home. As the manager of your business you will need to balance the financial and marketing conflicts as they arise. You have to strike the right balance. If the finance director in you is too risk averse, you may stifle the growth of your business. If the marketing director in you is too cavalier, and unrealistic about sales prospects, you may ruin your business in one or two rash decisions. More on this in part 4.
Computing
If you are working online full time, or even part time, you will always need to be looking out for developments in the arenas of software and the internet itself, and maybe at times hardware. You may come across software that either improves your efficiency, makes life much easier or takes you into a new and better way of working. This is another area where knowledge is power. You need to be competitive, and sometimes you will come across new software that will make you more competitive. Try to keep abreast of things in the software marketplace, as it affects your business.
Time Management
While not a function like finance or marketing, when you work at home alone you will find that time management becomes key to your success and enjoyment of working from home. It is a subject you should always be aware of and make conscious decisions about. I will write more on this topic in part 5.
The above are just the key areas where you need to view your business from a management viewpoint, and the list of course is not exhaustive. However, pay attention to these from a manager’s perspective, and you should benefit in the long run. You will take the leap from being “employee” to “boss”, even if you are the only one you can be “boss” to.
I believe that if you think of your new home business as having different areas of management for you to concentrate on, you are more likely to succeed long term. If you can adopt some of the techniques of good management, you will end up with a more sound business that will stand the test of time. You will be a better decision maker, and it is decisions that dictate the progress or downfall of any business. Decision making needs to be unemotional and as scientific as possible, but as much as anything needs to be based on common sense. Good management is often a matter of common sense, and that is why I believe you, whatever your background, can run a successful business limited only by your ambitions.
The other virtue you will need in abundance is patience, and this an area where you definitely need to manage yourself. Impatience brings emotion into your decision making. It also brings self criticism, or criticism of others, when none is either deserved or necessary. Patience, realism and common sense combined will contribute greatly to making you a good business manager. With those three attributes, you will be well placed to learn the skills of management in the context of your own small business. You will be able to learn how the different functions of a business relate to each other and interact.
That is not easy, but over time, if you apply yourself, it will all fall into place. This is where patience is vital. Your age or background do not necessarily matter. I know that in my late 20’s I did not really understand business and how it all fitted together. At 30, I knew I needed some sort of professional qualification, and I decided on management accountancy. The syllabus was tough, with 18 exams over 2 and a half to 5 years. What surprised me was the variety of subjects to cover. There were exams in company law, business law, economics, corporate planning, marketing, production, decision making, cost accounting, management accounting, mathematics and statistics. Each subject was very different. Then, at the end, I suddenly realized that all of them knitted together. The ones I hated (law) and loved (marketing) all had a place in the scheme of things.
You, of course, have no need to study or be an expert in all of those things. But it does help to at least be aware that some of them are, in their own way, critical to your success. If you are taking a long term view of things, which you should be if you are serious about having your own home business, you have plenty of time to learn about those subjects that are most critical for your business:
Finance
Whatever your business, this is a very critical function for you to understand and manage, so when it comes to learning all you can, financial management is a priority. Much of this is again common sense, and realism, and there are many tools around to help you keep good financial records. But as I mentioned before, it is decisions that dictate the progress or downfall of any business. All decisions you make will have a financial impact on your business. However, good financial records alone will not bring the reward of better decision making. If you want to maximize the profits of your home business, you may find it helps to have other, non-financial records to aid your decisions. I will discuss this more in part 3 of this series of articles.
Marketing
Marketing is what I love most about business, and it is equally important to finance in all free enterprises. With an online business, the marketing side is an ever moving area of expertise. Offline, marketing has long since stabilised. Online, it has not stabilised at all; it is still developing and evolving. You need to be aware of what’s happening in the world of internet marketing, what has happened, and what is likely to happen. Always remember, though, there will always be a financial impact of your marketing decisions. You are obviously prepared to take risks, as you have started or are starting an online business at home. As the manager of your business you will need to balance the financial and marketing conflicts as they arise. You have to strike the right balance. If the finance director in you is too risk averse, you may stifle the growth of your business. If the marketing director in you is too cavalier, and unrealistic about sales prospects, you may ruin your business in one or two rash decisions. More on this in part 4.
Computing
If you are working online full time, or even part time, you will always need to be looking out for developments in the arenas of software and the internet itself, and maybe at times hardware. You may come across software that either improves your efficiency, makes life much easier or takes you into a new and better way of working. This is another area where knowledge is power. You need to be competitive, and sometimes you will come across new software that will make you more competitive. Try to keep abreast of things in the software marketplace, as it affects your business.
Time Management
While not a function like finance or marketing, when you work at home alone you will find that time management becomes key to your success and enjoyment of working from home. It is a subject you should always be aware of and make conscious decisions about. I will write more on this topic in part 5.
The above are just the key areas where you need to view your business from a management viewpoint, and the list of course is not exhaustive. However, pay attention to these from a manager’s perspective, and you should benefit in the long run. You will take the leap from being “employee” to “boss”, even if you are the only one you can be “boss” to.
The Fun Of Starting A New Business
So you had that fantastic business idea, the one
that's going to be wildly successful and make you a fortune - even
better, you actually did something about it and started your own
business. Good for you! Not everyone gets that far. Most people sit and
day dream about what they might do if only ....
"The world is full of dreamers, there aren't enough who will move ahead and begin to take concrete steps to actualize their vision" - W. Clement Stone
But you got over the biggest hurdle, that first step and you actually created something.
Well done - you did more than most. Now you have the day to day details of running your business so how do you keep going?
There are several things to look at here:
1. What are you good at and what do you enjoy doing? Make two lists - one of the jobs you like and one of the jobs you don't do very well. Take the second list and have a look at what you might outsource or automate. Do you love doing those accounts or would your time be better spent in forward planning while your accountant does the sums? Must you personally reply to every enquiry or could you create a FAQ which you can post on your website and refer people to by autoresponder? In the early stages of your business you might find you don't have the money to pay someone to do the jobs you hate. Could you swap skills to get the help you need?
2. Why are you doing this? You need to be motivated to start a business and keep it going. The best way to do this is to know what the effort is for. What really moves you to get up in the morning and do what you need to do even when you don't really feel like it? Write your reasons down. Find pictures of that house, or that holiday and put them where you can see them.
3. How do you deal with those bumps in the road? Not everything you do will be perfect - sometimes things you've tried will be a disaster - it's the way you react to problems that matters. If you curl up in a ball and give up at the first sign of failure you'd better not be in business. It's all about attitude.
4. Have a plan and stick to it as far as possible but be prepared to be flexible and open minded. Sometimes the most unexpected opportunities come and you need to be ready to seize them. - as Joe Vitale says 'Money likes speed'.
5. Get a mentor - learn from someone who has done it. Someone to bounce ideas off and who can encourage you when things get tough is invaluable.
And most importantly, never let anyone put you down and never be afraid of failure:
"It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena; whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause; who at the best, knows in the end the triumph of high achievement; and who, at worst, if he fails at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat" - Theodore Roosevelt.
Don't ever forget that!
"The world is full of dreamers, there aren't enough who will move ahead and begin to take concrete steps to actualize their vision" - W. Clement Stone
But you got over the biggest hurdle, that first step and you actually created something.
Well done - you did more than most. Now you have the day to day details of running your business so how do you keep going?
There are several things to look at here:
1. What are you good at and what do you enjoy doing? Make two lists - one of the jobs you like and one of the jobs you don't do very well. Take the second list and have a look at what you might outsource or automate. Do you love doing those accounts or would your time be better spent in forward planning while your accountant does the sums? Must you personally reply to every enquiry or could you create a FAQ which you can post on your website and refer people to by autoresponder? In the early stages of your business you might find you don't have the money to pay someone to do the jobs you hate. Could you swap skills to get the help you need?
2. Why are you doing this? You need to be motivated to start a business and keep it going. The best way to do this is to know what the effort is for. What really moves you to get up in the morning and do what you need to do even when you don't really feel like it? Write your reasons down. Find pictures of that house, or that holiday and put them where you can see them.
3. How do you deal with those bumps in the road? Not everything you do will be perfect - sometimes things you've tried will be a disaster - it's the way you react to problems that matters. If you curl up in a ball and give up at the first sign of failure you'd better not be in business. It's all about attitude.
4. Have a plan and stick to it as far as possible but be prepared to be flexible and open minded. Sometimes the most unexpected opportunities come and you need to be ready to seize them. - as Joe Vitale says 'Money likes speed'.
5. Get a mentor - learn from someone who has done it. Someone to bounce ideas off and who can encourage you when things get tough is invaluable.
And most importantly, never let anyone put you down and never be afraid of failure:
"It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena; whose face is marred by dust and sweat and blood; who strives valiantly; who errs and comes short again and again; who knows the great enthusiasms, the great devotions, and spends himself in a worthy cause; who at the best, knows in the end the triumph of high achievement; and who, at worst, if he fails at least fails while daring greatly, so that his place shall never be with those cold and timid souls who know neither victory nor defeat" - Theodore Roosevelt.
Don't ever forget that!
How to Start an Investment Club - Business Model
Your investment club will need to decide what type
of entity you're going to adopt for business purposes. You'll have to
decide whether you're going to be a corporation, a general partnership,
or limited liability partnership.
Each of these business models has their own advantages and disadvantages.
· Corporation. Most investment clubs will avoid becoming a corporation. This is because corporations are taxable business entities that require knowledgeable accounting skills to make them run smoothly and in accord with government regulations. A corporation generally means a lot of paperwork. This paperwork can be avoided by choosing another business model for your purpose of running an investment club.
· General partnership. This type of business model requires less paperwork and knowledge about taxes and other financial issues. Most investment clubs choose a general partnership as their choice of a business entity. A general partnership has nominal paperwork and costs associated with it because the taxes are passed to each partner's tax returns. This type of business model will let you accomplish what you need to do to run your investment club with the least amount of tax influence.
· Limited liability corporations. This type of a business model is much like the general partnership but it gives individual members of your investment group a bit more liability protection. Keep in mind that this type of business entity can be expensive and will need more paperwork.
Members of your investment group will have to decide which of the above business models works best for your club.
You will have to make a decision one way or the other since establishing a business entity is a requirement for tax purposes.
Each of these business models has their own advantages and disadvantages.
· Corporation. Most investment clubs will avoid becoming a corporation. This is because corporations are taxable business entities that require knowledgeable accounting skills to make them run smoothly and in accord with government regulations. A corporation generally means a lot of paperwork. This paperwork can be avoided by choosing another business model for your purpose of running an investment club.
· General partnership. This type of business model requires less paperwork and knowledge about taxes and other financial issues. Most investment clubs choose a general partnership as their choice of a business entity. A general partnership has nominal paperwork and costs associated with it because the taxes are passed to each partner's tax returns. This type of business model will let you accomplish what you need to do to run your investment club with the least amount of tax influence.
· Limited liability corporations. This type of a business model is much like the general partnership but it gives individual members of your investment group a bit more liability protection. Keep in mind that this type of business entity can be expensive and will need more paperwork.
Members of your investment group will have to decide which of the above business models works best for your club.
You will have to make a decision one way or the other since establishing a business entity is a requirement for tax purposes.
Small Business 101: Deadly Ignorance
American small business is again in transition.
Many employees, now working from home, are no longer tied to a
geographic office and the woes of commuting. This is a relatively new
phenomenon with hints of explosive sector growth in the days ahead. As
this turbulent economy has forced downsizing, offshore restructuring and
closures in large companies, many new entrepreneurs have been born.
These are people, who instead of tirelessly attempting to find new
employment and possibly enduring the same fate as previously
experienced, are now starting small businesses and enjoying the benefits
and perils of self-employment.
There's an old story telling of an Admiral's decision to fight a battle against overwhelming odds. It seems that he was approaching the coast of an enemy land, with a larger naval force closing in from behind and a great army approaching from the land ahead. He prayed and then addressed his men. He announced that their battle weary forces would land on the beach ahead, dig in and prepare for the upcoming battle. There was no turning back and no other alternative. He ordered their ships burned after they landed. Their only choice was to fight to win or perish. They defeated their enemy because he eliminated any other escape route. They were fixed on the goal of survival and none other.
That is the same attitude we as entrepreneurs must take. We can not afford to be denied. We must grow and prosper or our business will surely perish. We must constantly be looking for ways to cost-effectively market our business and increase sales. We must control costs and have sufficient cash flow for daily operations. Each of us must be persistent, relentless and vigilant. As CEO, we are the manufacturer, the sales team, the marketing department, legal office, accounting office, human resources manager, IT manager, the webmaster and so on. We can't afford to be all these positions. Our job is to sell! We must locate cost effective resources to help us grow and protect our investment in our business.
The growth of the internet has changed our marketplace as well. Years ago, a small business owner decided upon a geographic chunk of the market and set up shop. Today, that shop is typically located in an office at the entrepreneur's home. The marketplace is now the world. The costs of marketing products and communicating worldwide are so low that almost anyone can take part in this revolution. Sophisticated voice mail, cell phones, email and effective ecommerce web sites now provide the illusion of size and grandeur for even the smallest home-based business. The end customer typically has no idea whether their supplier is local or across the world. He may be dressed in a shirt and tie or in his pajamas! All that typically matters is that the exchange of product and services is successfully made for a profit.
It is critically important for the small, home-based entrepreneur to be aware of resources available to her as she makes this great leap. Too many people leap prematurely into business only to fail because of poor planning and insufficient financial resources. Do not get caught in this trap. Don't quit your day job until you have enough cash on hand to pay the bills for at least a year into your new venture. Become aware of and develop the resources available to you. You want everything possible going for you as you make this leap of faith into the entrepreneurial world.
Here in South Carolina, we have the outstanding Women's Business Center (http://www.scwbc.org), a division of the SCMEP, South Carolina Manufacturers Extension Partnership (http://www.scmep.org), one of the best kept secrets available to businesses at all levels in our State. Other States have similar programs modeled after ours. These are incredible resources, partially funded by the State and private resources, available at little to no cost to entrepreneurs, with the purpose of aiding the successful growth of small business. Some additional national resources are:
http://www.national business.org
http://www.nase.org
http://www.gosmallbiz.com
http://www.empoweringbiz.com
http://www.nfib.org
http://www.qualitybusinessdirectory.com
There are also numerous magazines devoted to small business, home-based business, marketing, sales, accounting, etc… Get tuned in to these and other resources available to you. Read your industry publications to stay abreast of competition and other facets of your business interests.
A single legal issue, FACTA problem, accounting error or marketing miscue can put you out of business. In the case of FACTA, insufficient security or poor record-keeping these days could find you legally responsible for a single employee's identity fraud issue, which may end up being very costly. A single lawsuit or vendor dispute can shut you down. Many entrepreneurs are ignorant, ill-prepared and under-schooled with regard to these and other issues. Do not get caught in the deadly ignorance trap.
There is more opportunity available today than ever before for the wise entrepreneur. Get all you ducks in a row before you make the fateful leap into the new world marketplace. Be smart, learn all you can as quickly as possible and take action on your ideas. Like the Admiral, be determined to win in the face of what may appear to be overwhelming adversity.
There's an old story telling of an Admiral's decision to fight a battle against overwhelming odds. It seems that he was approaching the coast of an enemy land, with a larger naval force closing in from behind and a great army approaching from the land ahead. He prayed and then addressed his men. He announced that their battle weary forces would land on the beach ahead, dig in and prepare for the upcoming battle. There was no turning back and no other alternative. He ordered their ships burned after they landed. Their only choice was to fight to win or perish. They defeated their enemy because he eliminated any other escape route. They were fixed on the goal of survival and none other.
That is the same attitude we as entrepreneurs must take. We can not afford to be denied. We must grow and prosper or our business will surely perish. We must constantly be looking for ways to cost-effectively market our business and increase sales. We must control costs and have sufficient cash flow for daily operations. Each of us must be persistent, relentless and vigilant. As CEO, we are the manufacturer, the sales team, the marketing department, legal office, accounting office, human resources manager, IT manager, the webmaster and so on. We can't afford to be all these positions. Our job is to sell! We must locate cost effective resources to help us grow and protect our investment in our business.
The growth of the internet has changed our marketplace as well. Years ago, a small business owner decided upon a geographic chunk of the market and set up shop. Today, that shop is typically located in an office at the entrepreneur's home. The marketplace is now the world. The costs of marketing products and communicating worldwide are so low that almost anyone can take part in this revolution. Sophisticated voice mail, cell phones, email and effective ecommerce web sites now provide the illusion of size and grandeur for even the smallest home-based business. The end customer typically has no idea whether their supplier is local or across the world. He may be dressed in a shirt and tie or in his pajamas! All that typically matters is that the exchange of product and services is successfully made for a profit.
It is critically important for the small, home-based entrepreneur to be aware of resources available to her as she makes this great leap. Too many people leap prematurely into business only to fail because of poor planning and insufficient financial resources. Do not get caught in this trap. Don't quit your day job until you have enough cash on hand to pay the bills for at least a year into your new venture. Become aware of and develop the resources available to you. You want everything possible going for you as you make this leap of faith into the entrepreneurial world.
Here in South Carolina, we have the outstanding Women's Business Center (http://www.scwbc.org), a division of the SCMEP, South Carolina Manufacturers Extension Partnership (http://www.scmep.org), one of the best kept secrets available to businesses at all levels in our State. Other States have similar programs modeled after ours. These are incredible resources, partially funded by the State and private resources, available at little to no cost to entrepreneurs, with the purpose of aiding the successful growth of small business. Some additional national resources are:
http://www.national business.org
http://www.nase.org
http://www.gosmallbiz.com
http://www.empoweringbiz.com
http://www.nfib.org
http://www.qualitybusinessdirectory.com
There are also numerous magazines devoted to small business, home-based business, marketing, sales, accounting, etc… Get tuned in to these and other resources available to you. Read your industry publications to stay abreast of competition and other facets of your business interests.
A single legal issue, FACTA problem, accounting error or marketing miscue can put you out of business. In the case of FACTA, insufficient security or poor record-keeping these days could find you legally responsible for a single employee's identity fraud issue, which may end up being very costly. A single lawsuit or vendor dispute can shut you down. Many entrepreneurs are ignorant, ill-prepared and under-schooled with regard to these and other issues. Do not get caught in the deadly ignorance trap.
There is more opportunity available today than ever before for the wise entrepreneur. Get all you ducks in a row before you make the fateful leap into the new world marketplace. Be smart, learn all you can as quickly as possible and take action on your ideas. Like the Admiral, be determined to win in the face of what may appear to be overwhelming adversity.
Is Your Business Profitable?
What’s your job profitability? Do you know?
Many business owners are unsure of their profitability at a company or job level. They “think” they are making money because they have a few dollars in their checking account. Having money in your checking account doesn’t mean you are profitable. It might simply mean you haven’t paid all the bills yet, so you have a little cash. Cash and profit are two different concepts. If you don’t know your exact income and expenses for each job and your overall business, then how can you know whether you are making a profit? And, if you aren’t profitable, your business won’t last long.
Analyze Each Job
Regardless of the size of your business or your industry, profitability is something you should be monitoring on a monthly basis. To determine your profit, you must know how much you make and spend on each job. Expenditures should be tracked for direct labor and material costs on each job. In addition, you should also be tracking overhead costs and allocating them to your various jobs as applicable. There is always going to be some general overhead, but too often dollars are thrown into general overhead, when those dollars could easily be attached to specific jobs.
Intuit’s QuickBooks software program has easy-to-use features that allow you to do job-costing for time and materials, so you don’t have to worry about having to track it all manually. Rely on tools to help you run your business more efficiently and effectively.
Are you curious how you are doing with job costing measurements? Here are some quick and easy questions to gauge your job costing performance:
1. Do I track each customer’s revenue information through a detailed invoice?
2. Do I have a way of breaking down my direct job materials cost by customer?
3. Do I associate all time spent to each job accurately with actual dollar amounts?
4. Do I have access to reports to monitor profitability on each job in a timely manner?
5. Do I have a way to trend the fluctuations in job profitability from job to job, month to month, etc?
If you answered “no” to any of these, then it’s time for you to take an objective look at your financial goals. It’s time for you to implement a job costing mechanism to help you answer “yes” to all these questions. How can you track your profitability and long-term growth plans if you don’t have detail at a job level?
QuickBooks Can Help
Here are some easy ways to utilize QuickBooks effectively to help you with your job-costing process:
1. Set up the QuickBooks Item list so that you’ll have both an expense and an income aspect to each of the items. This will allow you to track your costs and your income, and will provide you profit by item.
2. Record your sales through the invoicing or sales receipt process. This will record the income aspects of the items.
3. As you purchase the product or service items, make sure that you utilize the Items tab so that it will record the cost to the appropriate item. In addition, make sure to assign your customer/job information to each line item so that you’ll have the costs associated to the appropriate customer/job for job-costing.
4. Utilize the time-tracking mechanism in QuickBooks so that you and your employees can track time by item and customer/job. No dollar value is associated with this time until you actually pay the employees within QuickBooks.
5. QuickBooks has preformatted reports that you can access to have job-costing information right at your fingertips. These are found under the Reporting menu and the Jobs/Time/Mileage option.
6. QuickBooks has the ability to provide reports for any time period you select. This will allow you to have a variety of detail over the growth of your business and to produce trending reports. You can modify the report as needed to meet your needs.
A good accounting professional can help you understand what these reports are telling you, in terms that you can use. Reports alone don’t provide value if you don’t understand them. So it is key that you understand the reporting information and how you can use that information to assist you in decision-making as you grow your business profitably.
Job-costing is easier when you set-up your accounting/bookkeeping software package and know how to use it. So, challenge yourself today to become more adept at running a financially savvy business through job-costing. Then, you’ll know, without a doubt, whether your company is profitable.
Many business owners are unsure of their profitability at a company or job level. They “think” they are making money because they have a few dollars in their checking account. Having money in your checking account doesn’t mean you are profitable. It might simply mean you haven’t paid all the bills yet, so you have a little cash. Cash and profit are two different concepts. If you don’t know your exact income and expenses for each job and your overall business, then how can you know whether you are making a profit? And, if you aren’t profitable, your business won’t last long.
Analyze Each Job
Regardless of the size of your business or your industry, profitability is something you should be monitoring on a monthly basis. To determine your profit, you must know how much you make and spend on each job. Expenditures should be tracked for direct labor and material costs on each job. In addition, you should also be tracking overhead costs and allocating them to your various jobs as applicable. There is always going to be some general overhead, but too often dollars are thrown into general overhead, when those dollars could easily be attached to specific jobs.
Intuit’s QuickBooks software program has easy-to-use features that allow you to do job-costing for time and materials, so you don’t have to worry about having to track it all manually. Rely on tools to help you run your business more efficiently and effectively.
Are you curious how you are doing with job costing measurements? Here are some quick and easy questions to gauge your job costing performance:
1. Do I track each customer’s revenue information through a detailed invoice?
2. Do I have a way of breaking down my direct job materials cost by customer?
3. Do I associate all time spent to each job accurately with actual dollar amounts?
4. Do I have access to reports to monitor profitability on each job in a timely manner?
5. Do I have a way to trend the fluctuations in job profitability from job to job, month to month, etc?
If you answered “no” to any of these, then it’s time for you to take an objective look at your financial goals. It’s time for you to implement a job costing mechanism to help you answer “yes” to all these questions. How can you track your profitability and long-term growth plans if you don’t have detail at a job level?
QuickBooks Can Help
Here are some easy ways to utilize QuickBooks effectively to help you with your job-costing process:
1. Set up the QuickBooks Item list so that you’ll have both an expense and an income aspect to each of the items. This will allow you to track your costs and your income, and will provide you profit by item.
2. Record your sales through the invoicing or sales receipt process. This will record the income aspects of the items.
3. As you purchase the product or service items, make sure that you utilize the Items tab so that it will record the cost to the appropriate item. In addition, make sure to assign your customer/job information to each line item so that you’ll have the costs associated to the appropriate customer/job for job-costing.
4. Utilize the time-tracking mechanism in QuickBooks so that you and your employees can track time by item and customer/job. No dollar value is associated with this time until you actually pay the employees within QuickBooks.
5. QuickBooks has preformatted reports that you can access to have job-costing information right at your fingertips. These are found under the Reporting menu and the Jobs/Time/Mileage option.
6. QuickBooks has the ability to provide reports for any time period you select. This will allow you to have a variety of detail over the growth of your business and to produce trending reports. You can modify the report as needed to meet your needs.
A good accounting professional can help you understand what these reports are telling you, in terms that you can use. Reports alone don’t provide value if you don’t understand them. So it is key that you understand the reporting information and how you can use that information to assist you in decision-making as you grow your business profitably.
Job-costing is easier when you set-up your accounting/bookkeeping software package and know how to use it. So, challenge yourself today to become more adept at running a financially savvy business through job-costing. Then, you’ll know, without a doubt, whether your company is profitable.
Bottleneck-oriented Business Management
Simple and effective Business Management
In every enterprise there are, at every time, one or more bottlenecks, which have influence to the commercial situation. Bottleneck-oriented business management has the purpose to early track the bottlenecks and to remove them, to allow an optimum of commercial development. To know at any time, what a business lacks of and to be able to add the missing things, is today a determining competition advantage. Bottlenecks can be, e.g.:
low sales proceeds
high due or overdue accounts receivables
low liquidity (Cash on Hand, etc.)
high amount of liabilities
low number of customers
too many new customers
too high capacity utilization
defective administration or management
and a lot more.
These example show that bottlenecks not only concern negative circumstances, but also can apply to positive commercial development. If an enterprise takes up many new customers, this results in new orders, which lead to other circumstances, like a possible excess in capacity utilization. In case the excess of capacity utilization stays for a longer time, this may result in a lower employee motivation, because of a slump in working atmosphere within the company, which then could lead to less qualtiy of the work performed.
Due to a TIMELY reporting system many companies take care of reaching the desired commercial development. However, a regular analysis of expenses or the annual reports are not enough to control a business today. In the today's dynamic markets these evaluations are too statical, too much oriented on the past commercial development, which had been achieved. Also cost accounting only shows what has happened in the past. The actual direction in which a business is running could not be seen.
Imagine a business to be a car. If you sat down in a car, do you like to receive information from the instruments from the last year or month? Probably not. You would like to have actual information about fuel tank content, coolant temperature and a lot more. Bottleneck-oriented business management should exactly bring the most important and actual information about a business to you, including so-called early warning signals (Screenshot abenetis ERS-Diagram).
Data oriented to the past for early-warning-systems?
A working early-warning-system needs data which are not oriented to the past, like from cost accounting or year-/month-end-closeings. It needs data from so-called early indicators, which has to be gathered from different areas of an enterprise. Of course, figures from the finance and accounting department belong into an early-warning-system, but they only have a subordinated role, because they are oriented to the past.
Nowadays the reporting must show the present situation of a business. In many businesses the expenditure of time for the reporting rose considerably, due to the today's flood of information. Aggravatingly added to this, is the selection of the really relevant business ratios, which allow an appropriate overview of the actual business situation. Too often reports are prepared, which are not perceived by anybody, due to the lack of necessary statements about the business development.
There are already proven business-ratio-systems, that enterprises only need to take over. Get back into the car again, imagine you have only one instrument in front of you, which shows the value "35". What does this signify? It is not recognizable how many fuel exists, how the Temperature of the coolant is or how fast the car is driving, etc.
At this example you could recognize the little expressiveness of only one business ratio. It shows the importance to use the right business ratios, which must have a connection to each other and which have a different temporal origin. Nevertheless, many business ratio systems are mostly based on data which originate from the past.
This turns often to the problem, that immediate information are not available, to indicate the actual situation of a business. However, there is still the alternative, to reduce the period of the past. How would it be with one week instead of analysing business data every 4 weeks? This would lead to the fact that you could act a few weeks earlier, if something should run a little bit inclinedly.
Only very few data are needed to receive an informative evaluation. This again is comparably with a car. If you are driving with your car, you only receive a small, well-chosen number of information and nevertheless, have an actual picture of the situation. This is also possible for businesses, as well!
As a motorist we receive only one fraction of the data which is acquired by the system of the car, and just these fraction of information is enough for us to reach the desired destination. When traveling usually we are well prepared, but the principle of the preparations is often neglected in business operation. As it is with traveling, the final goal has to be clearly stated by the business management. This could be done by having planing data available. Only by target/actual comparison divergences of the commercial development will be recognized.
Unfortunately, many small businesses renounce to use plan data. Besides, it is not about, to cut plan data into the smallest pieces, but only to get a rough picture, what the business is going to achieve. It is absolutely possible to run a business on the basis of the figures from the previous year, however, to use these figures, the past commercial development should be taken into consideration. So the figures from the previous year should be improved to fit with the new goals. And finished are the planning data and the basis for an operational risk management are laid. Still if it is most important to know the actual bottlenecks in business operation.
Recognize problems and act!
One of the most important factors in business management is the early recognition of problems and potentials. There are bottlenecks in every business, which could have serious results. Pecuniary difficulties could lead to bankruptcy for example. Therefore symptoms must be recognized early, in order to turn a possible crisis away and to secure the future of your business. Also to use available potentials, regular analyses should be done. Nowadays products and services could not be sold forever, because product cycles become shorter and shorter due to market dynamism. The recognition and development of potentials is exceptionally important, to avoid losing the already achieved basis of a business.
In every enterprise there are, at every time, one or more bottlenecks, which have influence to the commercial situation. Bottleneck-oriented business management has the purpose to early track the bottlenecks and to remove them, to allow an optimum of commercial development. To know at any time, what a business lacks of and to be able to add the missing things, is today a determining competition advantage. Bottlenecks can be, e.g.:
low sales proceeds
high due or overdue accounts receivables
low liquidity (Cash on Hand, etc.)
high amount of liabilities
low number of customers
too many new customers
too high capacity utilization
defective administration or management
and a lot more.
These example show that bottlenecks not only concern negative circumstances, but also can apply to positive commercial development. If an enterprise takes up many new customers, this results in new orders, which lead to other circumstances, like a possible excess in capacity utilization. In case the excess of capacity utilization stays for a longer time, this may result in a lower employee motivation, because of a slump in working atmosphere within the company, which then could lead to less qualtiy of the work performed.
Due to a TIMELY reporting system many companies take care of reaching the desired commercial development. However, a regular analysis of expenses or the annual reports are not enough to control a business today. In the today's dynamic markets these evaluations are too statical, too much oriented on the past commercial development, which had been achieved. Also cost accounting only shows what has happened in the past. The actual direction in which a business is running could not be seen.
Imagine a business to be a car. If you sat down in a car, do you like to receive information from the instruments from the last year or month? Probably not. You would like to have actual information about fuel tank content, coolant temperature and a lot more. Bottleneck-oriented business management should exactly bring the most important and actual information about a business to you, including so-called early warning signals (Screenshot abenetis ERS-Diagram).
Data oriented to the past for early-warning-systems?
A working early-warning-system needs data which are not oriented to the past, like from cost accounting or year-/month-end-closeings. It needs data from so-called early indicators, which has to be gathered from different areas of an enterprise. Of course, figures from the finance and accounting department belong into an early-warning-system, but they only have a subordinated role, because they are oriented to the past.
Nowadays the reporting must show the present situation of a business. In many businesses the expenditure of time for the reporting rose considerably, due to the today's flood of information. Aggravatingly added to this, is the selection of the really relevant business ratios, which allow an appropriate overview of the actual business situation. Too often reports are prepared, which are not perceived by anybody, due to the lack of necessary statements about the business development.
There are already proven business-ratio-systems, that enterprises only need to take over. Get back into the car again, imagine you have only one instrument in front of you, which shows the value "35". What does this signify? It is not recognizable how many fuel exists, how the Temperature of the coolant is or how fast the car is driving, etc.
At this example you could recognize the little expressiveness of only one business ratio. It shows the importance to use the right business ratios, which must have a connection to each other and which have a different temporal origin. Nevertheless, many business ratio systems are mostly based on data which originate from the past.
This turns often to the problem, that immediate information are not available, to indicate the actual situation of a business. However, there is still the alternative, to reduce the period of the past. How would it be with one week instead of analysing business data every 4 weeks? This would lead to the fact that you could act a few weeks earlier, if something should run a little bit inclinedly.
Only very few data are needed to receive an informative evaluation. This again is comparably with a car. If you are driving with your car, you only receive a small, well-chosen number of information and nevertheless, have an actual picture of the situation. This is also possible for businesses, as well!
As a motorist we receive only one fraction of the data which is acquired by the system of the car, and just these fraction of information is enough for us to reach the desired destination. When traveling usually we are well prepared, but the principle of the preparations is often neglected in business operation. As it is with traveling, the final goal has to be clearly stated by the business management. This could be done by having planing data available. Only by target/actual comparison divergences of the commercial development will be recognized.
Unfortunately, many small businesses renounce to use plan data. Besides, it is not about, to cut plan data into the smallest pieces, but only to get a rough picture, what the business is going to achieve. It is absolutely possible to run a business on the basis of the figures from the previous year, however, to use these figures, the past commercial development should be taken into consideration. So the figures from the previous year should be improved to fit with the new goals. And finished are the planning data and the basis for an operational risk management are laid. Still if it is most important to know the actual bottlenecks in business operation.
Recognize problems and act!
One of the most important factors in business management is the early recognition of problems and potentials. There are bottlenecks in every business, which could have serious results. Pecuniary difficulties could lead to bankruptcy for example. Therefore symptoms must be recognized early, in order to turn a possible crisis away and to secure the future of your business. Also to use available potentials, regular analyses should be done. Nowadays products and services could not be sold forever, because product cycles become shorter and shorter due to market dynamism. The recognition and development of potentials is exceptionally important, to avoid losing the already achieved basis of a business.
Why Online Presence Is Essential For Small Business Success
If you are any kind of small business or home
operated business, online presence is essential. Majority of web site
visitors are from the English speaking population due to the high levels
of internet penetration in that category, online presence for all small
enterprises cannot be overemphasized. The research data in the US about
online connectivity reveals the following facts which may help to
understand the importance of the web presence for businesses especially
the small enterprise.
70 % of the US households have web connectivity.
In 2004 worldwide online population was 801 million worldwide.
Of these 36% used English as the language. Of this U.S. alone accounts for close to 200 million.
The next major group was European languages with 38 % and major single language next to English was Chinese accounting for 14%.
Home web users were generally affluent, literate, and belonged to the younger age profile. This means the web presence for any business is necessary if you want to succeed in promoting your products and services to a population who can afford them and also willing to buy them online.
The household that did not own a computer or who were were not connected to the web, generally felt it is not useful or needed and cost too much.
What this means for a small business owner is that they are better off promoting their products to people who were online.
You small business success is undoubtedly linked to your online presence
70 % of the US households have web connectivity.
In 2004 worldwide online population was 801 million worldwide.
Of these 36% used English as the language. Of this U.S. alone accounts for close to 200 million.
The next major group was European languages with 38 % and major single language next to English was Chinese accounting for 14%.
Home web users were generally affluent, literate, and belonged to the younger age profile. This means the web presence for any business is necessary if you want to succeed in promoting your products and services to a population who can afford them and also willing to buy them online.
The household that did not own a computer or who were were not connected to the web, generally felt it is not useful or needed and cost too much.
What this means for a small business owner is that they are better off promoting their products to people who were online.
You small business success is undoubtedly linked to your online presence
Starting An Online Business From Home
Many people believe that starting an online
business from home is difficult. In fact it is quite easy. If you are
already familiar with what product you will sell you will need to create
or hire someone to produce an online website for you. This website
should list the product or products you have available. If you will be
selling your own products, make sure that your online business has a
name that reflects you and what you offer.
After this has been completed, you should inquire in your local state to learn the guidelines necessary for you to run a business from your home. Many states require that even an online business register with them and receive a business license. You will have to get the necessary forms to request this license.
After you have obtained you license, you should also find out how running an online business from home will affect you tax situation. You would still need to report any income you make from your business, even if you are working at home.
After all this paperwork is completed for you business, it is important to set up your home office for you new job. It is suggested that you have a separate space to conduct
your business affairs. A separate phone line that customers can call is also very necessary and I strongly suggest you get a fax machine. You will lose customers if you are not able to be reached by telephone, fax and e-mail. Having a separate phone line from the rest of the house is essential!
Other than a second phone line, it is also a good idea to buy the necessary hardware and software for you home office. You will save lots of money if you have your own fax machine, scanner, and printer. Also it is probably wise to have the latest software additions for word processing and accounting. The accounting software is especially useful for you to keep track of all expenses and revenue for your online business.
When you have established the business and things are going well, it is a good idea to consider outsourcing. This would mean hiring someone to take care of the little jobs that
you would have to do such as email or letter correspondence or creating marketing brochures. By doing this, you will be able to focus on the more important areas of making money and marketing your business, which will be key to your success.
After this has been completed, you should inquire in your local state to learn the guidelines necessary for you to run a business from your home. Many states require that even an online business register with them and receive a business license. You will have to get the necessary forms to request this license.
After you have obtained you license, you should also find out how running an online business from home will affect you tax situation. You would still need to report any income you make from your business, even if you are working at home.
After all this paperwork is completed for you business, it is important to set up your home office for you new job. It is suggested that you have a separate space to conduct
your business affairs. A separate phone line that customers can call is also very necessary and I strongly suggest you get a fax machine. You will lose customers if you are not able to be reached by telephone, fax and e-mail. Having a separate phone line from the rest of the house is essential!
Other than a second phone line, it is also a good idea to buy the necessary hardware and software for you home office. You will save lots of money if you have your own fax machine, scanner, and printer. Also it is probably wise to have the latest software additions for word processing and accounting. The accounting software is especially useful for you to keep track of all expenses and revenue for your online business.
When you have established the business and things are going well, it is a good idea to consider outsourcing. This would mean hiring someone to take care of the little jobs that
you would have to do such as email or letter correspondence or creating marketing brochures. By doing this, you will be able to focus on the more important areas of making money and marketing your business, which will be key to your success.
9 things you must do to maximize your chances of obtaining a small business loan
To get approval for your small business loan
application, you must be able to meet the lending criteria set down.
Some organisations are more risk averse than others, and will therefore
have more stringent criteria.
To vastly increase your chances of a successful funding application, you will need to present the following information:
1. The reason for the loan. The lender will be looking for something that fits within the normal range and expertise of your business. The amount may cover a number of items, so you will need to cover each.
2. The amount required, and the repayment term of the small business loan you want. (e.g. $10,000 term 5 years, payable quarterly).
3. Details of how you will repay the amount borrowed. For example, “From the increase in profits of reduced running costs of the Whizzbang Go4It”
4. Details of security you will be able to offer to the lender. This will act as reassurance for the lender. If you’re not prepared to put up some aspect of security, then why should they?
5. You will need to include your business plan which will serve to answer essential questions relating to management capabilities, information about the market you operate in. What kind of business you are in etc.
6. 3 Years financial statements. You will need to present quality financial information from your accounting software, preferably signed off by your accountant or tax advisor.
7. Latest Set of Management accounts. Again produced from your accounting software.
8. Accounts receivables (debtors) and payables (creditors) ageing reports.
9. Principals financial statements. – Particularly required if some form of security is necessary.
If you are a new company, the emphasis is going to be on your business plan , and the security (also called collateral) you or your business can provide against the loan.
You must take the time to practice presenting your case to the bank or lender to iron out any glitches. Practice on your colleagues and family (you never know, they might be so impressed, they'll invest or lend!). It may help to role play the lender and come up with as many pointy questions as possible. The more time you take the better your chances will be. (But remember, don’t fall into the analysis paralysis trap!)
Good luck!
To vastly increase your chances of a successful funding application, you will need to present the following information:
1. The reason for the loan. The lender will be looking for something that fits within the normal range and expertise of your business. The amount may cover a number of items, so you will need to cover each.
2. The amount required, and the repayment term of the small business loan you want. (e.g. $10,000 term 5 years, payable quarterly).
3. Details of how you will repay the amount borrowed. For example, “From the increase in profits of reduced running costs of the Whizzbang Go4It”
4. Details of security you will be able to offer to the lender. This will act as reassurance for the lender. If you’re not prepared to put up some aspect of security, then why should they?
5. You will need to include your business plan which will serve to answer essential questions relating to management capabilities, information about the market you operate in. What kind of business you are in etc.
6. 3 Years financial statements. You will need to present quality financial information from your accounting software, preferably signed off by your accountant or tax advisor.
7. Latest Set of Management accounts. Again produced from your accounting software.
8. Accounts receivables (debtors) and payables (creditors) ageing reports.
9. Principals financial statements. – Particularly required if some form of security is necessary.
If you are a new company, the emphasis is going to be on your business plan , and the security (also called collateral) you or your business can provide against the loan.
You must take the time to practice presenting your case to the bank or lender to iron out any glitches. Practice on your colleagues and family (you never know, they might be so impressed, they'll invest or lend!). It may help to role play the lender and come up with as many pointy questions as possible. The more time you take the better your chances will be. (But remember, don’t fall into the analysis paralysis trap!)
Good luck!
Material Values in Business Management
Maybe you have already heard that in some ways
immaterial values are important for business management. But you might
not found how to bring them into your management processes or into your
reporting packages. However, first of all we should be clear, what
immaterial values are? Well, this includes the balance sheet information
about intangible assets, but is going far behind it.
As we all know, decisions are mostly based on feelings or emotions, than on logical judgement. A feeling is an energy. Energy is not material, it is immaterial. The overall emotions or motivation of employees in a business is a immaterial value, it could have positive and negative impact on the business development. Does sound very esoterical for you? Might be, but today we know that our emotions drive a lot of our life.
Not only the feelings of the emplyoees have an impact on the business development, also the feelings of potenial customers have it. These customer feelings could be measured as customer satisfaction, as how customers see the company or it’s products and services and so on. There is more energy, which is immaterial, included in our business life as we are aware of.
Until today we might know about these energies or have read that businesses have to be more aware of them. But to find Solutions which are able to measure these energies are not very common and hard to find. Business Management still uses hard figures such as ratios based on financial values and just forgets that there has been more than only the numbers from the accounting and the money in the pocket.
If you only look to the accounting figures of a business, you only look to this company as if you were looking at an iceberg. You only see a fraction of the iceberg, only what is above the surface. Everything below the surface is out of your view. While the iceberg is melting away, it still brings up new parts of it self. But you only see this new parts, when the iceberg is melting. It’s just the same with the accounting figures as soon as you see them they are gone. That means they are old, it’s nice to knew them, but they relate to business already accomplished.
The accounting figures are just like to iceberg when it comes above the surface while it is melting away. Now, wouldn’t it be great to see the whole iceberg, even if a big part is below the surface? Yes, it would be great. The immaterial values of your business are just below surface. If you bring them up, you could see the whole picture of your business.
Running a business only focusing on profit could lead to running into a collapse. It might take time, but soon customers and employees will find out that just the profit counts to a specific company. Well, it’s correct, no business could survive without profit, but first of all every business has to make profit on immaterial items, such as image, motivation of employees and customers faith.
One day from these immaterial profits the financial profit arises. That’s the theory. Propably you already read about this, but have you found a way to measure immaterial values of your business? It’s not that difficult, but it needs some thoughts. First of all it is important to make a list of immaterial values which have the most impact on the business development. When this has been finished, methods to measure and valuate the immaterial values have to be found.
And at last, the values for all the selected immaterial items have to be analysed regularly. Setting up such a Reporting System for immaterial values could be a long lasting task. You might try to do it with a spreadsheet program or with a database, but either way will take it’s time. Using ready made Standard Software might be another option, but there are not much choices. In case you use the Balance Scorecard, you might think having all the data mentioned above and you might think having a good solution for analysation.
The Balance Scorecard has it’s advantages, but for a short, fast and regular analysis of immaterial values it is far to complex and much to slow. There is just the need to measure, store and analyse some data. About 30 items will be enough to have an overview of immaterial values and some material values as well. Most of the necessary data are usually already stored in every business. They only need to be concentrated into one table and have to be analysed.
Are immaterial values important for every business? Yes. This includes big businesses as well as the one-man-business, retail stores, mechanics, freelancer and so on. You may find more information on immaterial values in business management, when searching for Early-Warning-System, Early-Recognition-Sytems and something similar. You are able to find one or the other immaterial value included in Management Methods, Ratio Systems and Financial Analysis. But still, most Reports and Measurement System are based on financial data.
A Solution which every business, no matter of size, could use, is the abenetis ERS (Early-Recognition-System). It is called Early-Recognition-System, because with the used immaterial values every business could be aware of tendencies in it’s business development soon. At the moment the abenetis ERS is available only as Online-Service, but could soon be delivered as Intranet-Version, too. More details are available at our ERS-Subscription Page.
As we all know, decisions are mostly based on feelings or emotions, than on logical judgement. A feeling is an energy. Energy is not material, it is immaterial. The overall emotions or motivation of employees in a business is a immaterial value, it could have positive and negative impact on the business development. Does sound very esoterical for you? Might be, but today we know that our emotions drive a lot of our life.
Not only the feelings of the emplyoees have an impact on the business development, also the feelings of potenial customers have it. These customer feelings could be measured as customer satisfaction, as how customers see the company or it’s products and services and so on. There is more energy, which is immaterial, included in our business life as we are aware of.
Until today we might know about these energies or have read that businesses have to be more aware of them. But to find Solutions which are able to measure these energies are not very common and hard to find. Business Management still uses hard figures such as ratios based on financial values and just forgets that there has been more than only the numbers from the accounting and the money in the pocket.
If you only look to the accounting figures of a business, you only look to this company as if you were looking at an iceberg. You only see a fraction of the iceberg, only what is above the surface. Everything below the surface is out of your view. While the iceberg is melting away, it still brings up new parts of it self. But you only see this new parts, when the iceberg is melting. It’s just the same with the accounting figures as soon as you see them they are gone. That means they are old, it’s nice to knew them, but they relate to business already accomplished.
The accounting figures are just like to iceberg when it comes above the surface while it is melting away. Now, wouldn’t it be great to see the whole iceberg, even if a big part is below the surface? Yes, it would be great. The immaterial values of your business are just below surface. If you bring them up, you could see the whole picture of your business.
Running a business only focusing on profit could lead to running into a collapse. It might take time, but soon customers and employees will find out that just the profit counts to a specific company. Well, it’s correct, no business could survive without profit, but first of all every business has to make profit on immaterial items, such as image, motivation of employees and customers faith.
One day from these immaterial profits the financial profit arises. That’s the theory. Propably you already read about this, but have you found a way to measure immaterial values of your business? It’s not that difficult, but it needs some thoughts. First of all it is important to make a list of immaterial values which have the most impact on the business development. When this has been finished, methods to measure and valuate the immaterial values have to be found.
And at last, the values for all the selected immaterial items have to be analysed regularly. Setting up such a Reporting System for immaterial values could be a long lasting task. You might try to do it with a spreadsheet program or with a database, but either way will take it’s time. Using ready made Standard Software might be another option, but there are not much choices. In case you use the Balance Scorecard, you might think having all the data mentioned above and you might think having a good solution for analysation.
The Balance Scorecard has it’s advantages, but for a short, fast and regular analysis of immaterial values it is far to complex and much to slow. There is just the need to measure, store and analyse some data. About 30 items will be enough to have an overview of immaterial values and some material values as well. Most of the necessary data are usually already stored in every business. They only need to be concentrated into one table and have to be analysed.
Are immaterial values important for every business? Yes. This includes big businesses as well as the one-man-business, retail stores, mechanics, freelancer and so on. You may find more information on immaterial values in business management, when searching for Early-Warning-System, Early-Recognition-Sytems and something similar. You are able to find one or the other immaterial value included in Management Methods, Ratio Systems and Financial Analysis. But still, most Reports and Measurement System are based on financial data.
A Solution which every business, no matter of size, could use, is the abenetis ERS (Early-Recognition-System). It is called Early-Recognition-System, because with the used immaterial values every business could be aware of tendencies in it’s business development soon. At the moment the abenetis ERS is available only as Online-Service, but could soon be delivered as Intranet-Version, too. More details are available at our ERS-Subscription Page.
HOW TO STAY FOCUSSED AND BUILD YOUR BUSINESS
You have a detailed business plan, which showed the
overall intent of your company. You presented the business plan to your
bank before start-up and they submitted funding in the amount that you
both deemed acceptable. The original business plan contained the basis
of the procedures that will help you stay focussed while the company
grows. Let's examine some of these processes that you will use to give
your business the focus it needs to grow and succeed.
1. A marketing plan. If sales are a part of your operation (and it seems that some form of selling is always a big part of every company), then, you will need to have your sales group focussed on a marketing plan. Short term and longer-term analysis should be a part of this planning and will likely contain an analysis of your competition, market potential and sales projections. Be careful not to fall into the trap of letting “the business take care of itself”, stay focussed at all times and be sure your managers are tuned into this market monitoring regularly, nothing is more defeating to the general manager/owner than to be told by a sales manager…I didn't see that coming! YIKES!
2. Accounting procedures. If sales are important, then the need to stay focussed on receiving the proceeds from sales is equally important. Accounts payable, expenses and accounts receivable need to have fixed procedures in place to allow money to flow freely through the company coffers. Focussing on these procedures at regular weekly and monthly meetings will put the accounting and marketing groups on the same path. A rift between marketing and accounting is a common bureaucratic occurrence; so don't be surprised if one point you hear from someone from sales state, “We make the money here, how come I have to live by their rules?” Getting these two operations to stay focussed on a bottom line results oriented approach is a regular part of an owner's job description.
3. Human resources. If you have ever worked for a manager, who considered his employees as expenses rather than assets, then you will be familiar with the need for managers to stay focussed on human resources within the company. A manager who is fixated on staff reduction regardless of their accomplishments will create an atmosphere of fear. Certainly, no one wants to be grossly over-staffed, but a good owner/manager will focus on keeping adequate employee base numbers, and ensure continuing training, safety programs and top of the line employee benefits. It's your campground, why not have “happy campers?”
4. Selling your business. This does not mean selling in the true literal sense. It means focusing on being sure your company image is one that is the envy of your competitors and is known in the business world as a first class operation. You can do this by having key managers attending industry conferences. Be clear and tell them that their focus at these seminars is to network, thoroughly gathering as much new information that they can. They should also 'sell' other attendees on the importance and efficiency of their company in the industry. Upon their return, have follow-up meetings with these managers where they will report in detail on what they have learned. Managers attending conventions and seminars should take opportunities to enjoy themselves, nevertheless, they will be the “face” of your company, it's wise be sure that they focus on making them business meetings, and not all “playtime.”
If planning, organizing, staffing, direction and control are five major factors in managing a company, staying focussed throughout the process, is paramount!
1. A marketing plan. If sales are a part of your operation (and it seems that some form of selling is always a big part of every company), then, you will need to have your sales group focussed on a marketing plan. Short term and longer-term analysis should be a part of this planning and will likely contain an analysis of your competition, market potential and sales projections. Be careful not to fall into the trap of letting “the business take care of itself”, stay focussed at all times and be sure your managers are tuned into this market monitoring regularly, nothing is more defeating to the general manager/owner than to be told by a sales manager…I didn't see that coming! YIKES!
2. Accounting procedures. If sales are important, then the need to stay focussed on receiving the proceeds from sales is equally important. Accounts payable, expenses and accounts receivable need to have fixed procedures in place to allow money to flow freely through the company coffers. Focussing on these procedures at regular weekly and monthly meetings will put the accounting and marketing groups on the same path. A rift between marketing and accounting is a common bureaucratic occurrence; so don't be surprised if one point you hear from someone from sales state, “We make the money here, how come I have to live by their rules?” Getting these two operations to stay focussed on a bottom line results oriented approach is a regular part of an owner's job description.
3. Human resources. If you have ever worked for a manager, who considered his employees as expenses rather than assets, then you will be familiar with the need for managers to stay focussed on human resources within the company. A manager who is fixated on staff reduction regardless of their accomplishments will create an atmosphere of fear. Certainly, no one wants to be grossly over-staffed, but a good owner/manager will focus on keeping adequate employee base numbers, and ensure continuing training, safety programs and top of the line employee benefits. It's your campground, why not have “happy campers?”
4. Selling your business. This does not mean selling in the true literal sense. It means focusing on being sure your company image is one that is the envy of your competitors and is known in the business world as a first class operation. You can do this by having key managers attending industry conferences. Be clear and tell them that their focus at these seminars is to network, thoroughly gathering as much new information that they can. They should also 'sell' other attendees on the importance and efficiency of their company in the industry. Upon their return, have follow-up meetings with these managers where they will report in detail on what they have learned. Managers attending conventions and seminars should take opportunities to enjoy themselves, nevertheless, they will be the “face” of your company, it's wise be sure that they focus on making them business meetings, and not all “playtime.”
If planning, organizing, staffing, direction and control are five major factors in managing a company, staying focussed throughout the process, is paramount!
3 Essential Tools for Starting and Maintaining a Small Business
We believe that there are 3 factors that drive the success of small businesses.
1) Acquiring start-up capital
2) Finding customers
3) Accounting for, budgeting and controlling sales and expenses
The following resources will help your small business achieve these success factors.
Acquiring Start-Up Capital
An adequate supply of capital is essential as many profitable businesses fail because they don’t have enough cash to pay their employees and suppliers. But what is an adequate supply of capital? The only way to tell is by doing a significant amount of research on your potential market and formally documenting this in a business plan. I’m sure you know that a business plan is a very important document that is crucial to convincing your banker to lend you money.
There are two ways to obtain a business plan.
1) Do it yourself by amending a business plan template, or
2) Hire a professional to do it for you.
Obviously obtain 1) will be a great deal cheaper.
Our research led to a website that has over 60 high quality and free business plan templates. We also found a directory that you can use to easily find a business plan writer in your city – where ever you live in the world.
Finding Customers
Finding customers is a difficult and expensive task for service business owners such as accountants, lawyers and plumbers. We believe that a cost effective marketing strategy for service business owners is to simply give all their personal contacts a few business cards.
Our research led to a few websites that have pre-designed business card templates. We felt that the diversity and quality of these designs was outstanding. In addition, we found that you can obtain a significant saving by finding a printing service on the Internet. We found that you could get 2,000 full color business cards for as little as US $150.
Accounting For, Budgeting and Controlling Revenue and Expenses
Accurate accounting is very important for small business owners. It’s essential that you have timely access to information that could make or break your business. If stocks are running low – you need to know about it. If a large proportion of your debtors haven’t paid – you need to know about it. If you do not react to these situations quickly you may have a situation where you don’t have enough money to pay your employees – or worse still someone is stealing cash out the till.
Our research led to a website that compares and reviews top accounting software for small businesses. The cheapest software cost US $89.99 and the most expensive software cost US $1,499. It was interesting to note that the top 3 ranked websites were not the most expensive and cost between US $250 - US $300.
Hopefully you now have an idea of some of the tools that you can use to grow and maintain your small business. If you would like to benefit from our research please visit our website. We do not charge for this research and offer the content freely on our website.
1) Acquiring start-up capital
2) Finding customers
3) Accounting for, budgeting and controlling sales and expenses
The following resources will help your small business achieve these success factors.
Acquiring Start-Up Capital
An adequate supply of capital is essential as many profitable businesses fail because they don’t have enough cash to pay their employees and suppliers. But what is an adequate supply of capital? The only way to tell is by doing a significant amount of research on your potential market and formally documenting this in a business plan. I’m sure you know that a business plan is a very important document that is crucial to convincing your banker to lend you money.
There are two ways to obtain a business plan.
1) Do it yourself by amending a business plan template, or
2) Hire a professional to do it for you.
Obviously obtain 1) will be a great deal cheaper.
Our research led to a website that has over 60 high quality and free business plan templates. We also found a directory that you can use to easily find a business plan writer in your city – where ever you live in the world.
Finding Customers
Finding customers is a difficult and expensive task for service business owners such as accountants, lawyers and plumbers. We believe that a cost effective marketing strategy for service business owners is to simply give all their personal contacts a few business cards.
Our research led to a few websites that have pre-designed business card templates. We felt that the diversity and quality of these designs was outstanding. In addition, we found that you can obtain a significant saving by finding a printing service on the Internet. We found that you could get 2,000 full color business cards for as little as US $150.
Accounting For, Budgeting and Controlling Revenue and Expenses
Accurate accounting is very important for small business owners. It’s essential that you have timely access to information that could make or break your business. If stocks are running low – you need to know about it. If a large proportion of your debtors haven’t paid – you need to know about it. If you do not react to these situations quickly you may have a situation where you don’t have enough money to pay your employees – or worse still someone is stealing cash out the till.
Our research led to a website that compares and reviews top accounting software for small businesses. The cheapest software cost US $89.99 and the most expensive software cost US $1,499. It was interesting to note that the top 3 ranked websites were not the most expensive and cost between US $250 - US $300.
Hopefully you now have an idea of some of the tools that you can use to grow and maintain your small business. If you would like to benefit from our research please visit our website. We do not charge for this research and offer the content freely on our website.
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