Free daily tips, information and advice for people in small business
from personal experience founding, growing small businesses--been there, done that.
Real estate can be a business. I'm not talking about selling houses as an agent. And I'm not talking fixer-uppers or flipping--these are different types of property businesses.
Personal example: As a sideline to my main business, I set up a property business with a partner. First we set some criteria--it was a business plan of sorts. We concentrated on existing rentals--two and three family apartments. We looked for properties with cash flows that could carry the mortgage and a maintenance fund, and we were counting on appreciation long term. We looked for buildings (1) in a self-contained neighborhood that (2) had good access to city jobs with (3) well-constructed apartments that (4) were fully rented. When our criteria were met, we bought the place. No bungling together--each building was managed as a unit unto itself. In other words, we did not pyramid the whole--that's asking for trouble.
Managing apartment rentals is easy if you go about it in a no-nonsense way. All tenants had my personal phone number and they were told not to hesitate calling me day or night, seven days a week with any problem. I maintained a stable of tradespeople--electricians, plumbers, carpenters--who would come any time I called them, including Sundays and holidays. This rarely happened, but they knew they would be paid immediately and could expect a cash bonus for Sunday, holiday or overnight work.
You can consider real estate as a sideline, or you can make it your primary business.
Example: I worked with a man who concentrated on commercial real estate. He limited his targets to small, older stores and buildings in suburban towns. The storefronts needed attention, but the town showed unmistakable signs of growth. He checked carefully before buying a property--town councils, business organizations, regulatory people--to understand impacts going forward. When he bought a property, he renovated it and upgraded it. This had the effect of working with towns to help them improve the shopping district. He attributed his success to working closely with local authorities.
A property business offers a good business opportunity. These two examples show what can be done with residential rentals and commercial rentals.
People in small business get the benefit of my personal experience covering a lifetime in small business. These tips and advice are free, short, hard-hitting, and they come to you daily. I'm not selling anything.
Wednesday, July 30, 2014
Tuesday, July 29, 2014
Bonuses
Free daily tips, information and advice for people in small business
from personal experience starting up and running small businesses--been there, done that.
Giving out bonuses is a way to reward superior performance. There are ways to jiggle the process to better advantage both employee and employer.
Example: A company with about 30 employees regularly handed out end-of-the-year bonuses. A pot of money was set aside, then divided among employees whose performance had been exemplary for the year. The owner decided to try another method--shortening the period. Using the same amount of money, he divided it into four pots. At the end of each quarter, he handed out bonuses to employees showing the performance most valuable to the company. By giving out bonuses four times each year instead on only once, the effects were better. It put the reward closer to the performance deserving the bonus. Employees got a little extra motivation four times a year instead of once.
Example: Still looking at the situation, the same owner decided to try another variation. Using the same pot of bonus money, he divided it up into $100 bonuses. Whenever an employee showed exemplary performance or made a significant suggestion to improve the company, the owner called everyone together and presented the $100 bonus. This variation caused considerable increase in enthusiasm among employees. It kept the bonus very close to the performance that earned it. At the end of the year, the owner still gave out small bonuses--gift cards in small amounts. Although this experimenting took several years, the owner arrived at a bonus system that worked well.
If you give bonuses to employees in your company, you might want to get creative in structuring the way you do it. What works in one place might--or might not--work in the next. But it's food for thought.
My experience covers a lifetime of founding, growing and worrying with my own businesses, as well as helping other business owners with the problems we all face. I spend my retirement days writing about what I've learned--and learning new things every day. Remember: If you are not learning something, you're wasting your time.
from personal experience starting up and running small businesses--been there, done that.
Giving out bonuses is a way to reward superior performance. There are ways to jiggle the process to better advantage both employee and employer.
Example: A company with about 30 employees regularly handed out end-of-the-year bonuses. A pot of money was set aside, then divided among employees whose performance had been exemplary for the year. The owner decided to try another method--shortening the period. Using the same amount of money, he divided it into four pots. At the end of each quarter, he handed out bonuses to employees showing the performance most valuable to the company. By giving out bonuses four times each year instead on only once, the effects were better. It put the reward closer to the performance deserving the bonus. Employees got a little extra motivation four times a year instead of once.
Example: Still looking at the situation, the same owner decided to try another variation. Using the same pot of bonus money, he divided it up into $100 bonuses. Whenever an employee showed exemplary performance or made a significant suggestion to improve the company, the owner called everyone together and presented the $100 bonus. This variation caused considerable increase in enthusiasm among employees. It kept the bonus very close to the performance that earned it. At the end of the year, the owner still gave out small bonuses--gift cards in small amounts. Although this experimenting took several years, the owner arrived at a bonus system that worked well.
If you give bonuses to employees in your company, you might want to get creative in structuring the way you do it. What works in one place might--or might not--work in the next. But it's food for thought.
My experience covers a lifetime of founding, growing and worrying with my own businesses, as well as helping other business owners with the problems we all face. I spend my retirement days writing about what I've learned--and learning new things every day. Remember: If you are not learning something, you're wasting your time.
Monday, July 28, 2014
Time off
Free daily tips, information and advice for small business
from personal experience--been there, done that in small business.
Taking a vacation was always difficult for me. All my businesses were set up so that they could run without me. But something else was afoot.
I grew up on a dairy farm. It was 24/7/365. I developed a formidable work ethic. Today, if I'm not doing something, I feel like I'm wasting time. It's the same with most people who run a business.
In running my businesses, I never hesitated taking an afternoon off or disappearing for a long weekend. I didn't call in, but I worried. My employees could always reach me by phone if they ran into a problem they could not solve. That rarely happened.
Example: Mike started a small business running a computer repair shop. Gradually he expanded and provided additional services. He would go to their offices, install new computers and software, network them and train their employees. Soon, Mike had three employees and a service van on the road. Then he broke his leg. He was laid up for a month, and he was faced with running his business from bed. He was constantly on the phone, directing his employees at every turn. Tired and exasperated, he shouted at an employee one day to handle the problem himself. It was an eye-opener for Mike. Not only did the employee handle the problem, he did not call Mike again until the next day. Mike learned a valuable lesson--depend on your employees, and they'll handle most problems themselves.
Many of you already have employees, or you will have them as you grow. Train them how to handle problems and how to handle customers. Then let them make their own decisions. To get the best out of an employee, you must put them on their own.
Don't wait until you break your leg to take some time off. You need time away from your daily business grind to clear your head, let your thoughts roam, and think through some fresh ideas.
Go ahead. Take that time off--even if it's only for a long weekend. See how your business operates without you.
My lifetime of business experience comes to you daily in these write-ups. Over the years, I have founded and grown small businesses of my own, and I have counseled and worked with and written up thousands of different small businesses.
from personal experience--been there, done that in small business.
Taking a vacation was always difficult for me. All my businesses were set up so that they could run without me. But something else was afoot.
I grew up on a dairy farm. It was 24/7/365. I developed a formidable work ethic. Today, if I'm not doing something, I feel like I'm wasting time. It's the same with most people who run a business.
In running my businesses, I never hesitated taking an afternoon off or disappearing for a long weekend. I didn't call in, but I worried. My employees could always reach me by phone if they ran into a problem they could not solve. That rarely happened.
Example: Mike started a small business running a computer repair shop. Gradually he expanded and provided additional services. He would go to their offices, install new computers and software, network them and train their employees. Soon, Mike had three employees and a service van on the road. Then he broke his leg. He was laid up for a month, and he was faced with running his business from bed. He was constantly on the phone, directing his employees at every turn. Tired and exasperated, he shouted at an employee one day to handle the problem himself. It was an eye-opener for Mike. Not only did the employee handle the problem, he did not call Mike again until the next day. Mike learned a valuable lesson--depend on your employees, and they'll handle most problems themselves.
Many of you already have employees, or you will have them as you grow. Train them how to handle problems and how to handle customers. Then let them make their own decisions. To get the best out of an employee, you must put them on their own.
Don't wait until you break your leg to take some time off. You need time away from your daily business grind to clear your head, let your thoughts roam, and think through some fresh ideas.
Go ahead. Take that time off--even if it's only for a long weekend. See how your business operates without you.
My lifetime of business experience comes to you daily in these write-ups. Over the years, I have founded and grown small businesses of my own, and I have counseled and worked with and written up thousands of different small businesses.
Friday, July 25, 2014
Burning bright
Free daily tips, information and advice for people in small business
from personal experience founding and operating small businesses--been there, done that.
You've watched a candle burn, top down.
Like candles, small businesses have a lifespan. Your business can burn brightly for years--or not.
With business, it's the marketplace, not the candle. The market changes. If you insist on burning a single candle, you are most likely racing toward a business burnout.
Example: A farm in my area has been operating as a family business since the 1740s. Same family, same piece of land. It's gone through many changes over the centuries. The original farm changed with the times, becoming a large producer of apples and peaches as the 1800s turned into the 1900s. Since then, it has changed again. Today the farm is a large producer of boxwoods and other ornamental shrubs. Sales are to several well-known arboretums, garden centers, landscapers and homeowners. It's still the same piece of land and it's still in the same family, but it changed with the changing marketplace.
To keep your business burning bright takes a sharp eye on the marketplace. You might be building for your own lifetime, or you might want the business to continue through successive generations. Either way, every now and then you might light a new candle.
Example: A consignment shop in my area was established over 75 years ago. It's big and it's almost an institution in itself. The specialty here is vintage and antique clothing. Customers are party goers, actors and production companies, teenagers, and others. There are also racks of more recent clothing. In recent years the owner noticed a developing market for currently fashionable women's clothing. Customers were business women looking to extend their wardrobes. They could get name brands, gently used and at steep discounts off the original prices. They could wear the outfits a couple of times, return the items and select others. The owner decided to open a sister shop in an upscale suburban town. She now reaches out on Facebook to her growing list of regulars with pictures of items new to the shop. The sister shop is very successful, filling a niche market. The original store still enjoys its target market.
Keep your business burning bright. Stay on top of that ever-changing marketplace.
A lifetime of personal experience in small business is in this daily blog. I have started businesses, grown them, sold them and started more. In addition, I have counseled and coached thousands of small businesses at three New Jersey Small Business Development Centers and as head of the Business Owners Institute. Always writing, several books and collections of interviews are on Amazon.
from personal experience founding and operating small businesses--been there, done that.
You've watched a candle burn, top down.
Like candles, small businesses have a lifespan. Your business can burn brightly for years--or not.
With business, it's the marketplace, not the candle. The market changes. If you insist on burning a single candle, you are most likely racing toward a business burnout.
Example: A farm in my area has been operating as a family business since the 1740s. Same family, same piece of land. It's gone through many changes over the centuries. The original farm changed with the times, becoming a large producer of apples and peaches as the 1800s turned into the 1900s. Since then, it has changed again. Today the farm is a large producer of boxwoods and other ornamental shrubs. Sales are to several well-known arboretums, garden centers, landscapers and homeowners. It's still the same piece of land and it's still in the same family, but it changed with the changing marketplace.
To keep your business burning bright takes a sharp eye on the marketplace. You might be building for your own lifetime, or you might want the business to continue through successive generations. Either way, every now and then you might light a new candle.
Example: A consignment shop in my area was established over 75 years ago. It's big and it's almost an institution in itself. The specialty here is vintage and antique clothing. Customers are party goers, actors and production companies, teenagers, and others. There are also racks of more recent clothing. In recent years the owner noticed a developing market for currently fashionable women's clothing. Customers were business women looking to extend their wardrobes. They could get name brands, gently used and at steep discounts off the original prices. They could wear the outfits a couple of times, return the items and select others. The owner decided to open a sister shop in an upscale suburban town. She now reaches out on Facebook to her growing list of regulars with pictures of items new to the shop. The sister shop is very successful, filling a niche market. The original store still enjoys its target market.
Keep your business burning bright. Stay on top of that ever-changing marketplace.
A lifetime of personal experience in small business is in this daily blog. I have started businesses, grown them, sold them and started more. In addition, I have counseled and coached thousands of small businesses at three New Jersey Small Business Development Centers and as head of the Business Owners Institute. Always writing, several books and collections of interviews are on Amazon.
Thursday, July 24, 2014
Planning ahead
Free daily tips, information and advice for people in small business
from personal experience founding and growing several--been there, done that.
Planning ahead--the two terms seem to be contradictory. Planning by definition concerns the future.
You don't plan "behind" and planning for "now" has already been done--consciously or not.
Planning ahead sorts through the possibilities of "if/then" and brings up some possible courses of action for you and your business.
If the economy goes south, then I'll concentrate on certain products/services and de-emphasize the rest. If this type of advertising does not work, then I'll shift to alternatives. If a big box store opens in my town, then in my store I'll offer the things they don't carry.
Example: Joel had time to plan ahead. Walmart announced some 18 months ahead that the company would be opening one of their big stores nearby. Joel feared for the future of his small town hardware store, and he soon arrived at a "planning ahead" decision. He decided to move from the cramped, in-town location to a suburban location on a main road. Simultaneously, he would change the direction of his business. Contractors and homeowners already came to Joel's place to rent the power tools and equipment they needed for a day or two. In the sprawling new location, Joel would have more room and could add more rentals. Today, Joel is in his new location, offering more and more rentals--including trucks and trailers. He has been able to add a part time repairman to keep the equipment shipshape. He still offers high quality hardware items and power tools for sale--concentrating on items not carried by Walmart.
Sometimes, owners of small businesses get comfortable with the business running itself. But the marketplace is continually changing. You already know how to plan ahead, but It can take an outside force to kickstart the big decisions.
Example: Artists who paint pictures have a difficult time connecting with the buying public. Juan loved to draw. Growing up, he honed his skills producing endless pen and ink works. Gradually, he became fascinated with painting in oils. He showed some of his paintings at art shows and festivals. There was a great deal of interest, but sales were slow--not enough to support him. He noticed that his pen and ink drawings of homes, buildings, bridges and other structures sold well at shows. He did some planning ahead--he would concentrate on building a following for the pen and ink drawings, supporting him while he traveled the long road to transition to oil paintings. It's working. Doing pen and ink drawings is quick and easy for him. They bring in continuing income and give him the time to produce a backlog of oil paintings. Meantime, his reputation is spreading in the art world as an artist to watch.
Sometimes, an interim plan can be the path to the goal you want to reach. Baby steps can be the way to get you where you want to go.
Eventual success in a small business might lead through a detour or two. But planning ahead and keeping the goal firmly in mind will guide you through.
A lifetime of experience is distilled in these daily tips, information and advice for people starting up and running small businesses. Small business is the backbone of America--think hairdressers and pet groomers, chiropractors and accountants, cafes and neighborhood stores, auto repair shops and bakers. What would you do if all the landscapers and computer experts suddenly moved to Canada? You'd plan ahead, hunker down and figure out a new business to get into. This is what makes America great, not Washington with all its bloated bureaucracies feverishly writing more rules and regulations.
Wednesday, July 23, 2014
Partial payments
Free daily tips, information and advice for people in small business
from personal experience founding and growing businesses--been there, done that.
Some small businesses can increase sales by offering partial payments. It can be for products or services. Partial payments can be attractive to individual buyers as well as big companies.
Example: If your small business sells to big corporations, it is important to know the approvals structure in your customer's company. Frank runs a printing business and he uses the partial payments concept. His customers include banks, insurance companies, and large manufacturers. On different jobs, he might be dealing with with managers, vice presidents or senior officials. All of them have different levels of approval authority. In the case of lower level managers, they might be able to approve up to $500. As you move up the ladder, senior officials might be able to commit the company to a $50,000 order on their own signature. Frank works with his clients so that they can fit his invoices into their budget and approval authority. Sometimes this means splitting jobs into several pieces and billing them separately. Don't misunderstand--nobody's hiding anything here. It's simply working with existing responsibilities and authorities of clients. It's a way to put the partial payments concept to good use--to the benefit of buyer and seller.
A variation on the partial payments concept can be used by others--consultants for example. Here, the consultant and the client agree on a relationship, placing milestones on the work to be done. At the end of each milestone, work accomplished to that point is billed. Partial payments again work to the advantage of both parties.
More examples: Layaway plans were once used extensively by retail stores--large and small. The layaway concept declined in use over the years, but recently it has enjoyed a resurgence in popularity. (1) A small furniture store offers customers layaway plans. Some customers like the discipline of breaking up the price of an $800 chair into four monthly payments--taking delivery when the total is paid. (2) Small jewelry stores can miss sales when they do not offer layaway, common at large jewelry stores and department stores these days. (3) Electricians, plumbers and other tradespeople can realize a better bottom line by quoting the overall job in pieces--breaking up a big job into components, each billed as it is completed.
(4) Frank used progress payments in his printing operation (see main example above). Many large jobs were quoted in thirds--1/3 upfront when the job was defined and placed, 1/3 when a certain milestone was met, and 1/3 on delivery of the finished product.
Look for ways to put the partial payments concept--and its variations--to work in your business. Start by looking at your customers/clients and their problems.
Frequently, partial payments can help them. Pleasing them by helping them solve their own problems brings them back to you--and it can generate referrals.
All this helps you with your cash flow. And we know the importance of cash flow.
My lifetime of experience includes starting up and operating small businesses as well as counseling thousands of small business owners with their problems. This includes hands-on coaching at several Small Business Development Centers and running the Business Owners Institute in New Jersey. Free answers to your questions--email me at AlWarr16@gmail.com. Put BLOG as the first word in the subject line so I don't delete along with all those trying to sell me something. I never give out your email address, and your privacy is always respected.
from personal experience founding and growing businesses--been there, done that.
Some small businesses can increase sales by offering partial payments. It can be for products or services. Partial payments can be attractive to individual buyers as well as big companies.
Example: If your small business sells to big corporations, it is important to know the approvals structure in your customer's company. Frank runs a printing business and he uses the partial payments concept. His customers include banks, insurance companies, and large manufacturers. On different jobs, he might be dealing with with managers, vice presidents or senior officials. All of them have different levels of approval authority. In the case of lower level managers, they might be able to approve up to $500. As you move up the ladder, senior officials might be able to commit the company to a $50,000 order on their own signature. Frank works with his clients so that they can fit his invoices into their budget and approval authority. Sometimes this means splitting jobs into several pieces and billing them separately. Don't misunderstand--nobody's hiding anything here. It's simply working with existing responsibilities and authorities of clients. It's a way to put the partial payments concept to good use--to the benefit of buyer and seller.
A variation on the partial payments concept can be used by others--consultants for example. Here, the consultant and the client agree on a relationship, placing milestones on the work to be done. At the end of each milestone, work accomplished to that point is billed. Partial payments again work to the advantage of both parties.
More examples: Layaway plans were once used extensively by retail stores--large and small. The layaway concept declined in use over the years, but recently it has enjoyed a resurgence in popularity. (1) A small furniture store offers customers layaway plans. Some customers like the discipline of breaking up the price of an $800 chair into four monthly payments--taking delivery when the total is paid. (2) Small jewelry stores can miss sales when they do not offer layaway, common at large jewelry stores and department stores these days. (3) Electricians, plumbers and other tradespeople can realize a better bottom line by quoting the overall job in pieces--breaking up a big job into components, each billed as it is completed.
(4) Frank used progress payments in his printing operation (see main example above). Many large jobs were quoted in thirds--1/3 upfront when the job was defined and placed, 1/3 when a certain milestone was met, and 1/3 on delivery of the finished product.
Look for ways to put the partial payments concept--and its variations--to work in your business. Start by looking at your customers/clients and their problems.
Frequently, partial payments can help them. Pleasing them by helping them solve their own problems brings them back to you--and it can generate referrals.
All this helps you with your cash flow. And we know the importance of cash flow.
My lifetime of experience includes starting up and operating small businesses as well as counseling thousands of small business owners with their problems. This includes hands-on coaching at several Small Business Development Centers and running the Business Owners Institute in New Jersey. Free answers to your questions--email me at AlWarr16@gmail.com. Put BLOG as the first word in the subject line so I don't delete along with all those trying to sell me something. I never give out your email address, and your privacy is always respected.
Tuesday, July 22, 2014
Changing direction
Free daily tips, information and advice for small business
from personal experience founding and growing small businesses--been there, done that.
Yesterday's blog was about "business drift" that occurs when your business tries to go off in another direction.
Businesses are living entities. Like a child beginning to grow up, businesses always start showing a life pattern peculiar to themselves. As the parent, you must be ever watchful and guide them in the direction you think best.
You can follow where the business is leading you, or you can decide on a better path. It's up to you.
Changing the direction of your business is a big decision. I'm not talking about simply adding another service or product line. I'm talking a drastic change in direction.
Example: A machine shop has spent many years supplying the needs of commercial clients--parts and components meeting specifications. Clients are in various industries, including medical devices, automotive, nuclear, aerospace and others. Suddenly, 3-D printing burst on the scene, a quantum leap in technology. The expensive computer-driven machining of parts was suddenly under challenge by the new kid on the block. The owner of the machine shop knew that his business might well be replaced in the future by 3-D printing. But it would take time for the new technology to achieve the fine tolerances and finished products now demanded by his customer base. Meantime, he could not ignore what was happening. He decided to expand into 3-D printing in a small way and ride the wave as the technology developed.
Advances in technology can present opportunities for changing the direction of your business. So can market forces.
Examples: (1) Cars once had hubcaps. They were supplied to vehicle manufacturers by small companies. When automobiles rolled off the production line, hubcaps were in place. Then, suddenly, various market forces dictated the end of the hubcap. (2) Not so many years ago, it was impossible to find gluten-free foods. Today they are everywhere--in response to market forces. (3) Clothing cleaning operations today must be prepared to deal with clothing impregnated at the manufacturer with micro-deodorants, as well as wicking weaves in garments. (4) Landscapers are faced with changing market forces when residential clients opt for the wildflower look instead of high-maintenance lawns. (5) Big companies today can call a small firm specializing in temporary personnel placement to get an accountant or engineer for a specific project, thereby avoiding the costs of adding a permanent employee.
Market forces are everywhere. They continually change and they affect your small business. Be alert to market force changes, not only in your particular market, but to other industry segments as well. Otherwise, you can be blindsided.
Changes in technology and changes in the marketplace roll in almost daily. Frequently they are combined, and the resulting tsunami can wipe out that small business that's caught unaware. Keep up.
Questions? Free answers to your small business problems. Email me at AlWarr16@gmail.com but you MUST start the subject line with BLOG. Otherwise, you'll be deleted along with all the others trying to sell me something. I never share your email with anyone else. Your privacy is always respected.
from personal experience founding and growing small businesses--been there, done that.
Yesterday's blog was about "business drift" that occurs when your business tries to go off in another direction.
Businesses are living entities. Like a child beginning to grow up, businesses always start showing a life pattern peculiar to themselves. As the parent, you must be ever watchful and guide them in the direction you think best.
You can follow where the business is leading you, or you can decide on a better path. It's up to you.
Changing the direction of your business is a big decision. I'm not talking about simply adding another service or product line. I'm talking a drastic change in direction.
Example: A machine shop has spent many years supplying the needs of commercial clients--parts and components meeting specifications. Clients are in various industries, including medical devices, automotive, nuclear, aerospace and others. Suddenly, 3-D printing burst on the scene, a quantum leap in technology. The expensive computer-driven machining of parts was suddenly under challenge by the new kid on the block. The owner of the machine shop knew that his business might well be replaced in the future by 3-D printing. But it would take time for the new technology to achieve the fine tolerances and finished products now demanded by his customer base. Meantime, he could not ignore what was happening. He decided to expand into 3-D printing in a small way and ride the wave as the technology developed.
Advances in technology can present opportunities for changing the direction of your business. So can market forces.
Examples: (1) Cars once had hubcaps. They were supplied to vehicle manufacturers by small companies. When automobiles rolled off the production line, hubcaps were in place. Then, suddenly, various market forces dictated the end of the hubcap. (2) Not so many years ago, it was impossible to find gluten-free foods. Today they are everywhere--in response to market forces. (3) Clothing cleaning operations today must be prepared to deal with clothing impregnated at the manufacturer with micro-deodorants, as well as wicking weaves in garments. (4) Landscapers are faced with changing market forces when residential clients opt for the wildflower look instead of high-maintenance lawns. (5) Big companies today can call a small firm specializing in temporary personnel placement to get an accountant or engineer for a specific project, thereby avoiding the costs of adding a permanent employee.
Market forces are everywhere. They continually change and they affect your small business. Be alert to market force changes, not only in your particular market, but to other industry segments as well. Otherwise, you can be blindsided.
Changes in technology and changes in the marketplace roll in almost daily. Frequently they are combined, and the resulting tsunami can wipe out that small business that's caught unaware. Keep up.
Questions? Free answers to your small business problems. Email me at AlWarr16@gmail.com but you MUST start the subject line with BLOG. Otherwise, you'll be deleted along with all the others trying to sell me something. I never share your email with anyone else. Your privacy is always respected.
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