Free daily tips, information, advice and ideas
to help you better manage your small business.
Buying materials and running your small business using credit cards can be dangerous. It's common. Everyone has done this, but it can get out of control.
Example: Judy runs a pet supply store. In months when cash flow is not flowing, she uses her personal credit cards to buy materials for resale. She has several credit cards and she has good credit--never late and always paying the monthly charge--or more. The problem is that the amount outstanding has been steadily creeping up. It needs to be going in the opposite direction, but Judy cannot make more than the minimum payment.
Example: Emma is a Pilates expert. To get her certification, she used her personal credit card. To get the equipment she needed, she used the credit card again. Then there were the incidentals that she needed. By the time she got into business, Emma was in over her head with credit card debt.
Example: Tom needed several thousand dollars worth of new computing hardware and software. He put everything on his credit card, along with some office furniture and other items. In his excitement of expanding his operation, Tom overspent--all of it on his credit cards.
Credit cards are a marvelous invention. They represent a way to get a loan without the hassle of applying to a bank or credit union. Used wisely, credit cards can help you get into business, expand, and grow. But sooner or later, the bills must be paid.
If you have several credit cards and all of them are killing your monthly budget, it's time to get a handle on the situation. There are several ways to do this. The method I like is to target the one with the smallest total, then double or triple the payments each month until it is paid off. Then tackle the the next one with the smallest balance. Eventually, you'll be left with only the biggest one. Keep paying as much as possible until it's gone.
Credit cards give owners of small businesses some flexibility in managing money. That's the good side of the equation. The bad side is letting things get out of hand.
The thing to keep in mind with credit cards is this--you are using other people's money. Sooner or later they will demand repayment. Ain't no such thing as a free lunch.
Friday, May 22, 2015
Thursday, May 21, 2015
Changing directions
Free daily tips, information, advice, and ideas
to help you better manage your small business.
Opportunities to change directions are everywhere. Before you jump, do some careful consideration and planning.
You might have never operated a business before, and you want to take the plunge. Or, you might be in business and want to take off in another direction. Either way, the road ahead can be rocky.
Markets drive all businesses. Carefully check out the market you're about to tackle. Is it stable? Mature? Just opening up? Can you translate that market into numbers? Do the numbers make sense? Can you turn the numbers into a business plan?
Example: Marcia was in corporate America and she was unhappy. She wanted to run her own operation. First questions: Should she buy an existing business? Should she buy a franchise? Did she have a compelling interest that she could turn into a business and start up from scratch? Second questions: Did she have enough money to buy, to start up, to support herself for at least a year? Would the market support what she wanted to do? Did her business plan give her the confidence to proceed?
Example: Tom is a chiropractor. He has a small office that has attracted a regular list of clients, but growth has leveled off. Most of his clients want evening appointments which left Tom with open time during the days. He decided to open a second office at a local truck stop. Truckers traveled the major interstate in large numbers and many of them had back and neck problems. Today, Tom spends about half of his time at each office. The "old" office is by appointment only. The "new" office is walk-in, and Tom has added a massage therapist to this side of the operation.
Example: Mary runs a small cafe. It seems to be lagging. Is it just the economy which, given time, will turn around? Or should Mary start a catering operation, reaching out to corporations, event organizers, weddings and the like? Should she start cooking classes and reach out to people who will pay to attend?
These examples pose questions that need answers. And the answers come from the marketplace. Before you change directions, do that business plan.
Your business plan reduces all the verbiage to hard numbers. All of us know that politicians can fudge in speaking words, but the bottom line numbers don't lie. It's the same in changing directions in business. Reduce your dreams to numbers and you'll sleep better at night.
to help you better manage your small business.
Opportunities to change directions are everywhere. Before you jump, do some careful consideration and planning.
You might have never operated a business before, and you want to take the plunge. Or, you might be in business and want to take off in another direction. Either way, the road ahead can be rocky.
Markets drive all businesses. Carefully check out the market you're about to tackle. Is it stable? Mature? Just opening up? Can you translate that market into numbers? Do the numbers make sense? Can you turn the numbers into a business plan?
Example: Marcia was in corporate America and she was unhappy. She wanted to run her own operation. First questions: Should she buy an existing business? Should she buy a franchise? Did she have a compelling interest that she could turn into a business and start up from scratch? Second questions: Did she have enough money to buy, to start up, to support herself for at least a year? Would the market support what she wanted to do? Did her business plan give her the confidence to proceed?
Example: Tom is a chiropractor. He has a small office that has attracted a regular list of clients, but growth has leveled off. Most of his clients want evening appointments which left Tom with open time during the days. He decided to open a second office at a local truck stop. Truckers traveled the major interstate in large numbers and many of them had back and neck problems. Today, Tom spends about half of his time at each office. The "old" office is by appointment only. The "new" office is walk-in, and Tom has added a massage therapist to this side of the operation.
Example: Mary runs a small cafe. It seems to be lagging. Is it just the economy which, given time, will turn around? Or should Mary start a catering operation, reaching out to corporations, event organizers, weddings and the like? Should she start cooking classes and reach out to people who will pay to attend?
These examples pose questions that need answers. And the answers come from the marketplace. Before you change directions, do that business plan.
Your business plan reduces all the verbiage to hard numbers. All of us know that politicians can fudge in speaking words, but the bottom line numbers don't lie. It's the same in changing directions in business. Reduce your dreams to numbers and you'll sleep better at night.
Wednesday, May 20, 2015
Hiring new employees
Free daily tips, information, advice and ideas
to help you better manage your small business.
Over the years, many business owners have asked me about hiring employees. This is a basic question that goes to the long-term goals of your business.
If yours is a small machine shop and you want to add an employee to help with the growing overload of jobs, then you want someone with specific experience on the machines your have in your shop. But if you are looking for an employee to "grow with" you might look in another direction.
Basic skills are necessary in any employee. You always want someone who can read and write, do basic math, get to work on time, and gets along well with others. That said, I have learned the hard way that a college degree does NOT always mean that you hire the person who comes looking for a job.
College degrees are a dime a dozen these days. They have come to mean very little in the real world of business. Of course, a degree in economics means that the person has passed certain levels of knowledge. He or she can regurgitate, but can he or she think their way out of a paper bag?
I have hired many employees in the past who did not know how to operate the equipment I wanted them to run. But the person was bright-eyed, creative, anxious and willing to be a good contributor to the company. I could teach them to do what I wanted them to do every day, providing they had the basics for me to work with.
Example: Mary runs a flower shop. She designs flower arrangements herself and has a couple of helpers who finish the arrangements. The time came when she needed to hire a full-time designer. Neither of the helpers expressed any interest in design, so Mary went looking for a new employee. To her surprise, she found a graphic designer whose creativity perfectly matched the needs of the flower shop. Mary realized that she was hiring a creative person--not a floral designer who had years of experience. Mary worked with the new employee to bring her up to speed in floral design.
Hiring a new employee is not to be taken lightly. Bringing a new person into your operation will change the makeup of the business. When you sift through the applications of new people, make certain you are looking for the right combination of skills and experience.
Neither my mother nor my father finished high school. But both of them learned to think, to face reality and figure out solutions to problems. It is the most valuable trait you look for in new employees.
to help you better manage your small business.
Over the years, many business owners have asked me about hiring employees. This is a basic question that goes to the long-term goals of your business.
If yours is a small machine shop and you want to add an employee to help with the growing overload of jobs, then you want someone with specific experience on the machines your have in your shop. But if you are looking for an employee to "grow with" you might look in another direction.
Basic skills are necessary in any employee. You always want someone who can read and write, do basic math, get to work on time, and gets along well with others. That said, I have learned the hard way that a college degree does NOT always mean that you hire the person who comes looking for a job.
College degrees are a dime a dozen these days. They have come to mean very little in the real world of business. Of course, a degree in economics means that the person has passed certain levels of knowledge. He or she can regurgitate, but can he or she think their way out of a paper bag?
I have hired many employees in the past who did not know how to operate the equipment I wanted them to run. But the person was bright-eyed, creative, anxious and willing to be a good contributor to the company. I could teach them to do what I wanted them to do every day, providing they had the basics for me to work with.
Example: Mary runs a flower shop. She designs flower arrangements herself and has a couple of helpers who finish the arrangements. The time came when she needed to hire a full-time designer. Neither of the helpers expressed any interest in design, so Mary went looking for a new employee. To her surprise, she found a graphic designer whose creativity perfectly matched the needs of the flower shop. Mary realized that she was hiring a creative person--not a floral designer who had years of experience. Mary worked with the new employee to bring her up to speed in floral design.
Hiring a new employee is not to be taken lightly. Bringing a new person into your operation will change the makeup of the business. When you sift through the applications of new people, make certain you are looking for the right combination of skills and experience.
Neither my mother nor my father finished high school. But both of them learned to think, to face reality and figure out solutions to problems. It is the most valuable trait you look for in new employees.
Tuesday, May 19, 2015
Customer contacts
Free daily tips, information, advice and ideas
to help you better manage your small business.
Turn customer contacts into fun experiences, educational sessions, and go-to places for information. The idea is to position your operation in the forefront of customers' minds. Engage your customers and they will return again and again--bringing others with them.
Example: An accountant sees clients only at tax time. Take it to the next level. Invite several of them to attend a special session where you'll educate them on the latest tax rules and regulations. You'll answer all their questions, serve coffee, and demonstrate new software for handling accounts. You become the go-to place for expert information, and your clients refer others to you.
Example: A jewelry maker designs earrings, necklaces, and more in gold and silver. One-of-a-kind pieces are offered through the website. Social media drives eyeballs to the site. Clients are invited to submit their own ideas for custom designs, and rough illustrations arrive in emails. There is a back-and-forth to home in on the final design, but the jewelry maker has been very successful in providing finished pieces to happy customers--all done long distance.
Example: A hypnotherapist offers an open seminar on how hypnosis can be effective in pain management. The session is directed to and open to doctors and nurses. Post-surgery patients are referred to the hypnotherapist following the session.
Example: A furniture store looks at every walk-in as challenge to fill a room with appropriate pieces. When a client expresses interest in a recliner, he is guided to a computer screen to show how the piece will look in a room setting. The conversation leads to room layouts, and the client is encouraged to "play around" on the computer--designing a room with furniture. It leads to more sales and a customer who returns again and again.
Becoming involved with customers is good for business. Help them understand the possibilities and guide them through the complexities of whatever their wants might be.
Sometime, people don't actually know what they need or want. It's up to you to put a face on that need or want. Then you can help them solve their problem.
When you are the go-to expert in your field, customers will gladly pay extra for your expertise. Just remember to build the cost of this into your pricing schedules. You are selling not only a product or service. You are selling your knowledge and experience.
to help you better manage your small business.
Turn customer contacts into fun experiences, educational sessions, and go-to places for information. The idea is to position your operation in the forefront of customers' minds. Engage your customers and they will return again and again--bringing others with them.
Example: An accountant sees clients only at tax time. Take it to the next level. Invite several of them to attend a special session where you'll educate them on the latest tax rules and regulations. You'll answer all their questions, serve coffee, and demonstrate new software for handling accounts. You become the go-to place for expert information, and your clients refer others to you.
Example: A jewelry maker designs earrings, necklaces, and more in gold and silver. One-of-a-kind pieces are offered through the website. Social media drives eyeballs to the site. Clients are invited to submit their own ideas for custom designs, and rough illustrations arrive in emails. There is a back-and-forth to home in on the final design, but the jewelry maker has been very successful in providing finished pieces to happy customers--all done long distance.
Example: A hypnotherapist offers an open seminar on how hypnosis can be effective in pain management. The session is directed to and open to doctors and nurses. Post-surgery patients are referred to the hypnotherapist following the session.
Example: A furniture store looks at every walk-in as challenge to fill a room with appropriate pieces. When a client expresses interest in a recliner, he is guided to a computer screen to show how the piece will look in a room setting. The conversation leads to room layouts, and the client is encouraged to "play around" on the computer--designing a room with furniture. It leads to more sales and a customer who returns again and again.
Becoming involved with customers is good for business. Help them understand the possibilities and guide them through the complexities of whatever their wants might be.
Sometime, people don't actually know what they need or want. It's up to you to put a face on that need or want. Then you can help them solve their problem.
When you are the go-to expert in your field, customers will gladly pay extra for your expertise. Just remember to build the cost of this into your pricing schedules. You are selling not only a product or service. You are selling your knowledge and experience.
Monday, May 18, 2015
Arranging for space
Free daily tips, information, advice and ideas
to help you better manage your small business.
Expanding? Need space for that new business? Moving out of the house?
You have three choices. You can lease the space you need. You can share space with another business. Or you can buy a building.
Example: Rita was excited. She was about the realize her dream of establishing her own retail shop. She found a storefront in an up and coming town that she thought was perfect. The landlord was asking a rent that she could afford, but he wanted only a one year lease. This raised a red flag in Rita's mind. On the one hand, if the business did not go well, she would be out of the lease after 12 months. On the other hand, if the business took off, she would be going back to extend the lease after only one year. The landlord would be in the best position to ask a much higher rent because she would not want to move. Rita stood her ground, asking for a 5-year lease. Finally, they agreed to a 3-year lease.
Example: Diane is a personal trainer. She sees private clients in their homes, and she sees corporate employees at company gyms. She is building a client base and reputation so that one day she will be able to open her own place.
Example: John is a furniture designer. He could not afford a space of his own so he went looking for an upscale gift shop. He found one that offered original works by artists and artisans, and he made arrangements to consign his furniture.
Example: Elise is a potter. She used part of her inheritance to buy a small building. There, she established a working studio and display shop. She is supplementing her income by teaching--group and individual instruction. She is set up so that the business pays her back a monthly rental income, thereby recouping over time the money she spent buying the building.
Explore all the possibilities when arranging for space--especially when you are starting out. Opportunities vary. Make certain that the arrangement you make matches your long term goals.
Many will tell you that in today's computerized world, you don't need a space. Well, you'll have to handle your customers/clients somewhere--even if it's in your home office.
to help you better manage your small business.
Expanding? Need space for that new business? Moving out of the house?
You have three choices. You can lease the space you need. You can share space with another business. Or you can buy a building.
Example: Rita was excited. She was about the realize her dream of establishing her own retail shop. She found a storefront in an up and coming town that she thought was perfect. The landlord was asking a rent that she could afford, but he wanted only a one year lease. This raised a red flag in Rita's mind. On the one hand, if the business did not go well, she would be out of the lease after 12 months. On the other hand, if the business took off, she would be going back to extend the lease after only one year. The landlord would be in the best position to ask a much higher rent because she would not want to move. Rita stood her ground, asking for a 5-year lease. Finally, they agreed to a 3-year lease.
Example: Diane is a personal trainer. She sees private clients in their homes, and she sees corporate employees at company gyms. She is building a client base and reputation so that one day she will be able to open her own place.
Example: John is a furniture designer. He could not afford a space of his own so he went looking for an upscale gift shop. He found one that offered original works by artists and artisans, and he made arrangements to consign his furniture.
Example: Elise is a potter. She used part of her inheritance to buy a small building. There, she established a working studio and display shop. She is supplementing her income by teaching--group and individual instruction. She is set up so that the business pays her back a monthly rental income, thereby recouping over time the money she spent buying the building.
Explore all the possibilities when arranging for space--especially when you are starting out. Opportunities vary. Make certain that the arrangement you make matches your long term goals.
Many will tell you that in today's computerized world, you don't need a space. Well, you'll have to handle your customers/clients somewhere--even if it's in your home office.
Friday, May 15, 2015
Getting more referrals
Free daily tips, information, advice and ideas
to help you better manage your small business.
New customers and clients show up at your place all the time. Many come from referrals. John refers Mary who visits your website. Joan refers Ted who walks into your shop.
Referrals result from the natural interactions between people. When you are impressed with the work your plumber did, you want others to know about it. When someone admires the coat you're wearing, you tell them about the wonderful little shop where you found it.
You can do some things to speed up the number of referrals coming your way. This means you are growing your business.
Example: Pam is a massage therapist. She posts pictures on her Facebook page showing her hands hard at work on necks, legs, shoulders and more. The pictures get "liked" on Facebook and passed around. This has the effect of referring others to Pam. It has worked so well, Pam decided to post pictures on other social media. Today, Pam's appointment bookings extend far into the future and she's added another massage therapist to her staff.
Pictures are powerful communicators. Many of today's social media offer opportunities--mostly free--to get the word out there and passed around.
Social media, extensive as they've become, represent only one method to get more referrals. There are other ways to keep the word zIpping around the community.
Example: Jill is an attorney concentrating on elder care and the problems seniors have. She regularly puts on informational sessions at senior centers, organizational meetings, and other gatherings. She talks about living wills, social security, elder care and more. She answers questions from the audience and helps people understand the implications of their problems. These sessions have the effect of spreading Jill's reputation and calls come in for appointments. Attendees also refer others to Jill--not only other seniors, but grandchildren as well who have legal problems.
Getting the word out to the community can take many forms. Some businesses sponsor sports teams. Others hold classes to teach pottery making or baking fancy breads. Still others hold events.
Example: Lisa runs a health foods store. Once each month, she schedules an event at the store designed to increase awareness of healthy living. One month a nutritionist will talk about eating habits and foods. Another month an organic farmer will answer questions about the problems of raising vegetables organically. A chef has offered cooking lessons and a Reiki expert has demonstrated Reiki to the group. Lisa's reputation is spreading.
Getting more referrals can be an inexpensive way to grow your business. The way you go about it is up to you. Just keep in mind that many methods are available. And with today's social media, getting more referrals is easier than it has ever been.
Getting more referrals means putting your customers and clients to work for you. They will be doing it anyway, so what you want to do is to speed up the process. Keep it positive.
to help you better manage your small business.
New customers and clients show up at your place all the time. Many come from referrals. John refers Mary who visits your website. Joan refers Ted who walks into your shop.
Referrals result from the natural interactions between people. When you are impressed with the work your plumber did, you want others to know about it. When someone admires the coat you're wearing, you tell them about the wonderful little shop where you found it.
You can do some things to speed up the number of referrals coming your way. This means you are growing your business.
Example: Pam is a massage therapist. She posts pictures on her Facebook page showing her hands hard at work on necks, legs, shoulders and more. The pictures get "liked" on Facebook and passed around. This has the effect of referring others to Pam. It has worked so well, Pam decided to post pictures on other social media. Today, Pam's appointment bookings extend far into the future and she's added another massage therapist to her staff.
Pictures are powerful communicators. Many of today's social media offer opportunities--mostly free--to get the word out there and passed around.
Social media, extensive as they've become, represent only one method to get more referrals. There are other ways to keep the word zIpping around the community.
Example: Jill is an attorney concentrating on elder care and the problems seniors have. She regularly puts on informational sessions at senior centers, organizational meetings, and other gatherings. She talks about living wills, social security, elder care and more. She answers questions from the audience and helps people understand the implications of their problems. These sessions have the effect of spreading Jill's reputation and calls come in for appointments. Attendees also refer others to Jill--not only other seniors, but grandchildren as well who have legal problems.
Getting the word out to the community can take many forms. Some businesses sponsor sports teams. Others hold classes to teach pottery making or baking fancy breads. Still others hold events.
Example: Lisa runs a health foods store. Once each month, she schedules an event at the store designed to increase awareness of healthy living. One month a nutritionist will talk about eating habits and foods. Another month an organic farmer will answer questions about the problems of raising vegetables organically. A chef has offered cooking lessons and a Reiki expert has demonstrated Reiki to the group. Lisa's reputation is spreading.
Getting more referrals can be an inexpensive way to grow your business. The way you go about it is up to you. Just keep in mind that many methods are available. And with today's social media, getting more referrals is easier than it has ever been.
Getting more referrals means putting your customers and clients to work for you. They will be doing it anyway, so what you want to do is to speed up the process. Keep it positive.
Thursday, May 14, 2015
Do more for clients
Free daily tips, information, advice and ideas
to help you better manage your small business.
Clients tend to see you for one thing. They pigeon hole you. They file you away as a provider of something they need.
Joe takes care of my lawn. Mary is my fashion expert. Greg gets the kinks out of my neck and shoulder. Amy styles my hair. And Frank makes the best coffee in the world.
In business, you must continually remind your customers/clients that you can do more. Otherwise, you'll miss opportunities.
Example: Eli is an independent insurance agent. He has built up a client base filling their needs for insurance--homeowners, accident, life. He frequently reminds his clients that he can write other types of insurance--flood, loss of business, key man or partners insurance. It has brought more calls and clients.
Example: Sue is a hypnotherapist. She specializes in offering sessions on weight reduction and stopping smoking. Recently, she reached out to local physicians, informing them that she could help their patients with weight problems and smoking addictions. It resulted in more calls. When Sue informed physicians that she could also handle pain management problems, even more calls came in.
Example: John designs websites for clients. When he informed them that he could set them up on social media, the calls came in. His clients had not made the connection until John laid it out for them.
Example: Donna's restaurant was a go-to place for healthy meals, and customers regularly returned and referred others. Donna also offered catering, but she did not remind her regulars often enough that she could handle their parties and special events. When she lost several catering jobs to others, she realized she needed to put the word out on a regular basis.
Every business tends to settle into a comfortable way of doing business. And the customers/clients tend to settle into seeing you in one way or another.
Remind people of all the things you can do for them. It helps to grow and expand the business among a client base already familiar with you.
Every time you interact with customers/clients, try to remind them of all the ways you can serve them. Otherwise, they will tend to think of you in a very narrow way.
to help you better manage your small business.
Clients tend to see you for one thing. They pigeon hole you. They file you away as a provider of something they need.
Joe takes care of my lawn. Mary is my fashion expert. Greg gets the kinks out of my neck and shoulder. Amy styles my hair. And Frank makes the best coffee in the world.
In business, you must continually remind your customers/clients that you can do more. Otherwise, you'll miss opportunities.
Example: Eli is an independent insurance agent. He has built up a client base filling their needs for insurance--homeowners, accident, life. He frequently reminds his clients that he can write other types of insurance--flood, loss of business, key man or partners insurance. It has brought more calls and clients.
Example: Sue is a hypnotherapist. She specializes in offering sessions on weight reduction and stopping smoking. Recently, she reached out to local physicians, informing them that she could help their patients with weight problems and smoking addictions. It resulted in more calls. When Sue informed physicians that she could also handle pain management problems, even more calls came in.
Example: John designs websites for clients. When he informed them that he could set them up on social media, the calls came in. His clients had not made the connection until John laid it out for them.
Example: Donna's restaurant was a go-to place for healthy meals, and customers regularly returned and referred others. Donna also offered catering, but she did not remind her regulars often enough that she could handle their parties and special events. When she lost several catering jobs to others, she realized she needed to put the word out on a regular basis.
Every business tends to settle into a comfortable way of doing business. And the customers/clients tend to settle into seeing you in one way or another.
Remind people of all the things you can do for them. It helps to grow and expand the business among a client base already familiar with you.
Every time you interact with customers/clients, try to remind them of all the ways you can serve them. Otherwise, they will tend to think of you in a very narrow way.
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