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to help you better manage your small business
The heart of business planning is the marketing component. It's the market that will help you be all you can be. With a market out there for your goods and services, you can grow and expand. Without it, you will not go anywhere.
When you apply for a loan, however, the lender wants as much information about you and your business as you can provide. The lender can be a bank or a private party, but the request will come for you to provide a formal business plan.
Example: In one of my own businesses, I once applied to a bank for a substantial loan. The bank wanted to know all of my personal history as well as the complete background information on my business. So much for five years history. Then, they wanted to know how I had arrived at the $100,000 I was requesting. They were concerned that I might be requesting too little or too much.
Questions: How would I spend the funds? How did I know that I was requesting enough? How would I pay them back? How would I handle sales problems as they surely would arise? How would I handle competition? How would I ride out a general economic downturn? How well did I know my industry? Was the market on an upward trend?
Their questions seemed endless, but I had to admit that they were pertinent. After all, the bank was considering putting $100,000 on the table. They wanted assurances that I could be trusted and would pay back the loan.
Then came the kicker. Not only did they want written answers to their questions, but they wanted everything turned into numbers. And they wanted the numbers projected forward for five years.
Reducing verbiage to hard numbers is like wringing all the water out of a wet towel. When you do the numbers, all the crap disappears. Your history to date and your projections into the future is where the rubber meets the road.
The numbers give validity to all that you say in a written plan. This is where you convince someone else that they can believe in your market projections.
Even if you are not going for a loan at a bank, you owe it to yourself to do some serious planning. You don't need a lengthy written plan for your business. But you do need to do some serious thinking about the years ahead. Just remember that planning is putting numbers to the future market. It's hard to fudge with numbers.
Don't neglect the planning part of running your small business. It's some of the most important work you'll ever do.
Wednesday, February 10, 2016
Tuesday, February 9, 2016
How to start planning
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Planning is difficult for some business owners. But planning is necessary. If you are in business, you have done some planning. You might have done it without being fully aware.
Whether you are just starting out or you are currently running your business, you will do well to put yourself through the planning process. So, how do you begin?
A business plan matches you with the market. Your plan gets the marketplace firmly in mind, and then you can offer your goods or services. When there's a match, you can begin to see how you can grow into your business future.
Questions: Is there truly a market for my goods or services? How big is that market? What part or parts of that market can I serve? What is the future of that market? Is it growing or contracting or stable? Can I put numbers to how much of that market I might capture? What's the impact of technology? What's the competition already in place?
More questions: Is this market new, and, if so, is it likely to continue? Is it bricks-and-mortar based with a simple website presence? Can I reach out to expand via social media? Can the market be addressed entirely on the net? What's the best way for me to proceed?
Many more questions will occur to you. Some will be related to the overall economy. Others will be related to the particular industry you are in. I've found it useful to jot down questions/thoughts/ideas as they come to me. I throw these pieces of paper into a box. I call this my idea box. About every 2 or 3 months, I go through everything.
Using the questions and the idea box, my planning is accomplished. Of course, no bank will write a loan based on this. But this is the beginning. To get it organized and written down into a formal plan, you will need an outline. Contact your Small Business Development Center for help--it's free. Or, do a Google search for "Business plan" and you'll get many possibilities.
This is drawn from my personal experience. It has worked for me in starting and operating 4 small businesses. You'll find your own way.
Planning in business is done all the time. You don't get far without a plan. Always remember, however, that the most important part of planning is the market. After all, you cannot sell anything unless there's a market for it.
to help you better manage your small business
Planning is difficult for some business owners. But planning is necessary. If you are in business, you have done some planning. You might have done it without being fully aware.
Whether you are just starting out or you are currently running your business, you will do well to put yourself through the planning process. So, how do you begin?
A business plan matches you with the market. Your plan gets the marketplace firmly in mind, and then you can offer your goods or services. When there's a match, you can begin to see how you can grow into your business future.
Questions: Is there truly a market for my goods or services? How big is that market? What part or parts of that market can I serve? What is the future of that market? Is it growing or contracting or stable? Can I put numbers to how much of that market I might capture? What's the impact of technology? What's the competition already in place?
More questions: Is this market new, and, if so, is it likely to continue? Is it bricks-and-mortar based with a simple website presence? Can I reach out to expand via social media? Can the market be addressed entirely on the net? What's the best way for me to proceed?
Many more questions will occur to you. Some will be related to the overall economy. Others will be related to the particular industry you are in. I've found it useful to jot down questions/thoughts/ideas as they come to me. I throw these pieces of paper into a box. I call this my idea box. About every 2 or 3 months, I go through everything.
Using the questions and the idea box, my planning is accomplished. Of course, no bank will write a loan based on this. But this is the beginning. To get it organized and written down into a formal plan, you will need an outline. Contact your Small Business Development Center for help--it's free. Or, do a Google search for "Business plan" and you'll get many possibilities.
This is drawn from my personal experience. It has worked for me in starting and operating 4 small businesses. You'll find your own way.
Planning in business is done all the time. You don't get far without a plan. Always remember, however, that the most important part of planning is the market. After all, you cannot sell anything unless there's a market for it.
Monday, February 8, 2016
Finding a new employee
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Finding a new employee can turn into a real problem. Most good employees already have jobs. You can hire a new employee away from another business, but it will cost you.
To find a new employee for your business, first define what that new person will contribute. New employees must fit into your overall business plan. Where do you want to go? And how can a new person help you get there?
Many people who apply for a job don't have basic skills. They don't get to work on time, they cannot read or write, they don't know how to answer a business phone, and they don't know how to apply themselves to a problem, solve it, and move on to the next problem.
In my own experience, I have placed an ad in a newspaper. Bad idea, especially in today's world. I dreaded the responses because a wide range of unqualified people showed up.
Good employees have a sparkle in their eyes. They have learned self-discipline. They want to learn new things. They want to be a part of the business. They want to contribute to the success of something bigger than themselves. They want to feel good about what they do.
Through trial and error, I learned to look beyond the experience of the person in front of me. I learned that I could teach them the specific tasks I wanted them to do. I learned to look beyond the resume--in fact, it they arrived resume in hand, I simply laid it aside and began a conversation.
I always wanted to know if the applicant had served in the military. If so, then I knew self-discipline had become a part of the person. Military people have learned the importance of a team effort and they have learned to respect others. With these basics in place, I could teach them everything they needed to know.
Our public schools today are too frequently little more than baby-sitting operations. Students are not taught to engage life. Anything goes--there is little self-discipline. Educators experiment with the lives of our young people, coddling them, and not preparing them for the real life situations they will face later on. It is a huge disservice to the youngsters.
When you go looking for your next new employee, forget the resume. Resumes can be manufactured--and many are. Look instead for fire in the belly and self-discipline. Look for a person who can contribute to the team and help get you where you want to go in your business. Look for someone who has the potential to eventually replace you.
To find that next new employee, have a conversation with the best employee you currently have. Good employees know other good people. Ask them to refer a couple of prospects to you. Take it from there.
to help you better manage your small business
Finding a new employee can turn into a real problem. Most good employees already have jobs. You can hire a new employee away from another business, but it will cost you.
To find a new employee for your business, first define what that new person will contribute. New employees must fit into your overall business plan. Where do you want to go? And how can a new person help you get there?
Many people who apply for a job don't have basic skills. They don't get to work on time, they cannot read or write, they don't know how to answer a business phone, and they don't know how to apply themselves to a problem, solve it, and move on to the next problem.
In my own experience, I have placed an ad in a newspaper. Bad idea, especially in today's world. I dreaded the responses because a wide range of unqualified people showed up.
Good employees have a sparkle in their eyes. They have learned self-discipline. They want to learn new things. They want to be a part of the business. They want to contribute to the success of something bigger than themselves. They want to feel good about what they do.
Through trial and error, I learned to look beyond the experience of the person in front of me. I learned that I could teach them the specific tasks I wanted them to do. I learned to look beyond the resume--in fact, it they arrived resume in hand, I simply laid it aside and began a conversation.
I always wanted to know if the applicant had served in the military. If so, then I knew self-discipline had become a part of the person. Military people have learned the importance of a team effort and they have learned to respect others. With these basics in place, I could teach them everything they needed to know.
Our public schools today are too frequently little more than baby-sitting operations. Students are not taught to engage life. Anything goes--there is little self-discipline. Educators experiment with the lives of our young people, coddling them, and not preparing them for the real life situations they will face later on. It is a huge disservice to the youngsters.
When you go looking for your next new employee, forget the resume. Resumes can be manufactured--and many are. Look instead for fire in the belly and self-discipline. Look for a person who can contribute to the team and help get you where you want to go in your business. Look for someone who has the potential to eventually replace you.
To find that next new employee, have a conversation with the best employee you currently have. Good employees know other good people. Ask them to refer a couple of prospects to you. Take it from there.
Friday, February 5, 2016
Getting paid on time
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to help you better manage your small business
If you run a service business or small manufacturing operation, you do the work and then you wait to be paid. The wait can be long. Meanwhile, your payroll and other bill continue.
It's particularly frustrating if you are dealing with large companies. They have procedures, and your bills can languish in the bowels of their accounts payable departments.
You can do some things to speed up the payments process. Here are three things I have used myself in businesses I've operated.
1. Change your terms. Offer a discount for payment within a short period of time. I've used 2% discount if paid within 10 days. When invoices arrive at a company's accounts payable department, those with discounts get quicker attention. For you, it's a way of using their system to prioritize payment of your invoice. 2%-30 days also works well.
2. Set up progress payments. This method depends on the business. If you are providing significant inputs of labor and materials to accomplish a job that stretches over time, set up contractual milestones that trigger partial payments as the work progresses. As project phases are completed, send appropriate invoices, referencing the negotiated agreement. I've used this in a printing operation where big jobs could stretch out over several weeks. Construction businesses use this all the time, as do consultants in various fields.
3. Develop a close relationship with the contact you deal with in a big company. This is key. The contact might be a low level manager or a senior vice president. But if you're not being paid in a timely manner, a face-to-face conversation with your contact in the big company can put pressure to get your invoice paid. Calls to the accounts payable department will be of little value in resolving a problem--or, in some cases, a friendly call might be of great help.
I once had a serious conversation with a senior vice president of a major corporation about this. His company was three months in arrears and still ordering. He had approval authority and he would sign off on invoices and forward them to the accounts payable people. There, my invoices would linger. In our conversation, I told him that I was continuing to provide services, but it amounted to providing financing to his company. He suddenly understood and corrected the situation.
In a way, my small business was providing financing for his big company. By not paying my invoices, they were in effect getting a loan from me. Big companies do this to small suppliers, the thinking being that they can easily replace small suppliers with others clamoring for the business. Meanwhile, the bottom line of the big company looks better.
Getting paid quickly is crucial to the health of your small business. Never yell, but use quiet pressure to get paid on time.
to help you better manage your small business
If you run a service business or small manufacturing operation, you do the work and then you wait to be paid. The wait can be long. Meanwhile, your payroll and other bill continue.
It's particularly frustrating if you are dealing with large companies. They have procedures, and your bills can languish in the bowels of their accounts payable departments.
You can do some things to speed up the payments process. Here are three things I have used myself in businesses I've operated.
1. Change your terms. Offer a discount for payment within a short period of time. I've used 2% discount if paid within 10 days. When invoices arrive at a company's accounts payable department, those with discounts get quicker attention. For you, it's a way of using their system to prioritize payment of your invoice. 2%-30 days also works well.
2. Set up progress payments. This method depends on the business. If you are providing significant inputs of labor and materials to accomplish a job that stretches over time, set up contractual milestones that trigger partial payments as the work progresses. As project phases are completed, send appropriate invoices, referencing the negotiated agreement. I've used this in a printing operation where big jobs could stretch out over several weeks. Construction businesses use this all the time, as do consultants in various fields.
3. Develop a close relationship with the contact you deal with in a big company. This is key. The contact might be a low level manager or a senior vice president. But if you're not being paid in a timely manner, a face-to-face conversation with your contact in the big company can put pressure to get your invoice paid. Calls to the accounts payable department will be of little value in resolving a problem--or, in some cases, a friendly call might be of great help.
I once had a serious conversation with a senior vice president of a major corporation about this. His company was three months in arrears and still ordering. He had approval authority and he would sign off on invoices and forward them to the accounts payable people. There, my invoices would linger. In our conversation, I told him that I was continuing to provide services, but it amounted to providing financing to his company. He suddenly understood and corrected the situation.
In a way, my small business was providing financing for his big company. By not paying my invoices, they were in effect getting a loan from me. Big companies do this to small suppliers, the thinking being that they can easily replace small suppliers with others clamoring for the business. Meanwhile, the bottom line of the big company looks better.
Getting paid quickly is crucial to the health of your small business. Never yell, but use quiet pressure to get paid on time.
Thursday, February 4, 2016
Holidays for everyone
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to help you better manage your small business
Employees expect paid holidays. But in today's world, it can mean problems for a business. Just which holidays are paid?
Years ago I knew a business owner who solved the problem in a very unique way. As his business grew from 5 to 10 and then from 10 to 20 employees, the people he hired represented different ethnic groups and backgrounds. His business was open 7 days, 365 days a year, and he had everyone working together like a well-oiled machine--except for the holidays.
The company started out in the 1970s with 9 paid holidays--all designated. The business was open on these days and there was always a scramble as to who would be working. The holidays were New Year's Day, President's Day, Easter, Memorial Day, Fourth of July, Labor Day, Veteran's Day, Thanksgiving and Christmas. In addition, the company paid 3 personal days each calendar year. All in all, there were 12 days off with pay each year (not counting sick days or vacation days).
As the years went by, the business grew, and complaints about the holidays began to roll in. A Jewish man wanted to take Jewish holidays. An employee from Egypt wanted Islamic holidays. An African-American wanted to take off on Martin Luther King Day. A Chinese guy wondered why he had to take off any holiday. An atheist refused to take off Easter and Christmas. And a Buddhist wanted to take off on his birthday.
The owner of the business solved the problem in a very unique way. The company dropped all holidays, leaving no official ones. Instead, every employee was entitled to, and paid for, 12 personal days during each calendar year. They could be taken no more than two days together, and at least one week's notice had to be given in writing. The 12 days could be taken or not--if not taken, they were not carried forward into the next year.
The solution tossed the holiday problem squarely into the employee's lap. Interestingly, some of the loudest requests for religious holidays are now spent elsewhere during the calendar year. One employee began taking Groundhog's Day and another opted for Halloween.
You might consider this option in your own business. Whatever you do, however, make certain you are in compliance with all the regulations coming at you these days.
Contrary to popular belief, business owners do not get any time off. You carry your worries with you wherever you go. While the lawyers and busybodies who write the rules relax on Memorial Day, you are hard at work.
to help you better manage your small business
Employees expect paid holidays. But in today's world, it can mean problems for a business. Just which holidays are paid?
Years ago I knew a business owner who solved the problem in a very unique way. As his business grew from 5 to 10 and then from 10 to 20 employees, the people he hired represented different ethnic groups and backgrounds. His business was open 7 days, 365 days a year, and he had everyone working together like a well-oiled machine--except for the holidays.
The company started out in the 1970s with 9 paid holidays--all designated. The business was open on these days and there was always a scramble as to who would be working. The holidays were New Year's Day, President's Day, Easter, Memorial Day, Fourth of July, Labor Day, Veteran's Day, Thanksgiving and Christmas. In addition, the company paid 3 personal days each calendar year. All in all, there were 12 days off with pay each year (not counting sick days or vacation days).
As the years went by, the business grew, and complaints about the holidays began to roll in. A Jewish man wanted to take Jewish holidays. An employee from Egypt wanted Islamic holidays. An African-American wanted to take off on Martin Luther King Day. A Chinese guy wondered why he had to take off any holiday. An atheist refused to take off Easter and Christmas. And a Buddhist wanted to take off on his birthday.
The owner of the business solved the problem in a very unique way. The company dropped all holidays, leaving no official ones. Instead, every employee was entitled to, and paid for, 12 personal days during each calendar year. They could be taken no more than two days together, and at least one week's notice had to be given in writing. The 12 days could be taken or not--if not taken, they were not carried forward into the next year.
The solution tossed the holiday problem squarely into the employee's lap. Interestingly, some of the loudest requests for religious holidays are now spent elsewhere during the calendar year. One employee began taking Groundhog's Day and another opted for Halloween.
You might consider this option in your own business. Whatever you do, however, make certain you are in compliance with all the regulations coming at you these days.
Contrary to popular belief, business owners do not get any time off. You carry your worries with you wherever you go. While the lawyers and busybodies who write the rules relax on Memorial Day, you are hard at work.
Wednesday, February 3, 2016
Listening expands your biz
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Sometimes an idea to expand your small business comes at you from an unexpected direction. Even after you do careful thought and planning, good expansion ideas are where you find them.
Listen carefully to your current clients and customers. They can point you in a completely new direction. Of course, you always listen to them. But do you listen carefully?
Example: Mary runs a salon and spa. When she noticed that many of her clients were undergoing cancer treatments, she felt badly for them and wanted to help. She decided to add oncology esthetician services. After doing a search, she found an independent certified esthetician and made arrangements to offer the service at her place. Mary had expanded the services she offered, and it attracted additional people. When she posted the service on Facebook, many more arrived.
Example: Alex runs a landscaping business. He did lots of fall cleanup, winter pruning, spring planting, and year-round mulching. Many of his customers had questions about shrubs and perennials that Alex could not answer. He thought that this might be an area for expanding, so he contacted a garden center. They came to a partnership understanding and each began offering the other's services. Alex now has a bigger base of customers and regularly refers people to the garden center. He is now expanding into building gates and fences, laying brick and stone to create walkways and seating areas. The relationship with the garden center has been greatly beneficial to both.
Example: Law school and the bar exam behind her, Sue opened her own law office. She found herself handling traffic tickets, real estate closings, drawing up wills, and doing business partnership agreements. When a client asked about worker's comp, Sue saw an opportunity. She began concentrating on worker's comp cases, and she soon found it necessary to add a partner to her growing firm to handle all the work. Her reputation is growing and referrals regularly show up at her door. She has now become the go-to lawyer for worker's comp cases.
New directions for your business come at you all the time. Pick the good ones, test them out, and select the best.
Before heading off in a new direction, always do the numbers for your business plan. It's that projected bottom line that keeps you focused.
to help you better manage your small business
Sometimes an idea to expand your small business comes at you from an unexpected direction. Even after you do careful thought and planning, good expansion ideas are where you find them.
Listen carefully to your current clients and customers. They can point you in a completely new direction. Of course, you always listen to them. But do you listen carefully?
Example: Mary runs a salon and spa. When she noticed that many of her clients were undergoing cancer treatments, she felt badly for them and wanted to help. She decided to add oncology esthetician services. After doing a search, she found an independent certified esthetician and made arrangements to offer the service at her place. Mary had expanded the services she offered, and it attracted additional people. When she posted the service on Facebook, many more arrived.
Example: Alex runs a landscaping business. He did lots of fall cleanup, winter pruning, spring planting, and year-round mulching. Many of his customers had questions about shrubs and perennials that Alex could not answer. He thought that this might be an area for expanding, so he contacted a garden center. They came to a partnership understanding and each began offering the other's services. Alex now has a bigger base of customers and regularly refers people to the garden center. He is now expanding into building gates and fences, laying brick and stone to create walkways and seating areas. The relationship with the garden center has been greatly beneficial to both.
Example: Law school and the bar exam behind her, Sue opened her own law office. She found herself handling traffic tickets, real estate closings, drawing up wills, and doing business partnership agreements. When a client asked about worker's comp, Sue saw an opportunity. She began concentrating on worker's comp cases, and she soon found it necessary to add a partner to her growing firm to handle all the work. Her reputation is growing and referrals regularly show up at her door. She has now become the go-to lawyer for worker's comp cases.
New directions for your business come at you all the time. Pick the good ones, test them out, and select the best.
Before heading off in a new direction, always do the numbers for your business plan. It's that projected bottom line that keeps you focused.
Tuesday, February 2, 2016
Cause promotions
Free daily tips, information, advice and ideas
to help you better manage your small business
Cause promoting, or cause marketing, is not new. Small businesses have been helping local causes ever since they first supplied uniforms to local ball teams.
Small businesses improve their reputation and sales efforts by supporting local causes. Cause promoting is not only the right thing to do, it's good for business--spreading the word out into the community.
Examples: It's the local veterinarian who sponsors pet adoptions once a month. It's the local restaurant that opens up its party room to local charitable events. It's the local fitness center that sponsors a Walkathon for the benefit of cancer survivors. It's the local health food store that brings the Bloodmobile to its front door once each month. It's the local dentist who pays kids to bring in all the Halloween candy they've received. It's the local bakery that donates food to local food banks.
Big corporations put together big cause marketing campaigns to sell more product and enhance the company's image. Pink campaigns are so prevalent that the word "pink" has become synonymous with breast cancer research. Every time you see the word, you think about the contribution being made to a good cause.
Even small businesses have jumped at the chance to become part of local "pink" campaigns. Funds raised go to cancer research, and the reputation of the small business spreads in the community.
When CVS announced a campaign to remove all tobacco products from their pharmacies, the company's reputation was spread by the media--amounting to free advertising. CVS got widespread free publicity and improved the company's image in this cause marketing effort.
Small businesses are an integral part of the community they serve. It's a natural extension of that idea for businesses to be involved in cause promoting. Help the community and your small business is helped at the same time.
If your business is among the examples, you have a starting point. If not, put on your thinking cap and find a way to promote your business with cause promotions.
Cause promotions must be themselves promoted. Post your cause promotion on social media--it's easy and free. Cause promotions put a positive spin on your business and bring you some new people.
to help you better manage your small business
Cause promoting, or cause marketing, is not new. Small businesses have been helping local causes ever since they first supplied uniforms to local ball teams.
Small businesses improve their reputation and sales efforts by supporting local causes. Cause promoting is not only the right thing to do, it's good for business--spreading the word out into the community.
Examples: It's the local veterinarian who sponsors pet adoptions once a month. It's the local restaurant that opens up its party room to local charitable events. It's the local fitness center that sponsors a Walkathon for the benefit of cancer survivors. It's the local health food store that brings the Bloodmobile to its front door once each month. It's the local dentist who pays kids to bring in all the Halloween candy they've received. It's the local bakery that donates food to local food banks.
Big corporations put together big cause marketing campaigns to sell more product and enhance the company's image. Pink campaigns are so prevalent that the word "pink" has become synonymous with breast cancer research. Every time you see the word, you think about the contribution being made to a good cause.
Even small businesses have jumped at the chance to become part of local "pink" campaigns. Funds raised go to cancer research, and the reputation of the small business spreads in the community.
When CVS announced a campaign to remove all tobacco products from their pharmacies, the company's reputation was spread by the media--amounting to free advertising. CVS got widespread free publicity and improved the company's image in this cause marketing effort.
Small businesses are an integral part of the community they serve. It's a natural extension of that idea for businesses to be involved in cause promoting. Help the community and your small business is helped at the same time.
If your business is among the examples, you have a starting point. If not, put on your thinking cap and find a way to promote your business with cause promotions.
Cause promotions must be themselves promoted. Post your cause promotion on social media--it's easy and free. Cause promotions put a positive spin on your business and bring you some new people.
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