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to help you better manage your small business
Few people claim to be able to predict the future. Those who do are usually wrong. I'm talking about predicting future events, not today's weather forecast for tomorrow.
In business, we project where we want to be in the future. We set goals. And then we begin taking steps to get there. We ignore this at our peril. Stepping into our future business is prudent.
There is an element of caution in the steps we take in business. We see a possible expansion, we take a preliminary step in that direction, and, if it works, we might proceed. Because we are committing time and resources, we've learned to exercise caution. If not, we can be courting business failure.
Example: When videos became the rage, John opened a video store. He obtained a beginning stock of video cassettes, rented a store front, and held a grand opening. The store quickly became a destination. John rushed to sign another lease on the empty store next door. His operation blossomed, and he vastly increased his stock videos. Then a national video chain store came to town. If that were not bad enough, technology moved on. There was less demand for videos. Within ten years, John's store had shrunk back into its original space and he struggled to meet the rent. Today, he has closed both stores but he still offers videos--from a dispensing machine.
Tomorrow has a way of coming at you. No matter how carefully you might plan, tomorrow will surely bring surprises. Be ready.
Example: Ben operated a machine shop for many years. He had about 10 employees, supplying precision-machined products to the aerospace, automotive and health care industries. Then, the age of 3-D printing dawned. Ben scoffed at the idea that this technology could ever be a threat to his machine shop. So, he refused to install one of the new 3-D printing machines or hire a programmer with the skills to operate it. Today, Ben is down to 3 employees while a competing operation is snapping up his customers--supplying their needs with their new 3-D printers. Ben missed his opportunity.
It's not just technology that changes--and changes rapidly. The marketplace changes as well. People today are quite different from the people of yesterday. They demand different products, different services, and different customer service.
Today's marketplace is not yesterday's marketplace. And tomorrow's marketplace will not be like today's. Make sure your business is positioned to meet tomorrow's marketplace. Think about it and get ready.
Monday, February 15, 2016
Friday, February 12, 2016
Ignoring advice
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Okay. You have an idea. A great idea. You want to start a small business. Or, you want to take your existing business in another direction.
In your excitement, you mention it to several people. You discuss your idea with several friends and acquaintances.
Example: Elaine wanted to establish a big new website. Her idea was to have a platform to sell just about anything. It would work like an auction but it would not be an auction site. The platform would act as an intermediary between sellers and buyers. Buyers would peruse the items up for auction, and then they would place their bids against a pre-set deadline. As the deadline approached, bidding would intensify. Finally, there would be a winner. Elaine would take a percentage, and everybody was happy.
Everyone said it would not work. There would be technical and legal problems. No one would be attracted to bid on stuff they had never seen in person.
Of course, eBay exploded into a formidable presence. But eBay might never have happened--had its founders thought too much about all the negative advice they must have received.
Example: Ella trained as a hair stylist. She worked in several salons to nail down lots of experience. Her idea was to have her own salon--one day. That day came unexpectedly when the owner of a local salon became ill and placed her salon up for sale. Ella scrambled to put together the funding. But all her friends said to wait for a better economy. They questioned her lack of experience in running a business. They advised her against the deal. Ella considered the advice, but she went ahead anyway. It was an opportunity that she felt might not come again. Today, Ella is confidently operating the salon and planning to expand.
When you are in business, or when you want to start a business, your friends will offer advice--whether or not you ask for it. They feel compelled to offer advice--mostly negative. But that's one of the main reasons they themselves are not in business.
Business is all about optimism, confidence in yourself, and seeing a path into the future. If the opportunity is real and your gut feeling tells you to proceed, then by all means, go ahead. You will never know if success is around the corner unless you take the risk.
Before you jump, always do a business plan--concentrating on the market. The numbers you generate in the business plan will be the best advice you can take advantage of.
to help you better manage your small business.
Okay. You have an idea. A great idea. You want to start a small business. Or, you want to take your existing business in another direction.
In your excitement, you mention it to several people. You discuss your idea with several friends and acquaintances.
Example: Elaine wanted to establish a big new website. Her idea was to have a platform to sell just about anything. It would work like an auction but it would not be an auction site. The platform would act as an intermediary between sellers and buyers. Buyers would peruse the items up for auction, and then they would place their bids against a pre-set deadline. As the deadline approached, bidding would intensify. Finally, there would be a winner. Elaine would take a percentage, and everybody was happy.
Everyone said it would not work. There would be technical and legal problems. No one would be attracted to bid on stuff they had never seen in person.
Of course, eBay exploded into a formidable presence. But eBay might never have happened--had its founders thought too much about all the negative advice they must have received.
Example: Ella trained as a hair stylist. She worked in several salons to nail down lots of experience. Her idea was to have her own salon--one day. That day came unexpectedly when the owner of a local salon became ill and placed her salon up for sale. Ella scrambled to put together the funding. But all her friends said to wait for a better economy. They questioned her lack of experience in running a business. They advised her against the deal. Ella considered the advice, but she went ahead anyway. It was an opportunity that she felt might not come again. Today, Ella is confidently operating the salon and planning to expand.
When you are in business, or when you want to start a business, your friends will offer advice--whether or not you ask for it. They feel compelled to offer advice--mostly negative. But that's one of the main reasons they themselves are not in business.
Business is all about optimism, confidence in yourself, and seeing a path into the future. If the opportunity is real and your gut feeling tells you to proceed, then by all means, go ahead. You will never know if success is around the corner unless you take the risk.
Before you jump, always do a business plan--concentrating on the market. The numbers you generate in the business plan will be the best advice you can take advantage of.
Thursday, February 11, 2016
Expanding your customer base
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to help you better manage your small business
Your customers determine your business future. It's not your brilliant idea. It's not that new mousetrap. It's not how many certifications you have. It's the customers.
All those paintings you labored over will still be hanging on your wall--unless someone buys them. That outrageously complex computer game you devised will not turn into a business--if no one buys it. And that new beer you brewed and bottled will remain on the shelves--if no one buys it.
Example: Mary got trained and then certified in Reiki. She rented a small space where she could see clients. And she waited--and waited. Some clients came, but they were few and far between. To increase awareness and interest, Mary held a free open house where she demonstrated the benefits of Reiki and answered questions from the people who showed up. A few people became clients. To spread the word even more, Mary began posting on Facebook. More people called for appointments. To grow even more, Mary began holding classes to teach others the ins and outs of Reiki. She is still expanding. The next idea she wants to tackle is Reiki for animals.
Example: Bill serves breakfast and lunch in his small cafe. He noticed a trend in his area--people were increasingly interested in farm-to-table foods. He began promoting farm-fresh additions to his menus--organically raised greens and eggs laid by free range hens. All this attracted more people to his cafe--including younger people. His former standbys were tradespeople (electricians, plumbers, construction types), and they also took an interest in the new items on Bill's menu. His customer market had changed, and now he stays on top of trends. He even offers gluten-free waffles and pancakes that are eagerly snapped up by people.
Don't neglect what's happening in the marketplace. You can expand your customer base if you stay on top of marketplace trends. The market is continually moving, changing, and offering new possibilities. Catch the wave and the market will reward you with growth possibilities.
Doing the same things, day after day and year after year, can be a good thing. You are building your brand in the minds of customers and clients. But don't get stuck in your ways. Keep a keen eye on the market.
to help you better manage your small business
Your customers determine your business future. It's not your brilliant idea. It's not that new mousetrap. It's not how many certifications you have. It's the customers.
All those paintings you labored over will still be hanging on your wall--unless someone buys them. That outrageously complex computer game you devised will not turn into a business--if no one buys it. And that new beer you brewed and bottled will remain on the shelves--if no one buys it.
Example: Mary got trained and then certified in Reiki. She rented a small space where she could see clients. And she waited--and waited. Some clients came, but they were few and far between. To increase awareness and interest, Mary held a free open house where she demonstrated the benefits of Reiki and answered questions from the people who showed up. A few people became clients. To spread the word even more, Mary began posting on Facebook. More people called for appointments. To grow even more, Mary began holding classes to teach others the ins and outs of Reiki. She is still expanding. The next idea she wants to tackle is Reiki for animals.
Example: Bill serves breakfast and lunch in his small cafe. He noticed a trend in his area--people were increasingly interested in farm-to-table foods. He began promoting farm-fresh additions to his menus--organically raised greens and eggs laid by free range hens. All this attracted more people to his cafe--including younger people. His former standbys were tradespeople (electricians, plumbers, construction types), and they also took an interest in the new items on Bill's menu. His customer market had changed, and now he stays on top of trends. He even offers gluten-free waffles and pancakes that are eagerly snapped up by people.
Don't neglect what's happening in the marketplace. You can expand your customer base if you stay on top of marketplace trends. The market is continually moving, changing, and offering new possibilities. Catch the wave and the market will reward you with growth possibilities.
Doing the same things, day after day and year after year, can be a good thing. You are building your brand in the minds of customers and clients. But don't get stuck in your ways. Keep a keen eye on the market.
Wednesday, February 10, 2016
More about your planning
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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.
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.
Tuesday, February 9, 2016
How to start planning
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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.
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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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.
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
Free daily tips, information, advice and ideas
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.
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