You Need to Know Your Business Inside and Out

True understanding of your business and your industry is a necessary step towards becoming successful. It’s not about just opening a book and thinking you can learn what to do to make your business thrive. There are many different aspects in business. You need to understand things like management, marketing, human resources, and taxes. And you need to understand exactly how they apply to your business.

When we think about the management issues of your business what comes to mind? Maybe what kind of skills might your managers need. What kind of compensation will be required to attract good help? What kind of positions within your organization may need to be staffed in the coming years? And where are you going to find qualified managers or will you need to train them from the ground up. It’s these kinds of questions that you need to ask yourself so that you can learn more about your business.

In small business you have to be concerned with the marketing of your services or products. Do you know what kinds of advertising methods are best for your business? Do you know the costs of those kinds of services? Have you checked on the competition lately to see what methods they use to sell their products or services and do you know what kinds of prices they charge? Have you taken the time to develop an effective marketing plan? Marketing your small business is not an easy task and the things that have worked so far may not be effective in the future. Do you know what methods you may be able to use if something you use today fails?

When we look at the human resources aspect of a small business we can find many questions that need to be asked. Things such as how much should your employees be compensated? Do you or are you in the future going to offer health insurance and is your plan the best you can get? How will you handle doing employee reviews and giving out raises? What do you intend to do if you need help quickly? Will you use a temporary labor agency or do you have an alternative method. There are many questions in the human resources field that should be answered.

One of the most horrible subjects out there is always taxes. Can you do your taxes or do you rely on someone else? Are they doing the job right and saving you as much money as they can? Do you know how to handle payroll taxes and sales tax? Are there specific taxes that apply to your state? Something like a headcount tax maybe? How about if you sell items across the state line or operate locations in other states do you know the tax laws for those states?

There will always be questions in business that need answers. It’s up to you to take the initiative to search out those answers and ask yourself whatever other questions you might be able to think of. The old cliché that knowledge is power is especially true in business. And as a small business owner you need every edge you can get.

Want To Start A Business At Home – 4 Tips That Will Make Or Break Your Income (Don’t Ignore!)

With the economy cutting into pocket books worldwide, many people are looking to start a business at home to take some of the stress off the family finances. The internet is allowing those people the option to work from home by using their computer, telephone, and internet connect. One must beware that running a business at home is not as easy as some will advertise so I would like to give you 4 tips…

4 Tips To Follow If You Want To Start A Business At Home

Tip #1: Research Your Business Inside and Out

While there are legitimate business opportunities on the internet there are also a lot of scams. You must research and investigate opportunities inside and out and learn everything you can. If they don’t give you a telephone number for you to talk to a live person along with a physical address…Steer clear of it.

Make sure to use search engines like ‘Google’ and search the business with post keywords like “review” and “scam.” If you don;t get results it may be good but the business could be young enough that there is no data available. Bottom line, spend a lot of time digging up as much as you can.

Tip #2: Make Sure You Have The Skills To Be Successful

There are some businesses that will advertise the business opportunity as easy to operate but when they get the money you discover that you don’t have the skills required to be successful. You soon learn that you need to get training. That training costs more money. Be certain that you have the skills or can learn the skills in a short period of time and that it fits into your overall budget.

Tip #3: Map Your Plan And Commit The Time

Too many people jump into a business with no plan at how to promote and grow the business and they don’t set a consistent schedule of work. Without a plan of action and time to work the plan, the business will never take off. You must have a plan and then work the plan.

Make sure you commit to working some aspect of your business at least 10 hours per week. I don’t care what is going on you must find that time. If you don’t little growth will take place.

Tip #4: Keep Accurate Records For Tax Purposes

One of the biggest mistakes new home business owners make is not keeping accurate records of income and expenditures. It can be really easy to let expenses go without filing receipts but you must force yourself to do it. Set up 3 files on a monthly basis. One file is the name of the month and inside that file is two files with income and expenses. Do this each and every month and it will make you life easier come tax time.

I hope these tips help you if you want to start a business at home. It is harder than most people think but it can be very rewarding once it is established. The freedom of working for yourself makes the hard work worth it.

Writing a Business Plan – Distribution (Or, How Will You Get Your Product to the Customer?)

You want to write a business plan for your product but you don’t know where to start. Inside you’ll learn how to make a simple one sheet business plan.

Go get a piece of paper and a pen or better yet, print this article out.

1. What is Your Product or Service

This is your business idea or the product you want to sell. You can sell cakes, mow lawns, sell crocheted hats, or pillowcase dresses, it doesn’t matter what it is, just write your ideas down.

How does your product or service differ from what is already out there?

Assignment:

Go to a store and find a product. How many choices do you have? Which one do you choose? Why?

Some choose because of personal experience with the product, some choose based on packaging or on an advertisement. Others choose based on how it will make them look to their friends or it inflates their ego making them feel good about themselves.

Service products like mowing lawns are different. You need to do what you advertise, do it well, do it on time, and be reliable. Go the extra mile – maybe you can offer one free mowing if the account is paid-in-full for the month.

2. Name Your Business

The name of your business and/or product should be unique, memorable, and easy to pronounce. For example, in America we pronounce Adidas as Uh-deed-ahs while in Germany where the company is pronounces it Ah-dee-das.

Read 15 more well-known brand names that get mispronounced on Business Insider – businessinsider.com/mispronounce-difficult-to-say-brands-2014-9.

Jason Miles, Author of Craft Business Power and co-owner of Liberty Jane Clothing suggests naming your company a proper name instead of some cute insiders only name.

Can you guess the product of the business names below?

Liberty Jane Clothing vs. Momwithahook

In the first example (Liberty Jane Clothing) you know right away that the product is clothing. The name suggests that Liberty Jane may have something to do with the designs.

In the second example (Momwithahook) it is questionable what the product is. Does this mom sell fishing equipment, hooks, pirate themed merchandise? This is my username online as I enjoy crocheting, use a crochet hook, and am a Mom.

Not knowing this about me and not knowing about the hobby crochet you might be clueless about what exactly I’m offering. A better option might be Sara’s Crochet Patterns. You know who I am and what product I sell.

Assignment:

Take some time to come up with a variety of business names. Make sure it describes what you do and your product without confusing or misleading your customer. Use Jason’s suggestion of adding a proper name, it doesn’t need to be yours but it will help.

3. Target Market or Your Customer

Who wants or needs your product or service? It’s important to get this right so you don’t waste time and money.

Considering your product or service – mowing lawns – who is your customer?

– the elderly

– those incapable of doing it themselves

– busy people

– vacation homes

– houses on the market

Assignment:

Take a sheet of paper and divide into four sections. Label the sections Type, Where, What, and Willing.

Now add the type of people who use your product or service, where you will find them, what is most important to them, and whether they are willing to pay someone for it.

4. Getting the Word Out or Marketing

How will your customers know that you mow lawns? Will you create a website? Will you ask friends and family members? Will flyers be a good way to let people know what you are doing?

Assignment:

Brainstorm ways to market your product. For the mowing lawns example, what would be the most beneficial means of getting the word out?

– Churches

– Clubs

– Schools

– Neighbors

– Friends

– Craigslist

5. How Much Will You Charge or Pricing

In any business profiting is the goal. You need to price your product or service competitively and profitably.

Consider the costs of running your business and shipping if you are selling a product online.

Assignment:

Find out the cost per unit made. To do this you will need to do the following:

– hourly overhead costs

– hourly wage

– total hourly wage = hourly overhead costs + hourly wage

– how long does it take you to produce one item (use toggl.com to time yourself)

– total materials cost (everything that goes into to making your product)

– add an extra 10% for unexpected costs

– total price = time to produce one item + material costs x 10% unexpected costs

Read more on pricing your products on TheDesignTrust.co.UK. You might also find this calculator handy: craftscalculator[dot]com.

Assignment:

Time yourself making your product or completing your service. How long did it take? Determine the cost per unit made for your product. For a service based business, how long does it take to complete the project? Add some extra cushion to this for the unexpected.

6. Determine Your Profit

This is the fun part. To get your profit subtract your expenses from your income.

profit = income (sale price) – expenses (materials cost)

Assignment:

Sit down and find the profit for each product or service you plan to sell.

7. Delivering Your Product or Service (Distribution)

This step could also be done between step 3 and 4. Once you know your target market (who will buy your product) and where they are you need a plan for getting your product to them.

Do you sell locally? Will you deliver? What shipping company will you choose?

Products

Choose a shipping company that is reliable and cost-effective. Start small at first by utilizing the United States Post Office or your Postal Carrier.

Decide whether you will ship internationally. Who will pay the customs fee?

Services

How will your service be rendered? Will you go to your customer or will your customer go to you?

Assignment:

Research various shipping options for your product. Try shipping your item to a friend. How did it arrive? Was it damaged? How long did it take?

Sometimes the cheapest way isn’t always the best way.

Conclusion

You should now have a well thought out business plan. This isn’t acceptable for bank loans but it will guide you in starting your own little side business.

And now I’d like to invite you to read more on business and blogging for small business.

Getting a Small Business Loan – Will It Ever Be Possible?

With continuing talk of the UK and global economies facing challenging times into the foreseeable future many entrepreneurs are concerned as to how much support they can expect from their banks.

There are numerous stories of business owners suddenly finding their bank facilities taken away, previously friendly bank managers turning into the latest enemy, or being dealt a blow with a dramatic increase in fees or interest rates. Whereas previously loans were being granted in a reasonable time frame it’s not unheard of to be faced with a discussion with banks that can go on for months.

But don’t despair! It seems that banks are slowly dipping a toe back into the market, but bank attitudes have shifted – there is much more focus on serviceability… ‘demonstrate to me that you can repay your loan even if times get tough for you.’

Despite a tougher regime there are still some actions you can take to get the bank on your side.

Review What Your Business is About

All the best plans change as the general business climate changes. Nothing ever stays still and the businesses which will survive know that their market, and the way they do business, never stagnates.

As we start coming out of the economic darkness, and before you think about approaching your bank, now is the time to fundamentally examine where your business is today. How did you deal with the rough times? Has your market changed, even slightly, over the last two years? Are customer’s expectations different? Have recent events dented the confidence or purchasing ability of your target market? Will your customers be thinking twice about ordering your all-singing-and-dancing product? Will they no longer be able to accept your high price even taking into account your quality service? Have your costs significantly increased rendering your idea or business unprofitable?

You must not make the assumption that because your business model was viable two years ago that it is still viable today. Be wise enough to re-look at all the underlying factors that delivered a successful business.

Approaching the bank with a business model which has not been reviewed to take into account the lessons learned, is not going to get you the answer you want.

Write a Business Plan

So many business owners still don’t write a Business Plan; they don’t see the value of investing time in researching and writing one. Even in the good times banks liked to see a Plan but now, when banks need more persuading than ever to say ‘yes’, a Business Plan is essential.

Whilst many regard Business Plans as documents written solely for the bank this is not the case. A Business Plan must be seen as a tool which can act as a convincer for the bank and as a control and check for you. A well researched Plan will help you understand the pitfalls of your new venture or expansion; it will highlight the flaws in your thinking and potentially save you from making an expensive mistake.

Before you approach the bank commit time and resources to writing a Business Plan; it may be less painful than you think.

Know Your Business Inside Out

The bank is not going to rely solely on your Business Plan when it assesses your loan request. Many small business owners fail to understand that the bank is lending to them, not the business. You are the business.

In assessing whether your business has the capacity to repay the bank will want to find out as much as they can about you and how well you know your business. This means lots of probing questions. You must be prepared for this. You must research all aspects of your business; you must know your Business Plan inside out; you must know all the key financial aspects of your business.

Testing serviceability of the loan is one of the key assessment criteria. Do you know whether you afford to repay the loan if interest rates went up by 4% or your sales fell by 10%? Test your assumptions under different scenarios; the bank will, so be prepared to beat them to it by having the answers to hand.

Prepare in advance by thinking about what the manager is likely to ask you. What would you want to know about a business if someone was asking you to invest your hard earned cash? Once you have these questions, find out the answers.

Have Something to Lose

The bank will only want to support committed entrepreneurs. These are people who have committed not only their time but also their financial resources. If you want the bank to support your business then you have to show you are prepared to lose something if it all goes wrong. Asking the bank to take all the financial risk is not going to get you the loan. You must be prepared to put your money or other personal assets on the line. After all, if you don’t believe enough in your business to risk your assets, why would you expect the bank to?

Before you approach the bank for a loan, examine your personal commitment to the business; does it look compelling enough to an outsider? Seeing what you are prepared to lose will help the manager come up with a fair assessment of your commitment to making your idea work.

Talk to Your Bank Manager

If you are already borrowing and your business has suffered over the last year you must ensure that you don’t adopt the ostrich position – head in the sand. Problems do not go away by themselves, no matter how hard you try to convince yourself.

If your problems are affecting the business then one of the first people you need to see is your bank manager. The old saying, ‘Forewarned is forearmed’ is so true. No one likes surprises sprung on them and a banker is no different. You must share your concerns. Hiding away from the bank is no solution. A lack of facts or being kept in the dark is a sure way of creating panic and this can lead to incorrect and disastrous decisions being made. Avoid this by talking and informing.

This regular flow of communication is vital if you are likely to need more bank support in the future. How you handle your relationship today is how you and your business will be perceived tomorrow.

Banks can be known for making life tough but you have a part to play. Make it easier for the bank to support you by providing them with all the necessary information they need so that you come across as a business owner worthy of support.