Thursday, October 25, 2012

Ways to Strengthen Your Business and Effectively Manage Your Business Funding

With the current situation of the economy, more and more entrepreneurs are starting to focus on how they can strengthen their companies and successfully manage their business funding. In recent years, business owners started use various gauges such as return on investment, operating income, and economic value to evaluate and appraise the status of the company. Despite these, however, the question on whether or not these gauges will really provide an objective assessment of the company remains.

The use of these financial measures is important in every business. However, it should be noted that in order to get a better picture of the business, one must also use metrics that are not focused on the financial aspects of the organization.

One of the ways to put together a better picture of the company is by using a Balanced Scorecard which utilizes the right combination of financial and non-financial gauges.

In a nutshell, the Balanced Scorecard refers to a system that attempts to provide the company owners with an accurate status of the organization. It uses a variety of financial and non-financial metrics that gauges the performance of the company. These include:

1. The financial component which measures the cost reduction, revenue growth, and investment returns of the company;

2. The customer component which looks into the market share, loyalty of customers as well as their satisfaction and profitability;

3. The Internal Business Process which tries to find effective methods for the company that will lead to an efficient way to meet its goals; and

4. The learning and growth component that focuses on skills and training of employees, knowledge on information technology and the efficiency of processes concerning administration.

Initially, looking at these components may appear overwhelming. But since the Balanced Scorecard is only meant to cover those gauges that show the company's strategy, the reality is that it is far simpler. Instead of using every measure that is available, those who are tasked to develop a particular scorecard should limit their list with those that look into the fulfillment of the company's vision, goals and objectives. Thus, one is expected to first create or find a specific strategy that he or she wants to measure.

Using a Balanced Scorecard system will maximize a company's efficiency not only in managing business funding but also in strengthening the entire organization. Because it seeks to measure the progress of the company towards its objectives, the Balanced Scorecard will give entrepreneurs an opportunity to align the business into its targets. This solves one of the most common problems in the field - the tendency for some companies to develop a strategy and then forget about it for years.

Wednesday, October 24, 2012

How To Profit More By Thinking Small

Can you actually profit more by thinking small? The answer is absolutely and there are countless small business owners working online who can confirm this! The fact is these successful entrepreneurs, most of whom work alone, are experiencing financial success that many larger businesses can only dream about! The point here is so can you and here are 3 reasons why, provided you're willing to invest some time and effort!

Less Overhead

The internet is the only platform that allows you to access a global community and all for next to nothing in terms of cost! This enables small business owners the chance to market their goods and/or services in a much more competitive fashion without the large expenses typically involved to do so! This therefore levels the playing field for all companies no matter their size to have an equal chance at making a profit! No matter whether you work alone or have many employees, the costs involved in using the internet as your marketing platform is very inexpensive! In fact the smaller your company the higher you can expect your profit margins due to the size of your payroll!

Niche Specific

Oh yeah a smaller market does means less competition but it's up to you to do the research to locate these 'gold nuggets' and this requires patience and diligence! In so many words you're watching the crowd and going in the OPPOSITE direction and this takes nerve along with a bit of faith! What typically sets successful entrepreneurs aside from the rest of the crowd is their self confidence and vision! Testing new markets or opportunities online dramatically reduces the risks involved since the largest investment is usually just time and effort! On the other hand when the niche proves to be profitable, these small business owners are able to enjoy the financial rewards and with less competition!

Taking the Leap

Do you possess the 'moxie' to take chances and test the findings your research has uncovered? Many people are reluctant to take action primarily due to the 'unknown' or the necessary commitment involved if they do! Once again successful entrepreneurs possess a 'gun ho' attitude due to their self confidence and usually don't think twice about putting their plans into action! Being the internet greatly reduces any financial risks, many who aspire to business success experience a boost in their own confidence as well! This results in more people taking the necessary actions required and experiencing the rewards associated with the steps they've taken!

By using the internet as your primary marketing platform it is indeed possible to profit more than many larger businesses! Small business owners, most of whom work alone, have proven this point in a very convincing fashion and just about anybody can join their ranks! The 3 underlying reasons there are so many successful entrepreneurs found online are reviewed above and cost, or lack thereof, is the dominant factor! Although you may not be required to make a heavy financial investment to get started or even operate your own business, both your time and effort will still be needed! Do you have the motivation it takes to join the ranks of these successful entrepreneurs and enjoy similar financial rewards? If so get busy!

Tuesday, October 23, 2012

Bookkeeping Tips for Small Business Owners

Bookkeeping is an art and science. It has a set number of established rules and yet the system can be freely modified by users as per need. Bookkeeping and accountancy are often confused to be one single discipline. However, these are two different disciplines. Bookkeeping principally involves keeping a proper record of all the transactions that take place, whereas, accountancy involves processing and analyzing the recorded transactions. The point where the two overlap is, the preparation of balance sheet, cash flow statements and other analytical, costing related statements. The preparation of these statements is basically said to be a combination of the two, as it involves both recording and interpretation of transactions. Conventionally, bookkeeping has been considered to be a part of accountancy.

When it comes to small businesses, owners in several cases, are impartial to the importance of bookkeeping and accountancy. However, the use of these two disciplines even in small businesses proves to be productive and effective, in not just keeping a track of money, but also in analysis. Here are some simple tips, tricks and guidelines which will help you to maintain very good books of accounts.

Bookkeeping Tips and Tricks

Before we start off with the tips, here's one suggestion, make it a point to follow the double-entry system. The significant advantage of such a system is that, two entries offset and verify each other and any possibility of mistake or fraud is ruled out. Essentially, this system, which was developed by Luca Pacioli is considered to be the perfect system to maintain the books of accounts, due to the two self-verifying entries. Apart from that, it is also not that difficult to execute.

1. Proper Books, Every Day
This is the first and the most important step in the bookkeeping process. Punctually maintaining proper books of accounts is in fact the first step of bookkeeping. It is wise to pass journal entries as soon as the transaction takes place. Now, you can select two types of 'basis' for the entries, they can be either cash entries, that is the entry is recorded in the books of accounts as the transaction takes place. In accrual basis, the entry is made before the transaction. When you maintain books of accounts, you can pass entries in the journal and then transfer all the entries to the ledger book, before the closing of the day. To simplify matters, you can maintain 5 more books:
  • Cash Book (for cash transactions)
  • Creditor-Debtor Book (recording all transactions done on credit or debt basis)
  • Purchase Book (entries for purchase)
  • Sales Book (entries for sale)
  • Bank Book (transactions affecting bank accounts)
These books can be updated regularly, by first filling the journal and then passing the entries in the ledgers and the aforementioned books. Regularity in bookkeeping leads to enlightening accounting and further more, profit.

2. Periodic Balance Sheet
It is wise to prepare a balance sheet at short and regular intervals. One side will contain all liabilities including the current liabilities such as creditors. The second side shall contain all assets as of date and their market value. While preparing such between-the-year balance sheets, make it a point to include all accrual and market values. Such a balance sheet can be prepared at every weekend, after a quarter or after a 6-month period. Fact is, preparation of such a balance sheet always helps you to keep a better track of your financial status and that of the business.

3. Proper Record Keeping
Apart from maintaining the books of accounts regularly, make it a point to accompany them with appropriate records. For example, your purchase and sales books should contain all invoices and the creditor-debtor books should contain all bills of exchange, promissory notes, etc. Keeping such records will help you to keep a tab on the accounts and it is also a very good verification system.

4. Include Costing in the System
Now this one's a pretty difficult one. You can include a cost sheet, which can be made at regular intervals, such as a week, month or even a quarter. The cost sheet, depending upon your business should include the following:

A total of all possible incomes and sales, per unit (divide the total income by the number of units sold/produced/in-stock) and the number of unsold units and the ones which are still in process (approximate monetary amounts).
The purchases, costs incurred, expenditure of machine hour rate, relevant depreciation and all possible expenditures, per unit or per hour (divide the total expenditure by number of units sold/produced/in-stock).
The third element on the costing statement is the first point minus the second point. In such circumstances, the derived figure should be positive, as it indicates profit.

Saturday, September 29, 2012

How International Moving Companies Can Help You

If you are moving to another country, your move will be more complicated than if you are simply moving to the other side of town or another state. This is part of the reason it is so important to choose international moving companies. They will know exactly what needs to be done and in what order so you don't run into any problems as you make your move. If you fail to fill out something or to submit the papers on time, you could be in a new country with no belongings.

One of the most important parts of your international move is making sure all your paperwork is in order. While you need to get your own personal paperwork in order so you can live and work in another country, your belongings need to go through customs as well. A company that specializes in these types of moves will know exactly which papers you need, when to submit them and where to send them.

Some people like to take their cars with them when they are moving to another country. Even if you won't be able to drive it due to the way it is constructed, you may have a car that you just can't bear to part with. However, taking a car with you requires an entirely different set of regulations and paperwork. International moving companies are well aware of what needs to be done to transport a car.

As you consider your international move, you need to seriously consider how much stuff you need to take with you. While moving companies that specialize in international moves can take whatever you need them to, you need to remember that the more you send, the more expensive your move will be. Cutting back your belongings to the necessities will help keep your costs, as well as the paperwork required, low.

Friday, September 28, 2012

Starting A Small Business Is So Much Easier Today

Compared to a decade ago, starting a small business today has never been this easier. Although some may continue to argue that the level of success in business startups regardless of its size is always questionable, still a lot of seasoned entrepreneurs agree that the current environment is more favorable for business growth.

The Reasons

Foremost, population has an effect to the business. With less people, businesses are forced to sell a diverse range of products to cater to all of the people's needs. However, with a bigger population comes the opportunity to concentrate on a narrower product range. This is why many niche businesses succeed these days. The dense population today is an assurance that there is a potential market for constricted options. A perfect example is a snack bar. This food shop may be forced to sell even set meals for lunch and dinner if they wish to survive in a small town. But in the case of a densely populated city, snack bars can just concentrate on selling pastries or cakes and for sure they will find a healthy market for these products.

Secondly, the capital needed to start running a business has never been this low. With the introduction of technology, businesses can use smart solutions that help cut down operation cost. Although the use and purchase of technology do not come cheap, in the end the business will surely reap huge savings. Mailing, advertising, communication and even security are now replaceable with technology. Shops can easily send emails to their customers using the Internet and advertise online at popular social networking sites. The need for print ads is starting to diminish as well. To add, making free calls online is possible with a monthly subscription to broadband Internet. If landline phones were indispensable a decade ago, today businesses can still operate efficiently without them. And more surprisingly, small stores are relying more on webcams for security. Most especially for tenants who are renting space at big malls, they no longer need to tap 24/7 security guards because the mall itself offers a huge set of security personnel roving around the vicinity.

The entry of franchising also paved way to easier business start-ups. Equipped with the right training and equipment to ensure success of the product or service, franchised outlets are becoming more popular to investors because of the ease in setting them up plus the assistance and training they get from the franchisers. Coming up with new business ideas has never been this easier because they are already there. It just takes a big amount of time and money to put these ideas into action.

Thursday, September 27, 2012

Tips for Successfully Starting a Small Business

No business is ever easy to start. If you are planning to start one by yourself and don't have much help around, there are certain aspects you need to consider, in order to be better organized and to avoid failure. Consistent mistakes in the beginning are bound to ruin entirely something that could have been a promising incipient business. Here are some basic tips on how to start and what to take into account.

Market Intelligence

The main concern of an entrepreneur when starting a small business should be the market aspects and issues. This is often a big challenge. One has to research the chosen market thoroughly. Information is usually a most precious weapon against competition. Do you know who your customers should be and what would these want? What is the maximum price you could charge them? These are essential matters - finding your target audience and understanding their needs and possibilities. Also, unbiased statistics should be used. If you opt for an online business, take a look at which are the countries where people spend more time online.

Go for the Right Contracts

Whether it is about your connection to the Internet or the various suppliers, you should find reliable sources. Once you have identified these, the process can finally speed up. For example, in terms of Internet connections, a business - be it small - needs a fast connection. Opt for a special package offered by a nearby local provider, with a generous bandwidth. This will prove itself as very efficient for the long-term.

What Lies Beyond

Usually there can't be just you, your product, and your clients. There are a lot of other things to count in when starting a business of one's own. There is specific software to be use and a network of computers, a small business accountant and so on. Include these in your plan and consult an expert or a book in order to find out about the most appropriate solutions for you. Also, legal aspects represent an important aspect. Besides a permission to operate, you may want a business insurance as well, which is quite complex in itself.

Wednesday, September 26, 2012

How to Develop a Business Plan

Whenever I have come across the profiles of the most successful businessmen, I have always marveled at the business acumen of these businessmen. I wonder what was it that made them so successful and rule the world? Was it the business plan, the sheer passion, grit or determination or that germ for business? I feel even if they had the making of a businessman and had that passion and all, a major chunk of credit to their success goes to the business idea they thought of. Another thing is the way these people developed the business plan. Here in this article, I will tell you how to develop one yourself.

Developing a Business Plan

It is not exactly an easy proposition, developing a business plan, as there are innumerable things involved in it, from the very basic things to extremely complicated and tedious ones. Basically, while creating a business plan, you should include an executive summary involving -
  • A brief description of the history of the company.
  • The company's objectives
  • Description of the company's products or services.
  • The market the business intends to compete in.
  • A persuasive statement as to reasons and method for the success of the business.
  • Projected growth for the company and the market.
  • Mention of the core management team.
  • A description of funding requirements, with a time-line and the usage of the funds.
Homework on the Service or Product
Forget the business plan for sometime. Decide what is the product or service you are going to offer. Without that, it is impossible to go ahead and consider what comes next in your business proposal. Research on the market trends and what are the products and services which will be a hit with the consumers is fundamental with regards to understanding the intricacies of developing a business plan. If you have had an experience in product or a service, then your task just might become easier. In addition to this, also think of the name and the overall profile of your company. Have a thorough understanding of the products and services your company is going to offer.

Money Matters
Once you are done with the overall profile, think of the capital required for it as well as how much you intend to make from it or can make. To be clear about that you will have to chalk out and create a financial profile of the company. When you mention this while writing the plan, it should include your current assets, your liabilities, projected income and monthly expenses within a range of six months. Having all this data will help you establish a viable financial objective for your business. Be very careful about this.

Wednesday, August 29, 2012

Internet Marketing Business Plan

Internet Marketing, as a concept, is a requirement for any business or service provider, these days. I know, there are several websites that will help you to get your Internet promotion planning done yourself (a few of my articles would fall in the list too). Nonetheless, those ideas are most effective in case of small businesses. Like, if a business is in set up mode, then it would not be favorable for it to spend a lot of money on hiring professionals. As such, the "do-it-yourself" business plans are good to start off with. But, in the case of moderate to big businesses, the most plausible idea would be to hire a firm that could handle the Internet marketing on their behalf. This is why businesses promoted online have scope.

As usual, I am going to start off with a case study:
"LinkIn Consultancy is a firm that deals in Internet promoting solutions. It was started by a group of 4 college friends who were very Internet savvy and had done their Marketing Management Courses. As such, they know what the market needs and how to deliver. Since, they were young and energetic, they did a lot of self marketing and networking, this got them good long term clients. Now, at the age of 45, each one of them is drawing a turnover of Rs 300,000/- per month, individually" Isn't it amazing how a little out of the box thinking can make you rich and keep you intellectually fulfilled?

Let us now, see how to set up an Internet Marketing Business
First and foremost, it is imperative for anyone desirous to start this business, to have a good idea about several marketing strategies. It is vital to stay up-to-date with the latest case studies, take overs, and other similar activities. They may not all be Internet related, but they are, nonetheless, required to get an understanding of the market and its components.

Now we come to the starting points, I like to call them "Engine notes"
Once you have built a good enough marketing knowledge-base, you need to market yourself in order to get clients. You need to use online marketing, that would be applicable for small business and promote your website, as well. Google AdSense and Google AdWords could be put to good use in this case!

Next, you need to know exactly how to set up referral, Google AdSense and Google AdWords accounts (for the potential clients). Before you start work on a particular project, Google for related and relevant websites and blogs. This can assist virtual participation and visibility. Further, linking and back linking can be put in use, as well. Make sure, that the company that has retained you, provides you with rights to participate virtually on their behalf. They could do it themselves as well, but that would be redundant (they have hired you to do the Internet work, right?).

Tuesday, August 28, 2012

How a Guarantee Can Change Your Business

A well written guarantee takes the risk out of a purchase and, as a result, can compel a customer to buy from you instead of your competition. As such it is a fantastic tool in your sales and marketing toolbox.

A guarantee is a promise backed by a process. There's no point in promising something your customers don't want and there's no point promising something you can't deliver.

As such, a guarantee does two things for your business. It takes the fear and risk out of buying from you, and it focuses your attention on delivering what's most important to your customers.

I recently came across this guarantee offered by an estate agent. This particular company guaranteed their customers that they could negotiate their fees down - even completely eliminate them - if they felt they didn't receive full value for their money.

Can you imagine which of your competitors would go bust very quickly if they offered such a guarantee? That's a great test of a brilliant guarantee by the way - it should be something your competitors would never be able to or want to copy. It gives you a truly unique selling proposition.

How many processes would you need to change in your business to be able to offer that guarantee? How radically would they need to be changed? If the changes are small, why not make the changes, see how you get on and then go for it and deliver your killer guarantee.

Would your team rise to the challenge to meet the conditions of the guarantee? Wouldn't that be awesome.

Do you think you would attract more customers if you offered a guarantee like that? That's a rhetorical question...

This kind of guarantee could apply in any number of service industries. For example, I have recently had dealings with a number of national and regional business brokers, and I can speak from first hand experience that many would go bust very quickly if they offered a guarantee like this.

Which means there is a huge opportunity for a business brokerage firm to take over the market if they can find a way to offer clients such an amazing service that they could offer a value based negotiable fee. Now given that only 22% of businesses listed for sale in the UK are actually sold, that would be a huge undertaking, but imagine the opportunity...