Free Business and Financing Articles

When your business grows too quickly or needs to move to a smaller location, you need to create and execute an action plan that will have a good short and long term impact. Consider portable storage or other moving container companies designed for and experienced in commercial storage. You don’t want the move to become too expensive hurting your profit during expansion or crippling you cash flow situation when it needs to be protected the most.

Don’t under estimate costs as well. Plan carefully and create a “moving budget”. Consider financing for you move to avoid financial issues that may impact your business in a negative way.

There are many variables that you need to consider – do a search to find some good resources and articles on moving tips.

Making a physical backup of the data generated in a small business is a necessity that many small business owners overlook. But neglecting to make data backup a priority is inherently risky since theft, system failure, or damage can easily compromise the data stored on a computer. Moreover, making a physical backup of data means that valuable information can be moved off-site, safe from things such as fire or flooding.

There are several methods of transferring your backup files to another media. Here are a few of the most popular options:

• CD-Roms. What makes this method popular is that it is inexpensive and easy. But it is probably one of the most unreliable methods of data backup. CDs have a limited shelf life, are easily damaged, and are often rendered “unreadable.” If you plan on using this method, you should make several copies and check the CD afterward to make sure the information is accessible.
• External hard drives. External hard drives are relatively cheap compared to tape drives (a few hundred dollars versus approximately $1,000). With this method you can expect ease of use and higher reliability.
• Tape backups. The use of a tape backup drive is probably the most reliable of all options listed here. But this reliability comes with a hefty price tag. A good tape drive can will cost over $1000, and individual tapes for the drive can cost up to $40 each.
• Online backup services. Do an online search for data backup services and several companies will pop up. While this may seem like an attractive option, there are many security issues involved. Before you choose this method, consider how sensitive is your data. You should also research different companies. Find out how long each one been in business, what security systems they have in place, and ask for references.

Your data backup is as good as the method you choose. Do your research to determine which method is right for you and your business.

Though many small business owners spend significant amounts of time and money getting the right virus protection and security solutions for their computer systems, backing up data is often neglected. The truth is, however, that any business that relies on its data (which is most businesses these days) should make good data backup solutions a priority.

Why should you back up data?

With so many threats to your valuable business information this question is really a no-brainer. From power surges to viruses, or just plain age and overuse, PC hard drives can and will fail. If your only data backup is on a computer, and the hard disk fails or is damaged, then your business data is gone.

Having physical paper copies of business data is also not adequate protection, due to the possibility of theft, fire, and flooding. Do not leave data backup as an afterthought for when it is to late.

What should you backup?

When it comes to business data protection the general rule is if losing a particular kind of data will interfere with the way you do business, then back it up. For most businesses this information includes: customer databases, payroll records, income and sales records, important emails, addresses, as well as to-do-lists and schedules. All of the files that you have created and modified should also be backed up on a regular basis.

Keep in mind that you can always reinstall any software programs if you need to, but recovering the details of business transactions or important correspondence is impossible if those files are either irretrievably lost or damaged.

How should you chose the right method?

There are many reliable data backup solutions on the market available for small businesses, including backup software programs, tape backups, external hard drives, and off-site backup services. To determine which method is right for you and your business, you need to answer the following questions:

1. What kind of data needs to be backed up?

2. How sensitive is your data?

3. What are your physical and financial resources?

How often should you back up your data?

The answer to this question will really depend on the circumstances of your business as well as the method or methods of data backup that you have chosen. If you are using a backup software program, then you can usually set a schedule that will archive your data automatically. If your data backup system is on-site, then it would be worthwhile to back up your data on a daily basis, or at least a few times a week.

If you have the means to make physical backups that can be moved off-site, such as a tape backup, then it would be advisable to perform a data backup in this way at least once or twice a week.

Bottom line here is that you need to keep your data backups current and consistent. A good data backup solution is just good business sense.

Environment consciousness and the drive to “go green” is a trend that has left its footprint across countless industries causing entire businesses to transform their operations. The small business owner who wants to run a successful operation cannot afford to overlook this trend. But the reality is that many small businesses have limited resources to invest in things like renewable energy sources, environmental business consultants, or biodegradable packaging.

So what can a small business do to be more environmentally friendly without making a huge investment of time or money? Actually, quite a lot. Here are a few simple ways to make your small business more environmentally friendly

1. Reduce energy consumption. Turn off computers and lights when not in use. Use natural lighting where possible. Switch to energy-efficient bulbs. You can also make your air conditioning and heating units run more efficiently by putting them on a time switch, cleaning and replacing the air filter, and giving them a tune-up by a qualified technician.
2. Look for equipment that has energy-saving or waste reducing features. When it is time to bring in new equipment look for energy-saving and eco-friendly features that can reduce costs by operating more efficiently while making little or no environmental impact.
3. Rent or lease equipment instead of buying. Consider leasing copiers, computers, and other equipment from manufacturers who will be able to properly recycle and dispose of their goods at the end of their life cycle. Consider renting equipment that is used only occasionally or buy it second-hand.
4. Look to reduce and recycle waste. Set up a system that will cut back on paper, such as photocopying on both sides of the paper, using the blank side of printed material as well as outdated forms and letterheads for in-house memos and drafts, and e-mailing reports instead of printing them out.
5. Make your workplace environment greener. Adding plants, such as spider plants and peace lilies, to your workplace will filter out the pollutants in the air. Bring in calming, natural scents, such as lavender. You can also use natural and biodegradable cleaning products, such as vinegar, baking soda, and borax.

In short, there are many ways to be more environmentally friendly and efficient, to “go green,” without going away from what you do best- running a small business.

Effective pricing of products is an art. Reaching that delicate balance between consumer demand and product value generally takes a great deal of research and insight. But those business owners who continually invest in this process will position their businesses to maximize the revenue potential from their customers and ultimately increase their bottom line.

When trying to price the products in your business, there are several things to consider:

• What are you selling? Your first consideration when determining your pricing strategy is to take a look at the products themselves. Are you offering a high-end or specialized item, or something more generic? If the price of a high-end or specialized product is set too low compared to competitive products, then customers will perceive that the quality is lower. On the other hand, a standard product that is significantly higher in price compared to those of competitors may drive away customers who feel the product is overpriced.

• Who is your target market? Who shops at your business, what products and services are they looking for, and what are their spending habits? Since pricing is directly linked to consumer demand, awareness of the current consumer trends is invaluable to running a successful small business.

• What is your competition doing? In order to properly price your products and services it is essential that you determine what your competitors are charging and what the customers get for their money in terms of value and service. This information should give you a general price range for the products and services you are offering.

• What is your business’ perceived value among customers? The value of your products is greater then raw materials and labor that was used to create them. Convenience, customer service, free or immediate shipping, location, brand name, and reputation all add to the value of your products and will effect how much a customer is willing to pay for them.

• How should your salespeople close a deal? To encourage consistency and quality performance from your salespeople, you should create price guidelines that contain a target price, price floor and price ceiling, and then only allow deals that fall within this range. You should also create an incentive program that rewards high profit margins over sales volume, since salespeople may try to sell products and services at the lowest possible price in order to close the deal.

With all the hubbub involved in running a successful business, pricing management is often pushed aside with barely the slightest consideration. The truth is, however, that good pricing management can virtually boost a business’ profit margins overnight. Since small businesses typically operate on a tight cash flow and even tighter profit margins, pricing management is an invaluable tool that can help business owners in their quest to maximize operations and performance.

Addressing your pricing strategy in a systematic fashion, brings several benefits to your business:

1. Good price management can stop revenue and margin leaks. Through effective price management you will stay in touch with the amount that customers are willing to pay for the products and services you offer and thereby reduce the risk of revenue loss through underpricing or overpricing.

2.You will stay in touch with the needs of your customers. Since pricing is heavily connected to consumer demand, you will need to be aware of the current consumer and industry trends. This information is invaluable to running a small business where success is often determined by the ability to establish a niche market and quickly cater to changes in consumer demand.

3. Learn the value of your products and services. The value of your products goes way beyond the raw materials and labor that was used to create them. Convenience, customer service, free or immediate shipping, location, and brand name, all add to the value of your products and will effect how much a customer is willing to pay for them.

4. Recognize the strength of your brand name. A small business’ reputation among customers is an asset that is often overlooked, yet can greatly add to the value of a product.

5. Encourage consistent and quality performance from your salespeople. You can establish price guidelines for salespeople that contain a target price, price floor and price ceiling, and then only allow deals that fall within this range. You can also create an incentive program that rewards high profit margins over sheer sales volume.

With a little discipline, good organization, and planning, small businesses can safely survive an economic downturn. Here are a few suggestions on how to stay afloat:

1. Stay in touch with your cash flow. Focus on the areas where your cash is being held up, such as inventory, equipment purchases, and accounts receivable. By doing so, you will be in a position to improve your current cash flow and predict a future shortfall.

2. Consolidate or restructure your debts. Bring together debt from loans, credit cards, or any other lines of credit. Negotiate with creditors for a longer repayment period.

3. Look for ways to cut costs. You could, for example, cut down on old and obsolete inventory, and save on paper and postage through the direct deposit of payroll.

4. Streamline your billing system. You need to on top of your customer receivables. There are several accounting software programs on the market, such as QuickBooks, that can help you keep track of who has paid and automatically alert you when bills are overdue.

5. Tighten your credit policy. Set stricter terms and conditions for receiving credit. You could require a down payment at purchase, shorten the payment period, and only extend credit to select customers.

6. Use assertive debt collection techniques. Know when to make phone calls, send written requests for payment, and statements, and know when it is time to hand it over to a collection agency.

7. Put off any plans for expansion. It is better to stick to what you are already good at and just try to make it better.

8. Negotiate with your suppliers. You can try to barter down what you are paying your suppliers. If you have a long term relationship with any of your suppliers then you may be able to get better credit terms.

9. Outsource certain jobs or tasks. Business owners can take advantage of a growing pool of professional freelance workers for any job or project that will take away from the business. This is a cheaper option to hiring employees, and you can get some quality work.

10. Focus on customer satisfaction. Work on retaining the customer base that you have built up with follow-through, good customer service, and quality control.

11. Know your financing options. Know where to get money before you need it. Some financing options are based on future sales and have flexible repayments, such as invoice factoring or merchant/ business cash advances. Focus on building relationships with current lenders, and do not forget about any family or friends who may be able to help you out in a pinch.

Setting up a system for performance management is sound business practice. Though performance management is usually associated with big and mid-sized businesses, small businesses have much to gain from evaluating how their employees work. This is especially true since many small businesses typically undergo rapid growth and/ or change. Performance management can help small business managers stay on top of productivity given changes in job descriptions or location, and hiring new employees.

A solid performance management system includes four basic elements:

1. It provides a clear understanding of job expectations. Create a clear and detailed job description for each position in your business. Each job description should describe the employee’s current duties and performance expectations, including: job function, required skills, deadlines and goals, as well as relations with peers and customers.

It is important to update your job descriptions especially if your business is rapidly growing or changing, since this could lead to new job responsibilities and shift in workload.

2. There is a system in place to measure job performance.
Once you have clearly defined each position, you need to find a way to evaluate job performance. For some jobs where there is a quantitative output, this can be relatively easy, such as measuring how many sales were completed, or how many items were constructed. Other positions may require more subjective measurements, such as customer satisfaction.

3. Management offers regular feedback about performance. Once you have evaluated your employees’ job performance, it is vital that you give them advice and feedback on how they are doing. If their performance is average or above-average, then make sure to let them know. If there is room for improvement, then give them suggestions on how to perform better.

Some of the feedback and suggestions for improvement could actually come from the employees themselves. Therefore, do not forget to tap into this resource by asking your employees how things could be made better.

4. There is a reward system for good performance. Make sure to have a system in place that recognizes and rewards good performance. Just try to ensure that your definition of “good” performance is not set too high. Otherwise, you may create a system that only recognizes the contributions of the over-achievers.

Building good employee morale is one of the most important keys to running a successful small business, and it starts with the recognition that your workers are one of your biggest assets. Aside from productivity, your employees can be a source of innovation and a positive customer experience that will lead to increased sales. Knowing how to bring the best out of your employees will therefore not only make your business a more enjoyable place to be, but it will also effect your bottom line.

The following are 5 tips to building employee morale in your small business:

• Communication: There are several aspects to communication with your employees: initiating dialog, encouraging your employees to speak, and then listening to what they have to say. Your workers will appreciate your openness if things need to change, such as the introduction of new equipment or a change their work patterns, and they will further appreciate being able to voice their concerns or offer helpful suggestions that you may not have thought of.

• Response: But it is not just good enough to hear what your employees are saying, you also need to respond to it. Whether an employee brings a complaint or a cost-saving suggestion, and irregardless of the actual action you end up taking as a result, you should try to get back to your employee about the issue. The more validated and understood your employees feel, the more change they will be able to withstand and the more helpful tips they will be able to offer.

• Recognition: You will also go a long way with your employees by recognizing their efforts. Just keep in mind, that what ever recognition and reward system you set up, make sure that it is not just focused on the outstanding performers. Some of your employees may never be outstanding, even if they technically do a good job. So make sure to also focus on the average players.

• Involvement: Getting employees involved in some of the big business decisions, especially the ones that will directly effect them, is another good way to build employee morale. You could for example, set up a small committee among the workers to come up with ways to increase efficiency or sales.

• Advancement: Make sure you have a set plan for employee advancement. This plan should include steps to increased responsibility, higher paying jobs within the business, and a raise schedule.

You have worked for weeks on a business proposal to bring a new product line to your company. You have carefully updated your business plan and secured all the necessary financial documentation. Now, several days later, you are sitting in front of the loan officer and despite all of the preparation, your application for a business loan is denied!

Being rejected for a loan can be an unpleasant shock, but with a little time and effort it is possible to rectify the issues that caused the rejection. First, you need to determine exactly why your loan application is being turned down.

The following is a list of common reasons why a bank may choose to deny a loan as well as some ways to handle it:

• Your business is under-capitalized. This is generally due to an unfavorable debt-to-equity ratio. First, you should try to include any outstanding notes payable to the company and list those as equity. Additionally, you can use the funds in your savings account and either invest it in your company or pay off any debts. Finally, you can try to secure a second mortgage, liquidate investments or even cash-in the value of your life insurance policy.

• Your company has not yet made a profit. Without a solid track record of profits, a lending institution may be unwilling to risk giving you a loan. In this case, you can create a more accurate picture of your financial situation by providing comprehensive income and cash flow statements You should also provide a detailed proposal of how you plan to make a profit in the future. Include a breakdown of the profits that you hope to achieve once you have secured the loan.

• The amount requested is too high. Lending institutions will often minimize the risk of granting a loan by reducing the principal so that it matches up to your collateral. Here you have a few options. First, you can reexamine the current net worth of your assets. If the determined value is unchanged then you could offer other items up as collateral. Finally, you can always reexamine your proposal and try to reduce the amount of money that is required to complete your venture.

Many small business owners have successfully avoided the arduous business of applying for loans by utilizing business cash advances. Business cash advances are based solely on the purchase of future credit card transactions and therefore do not have interest charges or obligations for repayment.

How do you use your company’s resources to its maximum? How can you successfully run your small business? After investing so much time and money to start your small business, you want to know exactly how to run it successfully.

The first thing to realize is that although you may be concerned about making an income, with a small business, success is not necessarily measured by the bottom line- especially if you are just starting up. A successful small business is really one that uses its resources to the maximum, and this only happens when the business owner is well informed.

There are numerous articles online that offer advice on how to successfully run your business. Though these articles include several important tips, such as making a business plan and paying attention to your cash flow, I felt that many fundamental ideas were either missing or under emphasized.

What follows is a list of these essential ideas on how to run your small business to its maximum:

Start small; think big! We are living in an “instant generation.” Many people are looking to “get rich quick” with as little investment as possible. Even if someone has a solid business idea, without hard work and  a lot of patience, often this bubble bursts, and the venture is unsuccessful.

The best thing you can do for yourself and your business is to start small and set realistic goals! There is almost always room to expand later on once you have established a customer base and standard operating procedures.

Know where and how to get capital you need!  The business financing industry goes way beyond standard business loans (See my article, “Alternative Financing 101″). You can for example, lease equipment, or factor your accounts receivable. So before you offer you house up as collateral, make sure to do your research. 

If a loan ends up being your best option, then interview prospective loan providers. Choose the lender with whom you can build a long-term relationship in case you need to get another loan later on.

Outsourcing! Recognize your company’s strengths and focus on them- especially at the beginning. Outsource anything that is not a skill or will take away from your company. Typical outsourcing includes, shipping, billing, secretarial work, and web design.

Marketing! When it comes to small business, advertising goes beyond plastering your name in as many places as possible. This only works for big companies with established brand names. Here quality and not necessarily quantity is most important. If you rely heavily on word of mouth, then put a lot of emphasis on your customer service. If you have a website, then don’t just optimize it for a search engine. Make sure it has good and clear content.

Value your workforce! Whether you are paying minimum wage or top dollar, your workforce is your most valuable asset. If your workers are happy then they will do a better job for you. They should feel respected, valued, and treated fairly. Also, encourage them to give advice on how to improve your business. 

Stay in touch with your market! Take time to talk to your customers. Ask for feedback, do surveys, and be flexible to act on what they tell you.

Good Luck!