Archive for February 2011
In the event your small business starts experiencing a lull in cash flow, you need to act fast. Even if you’re still profitable on paper, that doesn’t necessarily mean you have enough in the bank to pay the bills. Problems can arise especially if your company is successful, but your customers start slowing down their payments.
David Worrell of Allbusiness.com has a specialty in finance and managing small businesses. He wrote a great article on a few tips that can help you survive a cash flow crisis. Below are a few pieces of advice from David that may help to save your company from going under.
Know the numbers.
“In good times and bad, keep an eye on key cash flow numbers. I’m not talking just about a cash flow statement each month, but also about key ratios or metrics in your business. If you start this habit in good times, you’ll have forewarning when cash turns against you,” David says.
His advice is extremely useful in this circumstance because new business owners have their focus spread out. It’s important to keep a finger on the pulse of your cash flow because you will be able to better sense an incoming crisis and have more opportunities to prevent it from happening.
Cut your own pay. Now.
“Besides taking pressure off of cash, this will motivate you to fix the problem. If you hide behind a salary – and keep building debt, or laying off staff to pay yourself – the problem will grow worse until it is out of control. Cutting your own pay also demonstrates leadership to your team,” David says.
This fact is extremely important to running and entrepreneurial business. As a leader, you need to demonstrate how important it is to work together with your team members. If that means your employees are paid and you’re not in times of crisis, so be it. They will be more motivated to stick with you and have a deeper connection with the business. Employees that feel as though they are a part of the company – rather than just employed by it, can help take a company to a much higher level.
You can’t start anything and expect it to succeed if you don’t have a plan. After developing, nurturing and convincing yourself and all of your confidantes that your new venture proposal is an absolutely fantastic idea, you need to write a business plan.
There are many different views on how long this process can take, some say a few weeks and some say six months. It truly all depends on the kinds of resources you have available like time, money to conduct an effective amount of research, and the people you need to work with in order to create the best business plan ever.
Here are a few tips based on some advice from Tim Berry, founder of Palo Alto Software, about a few factors that make an effective business plan.
It must match the business purpose
Your small business should have an ultimate end goal in mind, whether the plan is to exit to get investment, create a self-sustaining charity, or whatever your goal for your business may be. Your business plan should be framed by your business purpose – where your business is going and what you want to leave behind.
Lesson 1: Your business plan must outline your company objective.
It must be realistic
Your business plan really won’t get you anywhere if your projections are off the charts. You may have a fantastic business plan with pretty charts and flawless formatting, but if you are presenting an idea for a product that simply cannot be produced, it’s not going to catch on.
Lesson 2: Step back and assess the feasibility of your plan.
It must be specific
According to Tim Berry, “every business plan ought to include tasks, deadlines, dates, forecasts, budgets, and metrics. It’s measurable.” This idea is so true and it’s amazing how many business plans leave out the crucial information. You can make your company sound great but if you don’t have the numbers backing up your projections, you might as well start over.
Lesson 3: Outline your business’s every detail
You have to give yourself the ability to track your results and see if you are in line with your projections and goals. You will most likely encounter set backs and a few failures here and there but if you have a solid business plan and structure in place, it won’t be difficult to reassess your business situation and get back in line.
One of the biggest mistakes you can make with a small business website is just waiting for traffic to come to you. Why not, if you have a great product? Wrong. If you have a small business website you need to get your market’s attention. That’s not going to happen by simply offering a good product.
Your small business website has two different types of Google rankings. You have your search engine ranking and your page ranking. While they essentially work together to determine your website’s worth, they have a different set of criteria that defines the rank.
Search Engine Ranking
Your search engine ranking is where you end up on a results page after a person conducts a keyword search through Google. Naturally, people are going to click higher up on Google to get what they want. So, it’s important for you to put some effort into your website so you show up higher on Google.
Every web page out there has a score between 0 and 10 (10 being the better score). This score represents how influential your web page is. According to Entrepreneur.com, Google updates page rankings four times every year. There are several things you can do to improve your individual page ranking as well.
If you don’t know your ranking, simply search for your product on Google and see where you end up. You also have the option of finding a web page that shows page ranks – for you and your competitors. If you install Google’s Toolbar, you will have the ability to see each site’s page rank as you visit them.
Here are a few ways to improve your page ranking and your overall search engine rankings:
The more pages out there that link back to your site, the higher you will appear on a search engine, it’s as simple as that. This means you should participate in conversation with others (or even your competitors), and provide a link back to your website. Social Media is another great place to leave links.
Use keywords throughout every webpage, but don’t practice keyword stuffing. If you stuff your content with keywords, Google can actually punish your ranking. Try to use keywords as naturally as possible throughout your web content.
In lieu of Valentine’s Day next week i decided to cover a topic a little closer to our hearts. How do we business-oriented people balance our relationships and our professions? This sort of advice can apply to any career-oriented person, not just the newly budding entrepreneur or over-achieving small business owner.
Entrepreneur.com recently posted an article that discusses the ultimate business question: how do you balance your business and your personal life? Any mentor will tell you that owning your own business can often strain even the best marriages. The article shows how three couples manage to balance romance and business.
Travel often comes with the territory when you own your own business. Entrepreneurs Peter and Susan Fuller (married for 18 years) have firsthand experience. They each own a separate business in Indianapolis and Peter is forced to travel frequently – one of the number one strains of any relationship, especially if there are children involved.
Peter felt he was doing his best to stay connected but once he slowed his business travel to once every six weeks, and supplemented the time apart with Skype video calls, the couple was able to regain their passion.
in any relationship it’s important to have similar goals, like having the freedom to create their own paths in life.
Another struggle couples often go through when business is involved is the failure of a venture. Dediako Rogers watched helplessly as his real-estate business plummeted in 2008 after the housing-market collapse. He and his wife, Rachel were newlyweds and were constantly cutting expenses in every way they could, including downsizing their home and sharing one vehicle.
The couple was able to get back on their feet after Rachel received her law degree and started a law firm serving Gen-Y entrepreneurs and business owners.
Being married to another entrepreneur is helpful because you understand each other’s drive to run their own business. Be supportive of each others’ pursuits and encourage each other to start new businesses and try new things.
One of the most unlikely strains comes from being married to your business partner. It can make it difficult to keep business from becoming involved in every part of your life. Jessica Rovello and Kenny Rosenblatt met while working at a tech company and launched an online gaming business in 2001 together. They married in 2004.
The two experienced difficulties when they caught themselves bringing their work home.
Respect each other’s passion for your professions. It’s important to balance work topics with fun topics as well.
If you are an aspiring entrepreneur, 2011 is the best time to start a business. If you’re tired of working in a managerial environment and you’re ready to take on a market, you should start exploring some ideas. Before taking off into a new venture, you need to be aware of what kind of opportunities are excelling in the market this year.
The Noobpreneur Business Blog posted 10 great ideas for budding entrepreneurs everywhere to consider. Read on to see the ones I thought were the most opportunistic for 2011.
1. Online business and make money online
Online businesses will always thrive so long as our society continues to depend on technology the way it does today. People search for products, brands, prices, reviews, and just about everything they need online. Your online business can be very lucrative because it is more cost-effective (if executed properly) than a brick-and-mortar location. If you set up your small business website, make sure you maintain control over the content so you can adapt to the changing environment and evolving consumer preferences.
2. Personalized products and/or services
There is a growing need for expressing individuality in today’s market. Customization is always a great way to please your consumer base. Offering a product your consumers can design themselves is almost a guarantee of customer satisfaction and word-of-mouth marketing. The opportunities are limitless here. You can offer t-shirts, greeting cards, school supplies, really anything that someone can personalize – you can take advantage of.
3. Small business with a cause
I recently learned of a non-profit organization that offers a free online game similar to Facebook’s Farmville. This game allows the user to build villages and actually purchase provisions for the village. By making donations and purchasing provisions through the game, the game hosts purchase real life provisions and provide them to a needy village in Uganda. Once the village is self-sustaining, they can move on to another village. They then take pictures of the provisions being provided to the village in Uganda, and post them so the gamers can see them and be involved in the whole process.
Offering an abstract incentive to buying your product can go a very long way towards your business success. If you embed a social cause into your products and services, you will have happy customers.
There are so many opportunities for you to take advantage of. Setting up your business is the easy part – it’s finding an idea that’s difficult. All you have to do is pay attention to a problem in the market and figure out a way to solve it.