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4th Quarter Small Business Checklist
posted by Sarah Day, December 15, 2011

As we approach the end of the year, here are some things you can do to make sure your business is in shape for the New Year. Run a financial check-up. Review your year-to-date profit and loss statement, balance sheet and expenses in preparation for your year-end reporting. Look for gaps or errors you can correct before the end of the year.

Prepare a budget. Factor in expenses for computer and software updates and purchases of new equipment. Prepare a list of areas to cut if cash flow or profits fall below expectations and a list of opportunities to add or increase if above expectations!
Fine tune your business plan. Adjust your expectations based on financial variances and lay the groundwork for future sales.
Update your marketing plan. Make changes for the coming year. Are you consistently getting the right message out to your target market or are your communications sending mixed messages?
Review your customer database. Update information as needed. Make a list with the intent of getting in touch with past customers and checking in with existing customers. And don't forget to ask for referrals when you do.
Review staff and provide feedback. Acknowledge and reward accomplishments. Identify behavior that should be addressed and improved.

Attracting Employees When You Don't Pay for Healthcare
posted by Sarah Day, September 9, 2011

If you don't pay for healthcare and retirement benefits it can be difficult to attract employees. But don't overlook non-traditional benefits that can enhance work/life balance – they can help give you a competitive edge. Some examples:

Work at home privileges
Discretionary hours (earlier mornings or later nights)
Paying for all or part of club memberships, association dues and training courses
Bonuses, such as time off or other prizes, that are pegged to performance goals
Paying for all or part of home technology equipment and/or telecommuting expenses
Assisting with daycare
Tax or retirement planning help

While you may not be able to offer a comprehensive benefit plan, you likely have some flexibility. Extending benefits like these that speak directly to the needs of the employee can help you to attract candidates who are ruling out more structured situations.

Tune-Up Your Business Contracts
Posted by guest blogger, Steve Marino of Marino Law Firm, P.A.

All businesses should have their own preferred standard form contracts with customers, and any deviations should require approval from top management.

Further, just as a smart car owner periodically inspects tires and fluid levels and has tune-ups done at recommended times, so too a savvy business owner should revisit the business' standard contracts periodically to adjust and tune them up. Typically, every one to two years is a good interval to revisit this subject.

You should review and revise your standard form contracts based on your business' experiences. Ask yourself these questions in doing that review:

Are there terms that customers on several occasions have complained are confusing or have led to legal disputes?
Are there terms that have upset customers on multiple occasions?
Are there new best practices developing among your competitors' own contract terms?
Does your standard contract spell out clearly and completely such key terms as payment terms, time for performance or delivery, an integration clause, cancellation and refund rights, warranty, liability limits, etc.?
Are there typos, garbled language or missing words? Over time, such flaws can develop despite the best intentions.

After taking this contract review and editing process as far as you can internally based on your practical experience from working at the business, you should then run the contract by a business attorney who is knowledgeable on contract law to finalize the matter.

In sum, periodically adjusting and tuning up your standard form contracts will help your business run better and reduce legal risks.

Steve Marino can be reached by e-mail at steve@marinolawfirm.com and by phone at 651.631.8508.

When to Renegotiate with a Customer
posted by Sarah Day, May 25, 2011

With summer around the corner, you may find yourself with a few more minutes to evaluate your business. One of the things to look at is your customer relationships – do they all still work for you? Evaluate each customer's cost of goods and profit margins, payment history, and the amount of time spent by you and your staff to get a clear picture of what is going on.

It may be this review will show you that the terms of some of your business relationships need to be restructured. Think about restructuring when:

The customer is demanding lower prices. Do not commit to margins that make the job impractical for you. If they persist, see if they will commit to purchasing in bulk in exchange for a lower unit price.
They are slow to pay their bills. There can be many reasons for slow pay, ranging from poor cash flow to poor organization. To increase their motivation to pay, see if a small discount for early payers can get the account back on track.
They absorb a large amount of employee time. Assign them a key contact within your company to limit their access – and make sure everyone in the company knows who it is and complies with this requirement.

Not all relationships can be effectively renegotiated. Next time I'll tell you when to fire a customer!

Can't Handle Your Workload? Raise Your Prices!
posted by Sarah Day, May 13, 2011

Everyone strives to fill capacity and stay busy but if you are a sole practitioner with too much to do there's a sure-fire way to de-stress. Raise your prices! Ask yourself these questions to see if a price increase makes sense:

What's your closing ratio? If you are closing 100% of your business chances are you are priced too low. Probabilities indicate that you shouldn't close it all – and if you are I guarantee you are priced lower than your competition.
How close are you to 100% capacity? The closer you are to 100% the greater the opportunity for a price increase.
How much of your business is repeat business? If repeat business is not a factor for you (or if customers shop infrequently) your customers have no basis on which to compare your present pricing with your past pricing. This makes your increase practically invisible.
When did you last take a price increase? Most service businesses take regular price increases. Because of inflation, if you aren't taking a regular price increase you are actually squeezing your margins over time!

Often business owners are concerned about losing business if they raise prices but consider this: if you raise your prices 25% and lose 20% of your business you could be making the same amount of money but doing less work. Hmmm…

Where to Look for Profit Leaks
posted by Sarah Day, March 15, 2011

So your business is unprofitable and you aren’t exactly sure where all the money is going…ask yourself these questions to see if you’re experiencing any of these common profit leaks:

Have your labor costs risen?
Are you paying more for materials used to provide your goods or services?
Are you experiencing a high volume of returns? Why?
Are you paying more for freight, transportation or gas than you used to?
Have your utility costs risen?
Are you performing work for customers that you don’t bill, like shopping for materials or project design?
Are you making return trips to customer sites to correct customer problems?

Any of these issues can be leaching cash out of your business. If you see these things happening diagnose the situation to see how and why it’s happening and take corrective actions.

Go on a Debt Diet
posted by Sarah Day, February 10, 2011

Are you struggling to pay multiple creditors, including credit card holders? Is it sucking the cash out of your business? If your business is weighed down by credit card debt try following these steps to get it under control.

To the extent possible, stop using credit cards. Delay purchases that are necessary to the business. For necessary purchases, see if you can negotiate payment terms with your vendors.
Identify any credit cards with unusually high rates. See if you can pay the off or transfer the balance to a card or credit line with a lower rate. (Keep a watch out for high balance transfer fees – sometimes these can eat up the savings from the lower rate!)
Set up a budget. Lay out the amounts you can commit to pay by month so you can budget the total amount to be paid. If you can commit more than the total minimum payment amount, apply the difference to the card with the lowest balance.
Roll over payments. As you pay off the card with lowest balance, add the minimum payment amount (or the actual amount you were paying, if higher) to the amount you are paying to the card with the next lowest balance. This way your total outlay of cash for debt repayment remains the same but over time you are more aggressively attacking the remaining debt.
As you pay off a card, cut it up so it cannot be used again. After all, you don’t want to be running up a debt on a card that’s paid off while trying to reduce the balances on others!
If you can’t commit to the minimum payments…see if your credit card holders will renegotiate terms or accept a lower repayment amount for payment in full. Consult a turnaround specialist if you need help negotiating.

What’s Your Competition Paying Its Employees?
posted by Sarah Day, January 20, 2011

Uncovering the competitive market rate for a job can take some detective work. To find out what other companies pay, research these sources:

Visit the U.S. Bureau of Labor Statistics to view “Wages by Area and Occupation”
Look for salary survey information on the web. Software providers like Salary.com offer regionally-based salary information for job seekers that you can access for free
Search classified ads in newspapers, trade magazines or online job boards
Quiz your professional contacts and officials at your local chamber of commerce
Ask the associations you belong to if they issue annual salary surveys – if they do it is likely that your dues paid to fund the survey and you can get a copy of the results at no additional charge

When agreeable partners can’t agree
posted by Sarah Day, October 25, 2010

What you find in many good, long-term partnerships is one partner who is relatively conservative and one partner who is more of a risk-taker. The partnership survives because of a deep-seated mutual respect and the balance that each provides the other.

But while this balance can be a real strength when dealing with day-to-day operations, it can make things difficult when there is a strategic decision to make. Every decision involves a certain amount of risk and these opposing partners may have very different ideas about the impact to the overall business.

If the conservative partner yields to the risk-taker it can lead to an immense amount of stress for the conservative partner. They worry about the impact of the decision, feel a lack of control, and can put unrealistic expectations on the risk-taker to make the venture successful.

If the risk-taker defers to the conservative partner it often leads to inactivity. Because the conservative partner is not willing to make a strategic move perceived as high-risk the business stagnates.

In order to reach good decisions, each partner must step outside his or her personal position and take an objective look at what is best for the business. A classic resource that can assist with basic negotiation skills: Getting to Yes: Negotiating Agreement Without Giving In by William L. Ury, Roger Fisher, and Bruce Patton.

Free Market Research for Small Business
posted by Sarah Day, September 30, 2010

Here are some of my favorite free resources for conducting marketing research:

Small Business Administration (SBA) for small business information including free, online training

U.S. Census Bureau for regional demographic information

North American Industry Classification System (NAICS) for information on specific industries

U.S. Department of Labor’s Bureau of Labor Statistics for consumer spending information

American Factfinder available through the Census Bureau

Getting Your Business Plan off the Ground
posted by Sarah Day, September 1, 2010

One of the struggles for many business owners trying to write a business plan is identifying the elements to go into the plan. But you needn’t struggle. There are resources available to help you get your plan started.

If you haven’t written a business plan before, the Small Business Administration (SBA) is a good place to start. Look for the Small Business Planner. SCORE also has a business plan template in their Business Tool box.

Low cost software packages like Business Plan Pro can help you by providing a structure and often a template, depending on your type of business. And check with your bank – some have a business plan template they offer their customers. Ask your business banker or check the resources on their web site if they have a recommended template you can use.

Another option – attend my business planning webinar on September 8. The hour-long session will discuss the elements of a business plan and give you a roadmap to get started. For more information or to register see the posting at Business Expert Webinars.

Posted by Sarah Day, August 11, 2010

Business Expert Webinars (BEW), the leading provider of virtual business training, announced the release of their latest book: Business Expert Guide to Small Business Success. Twenty-one business thought leaders collaborated book to develop this book intended for small business owners and operators. Published by Business Expert Publishing, the book publishing arm of Business Expert Webinars, this book presents actionable ideas addressing the critical areas plaguing small businesses.

“As a small business owner, your employees look to you to come up with all of the answers. Many have found that the 'idea-well' has run dry and are looking for new, innovative ways to increase revenue, improve morale, or drive profits. The twenty-one business thought leaders who contributed to this book share secrets that can have an immediate impact for small business owners,” said Lee B. Salz, President and CEO of Business Expert Webinars."

See the complete release at http://www.businessexpertwebinars.com/content/view/1071/86/

Is E-mail a Time Saver or a Time Waster?
posted by Sarah Day, August 4, 2010

If you kept a schedule of how much time you spend reading and responding to e-mail you’d probably be unpleasantly surprised. Don’t let your e-mails dictate your day. Here’s a few ways to take control:

1. Set aside one or two specific times each day to read and respond to e-mail
2. Limit the amount of time for each session
3. Prioritize your responses and act on urgent e-mails first
4. Take an hour to unsubscribe from lists that send mail you don’t read
5. Set up your e-mail to send non-urgent communications to a special folder where you can read them at your leisure

Is Your Business Starved for Cash? Four Things You Can do Right Now to Increase Cash Flow
posted by Sarah Day, July 19, 2010

If you need to generate cash in a hurry, here are a few places to start:

Look at your aged receivables report. If there are clients that are past due, even by a few days, give them a call. If possible, offer to send a courier to pick up a check.

Make sure your invoicing is up-to-date. If jobs or orders are unbilled drop everything else and bill them now. Send invoices by e-mail to speed up payment.

Blow out excess inventory. If you have items that aren’t selling they are just tying up cash. Put them on sale or offer a sizeable discount for bulk purchase. Call customers who’ve bought the product in the past to let them know you’re phasing it out and give them a “last chance” opportunity to buy. If you can’t find an obvious buyer, try putting excess inventory on eBay or try to barter it for something you need that would otherwise require cash.

Consider alternate forms of payment to get cash up front. Credit cards have processing fees but the “cash” is in hand right away. Or offer a small discount for cash payment.

Stop Procrastinating!
posted by Sarah Day, July 8, 2010

Does summer find you gazing out the window thinking of everything but completing the work on your desk? Whether procrastination is a way of life for you or just an occasional bad habit you can learn to work more effectively using these tips:

Break it down. Think of complicated or time-consuming projects as a series of smaller tasks. Completing smaller tasks can give you the momentum and the sense of gratification you need to help move you forward.

Celebrate milestones. Instead of waiting until a complex project is done, reward yourself for completing tasks within the project.

Eliminate distractions. Organize your work environment. Close your door. Get the clutter off your desk (even if only temporarily). For help eliminating clutter try Getting Things Done: The Art of Stress-Free Productivity by David Allen.

…and Be Patient – procrastination is a habit, and like all habits it can take a while to break.

Characteristics of Good Business Partnerships
posted by Sarah Day, June 28, 2010

Why do some partnerships succeed and others fail? Good partnerships often share most or all of these characteristics:

Clearly stated expectations. Don’t keep your partner guessing about what is important to you or what your goals are for the business. If your goals differ it is important to know early so you can reconcile differences or accommodate them.

Honest dialog. It’s critical to be open and honest especially if you disagree. Keeping your opinion to yourself can breed resentment and possibly head your business down the wrong path.

Recognition and acknowledgement of each others strengths and weaknesses. Know where each partner excels – and where they need help. This can help you to allocate responsibility and be a key to know when to get help.

Regular review of results. Both partners should have complete and ongoing visibility to what is happening in the business. The only way to address problems – and celebrate mutual success – is to share them.

Are You Taking Care of Business – or Are You Micromanaging?
posted by Sarah Day, June 16, 2010

Every business can benefit from a leader’s laser focus and passionate attention to detail. However, when passion turns to obsession productivity and morale are both at risk! Here are three indicators that might mean you are micromanaging:

1. Nothing moves forward when you’re away from the office. If your staff must OK every decision with you, you are standing in the way of productivity. Of course you need oversight over major decisions, but there are surely a handful of day-to-day decisions (or more!) that they can handle without your supervision. Decide what those are and delegate them permanently.

2. Your desk is full of administrative tasks that must be completed. You’re the manager – manage! The first things you should delegate as a leader are the administrative tasks that can be done by someone who works for you. Free up your time for the more important work.

3. Your day is full of meetings with your staff. The more people in the meeting, the more that meeting is costing you. And you are the most expensive resource there because the opportunity cost of tying up your time is huge! Evaluate those meeting that you attend and decide which ones can be held without you (and which ones can be done away with completely).

How – and When – to Get Professional Help for Your Small Business

Most small business owners do it all – you’re the boss, the financial officer, the head of sales and everything in between. And when you’re starting out that’s often necessary. You’re not sure what support would help your business and even if you knew, you couldn’t afford it anyway.

But as your business grows, being a one-person show can stop you dead in your tracks. You have only so much time in the day and eventually, you’ll top out on how much you can accomplish. No one can grow over their own capacity!

Here are some signs that you should seek professional management help:

Important things are falling through the cracks. If you’re on your feet all day and still missing bids, behind on your financial record-keeping, and not returning calls you may be impeding your business growth. This is the time to get some help assessing the way you work and where you can become more efficient.

You’re stuck in the details of the business. Anytime you pour your heart and soul into your work there’s potential to become too focused on the details at the expense of the big picture. Think how many times you’ve reviewed something you’ve written or produced only to have the first person you hand it to point out an obvious mistake! Getting an outside perspective can help you see the things you’re missing. And often, correcting those things can get you quickly back on track.

You lack management support. Many small businesses have no management in place at all – there are front line employees doing the work and an owner or a couple of partners managing at the top. But the whole layer of management that exists in larger businesses is missing. There’s no human resources director to help you hire or manage your workforce. No marketing manager to plan your ads or generate leads. No CFO to monitor what’s happening financially. A trained professional can help you with management tasks that you can no longer perform effectively or that are outside your area of expertise.

The business isn’t going as expected - and it’s keeping you up at night. Perhaps despite your best intentions the business is not taking the direction you want and you have no idea what to do about it. Not only that, you can’t tell anyone – it’s too stressful to talk to your spouse, and you can’t share business details with your employees or peers. It can be a desperate, lonely place to be. Getting outside help can give you not only some needed direction, but the peace of mind that you’re doing the right things and making good decisions.

Asking for help is not a sign of failure – it’s a sign that you have the leadership and desire to make your business better! To get help consult resources like the local office of the SBA . Or to find an advisor you can trust, ask your friends and associates, or seek out a local member of Business Network International (BNI) or the Institute for Independent Business (IIB).