http://www.sba.gov/community/blog/rss/15021/feed en Get Over These Dangerous Business Planning Myths http://www.sba.gov/community/blogs/get-over-these-dangerous-business-planning-myths <p>If you don&rsquo;t plan your business because you don&rsquo;t need a formal business plan document for a loan application or investors, you&rsquo;re missing out. Planning is a tool for steering and managing your business &ndash; something that benefits all businesses, whether they need the formal document or not.</p> <p>That fear and doubt so many business owners have (are you one of them?) is associated with several dangerous myths about business planning. So I want to dispel those myths with this post.</p> <h2> 1. It&rsquo;s about the management, not the plan.</h2> <p>Your plan exists to help you manage. It includes only what you need for its function, which is setting strategy, tactics and concrete specifics. You use it to track performance against plan, review results, and revise regularly, so the plan is always up to date. And that&rsquo;s not a big document; it&rsquo;s a collection of lists, bullet points, reminders and projected business numbers. I hope it&rsquo;s gathered into a single place, as if it were a document, but it doesn&rsquo;t have to be. And it&rsquo;s only as big as you need, as polished as you need, as formal as you need.</p> <p>Your business plan document, if and when needed, adds a lot of description and supporting information that&nbsp;aren&rsquo;t in the main plan. That&rsquo;s additional dressing. You add it when you have to in order to show a plan document to outsiders.</p> <p>Every small-business owner suffers the problem of management and accountability. It&rsquo;s much easier to be friends with your coworkers than to manage them well.</p> <p>Correct management means setting expectations well and then following up on results. Compare results with expectations. People on a team are held accountable only if management actually does the work of tracking results and communicating results, after the fact, to the people responsible.</p> <h2> 2. Not all business planning needs rigorous market analysis.</h2> <p>Contrary to the myth, a business plan doesn&rsquo;t have to include supporting information to analyze or prove a market &mdash; at least, not until later, if and when the business purpose requires it. Not that you don&rsquo;t have to know your market &mdash; but you don&rsquo;t have to describe it or prove it for a lean plan. You don&rsquo;t have to show some outsider who you are, what you own, or any of that.</p> <p>You don&rsquo;t have to do a rigorous market analysis as part of your plan if you know exactly what you&rsquo;re offering, and to whom. So what about market analysis? Think about the business purpose. Do you need the market analysis to help determine your strategy? Then do it. Are you ready to go with that&nbsp;strategy regardless? Then don&rsquo;t sweat the market analysis.</p> <h2> 3. Good planning doesn&rsquo;t reduce flexibility. It builds flexibility.</h2> <p>People say, &ldquo;Why would I do a business plan? That just locks me in. It&rsquo;s a straitjacket.&rdquo;</p> <p>And I say: wrong. The dumbest thing in the world is to do something just because it&rsquo;s in the plan. There is no merit whatsoever in following a plan just for the plan&rsquo;s sake. You never plan to run yourself into a brick wall over and over.</p> <p>Instead, understand that the plan relates long term to short term, sales to costs and expenses and cash flow, marketing to sales, and lots of other interdependencies in the business. When things change &mdash; and they always do &mdash; the plan helps you keep track of what affects what else, so you can adjust accordingly.</p> <p>It&rsquo;s not like change undermines planning; actually, planning is the best way to manage change.</p> <p>So running a business right requires minding the details but also watching the horizon. Eyes down, eyes up. At the same time.</p> http://www.sba.gov/community/blogs/get-over-these-dangerous-business-planning-myths#comments The Industry Word Managing Starting Mon, 21 Jul 2014 21:01:55 +0000 Tim Berry 1099581 at http://www.sba.gov/community 5 Reasons Your Business Credit Scores Don’t Get You the Credit You Need http://www.sba.gov/community/blogs/5-reasons-your-business-credit-scores-don%E2%80%99t-get-you-credit-you-need <p>When you apply for a new credit line or request a credit limit increase for your business, suppliers, creditors and lenders want to see how your company has handled its existing credit obligations in the past. This enables them to determine if they should approve your request and to help determine what terms they should offer.</p> <p>Lenders often use <strong><a href="http://www.businesscreditblogger.com/2011/05/10/business-credit-ratings-2/" target="_blank" title="business credit blog" type="business credit scores">business credit scores</a></strong> to help them assess the level of risk a company presents. Business credit scores are calculated based on the information in a company&rsquo;s credit report. In most cases, higher business credit scores mean lower risk to a lender when extending credit to a business.</p> <p>Your business credit scores are calculated by a statistically derived algorithm, designed to calculate risk based on a variety of factors. Although each <strong><a href="http://www.businesscreditblogger.com/2010/12/17/business-credit-reporting-agency/" target="_blank" title="business credit blog" type="business credit reporting agency">business credit reporting agency</a></strong> has its own unique scoring models, scores and ratings, other types of information &ndash; such as financials, payment history and credit diversity &ndash; all play a role in the strength of your business credit reports and scores.</p> <p>Here are five reasons that may prevent your business from getting the credit it needs:</p> <p>1) <strong>A weak or incomplete business credit profile</strong> &ndash; The report and demographics of a company play an important role in how creditors assess creditworthiness. A business with issues such as poor financials, outdated registrations or high-risk industry classification codes can trigger a denial of credit or unfavorable credit terms. So it&#39;s vital that your company&rsquo;s documents, financials, filings, and registrations are complete, accurate and up to date.</p> <p>2) <strong>Limited or negative payment history</strong> &ndash; Your payment track record demonstrates how well your company handles its current and past credit obligations. A company with limited or negative payment history will have a difficult time getting credit.</p> <p>Aside from paying invoices in a timely manner, keep your credit usage consistent. Regular purchases and timely payments are what establish a positive payment history; it&rsquo;s what lenders want to see.</p> <p>3) <strong>Low credit limits</strong> &ndash; Low credit limits across multiple accounts plainly reveal to creditors that a business has limited credit capacity. However, a business with high credit limits reveals that it has the ability to handle large credit obligations. As a result, a business will receive much larger credit limit recommendations, especially if the company has low revolving debts. If your company has a positive payment track record with an existing supplier or creditor, it may be in your company&rsquo;s best interest to request a credit limit increase.</p> <p>4) <strong>High credit utilization ratio</strong> &shy;&ndash; While the size of credit limits reveal what amount of credit your creditors are willing to extend to your company, credit utilization ratios show how well your business manages it. Creditors view a high credit utilization ratio as a business with excessive debt with a greater risk of default.</p> <p>Keep credit utilization ratios at 50% or below to avoid falling into this high risk category. Low credit utilization is a clear indication that your business can handle its credit obligations. Doing so will ultimately benefit you during the credit application process.</p> <p>5) <strong>Lack of credit diversity</strong> &ndash; The types of trade lines your business has reporting play a substantial role in the credit granting process. Limited credit diversity may limit your company&rsquo;s ability to qualify for certain types of funding. Having short term financing, revolving accounts, installment loans and open accounts reveals to creditors that your company can manage various types of credit responsibly.</p> <p>Bear in mind your business credit scores will certainly have the tendency to fluctuate with each business credit agency, so it&#39;s vital to monitor your <strong><a href="http://www.businesscreditblogger.com/2014/06/16/business-credit-profile/" target="_blank" title="business credit blog" type="business credit profile">business credit profiles</a></strong> on a regular basis. While business credit reports and scores are an essential tool for lenders, suppliers and creditors to assess credit risk; other factors such as banking history, revenues and personal credit scores may play a larger role if a business lacks depth, diversity and density in its files.</p> http://www.sba.gov/community/blogs/5-reasons-your-business-credit-scores-don%E2%80%99t-get-you-credit-you-need#comments The Industry Word Financing Starting Tue, 08 Jul 2014 21:41:21 +0000 Marco Carbajo 1095961 at http://www.sba.gov/community True Story: Why You Don’t Want a Business Plan Writer http://www.sba.gov/community/blogs/true-story-why-you-don%E2%80%99t-want-business-plan-writer <p>It&rsquo;s been years since I was making a real living off of business plan consulting (I migrated to business plan software instead), but I had an exchange last week that reminded me of one of the biggest problems &ndash; and most common misunderstandings &ndash; related to business plans.</p> <p>Not that you, in your situation, should never hire a business plan writer, consultant or coach. In some cases that&rsquo;s a good idea. But let me explain that after I tell this story.</p> <p>One of my first engagements in business planning was as business plan consultant to a startup with three experienced founders. I met with them several times, listened always, and did their business plan. I built the financial model, wrote the text, and produced the document as a business plan document. But I wasn&rsquo;t part of the team. I wasn&rsquo;t able to promise to go full time. I was just the business plan writer.</p> <p>It was a good startup. It had a good idea and, much more important, a market window, differentiation and experience to make it happen. The three founders had about 40 years of computer company experience between them. And it was a good plan too.</p> <p>But there was a problem with the plan: The founders didn&rsquo;t know it. They thought it was enough to have a plan, but it wasn&rsquo;t. In every meeting I attended along with the founders, when there were critical questions, I had to answer them. I knew the plan. They didn&rsquo;t. It was my plan.</p> <p>And, in fact, the plan failed. My clients didn&rsquo;t get financed, and the venture never launched. Of course I was disappointed because I spent a long time developing and revising that plan. I repeatedly changed financial assumptions and revised text.</p> <p>So here is my advice about hiring a business plan writer, consultant or coach:</p> <p>The best business plan is one you do yourself. Hiring out is threatened by the fact that good business plans in real business use last a few weeks at best. Business planning is about regular review and revision.</p> <p>Consider hiring somebody from the outside only if you have the budget for it. It is conceivable that you don&rsquo;t want to do it yourself and your time is better applied to other business functions. Cheap business plan writing strikes me as about as good an idea as cheap surgery, cheap dentistry, or discount sushi.</p> <p>If you do hire somebody, look for a relationship more like coaching than consulting. Hire somebody who shares expertise and experience, makes suggestions, but doesn&rsquo;t do the task so you don&rsquo;t have to.</p> <p>Don&rsquo;t believe ever that having a business plan written is any good for more than a few short weeks. Business plans get old and useless very quickly. If you don&rsquo;t have one you can keep alive, then you don&rsquo;t have one at all.</p> http://www.sba.gov/community/blogs/true-story-why-you-don%E2%80%99t-want-business-plan-writer#comments The Industry Word Managing Starting Wed, 25 Jun 2014 15:41:11 +0000 Tim Berry 1092701 at http://www.sba.gov/community Searching For A Franchise? Don’t Complicate It http://www.sba.gov/community/blogs/searching-franchise-don%E2%80%99t-complicate-it <p>It&rsquo;s easy to do. It&rsquo;s easy to search for a franchise. Looking for a franchise...or even a couple of <a href="http://www.sba.gov/content/franchise-businesses" title="link to sba article">franchise opportunities</a> to investigate isn&rsquo;t hard. There&rsquo;s no pressure. You&rsquo;re just &ldquo;looking.&rdquo;</p> <p>It only starts to get difficult after you find one or two franchise concepts that actually make sense to you. I&rsquo;m talking about franchises that you can &ldquo;see&rdquo; yourself owning.</p> <p><strong>Let The Fun Begin</strong></p> <p>A lot of things happen internally when you start to see franchise opportunities that you can visualize owning.</p> <p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Your <a href="http://www.merriam-webster.com/dictionary/adrenalinew" title="definition of adrenaline">adrenaline</a>*&nbsp;levels increase. You start getting excited. More energetic. Nervous, too.</p> <p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You change from &ldquo;casual looker&rdquo; to &ldquo;would-be franchise owner.&rdquo; Things start to feel a bit more serious.</p> <p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; You start thinking.</p> <p><strong>Don&rsquo;t Complicate Your Franchise Search</strong></p> <p>Once you find a franchise you&rsquo;re interested in, your wheels start spinning. You start thinking about lots of things. Like:</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Where can my new business go? What would be <a href="http://www.sba.gov/community/blogs/finding-location-your-franchise-business" title="about franchise locations">the best location</a> for it?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; How many other franchises of the concept I&rsquo;m interested in are there around my area?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Will I be able to secure a small business loan?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Will I make enough money?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Could I lose all of my money in this venture?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Will my family be okay with me buying this franchise?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Should I just get a job instead of risking my money now?</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Etc. Etc.</p> <p>Stop.</p> <p>None of those things matter. You&rsquo;re complicating your search for a franchise.</p> <p><strong>First Things First</strong></p> <p>There will be plenty of time for you to ask those questions. But, you&rsquo;re wasting your time, and a lot of energy, if you start asking yourself questions like the ones I wrote above before you find out if the opportunity you&rsquo;re interested is even a viable one.</p> <p>In other words, don&rsquo;t put the cart before the horse.</p> <p>Instead, do this:</p> <p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Go to the franchisors website</p> <p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Look for the &ldquo;contact&rdquo; link</p> <p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fill out the contact form</p> <p>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Wait to get contacted</p> <p>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Arrange a call with a member of the franchise development department</p> <p>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On the call, share your story-and listen to theirs</p> <p>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Decide if you&rsquo;d like to continue learning more about the franchise</p> <p>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Follow the franchisors &ldquo;next steps&rdquo;</p> <p><strong>Take the steps</strong></p> <p>If you&rsquo;re still interested in possibly buying the franchise, continue down this list. If not, start your search for a franchise again.</p> <p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Call several franchisees, and <a href="http://www.thefranchiseking.com/two-franchise-research-questions-are-better-than-one" title="asking questions on franchising">ask questions like these</a>*&nbsp;&nbsp;&nbsp;</p> <p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Visit franchisees-spend a day with one or two of them</p> <p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="http://www.franchisebizdirectory.com/article/found-a-franchise-to-buy/" title="link to article on business plans for franchises">Start writing a business plan</a>*</p> <p>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Find a franchise attorney</p> <p>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Visit franchise headquarters&nbsp; &nbsp;</p> <p>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Have your attorney look over the franchise agreement</p> <p>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Make your decision</p> <p><strong>Your Wheels </strong></p> <p>It&rsquo;s right before your decision that your wheels will be spinning. Sometimes, they&rsquo;ll spin out of control. Things like self-doubt will creep into your head. Fear&hellip;real-live fear will also appear on your doorstep. But, don&rsquo;t worry. It&rsquo;s completely normal.</p> <p>If you ask the franchise development director, the franchise executives at headquarters, and existing (and former) franchisees great questions, and their answers are satisfactory, it may be time for you to become the owner of the franchise you&rsquo;ve been focused on for the past few months.</p> <p>But, you don&rsquo;t have to say yes. You always have a choice. Don&rsquo;t complicate your search for a franchise-the right franchise.</p> <p>Keep it simple. Go step-by-step. Don&rsquo;t get ahead of yourself.</p> <p>Are you ready to start searching for a franchise?</p> <p>*Non-US Government links.</p> http://www.sba.gov/community/blogs/searching-franchise-don%E2%80%99t-complicate-it#comments The Industry Word Starting Tue, 17 Jun 2014 13:00:13 +0000 FranchiseKing 1089511 at http://www.sba.gov/community 10 Can't-Miss Business Credit Profile Tips for Small Business Owners http://www.sba.gov/community/blogs/10-cant-miss-business-credit-profile-tips-small-business-owners <p>If you run a company, your business credit profile is related to your reputation. With a strong business credit profile, you have access to much greater financing opportunities with favorable terms and lower interest rates.</p> <p>For lenders, a company with a creditworthy profile is considered a good risk. Whether you own a startup or existing business, managing and protecting your profile with all three major business credit reporting agencies is crucial.</p> <p>Here are ten essential tips for establishing, maintaining and protecting your business credit profile:</p> <ol> <li> Keep all company data identical &ndash; Whether <strong><a href="http://www.businesscreditblogger.com/2014/05/08/apply-for-a-duns-number/" target="_blank" title="business credit blog" type="duns number info">applying for a D-U-N-S Number</a></strong>, submitting a credit application or <strong><a href="http://www.sba.gov/community/blogs/how-open-small-business-bank-account-online" target="_blank">opening a business bank account</a></strong>, provide all the same information in order to avoid any potential issues. Inconsistent data can cause a denial of credit due to mismatched data or even cause your company to have a duplicate credit file.</li> <li> Leverage the good credit you already have &ndash; If your business has existing trade references not reporting on its file, then consider adding them to your report. Currently, only one business credit reporting agency enables you to <strong><a href="http://www.businesscreditblogger.com/2013/11/05/dun-and-bradstreet-credit-builder/" target="_blank" title="business credit blog " type="trade reference info">add trade references to your file</a></strong> via a paid program.</li> <li> Make certain your profile represents a real business &ndash; The information you supply about your company, its background, banking history and operations plays an essential role in the credibility and creditworthiness of your business. With a complete profile, creditors will get an accurate portrayal of your business.</li> <li> Pay better than terms &ndash; By paying invoices 10, 15 or 20 days ahead of the due date you get a much greater impact to your overall business credit ratings. Paying better than terms shows creditors that you manage your financial obligations promptly and are a good credit risk.</li> <li> Have a diversity of credit accounts &ndash; The types of credit your company use are seen as a sign of stability and credit responsibility. Whether it&rsquo;s short-term financing, installment loans, <strong><a href="http://www.businesscreditblogger.com/2014/04/29/unsecured-business-line-of-credit/" target="_blank" title="business credit " type="revolving lines of credit info">revolving lines of business credit</a></strong> or leases, each type of account plays a role in establishing a diversity of credit usage.</li> <li> Monitor your business credit profile regularly &ndash; While it&rsquo;s crucial to <strong><a href="http://www.sba.gov/community/blogs/build-business-credit-reports-you-can-be-proud-about-having" target="_blank">build a strong business credit profile</a></strong>, it is equally important to protect what you have built. Each business credit agency offers its own monitoring services so you can be alerted to any recent changes, inquiries into your file or fluctuations in your scores.</li> <li> Correct any inaccurate or outdated information &ndash; If you identify any mistakes on your company&rsquo;s profile, be sure to take the necessary steps to update and/or correct it. Each agency has its own procedures for submitting updates, corrections or disputes.</li> <li> Select the appropriate industry classification code &ndash; The <strong><a href="http://www.businesscreditblogger.com/2014/06/03/business-sic-codes/" target="_blank" title="business credit " type="sic code info">SIC/NAICS Code</a></strong> you select for your business describes the principle activity of your business to creditors. Lenders use these codes to help identify the industry affiliation of a company so it is vital to select the code that best describes what you do.</li> <li> Improve your score by submitting financials &ndash; Financials that show an improvement in cash flow, current assets and net worth can have a significant impact to a company&rsquo;s overall creditworthiness. You can upload financial statements to impact the strength of your reports by following the on-screen instructions available on the business credit agency&rsquo;s site.</li> <li> Update and maintain your company&rsquo;s internet presence &ndash; Information that goes into creating a business&rsquo; credit profile comes from primary and secondary sources such as web mining, news and media. It&rsquo;s imperative that your company&rsquo;s website and its contact information are consistent with the data collected from other primary and secondary sources.</li> </ol> <p>Your business credit profile is a report card on your company&rsquo;s finances. Your profile and business credit history can affect your day to day business operations &ndash; from how much you pay for a business loan, company credit card, lease or business insurance. Use these tips to build, manage and protect your company&rsquo;s financial reputation.</p> http://www.sba.gov/community/blogs/10-cant-miss-business-credit-profile-tips-small-business-owners#comments The Industry Word Financing Starting Wed, 11 Jun 2014 15:43:15 +0000 Marco Carbajo 1086231 at http://www.sba.gov/community 5 Simple Steps for Better Management http://www.sba.gov/community/blogs/5-simple-steps-better-management <p>Good news: Here&#39;s a simple process, five easy steps, to improve your business. It&#39;s easy to do. And, if you&#39;re not doing something like this already, then this simple addition to your process offers you substantial business improvement.</p> <p><strong>Step 1: Visualize your main story </strong></p> <p>Take a step back for the business and visualize the main business story. Imagine the ideal customer, what they want from your business, how they find you, and how what you do matches your business&#39; unique qualities and what that specific person wants.</p> <p>Don&#39;t make this hard. Don&#39;t sweat the details. You don&#39;t even have to write it down, although writing down a few key bullet points can be really valuable for reminding yourself and others, later, about strategy.</p> <p>Do make it strategic. Strategy is focus, so it&#39;s a lot about what you don&#39;t do and who isn&#39;t in your market. Real business strategy has three elements mixed together: identity, which is what&#39;s unique about your business; target market, which you want to define strategically; and business offering, which should also be strategic. Who isn&#39;t in your market is as important as who is. What you aren&#39;t doing is also important. For example, if your restaurant is about a quiet, leisurely, gourmet dining experience, don&#39;t offer take-out or drive-though, and don&#39;t have kids eat free.</p> <p><strong>Step 2: Identify your main assumptions </strong></p> <p>Don&#39;t make this one hard either. Take a step back from the business for a moment, and think about the assumptions you make all the time. Are you assuming a healthy economy, for example, or strong regional growth, or good weather for growing lemons? List these key assumptions. Don&#39;t go into too much detail; you&#39;ll run into diminishing returns. What you want is a good list to help with regular review and revision (my step 5 below).</p> <p><strong>Step 3: Set your milestones and performance metrics </strong></p> <p>Milestones have to do with dates, deadlines, and specific task responsibilities. You write these down for yourself and, if you have a team, for your team members. You don&#39;t really get accountability into the business without writing down and agreeing on what&#39;s supposed to happen, when, and who is supposed to do it.</p> <p>Even if you&#39;re running your own business entirely by yourself, you still list milestones so you can track progress later. I&#39;ve learned the hard way on this one, both in my one-person consulting business that I ran for 14 years, and for the 50-person product business it became. If we don&#39;t write our intentions down, we lie to ourselves later about what we thought we were going to do. I hope that&#39;s just me and not you; but I doubt it.</p> <p>Performance metrics add backbone and accountability. Some are about basic business performance including sales, direct costs and expenses. But many others are also valuable. For example, leads, website visitors, traffic, meals served, trainings, trips, conversion rates, orders, presentations, incoming calls, minutes per call and so forth. These key performance metrics help you stay on top of the pulse of your business.</p> <p><strong>Step 4: You need to manage your business cash </strong></p> <p>Profits alone don&#39;t guarantee cash. For example, you can be profitable, but have too much cash tied up in accounts receivable, or inventory, so you end up without enough money to make payroll or cover necessary expenses. To manage cash, you need to project sales, direct costs, expenses, extra spending (for loan repayment or buying assets and such) and extra income (from borrowing, bringing in new investment, or selling assets and so forth).</p> <p>On this one too, don&#39;t try to accurately predict the future. Instead, try to lay out how sales, costs and expenses relate to each other, so later when sales are different from expectations, you have an easy time of identifying the related changes you need to expect in direct costs and make in expenses. Think of what drives sales, such as pricing, marketing expenses, traffic, conversions, leads, pipelines and so forth. And don&#39;t go into too much detail because, as with assumptions above, you&#39;ll run into diminishing returns if you do. For example, a restaurant shouldn&#39;t project sales for every menu item, but summarize and aggregate for dinners, lunches, drinks and other. And a bookstore doesn&#39;t project sales by title or author or subject, normally, but rather hard over, soft cover, magazines and other. Keep your categories manageable.</p> <p><strong>Step 5: Review, revise, repeat </strong></p> <p>Set a specific day of the month, such as every third Thursday of the month, to review results and revise as necessary. If you&#39;re working with others, make sure they know about this regular monthly meeting and miss it only when they have to miss it for good business reasons.</p> <p>Start your review meeting with your list of assumptions. Identify whether assumptions have changed, and how, and what that means for your business.</p> <p>Include a review of milestones for the past month, including whether or not expected milestones were reached. Then look at milestones for the next month, to review expectations and compare the milestones with the underlying assumptions.</p> <p>Finally, review performance metrics. Track and manage the difference between actual performance and established expectations.</p> <p><strong>And now, lo and behold, you have a business plan</strong></p> <p>I didn&#39;t use the words &quot;business plan&quot; in the title or first paragraph because I don&#39;t want you to dismiss it because of the myth of the formal business plan document. Too many business owners read the words &quot;business plan&quot; and dismiss the idea, thinking of some hard-to-do term-paper-like formal document that they don&#39;t need unless they are applying for commercial credit, seeking investment, or dealing with issues like selling the business or managing a divorce settlement.</p> <p>The real business plan, however, is as simple as these five steps. You keep this business plan fresh and up to date and it optimizes management of your company. And when you do need a formal plan, you take this real business plan and dress it up with more description and explanations for outsiders, and print it as a formal business plan document.</p> http://www.sba.gov/community/blogs/5-simple-steps-better-management#comments The Industry Word Managing Marketing Starting Wed, 28 May 2014 17:12:40 +0000 Tim Berry 938501 at http://www.sba.gov/community Which Unsecured Business Lines of Credit are Best for Your Business? http://www.sba.gov/community/blogs/which-unsecured-business-lines-credit-are-best-your-business <p>Whether you&rsquo;ve been in business for a couple of weeks or five years, access to cash is a crucial element of survival for a business. When the going gets tough, a business can fail unless it has access to cash on demand.</p> <p>For business owners, getting <strong>unsecured business lines of credit </strong>is by far the best choice for having that cash on demand. The fact is that business owners want access to funds &ndash; whenever they need it, at a competitive rate and with flexible payment options. The National Federation of Independent Businesses says, &ldquo;Think of it as an insurance policy that never needs to be paid until you need it.&rdquo;</p> <p>It&rsquo;s important to note there are two main types of unsecured business lines of credit one needs to consider: traditional and non-traditional.</p> <p>So how do you determine which one is best for your business?</p> <p>The traditional business line of credit issued by a bank calls for a substantial amount of documentation in order to qualify such as financials, personal tax returns, business tax returns, bank account information, business registration documents, etc.</p> <p>In addition, once a line is issued an annual financial review is required to maintain the line of credit. While a traditional credit line offers various benefits such as check-writing privileges, it tends to be the most difficult line of credit to obtain and maintain.</p> <p>In a recent survey conducted by the National Small Business Association, &ldquo;29 percent of small business owners report having their lines of credit reduced in the last four years and nearly 1 in 10 had their line of credit called in early by the bank.&rdquo;</p> <p>In my opinion, a non-traditional line of credit in the form of business credit cards are the <a href="http://www.businesscreditblogger.com/2014/04/29/unsecured-business-line-of-credit/" target="_blank" title="Business Credit Blog" type="unsecured lines of credit "><strong>best unsecured business lines of credit</strong></a> a company can get. It provides the fast access to cash and payment flexibility associated with a traditional credit line but without all the drawbacks.</p> <p>Qualifying for this type of revolving credit line is FICO&reg; driven and doesn&rsquo;t require the yearly reviews, excessive documentation and level of scrutiny that comes with a traditional credit line.</p> <p>Some of the advantages of non-traditional <strong>business lines of credit</strong> are as follows:</p> <p>1) Access to cash quickly &ndash; With <strong><a href="http://www.businesscreditblogger.com/2013/10/11/unsecured-business-credit-card/" target="_blank" title="business credit blog" type="unsecured business credit card">unsecured business credit cards</a></strong>, you can utilize as much or as little credit from your line as you want to, anytime and anywhere</p> <p>2) High credit limits &ndash; Business credit cards carry high credit limits, making it extremely convenient to finance larger business purchases. Many cards even offer 0% APR for the first 12 months.</p> <p>2) Flexibility &ndash; With business credit cards you have flexible payment options compared to a fixed month-to-month payment that comes with a business loan. When you tap into your credit line, you have three options every month. You could pay the full amount due, pay at least a minimal portion of the balance or pay greater than the minimum amount due.</p> <p>3) True separation &ndash; Business credit cards enable business owners to separate personal and business expenses while benefiting from business credit reporting. This makes it possible for business owners to establish the creditworthiness of the business itself.</p> <p>4) Personal credit protection &ndash; <strong><a href="http://www.businesscreditblogger.com/2013/08/22/small-business-credit-cards/" target="_blank" title="business credit blog" type="small business credit cards">Small business credit cards </a></strong>that report solely to the business credit agencies allow business owners to protect their personal credit ratings while building their business credit.</p> <p>While a non-traditional business credit line provides all the convenience and flexibility a business needs, there are some negative aspects to consider. The major drawback is the ability for a business to accumulate debt. Without a fixed payment schedule, business owners may be tempted to simply pay the minimum monthly payment on its outstanding balances. By carrying debt, compound interest can really add up, especially if a company carries large balances.</p> <p>No matter what type of <strong>unsecured business lines of credit</strong> you decide to obtain for your business, it&rsquo;s crucial to manage any debt responsibly. Traditional and non-traditional business lines of credit are essential tools for any business to have in its financial arsenal.</p> http://www.sba.gov/community/blogs/which-unsecured-business-lines-credit-are-best-your-business#comments The Industry Word Financing Starting Wed, 21 May 2014 14:53:17 +0000 Marco Carbajo 846891 at http://www.sba.gov/community Three Popular Start-Up Financing Options http://www.sba.gov/community/blogs/three-popular-start-financing-options <p>Thinking about starting a business? Recent studies and reports have shown that entrepreneurs are <a href="http://www.sba.gov/community/blogs/optimism-runs-high-independent-workforce" title="link to blog post">more optimistic than in recent years</a> when it comes to the state of their businesses this year, and that&rsquo;s great news! But always high on the list of concerns for starting a business &ndash; even in optimistic times &ndash; is financing. Here&rsquo;s a roundup of some ways, aside from avenues such as <a href="http://www.sba.gov/loanprograms" title="link to loans information">SBA-backed loans</a>, to finance your business.</p> <p><strong>Credit Cards</strong></p> <p>According to expert Marco Carbajo, <a href="http://www.sba.gov/community/blogs/business-credit-cards-what-every-business-owner-should-consider" title="link to blog post">credit cards are a major source of financing</a> for small business owners, with statistics even showing that more than 65% of small businesses using them on a frequent basis. It&rsquo;s a popular approach, but you should be sure to do your research to determine if it&rsquo;s the right one for you. Here are some tips from <a href="http://www.entrepreneur.com/article/81822" title="link to Entrepreneur.com article">Entrepreneur.com</a> to help:</p> <ul> <li> Unless your business is incorporated &ndash; so if yours is a sole proprietorship, for instance &ndash; <em>you</em> are guarantor of all debts. So if your sales are slow and you fall behind on payments, you risk your personal credit rating and ability to borrow.</li> <li> It varies by state, but your credit-card issuer might still require that shareholders with significant ownership guarantee the line of credit &ndash; even if your business is incorporated.</li> <li> Potentially bringing on partners? Make sure your agreement states that they&rsquo;ll accept personal guarantees on all <em>existing</em> business debt. You need to address this specifically because in many states, new partners aren&#39;t automatically responsible for previous debts.</li> <li> Read the fine print. Don&rsquo;t accept an offer without checking into the details, understanding the terms of use and evaluating risks. Don&rsquo;t hesitate to ask a professional for guidance.</li> </ul> <p><strong>Friends and Family</strong></p> <p>Asking friends and family to borrow funds to help finance your business sounds like it could get awkward, but it doesn&rsquo;t have to. Treat the process just as professionally as you would an engagement with a bank. If you done right, you can potentially gain quicker access to the cash you need and jump through fewer hoops &ndash; after all, your friends or family already know you. Read more about borrowing from friends and family in <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/6-tips-borrowing-startup-funds-friends-or-famil" title="link to blog post about borrowing funds">our article here</a>, but think about these highlights as you consider this option:</p> <ul> <li> Think carefully about who you&rsquo;ll approach and make sure they understand the risks (and rewards) of getting involved. Keep in mind if your business doesn&rsquo;t work out and you can&rsquo;t repay your obligations, relationships could suffer.</li> <li> Be realistic about how much money you need. Instead of asking for the maximum, consider what you need to get you to a certain point in your business plan. Once you show you can repay that initial investment, you&rsquo;ll be in a better position to ask for more money if you need it.</li> <li> Write it down. You might think a verbal agreement with your friend or relative is sufficient given the personal relationship, but this is business. <a href="http://www.entrepreneur.com/article/24380" title="link to Entrepreneur.com">Consider this advice</a> from Entrepreneur.com: &quot;Any time you take money into a business, the law is very explicit: You must have all agreements written down and documented. If you don&#39;t, emotional and legal difficulties could result that end up in court. And if the loan isn&#39;t documented, you may find yourself with no legal recourse.&rdquo;</li> <li> Communicate. Show your business progress and share updates along the way, even if it&rsquo;s correcting mistakes you&rsquo;ve made with your business strategy. Checking in and sharing information shows that you&rsquo;re taking seriously the role others are playing in your venture and demonstrates professionalism.</li> </ul> <p><strong>Crowdfunding</strong></p> <p>Increasingly, crowdfunding is becoming a popular way for people to get startup financing for their businesses. You&rsquo;ve probably heard of Kickstarter campaigns &ndash; that&rsquo;s crowdfunding. It works through a collective cooperation of people who network and pool their money and resources together, usually online, to support efforts initiated by others. So it gathers multiple, smaller investments as opposed to a single source of funding. You can read more about <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/crowdfunding-%E2%80%93-it-right-your-business-where-do-" title="link to blog post">the details here</a>, but here are three other key considerations from <a href="http://www.entrepreneur.com/article/232301" title="link to Entrepreneur.com article">Entrepreneur.com</a>:</p> <ul> <li> You should begin working on your crowdfunding campaign six months before you want to launch your project. When your campaign starts, you should&rsquo;ve already made a significant effort in letting people know about it collecting email addresses so you can really hit the ground running when you open the gates for your campaign.</li> <li> Set your funding goal as low as you can manage because some crowdfunding platforms, like Kickstarter, are &ldquo;all or nothing.&rdquo; For instance, if you set a goal of $1,000 and you meet it, then you get the money. If you raise only $500, you won&rsquo;t get anything. Read the fine print about the platform you choose so you can be strategic about your funding request.</li> <li> Don&rsquo;t forget to award your donors. You&rsquo;re asking people to take a risk on your business venture &ndash; there are no guarantees. So thank them and show your appreciation by offering your product or service at a discount when the time comes.</li> </ul> <p>You can also learn more from our online Learning Center course, &ldquo;<a href="http://www.sba.gov/tools/sba-learning-center/training/introduction-crowdfunding-entrepreneurs" title="link to Introduction to Crowdfunding for Entrepreneurs article">Introduction to Crowdfunding for Entrepreneurs</a>.&rdquo;</p> <p>Beyond a &ldquo;traditional&rdquo; track of securing a loan from a bank, there are quite a few avenues to consider for financing your business. And with passion, professionalism and planning, you&rsquo;ll establish a good foundation for success down any of these paths.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/6-tips-borrowing-startup-funds-friends-or-famil" title="link to 6 Tips for Borrowing Startup Funds from Friends or Family article">6 Tips for Borrowing Startup Funds from Friends or Family</a></li> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/crowdfunding-%E2%80%93-it-right-your-business-where-do-" title="link to Crowdfunding – Is it Right for Your Business? Where Do You Start? article">Crowdfunding &ndash; Is it Right for Your Business? Where Do You Start?</a></li> <li> <a href="http://www.sba.gov/community/blogs/5-ways-help-young-entrepreneurs-finance-their-business-ideas" title="link to 5 Ways to Help Young Entrepreneurs Finance Their Business Ideas article">5 Ways to Help Young Entrepreneurs Finance Their Business Ideas</a></li> </ul> http://www.sba.gov/community/blogs/three-popular-start-financing-options#comments Small Business Cents Financing Starting Wed, 21 May 2014 11:59:01 +0000 kmurray 846801 at http://www.sba.gov/community Investigating Feel-Good Franchises http://www.sba.gov/community/blogs/investigating-feel-good-franchises <p>We all want to feel good. We all want to have pleasant experiences. And, we&rsquo;re willing to pay for them. We&rsquo;re willing to pay to ensure we get our fair share of the good things in life.</p> <p>If you&rsquo;re looking to become <a href="http://www.sba.gov/community/blogs/3-ways-look-franchising" title="link to sba blog post">a franchise owner</a>, have you thought about targeting opportunities that provide feel-good products and services?</p> <p><strong>Feel-Good Franchise Opportunities </strong></p> <p>Opportunities that make people feel good run the gamut from franchises in the spa industry to franchises that promote fitness.</p> <p>Here are some examples of franchises in the spa category:</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Massage Heights</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Massage Envy</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Hand And Stone Massage</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Woodhouse Day Spa &nbsp;&nbsp;&nbsp;</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seva&reg;</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Planet Beach Automated Spa</p> <p>Credit must go to the people at Massage Envy for putting spa franchises on the map. In addition to helping energize a not often-mentioned franchise category, the executives at Massage Envy came up with a membership model. For a set monthly price, clients are entitled to receive one massage and can purchase additional ones at discounted prices.</p> <p>Read this from the <a href="http://www.abmp.com/textonlymags/article.php?article=283" title="article on spas">Associated Bodywork &amp; Massage Professionals website</a>:*</p> <p><em>After 30 years in the fitness industry, John Leonesio saw the opportunity massage offered and in 2002 designed the Massage Envy concept in Scottsdale, Arizona, to resemble the health club membership model. Now owned by Sentinel Capital, a middle-market private equity firm, Massage Envy&rsquo;s original concept&mdash;to make the health benefits of massage both convenient and affordable&mdash;remains and has earned the company several distinctions</em>.&nbsp;</p> <p><strong>Fitness Franchise Examples</strong></p> <p>Fitness franchises have been around a long time. Jack LaLanne, considered to be the &ldquo;Father of Fitness,&rdquo; opened what is thought to be the nation&rsquo;s first health club in Oakland, California in 1936.</p> <p>Today, people want to get in shape and stay in shape, but there&rsquo;s a big difference between doing so in the 1930&rsquo;s and now.</p> <p>That difference is <em>time</em>. We just don&rsquo;t have as much time to get physically fit as we used too. We have too many constraints&hellip;time constraints. We&rsquo;re all busy, busy. Sometimes, it&rsquo;s really difficult to go to a fitness club and work out on a regular basis. &nbsp;&nbsp;</p> <p>A few entrepreneurs &ndash; innovators, really &ndash; have been able to capitalize on the problem&hellip;the issue of not having a lot of time to get in shape and stay in shape.</p> <p>Chuck Runyon, Dave Mortensen, and Jeff Klinger founded <a href="http://www.anytimefitness.com/franchise-opportunities/accolades" title="link to anytime fitness franchise website">Anytime Fitness</a>* in 2002. They realized that consumers were starved for time and were having problems finding fitness clubs that were open when they needed them to be. Anytime Fitness was born, and they, along with several others in the space, have been able to serve those clients, 24 hours a day, 7 days a week.</p> <p>Below, you&rsquo;ll find several fitness franchises to investigate if you&rsquo;re interested in these types of feel-good franchises.</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Snap Fitness</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Koko FitClub</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title Boxing Club</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; FitZone&reg; For Women</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fitness Together</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Zoo Health Club</p> <p><strong>Feeling Good About Feel-Good Franchises</strong></p> <p>A lot of the people I work with share their desire to provide products and services that bring positive change to people&rsquo;s lives.</p> <p>Franchises that make people feel good provide positive things that today&rsquo;s busy consumers want.</p> <p>If you&rsquo;d like to own a franchise that makes people feel good, you have lots of choices. Narrowing those choices involves serious research. Thoroughly investigate franchises you&rsquo;re interested in. Talk to existing franchisees. They&rsquo;re the ones who have already invested their money and their time into the franchises you&rsquo;re thinking of buying. That way you&rsquo;ll feel good about what you may end up doing.</p> <p>Here are a few articles which include dozens of tips designed to help you do great franchise research.</p> <p>Entrepreneur Magazine: <a href="http://www.entrepreneur.com/article/199090" title="entrepreneur mag article">Researching Franchises</a>*</p> <p>SBA.gov: <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/researching-franchise" title="sba.gov article ">Researching That Franchise</a></p> <p>Franchise.org: <a href="http://www.franchise.org/franchiseesecondary.aspx?id=52637" title="ifa website article">How To Investigate A Franchise</a>*</p> <p>*Non-US Government links</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/investigating-feel-good-franchises#comments The Industry Word Starting Tue, 20 May 2014 12:17:06 +0000 FranchiseKing 846191 at http://www.sba.gov/community My Inspirational First Month at SBA http://www.sba.gov/community/blogs/official-sba-news-and-views/open-business/getting-help-where-it%E2%80%99s-needed-most <p>One month ago, I took my oath and was given the opportunity of a lifetime to be a champion for America&rsquo;s small businesses.</p> <p>In my first public statement after my swearing-in, I talked about my intention to support our job creators and build the U.S. economy from the middle out; to promote lending that reflects the diversity of America by getting capital to the areas that need it the most; and to use technology and best practices in customer service to make it easier for borrowers to borrow and lenders to lend.</p> <p>Then, I immediately embarked on a listening tour to send a signal to entrepreneurs that I wanted a robust dialogue and open lines of communication to understand the range of challenges that America&rsquo;s small businesses owners face.</p> <p>It has been an exhilarating first month. On my third day on the job, I defended our FY15 budget before the Senate. I went to to the Pentagon to meet with transitioning service members taking an SBA course on how to apply their military skills to civilian entrepreneurship. And I visited Washington state to accelerate the deployment of disaster aid to businesses and families impacted by the devastating mudslide.</p> <p>I testified at a field hearing that explored how small business R&amp;D can create more high-growth, high-paying jobs. Then, I met with military leaders to make sure the Department of Defense is making procurement decisions that harness the incredible innovation happening at small firms. I traveled to Baltimore and Boise to talk to emerging leaders and women-owned businesses about how to plug into federal contracting opportunities and earn business from the world&rsquo;s top buyer of goods and services: the United States government.</p> <p>I sat down with women and minority entrepreneurs to hear about their challenges in getting access to capital, and I shared their stories this past week at two major lending conferences to explain SBA <a href="http://www.sba.gov/content/sba-improves-small-businesses-access-7a-and-504-loan-programs-enhances-job-creation-0">regulatory changes</a> that will make it easier to get capital to neighborhoods the recession left behind. &nbsp;We dropped the so-called &ldquo;wealth test&rdquo; and &ldquo;nine-month rule,&rdquo; and we announced more collateral flexibility for our borrowers. These important technical changes will all increase the number of small businesses that qualify for SBA assistance.</p> <p>At each stop, I&rsquo;ve evangelized the SBA message of &ldquo;three Cs and a D&rdquo; &ndash; our work to deliver capital, contracts, counseling and disaster assistance, which comprise the core of this agency&rsquo;s mission.</p> <p>My listening tour continues Monday with the kickoff of National Small Business Week at Twitter headquarters in San Francisco. Soon, I&rsquo;ll sit down with our exceptional SBA staff and begin the process of taking the insights gleaned from my time on the road to develop an action plan to take our agency to the next level.</p> <p>But as I reflect on an eventful first month, the word that stays in my head is &ldquo;inspirational.&rdquo; As our field team knows so well, our work does more than help America&rsquo;s small businesses succeed and our economy grow. So often, what we&rsquo;re really doing is empowering our entrepreneurs to give back and lift up entire communities.</p> <p style="text-align: center"><iframe allowfullscreen="" frameborder="0" height="315" src="//www.youtube.com/embed/FZhdrcnSnjo" width="560"></iframe></p> <p>We&rsquo;re helping women like Dr. Carla Thomas serve generations of families in her hometown of Inglewood, California. Less than four percent of this nation&rsquo;s dentists are African American, but with a real estate loan backed by SBA, Dr. Thomas now has her own building and a thriving practice three miles from the house where she grew up. She stayed &ldquo;home&rdquo; to provide dental care to local children and generations of families who need her. Dr. Thomas calls her practice &ldquo;The Smile Studio.&rdquo; Watch the video above, and you&rsquo;ll see why her unique commitment to give back in Inglewood gives us all a reason to smile.</p> http://www.sba.gov/community/blogs/official-sba-news-and-views/open-business/getting-help-where-it%E2%80%99s-needed-most#comments Open For Business Financing SBA News and Views Starting Fri, 09 May 2014 15:55:52 +0000 Maria Contreras-Sweet 837291 at http://www.sba.gov/community 5 Keys to Angel Investment http://www.sba.gov/community/blogs/5-keys-angel-investment <p>With this post I&rsquo;d like to give my personal answer to the frequent question, &ldquo;What do angel investors look for in a business plan?&rdquo; I can&rsquo;t promise that what I think applies to anybody else. But I&rsquo;ve been in an angel investment group for five years now, and I&rsquo;ve seen a lot of businesses evaluated. Here are five things I say matter.</p> <p><strong>1. A believable market definition </strong></p> <p>It&rsquo;s not just the numbers. Especially not huge numbers that lack definition. Too many of the several dozen business plans I&rsquo;ve read this year lack a good market-defining story. Market numbers are useful, yes, but they don&rsquo;t stand alone. Investors want to believe the story first, then get the numbers.</p> <p>The story is about the use case, also called &ldquo;why to buy,&rdquo; and market need.</p> <p>I like the business pitches that put a picture on a slide and explain how that person has a problem that this business solved. For example, one recent pitch starts with a picture of a middle-aged woman and explained how this new business creates a channel for her to sell her craft goods effectively. Another pitch I saw showed a picture of the garbage area behind a restaurant to pitch a system to save unused food and make it available to people who need it. Then they go to the numbers, after explaining the need.</p> <p><strong>2. Believable growth plan </strong></p> <p>Startups become good for the early stage investors by growing. While there are some extremely rare cases where traffic and position alone created value (such as Amazon in its early days, Facebook, Twitter, Instagram, etc.), for most of us it takes sales growth.</p> <p>Investors want to see and believe the growth plan. For example, if it&rsquo;s a physical product to be sold in retail stores, there should be a plan for getting the product into distribution, and a sales forecast based on sales per store and stores&rsquo; growth by year. Or if it&rsquo;s a mobile app, then sales growth based on potential user base and ways to drive traffic to the app via the various download stores.</p> <p>Sales forecasts based on details are more credible. I liked a plan I saw recently that presented a forecast of sales of a product related to bars by showing actual sales in the first four bars and extrapolating those to all bars in the U.S. The methodology made sense.</p> <p><strong>3. Defensibility </strong></p> <p>Defensibility is whatever quality keeps a startup from being overwhelmed by competition that stunts its growth. Most investors look for proprietary technology, such as patents &mdash; when they are good patents that experts say will be reasonably defensible &mdash; or trade secrets. This is also called &ldquo;barriers to entry.&rdquo; There&rsquo;s limited value to an idea that any other business can just copy.</p> <p><strong>4. Scalability</strong></p> <p>The lack of scalability in most service businesses is why investors generally prefer product businesses and why the classic service businesses aren&rsquo;t as attractive. The test is whether it can double sales without doubling fixed costs and employees. Most service businesses don&rsquo;t scale: the classic consulting business, for example, or attorneys, graphic design, programming for hire&hellip; these service businesses are hard to scale.</p> <p>With product businesses, when a widget starts selling in most cases you can make more widgets with automation.</p> <p>And there are some service businesses that are scalable. Generally, they relate to software services over the web. The travel buyer sites are services, but they scale.</p> <p><strong>5. Potential exit </strong></p> <p>Angel investors make money by investing money in a business today and getting money back from that business in a few years when it grows, increases its value and sells out to a larger company or registers its stock for sale on a public market.</p> <p>What many people don&rsquo;t realize is that outside investors don&rsquo;t make money just from owning a small portion of stock in a successful business. Theoretically, there could be dividends eventually, but growing companies don&rsquo;t normally generate dividends. Angel investment assumes that the businesses create some way for the investors to sell their shares.</p> <p>Having a minority share in a healthy, happy company &ndash; one that doesn&rsquo;t need any more outside investment and has no reason to invite a larger company to purchase it &ndash; offers no return on investment for the early investors who aren&rsquo;t employees.</p> http://www.sba.gov/community/blogs/5-keys-angel-investment#comments The Industry Word Financing Starting Tue, 29 Apr 2014 21:36:49 +0000 Tim Berry 832051 at http://www.sba.gov/community Franchise Ownership Success Starts With Great Training http://www.sba.gov/community/blogs/franchise-ownership-success-starts-with-great-training <p>When you buy a franchise, you&rsquo;re paying for the right to use the franchisors proprietary systems. Some of these include their marketing systems, computer and software systems, inventory management systems and more.</p> <p>But, you won&rsquo;t be able to use any of their business systems unless you know how to use them. That&rsquo;s where the franchisors formal training program comes in. It&rsquo;s part of what you&rsquo;re paying for when you <a href="http://www.sba.gov/content/franchise-businesses" title="link to franchise article on sba website">purchase a franchise</a>.&nbsp;</p> <p><strong>Are Franchise Training Programs Good?</strong></p> <p>I can&rsquo;t think of one occasion in which a client of mine told me the training they received from their franchisor was disappointing. But, since this is <em>your</em> money we&rsquo;re talking about&hellip;it&rsquo;s you that will be buying the franchise, it&rsquo;s important for you to make sure the training you&rsquo;ll receive from franchise headquarters will be good. Here&rsquo;s how:</p> <p>Call existing franchisees of the franchise concept you&rsquo;re thinking of buying and ask them to share their views on the training they received. It should be part of your <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/researching-franchise" title="researching a franchise due diligence ">due diligence</a>.</p> <p><strong>Types of Franchise Training</strong></p> <p>These days, technology plays a major part of company training programs. Expect the franchisor to utilize technology in their training program.&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</p> <p>One way <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/franchisees-need-have-great-technology-their-fingertips" title="link to article on franchise technology">franchisors use technology</a> to train their franchisees is to have some setup online. That&rsquo;s right: Part of your training may be online. I&rsquo;ve seen franchisors do what&rsquo;s called pre-training online. Pre-training takes place a few weeks before you arrive at franchise headquarters for in-person training. I&rsquo;ve found pre-training to be a great way for new franchisees to get their feet wet and have a head start on what&rsquo;s to come when they arrive at headquarters for more intensive formal training.&nbsp;</p> <p>The formal, in-headquarters training will end up having the biggest impact on you. The training that takes place at headquarters is pretty intensive. It&rsquo;s designed to prepare you for all of your day-to-day activities as a franchise owner. You&rsquo;ll go through the entire operations manual. You&rsquo;ll be trained on things like:</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Computer systems</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory systems</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Point of sale systems</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Payroll management</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Marketing</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Advertising</p> <p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="http://www.franchisebizdirectory.com/article/the-importance-of-great-customer-service-in-franchising/" title="customer service in a franchise">Customer service</a> *</p> <p>You&rsquo;ll learn a lot in a short period of time. (Training programs at franchise headquarters are usually 3-5 days in length)</p> <p>If the thought of learning everything about running your new franchise business in a few short days sounds overwhelming, you&rsquo;re not alone. Every franchisee before you thought the same exact thing, and their businesses are up and running. Yours will be too.</p> <p>You could always ask some of the existing franchisees if the training they received prepared them to open and run their businesses adequately. The answers you get will give you a good idea of the quality of the franchisors training program. And, you&rsquo;ll get a good idea of what to expect as a new franchise owner early on in your business.&nbsp;</p> <p>Franchisors want you to be successful. They know you&rsquo;ll be apprehensive in the weeks and days before you actually open. Their training programs are designed to make sure you&rsquo;re ready.</p> <p>*Non-US Government link.</p> http://www.sba.gov/community/blogs/franchise-ownership-success-starts-with-great-training#comments The Industry Word Starting Tue, 15 Apr 2014 12:22:30 +0000 FranchiseKing 820821 at http://www.sba.gov/community Crowdfunding Sites: Top 3 Tips to Get Funding Once and For All http://www.sba.gov/community/blogs/crowdfunding-sites-top-3-tips-get-funding-once-and-all <p>The internet has fundamentally changed the way we do business on a national and global scale. With over 2 billion internet users and growing, the speed and the way in which we communicate, share ideas, and even invest in businesses have changed forever.</p> <p>Now anyone with a computer or mobile device and an internet connection can research, review and become an investor in a business with a push of a button. With the growing popularity of <strong>crowdfunding sites</strong>, it&#39;s clear the idea of advertising to the general public through a crowdfunding platform is far more effective at drawing in investors as opposed to finding traditional investors the old fashion way.</p> <p>To put it bluntly, crowdfunding empowers entrepreneurs.</p> <p>It offers them the ability to raise capital without giving up equity or accumulating debt. Instead, these rewards-based crowdfunding platforms allow entrepreneurs to raise capital from the public in exchange for tangible products or other relative rewards.</p> <p>It&rsquo;s simply one of the best ways to cast a huge net for attracting investors to a business. However, with all the hype and popularity buzzing around the internet, many entrepreneurial hopefuls need to be aware that just because launching a crowdfunding campaign is simple doesn&rsquo;t mean it&rsquo;s easy.</p> <p>There is a big misconception on what it really takes to reach a funding goal and achieve <a href="http://www.businesscreditblogger.com/2014/04/08/successful-crowdfunding-campaigns/" target="_blank" title="crowdfunding resource" type="crowdfunding article"><strong>success in crowdfunding</strong></a>. It&rsquo;s not as simple as creating a campaign and clicking the submit button and waiting for an idea to go viral. The <em>set it and forget it</em> attitude is the number one reason why crowdfunding campaigns fail.</p> <p>Did you know of the roughly 60,000 unsuccessful crowdfunding campaigns launched, about 40,000 failed to reach even 20% of their funding goal? The good news is you can succeed in crowdfunding, you just need to know how to prepare for it.</p> <p>Here are three key tips for crowdfunding success:</p> <p><strong>1) Perfect Your Pitch </strong>&ndash; An incredible pitch is crucial for crowdfunding and can make or break landing an investor. People have to be sold on you, your idea and your vision before they will ever invest in your business.</p> <p>For starters, write up your preliminary draft, include pictures and record a video explaining your vision, the offer and why you should <a href="http://www.businesscreditblogger.com/2013/12/12/how-to-get-funding-for-a-small-business/" target="_blank" title="business funding " type="business funding information">get business funding</a>. Let your passion shine through!</p> <p>Send your pitch to family and friends so you can get feedback and make any necessary changes. Once you perfected the pitch, start locating initial backers before launching your campaign.</p> <p>Remember, you don&rsquo;t have to swim with the sharks; in crowdfunding, you get to swim with the goldfish.</p> <p><strong>2) Test Your Rewards</strong> &ndash; Every successful campaign started with a dedicated following. The obvious rewards would be to provide backers with a digital copy, physical product, souvenirs, combined rewards, etc. depending on your business idea.</p> <p>Start by testing your reward ideas with your personal network, make necessary adjustments and perfect your rewards package so it is unique, eye-catching and memorable.</p> <p><strong>3) Get Pre-Pledges</strong> &ndash; Pre-pledges are commitments from those people who fully support your business idea and will be there to invest on day one when you launch your campaign. Since the majority of crowdfunding sites provide a 30-90 day time frame for each campaign, it&rsquo;s vital to launch with momentum.</p> <p>Did you know the most <strong><a href="http://www.businesscreditblogger.com/2014/04/08/successful-crowdfunding-campaigns/" target="_blank" title="crowdfunding success" type="crowdfunding success resource">successful crowdfunding campaigns</a></strong> had their campaigns go live only after they had 20-30% of their business funding secured by initial backers? Let&#39;s face it; nobody wants to be the first person to fund money into a newcomer&#39;s campaign.</p> <p>Once you perfect the pitch, test your rewards, get pre-pledges and choose a reputable crowdfunding platform, you will need to establish a marketing strategy to reach your target audience so you can advance the momentum of your campaign once you go live.</p> <p><strong>Crowdfunding sites</strong> are a strong stepping-stone for acquiring investors for a business. While for some it can be a viable option, entrepreneurs do need to conduct their due diligence to decide if this <a href="http://www.businesscreditblogger.com/2014/01/27/business-funding/" target="_blank" title="Business Funding" type="business funding resource">business funding</a> option is best for them.</p> http://www.sba.gov/community/blogs/crowdfunding-sites-top-3-tips-get-funding-once-and-all#comments The Industry Word Financing Starting Wed, 09 Apr 2014 17:28:52 +0000 Marco Carbajo 818031 at http://www.sba.gov/community How to Use Business Books To Grow Yourself, Your Team, Your Business http://www.sba.gov/community/blogs/how-use-business-books-grow-yourself-your-team-your-business <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-c3be48f1-283f-ee23-846d-8b8ada4a3659"><span style="font-size: 16px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">Business books are valuable in that they do more than simply teach you how to run your business more smartly. They&rsquo;re conversation starters, continuing education tools for your staff and more.</span></span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; font-weight: bold; white-space: pre-wrap; line-height: 1;">Educate Yourself</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-c3be48f1-283f-ee23-846d-8b8ada4a3659"><span style="font-size: 16px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">The primary benefit of business books is, naturally, that they help you achieve better results in business.&nbsp;Don&rsquo;t know a thing about social media marketing? Pick up a book and teach yourself. Curious about the latest leadership technique? A book can help you with that too.</span></span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">Books only help if you commit to reading them. You&rsquo;re busy. We all are. But if you set a goal for yourself to leverage the knowledge inside books, you end up a smarter business owner.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">It&rsquo;s not necessary to fly across country or spend lots of money on expensive conferences to glean information from business experts. Instead, budget about $150 a year to buy a book each month on Kindle and get all that knowledge (probably more) from the convenience of your favorite easy chair. Don&rsquo;t have a budget for books? Then don&rsquo;t forget your local library. Many even offer digital books these days.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; font-weight: bold; white-space: pre-wrap; line-height: 1;">Share Your Knowledge</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">If you blog for your business, books provide great subject fodder. Writing about what you learn is also a wonderful way to process that information and really understand it. As you read, take notes or bookmark pages (yes, you can digitally bookmark as well) so you can come back to pull quotes for your content. </span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">As you continue to master your industry as an expert, you&rsquo;ll end up imparting what you&rsquo;ve learned. So that book knowledge can be translated into content for speaking engagements, webinars, social media updates ... even data for your own authored book! </span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; font-weight: bold; white-space: pre-wrap; line-height: 1;">Give It as a Gift</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-c3be48f1-283f-ee23-846d-8b8ada4a3659"><span style="font-size: 16px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">Business books also make fantastic business presents. When you run across a great book, buy copies for key members of your team who you think would benefit and give the books as gifts to each. You could even start a mini book club within your organization and discuss the principles in a book. Not only does this make your team smarter, but it also helps you bond. </span></span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">Clients appreciate good books too. Send a book you&#39;ve read to a favorite client along with a note about what you&#39;ve enjoyed in it (e.g., &quot;I especially loved Chapter 7!&quot;) &nbsp;Doing so will build relationships with your clients, and they will appreciate your ongoing investment in your business expertise. </span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">Pay attention when talking to clients or contacts to get clues about what topics they&rsquo;re interested in. For example, if a long-time client mentions he struggles with analytics, that&rsquo;s the perfect cue for you to send him your favorite book on the subject. People notice when you pick up on their interests, and it makes for a more personalized gift. </span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; font-weight: bold; white-space: pre-wrap; line-height: 1;">Thirst for More</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-size: 16px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">There will never, ever be a shortage of books. Every day, new ones are published, especially with the surge of self-published authors. It can be a challenge to know which ones are worth reading, and which aren&rsquo;t. At the next Chamber of Commerce meeting or industry mixer you attend, ask others if they&#39;ve read any good business books recently. Get recommendations from friends and colleagues. Ask your social network what to read. Join </span><a href="https://www.goodreads.com/" style="line-height: 1;" title="Link to Goodreads"><span style="font-size: 16px; font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">GoodReads</span></a><span style="font-size: 16px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> and see what your friends are reading. &nbsp;And check out the </span><a href="http://bookawards.smallbiztrends.com/" style="line-height: 1;" title="Small Business Book Awards"><span style="font-size: 16px; font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Small Business Book Awards</span></a><span style="font-size: 16px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> to see what the community believes are top books for entrepreneurs and small business people.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 16px; white-space: pre-wrap; line-height: 1;">Make time for reading business books, just like you make time for marketing, sales, and other components of your business. While the results may not be directly obvious, books do help you succeed as a business owner.</span></p> http://www.sba.gov/community/blogs/how-use-business-books-grow-yourself-your-team-your-business#comments The Industry Word Managing Mentoring and Training Starting Thu, 03 Apr 2014 15:46:24 +0000 smallbiztrends 814211 at http://www.sba.gov/community Growing Importance of Business Plan Competitions http://www.sba.gov/community/blogs/growing-importance-business-plan-competitions <p>Are you aware of business plan competitions? If you&rsquo;re an entrepreneur, they&rsquo;re an excellent opportunity to present your business and compete for cash and in-kind prizes or, worst case, really good feedback from serious business people. If you&rsquo;re lucky enough to be invited to judge, it&rsquo;s a chance to spend a few days reviewing real-world startups.</p> <p>I&rsquo;ve been judging business plan competitions for almost 20 years. As I write this I&rsquo;m looking forward to another season judging venture competitions including the University of Texas&rsquo; <a href="http://www.mccombs.utexas.edu/centers/texas-venture-labs/investment-competition" title="Link to Venture Labs Competition">Venture Labs Investment Competition</a>, the <a href="http://alliance.rice.edu/rbpc.aspx" title="Link to Rice Business Plan Competition">Rice University Business Plan Competition</a>, and the University of Oregon <a href="http://nvc.uoregon.edu/" title="Link to New Venture Championship">New Venture Championship</a>. Each of these three events pit grad-level business students from all over the world against each other as they compete for cash and in-kind prizes. They submit business plans, do business pitches and answer detailed questions.</p> <p>I find judging these competitions fun, interesting and for me a great way to keep up with the evolution of high-level startups, business planning and entrepreneurship education.</p> <p>The University of Texas started this, as far as I know, with the first &ldquo;Moot Corp&rdquo; in 1984. Moot Corp became Venture Labs Competition three years ago. It&rsquo;s the oldest and possibly most prestigious &ndash; although Rice University is a serious rival. All of its entrants have won other business plan competitions to get to that one.</p> <p>The Rice University contest is the richest. Recent winners have won cash prizes of hundreds of thousands of dollars and total prizes of more than $1 million including in-kind services (like free rent, consulting, legal work, etc.)</p> <p>I&rsquo;ve been judging the University of Oregon competition since 1997. I&rsquo;ll never forget arriving on a Thursday morning to discover, to my horror, that I&rsquo;d committed myself to all day Thursday, Friday and Saturday. My horror changed to real interest as the teams began their pitches. By Saturday I had enjoyed it so much I made sure to stay on the list for the future years. And I&rsquo;ve missed only one year since then.</p> <p>One obvious change I&rsquo;ve seen in this area is the tremendous growth in the number of contests, the interest in contests, the prize money and the seriousness of the startups that enter.</p> <p>The most important change is an amazing increase in the viability of the competing startups. The early Moot Corps were almost entirely hypothetical business plans developed by students as academic exercises. Nowadays most of the entrants in the major business plan competitions are real companies with real prospects. Of the three I judge, a clear majority of the startups that enter will eventually get financed and launch. Both Rice and Texas track angel investments and venture capital financing landed by former contestants in the hundreds of millions of dollars. Winners almost always have viable products, believable management teams, and credible growth prospects.</p> <p>Another change is the length, style and content of the business plans submitted. Today&rsquo;s business plans are much shorter than they used to be, as page limits have gone from 30-40 to 10-20. Judges have to read plans and they want shorter, sharper and more summarized. And &ndash; sadly, in my opinion &ndash; financial projections seem to be less rigorous.</p> <p>Another development is that because of the continuing increase in interest, there is now a good website dedicated entirely to listing competitions, at <a href="http://bizplancompetitions.com" title="Link to bizplancompetitions.com">www.bizplancompetitions.com</a>. You&rsquo;ll be amazed at how many events they list. And I hope you find one you can attend, enter or judge. If you have any interest in startups, it&rsquo;s a great experience.</p> http://www.sba.gov/community/blogs/growing-importance-business-plan-competitions#comments The Industry Word Starting Wed, 26 Mar 2014 20:30:41 +0000 Tim Berry 810581 at http://www.sba.gov/community How to Calculate the Cost of Food for Your Culinary Business Venture http://www.sba.gov/community/blogs/how-calculate-cost-food-your-culinary-business-venture <p>Are you hungry for information about launching your food-service small business? While there&rsquo;s a lot of shared <a href="http://www.sba.gov/thinking-about-starting" title="link to information about starting a business">information to get started across all industries</a>, the food industry poses unique opportunities and questions. One of the most common we see is how to calculate the cost of food.</p> <p>Here&rsquo;s one approach from small-business expert Sam Ashe-Edmunds, who dishes out <a href="http://smallbusiness.chron.com/calculate-food-cost-restaurant-39551.html" title="link to food cost article">food-cost calculations</a> into nine steps to help ensure that you&rsquo;ll be able to keep a consistent menu, please customers and remain profitable. Here&rsquo;s what he has to say:</p> <p><strong>Step 1</strong>: Pick a dish to start and list all of its ingredients &ndash; even condiments and garnishes. You&rsquo;ll want to make sure that the portion for each dish is the same so that it always <em>costs</em> the same.</p> <p><strong>Step 2</strong>: Calculate the cost of each ingredient. Take a head of lettuce, for example. If it costs 75 cents and you get 30 leaves, the lettuce cost for a dish that includes <em>one</em> lettuce leaf would be about 2.5 cents. Ashe-Edmunds reminds us to include a proportion of any expenses directly related to purchasing foods, such as delivery fees or interest.</p> <p><strong>Step 3</strong>: Add up the costs of all the ingredients for the dish, but don&rsquo;t include costs for labor or actually serving the dish.</p> <p><strong>Step 4</strong>: To start figuring out if you&rsquo;ve priced the meal right, divide the menu price by the food cost to calculate the percentage of the price that comes from food. If you charge $10 for a meal for which food costs are $5, then your food cost is 50 percent.</p> <p><strong>Step</strong> <strong>5</strong>: Now, you&rsquo;ll want to determine overhead cost per meal, which includes everything <em>not </em>related to food that&rsquo;s required to run your restaurant. This includes things such as labor, rent, marketing, taxes, etc. So, consider what it will cost to run your restaurant on a daily basis &ndash; then divide that number by the number of customers you think you&rsquo;ll serve every day. If your overhead is $1,000 per day and you have 200 customers each day, your overhead <em>per person</em> is $5.</p> <p style="margin-left:.5in;"><strong>TIP</strong>: Keep employee meals and food theft in this overhead figure as well, because they&rsquo;re not included as direct costs to serve a meal but can&rsquo;t be left out.</p> <p><strong>Step 6</strong>: Using your overhead costs as a guide, decide your ideal food-cost percentage. If you charge $10 for a meal and your overhead cost is $6, then your food costs can&rsquo;t be more than $4 to break even. Want a $2 profit per meal? Then you&rsquo;ll have to charge $12 for that particular dish.</p> <p><strong>Step 7</strong>: Take a look at the prices listed in your menu to figure out if they&rsquo;ll cover your overhead and food costs &ndash; and if you&rsquo;ll be able to make a profit. So if you&rsquo;ve calculated an ideal food-cost percentage of 20 percent and a dish uses $4 of ingredients, you can&rsquo;t sell that dish for any less than $20.</p> <p><strong>Step 8</strong>: You <em>may</em> need to calculate different food-cost percentages for different services or items, such as a breakfast menu versus dinner menu, because of different requirements &ndash; some less, some more &ndash; to satisfy each dish.</p> <p><strong>Step 9</strong>: Finally, examine your sales by item to determine if your food-cost percentages are adequate to keep your restaurant in business. If it turns out you&rsquo;re selling at primarily a low cost, you might need to raise prices (or lower food costs) to be profitable.</p> <p style="margin-left:.5in;"><strong>TIP</strong>: Get a more complete picture of your food costs by checking out total food costs per service and dividing them by total sales. Then you won&rsquo;t have to calculate the actual cost of each menu item.</p> <p><a href="http://smallbusiness.chron.com/calculate-food-cost-restaurant-39551.html" title="link to food cost article">Ashe-Edmunds&rsquo;</a> offers just one approach to determining the cost of food. You can explore these additional resources from around the web for more insight:</p> <ul> <li> <a href="http://restaurantengine.com/how-to-make-food-costs-projections-for-your-new-restaurant/" title="link to How to Make Food Costs Projections For Your New Restaurant article">How to Make Food Costs Projections For Your New Restaurant</a></li> <li> <a href="http://www.foodservicewarehouse.com/education/restaurant-management-and-operations/a-quick-guide-on-pricing-restaurant-menu-items/c28020.aspx" title="link to A Quick Guide on Pricing Restaurant Menu Items article">A Quick Guide on Pricing Restaurant Menu Items</a></li> <li> <a href="http://www.restaurantreport.com/departments/biz_restaurant-food-menu-pricing.html" title="link to Restaurant Operations: Food And Menu Pricing For Your Restaurant article">Restaurant Operations: Food And Menu Pricing For Your Restaurant</a></li> </ul> http://www.sba.gov/community/blogs/how-calculate-cost-food-your-culinary-business-venture#comments Small Business Cents Managing Starting Wed, 19 Mar 2014 12:03:21 +0000 kmurray 807951 at http://www.sba.gov/community Is The Green Franchising Scene Still Active? http://www.sba.gov/community/blogs/green-franchising-scene-still-active <p>Maybe my radar screen just needs a bit of a tune-up.</p> <p>That&rsquo;s because the word &ldquo;green&rdquo; hasn&rsquo;t been on it as of late.</p> <p>For a while, it seemed like <a href="http://www.sba.gov/green-business-guide" title="sba article on green business">everybody was talking about green</a>.</p> <p>Green energy. Green chemicals. And, green franchises.</p> <p>A few short years ago, I was talking and writing about what&rsquo;s turned out to be an entire new sector in franchising. I was very excited about the business possibilities. I launched a green franchise web directory. I helped a solar energy franchise get the word out about their opportunity. I tried to learn all I could about all things green. A good friend of mine in Florida, experienced with green energy and technology, brought me up-to-speed on the latest and greatest developments. I was seriously &ldquo;energized&rdquo; by all of it.</p> <p>Solar energy intrigued me, and still does. Before the recession, there was pretty much only one solar energy company offering franchises. Now there are several. I just don&rsquo;t hear about them much. What does that mean? Is interest in solar energy fading?&nbsp;&nbsp;</p> <p>I wrote about green franchising <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/green-franchise-business-scene" title="green business link sba.gov">on SBA.gov</a> back in 2010. The article included a couple of different green franchise concepts. I think my enthusiasm showed back then.</p> <p>Included in that article was information about environmentally-friendly cleaning agents.&nbsp;</p> <p>&ldquo;Residential and commercial cleaning services (of the franchise variety) are jumping on the green bandwagon. Some of them are starting to use cleaning products that are non-toxic, and that won&#39;t hurt our environment.&rdquo;</p> <p>If my memory serves me correctly, Maid Brigade, a franchisor who I had done some work for, was really the first residential cleaning franchise to get serious about the green movement. As a matter of fact, <a href="http://www.maidbrigade.com/green-house-cleaning/green-cleaning-services" title="link to maid brigade website green cleaning product use">they still are</a>*. But, I&rsquo;m not hearing about the use of environmentally-friendly cleaning solutions as much as I used to. What&rsquo;s changed?</p> <p>Maybe the seemingly waning interest in green and the business opportunities that surround it have to do with <a href="http://money.cnn.com/2009/03/25/news/economy/depression_comparisons/" title="link to article about the recession">the great recession</a>*, and the necessary belt-tightening that went on during that time. Green products and services generally aren&rsquo;t cheap. Maybe our priorities have changed because of the hit we took when the economy took a turn for the worse.</p> <p>I have another theory. Maybe we&rsquo;ve all gotten so used to hearing about solar energy, wind energy, and safe chemicals, we are just well...used to hearing about green things. What do you think? Are green initiatives so commonplace now that we&rsquo;re just used to hearing about them?</p> <p>&nbsp;<strong>Green Franchises</strong></p> <p>There are plenty of opportunities you can choose from in the franchise world that are considered green. <a href="http://www.franchisesolutions.com/earth-friendly-franchises.cfm" title="link to green franchise opportunity examples">Here is an entire page of them</a>*. Just make sure they&rsquo;re truly green.</p> <p>A writer for Franchise Direct wrote about what&rsquo;s called &ldquo;greenwashing,&rdquo; which is when companies aggressively market themselves as green, but aren&rsquo;t.&nbsp;</p> <p>&nbsp;&ldquo;When selecting a green franchise, make sure they are truly green. A lot of &ldquo;greenwashing&rdquo; occurs as franchisors try to profit from the hype without putting forth the effort required to be truly green. In some cases a franchise spends their entire green budget on promoting the fact that they are a green company rather than using the money to implement green practices. Also be aware that some green &ldquo;awards&rdquo; displayed may not be legitimate.&rdquo;</p> <p>Make sure the green franchise you&rsquo;re interested in truly is green.</p> <p><strong>The Future Of Green Franchising</strong></p> <p><a href="http://www.sba.gov/content/green-businesses" title="sba.gov link to green biz info">Businesses that offer and use green products and services</a> are going to win in the long-run. As more people get educated about the importance of clean and sustainable energy, more of them are going to demand it in their everyday lives. There are franchise businesses out there right now that provide it. One day there may even be franchises that sell and install wind farms. The opportunities are endless.</p> <p>In the not too distant future, almost all of the cleaning agents we use around our homes and offices will be free of damaging toxins. Franchises in the residential and commercial cleaning sectors that aren&rsquo;t using green chemicals will have to&hellip;again because of consumer demand.</p> <p>Green franchising isn&rsquo;t going away. The sector just needs to be re-energized a bit.</p> <p>*Non U.S. Government links</p> <p>&nbsp; &nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/green-franchising-scene-still-active#comments The Industry Word Starting Tue, 18 Mar 2014 12:01:42 +0000 FranchiseKing 807591 at http://www.sba.gov/community How to Buy an Existing Business http://www.sba.gov/community/blogs/how-buy-existing-business <p>Are you ready to enter the business world but nervous about starting from scratch? You may be considering buying an existing business, which certainly has its perks when compared to establishing your own, brand-new operation. But there&rsquo;s still plenty to keep in mind, and success isn&rsquo;t guaranteed by simply writing a check and getting the keys. Here are a few tips to help you <a href="http://www.sba.gov/content/buying-existing-business" title="link to information about buying an existing business">do your due diligence as you explore buying a business</a>.</p> <p><strong>Considering the pros and cons</strong></p> <p>There are many favorable aspects to buying an existing business such as an existing customer base, a team of employees and drastic reduction in startup costs. You may be able to jump start your cash flow immediately because of existing inventory and receivables.</p> <p>But there are also some downsides to buying an existing business. Purchasing cost may be much higher than the cost of starting a new business exactly <em>because</em> the initial business concept, customer base, brand and other fundamental work has already been done. Also, be aware of hidden problems associated with the business (like debts the business is owed that you may not be able to collect).</p> <p><strong>Choosing a business</strong></p> <p>There are many different types of businesses to buy. To narrow down the list of potential businesses you might be considering, ask yourself:</p> <ul> <li> <strong>What are my interests?</strong> If you have absolutely no idea what business you want to invest in, first eliminate businesses that are of no interest to you.</li> <li> <strong>What are my talents?</strong> Being honest about your skills and experience can help you eliminate unrealistic business ventures.</li> <li> <strong>What are my conditions for a business?</strong> Consider if a business has a condition that is unfavorable to you, such as location and time commitment.</li> </ul> <p><strong>Doing your research </strong></p> <p>Once you have found a business that you would like to buy, it is important to conduct a thorough, objective investigation and to <a href="http://www.score.org/resources/how-value-your-business" title="link to SCORE article about how to value a business">determine a fair and equitable price for the sale of the business</a>. You&rsquo;ll want to examine information such as tax returns, financial statements, employee files, contracts, leases and any <a href="http://www.sba.gov/content/buying-existing-business" title="link to list of important documents">other important documents</a> related to the business.</p> <p class="rteindent1"><strong>TIP</strong>: You should enlist a qualified attorney to help review the legal and organizational documents of the business you are planning to purchase. Also, an accountant can help with a thorough evaluation of the financial condition of the business.</p> <p><strong>Buying a business</strong></p> <p>When you&rsquo;ve decided to move forward with buying a business, the sales agreement is the key document you&rsquo;ll need to finalize the purchase. This agreement defines everything that you intend to purchase including business assets, customer lists, intellectual property and goodwill. If you do not have a lawyer to help you draft the terms of the sale, you should at least have one review the agreement before you sign it.</p> <p><strong>Closing on a business</strong></p> <p>The closing is the final step in the process of buying a business. Once again, you should have legal counsel available to review all documentation necessary for the business transfer. This page details <a href="http://www.sba.gov/content/buying-existing-business" title="items you should address during your closing">items you should address during your closing</a>.&nbsp;</p> <p>If you think buying an exiting business could be the right path for you, there&rsquo;s a lot of information available to help you succeed, including this <a href="http://www.entrepreneur.com/article/79638-1" title="link to Entrepreneur.com">article from Entrepreneur.com</a> and <a href="http://www.nolo.com/legal-encyclopedia/buying-business-what-you-need-29703.html" title="link to NOLO.com">additional guidance from NOLO.com</a>.</p> http://www.sba.gov/community/blogs/how-buy-existing-business#comments Business Law Advisor Starting Tue, 18 Mar 2014 11:57:18 +0000 kmurray 807581 at http://www.sba.gov/community Is Bad Credit Stopping You from Getting Business Loans? http://www.sba.gov/community/blogs/bad-credit-stopping-you-getting-business-loans <p>In a recent <a href="http://www.colemanreport.com/capital-wanted-but-only-from-preferred-sources/?utm_source=September+19%2C+2013+CRAM&amp;utm_campaign=082412+AM&amp;utm_medium=email" target="_blank" title="report" type="report">report</a>, over 63% of business owners attempting to find funding say they most often targeted banks. Unfortunately, the success among these respondents of actually getting a business loan was a low 27%. &nbsp;</p> <p>However, recent news suggest small business owners considered creditworthy are discovering it to be easier to get business loans from traditional banks. This is good news for the economy since access to funding for small businesses is a part of job and economic growth.</p> <p>Unfortunately, bad credit plagues a large percentage of small business owners as a result of the financial crisis several years back. The fact remains that it&rsquo;s harder for smaller businesses &shy;&ndash; even with stellar credit ratings &shy;&ndash; to get traditional bank loans than it is for larger businesses.</p> <p>Access to capital is the single largest roadblock most business owners face when growing their business. With a <strong><a href="http://www.businesscreditblogger.com/2013/08/14/unsecured-business-loans/" target="_blank" title="business credit blog" type="unsecured business loan info">business loan</a></strong>, these businesses can hire new employees, purchase additional inventory, buy or upgrade equipment and increase their marketing efforts.</p> <p>So what can a business owner do if bad credit is preventing them from getting a business loan?</p> <p>The good news is there are alternative funding programs and solutions providing business owners the opportunity to obtain a business loan or line of credit regardless of having bad personal credit. Instead, other factors are taken into consideration such as bank deposit history, credit card sales, credit partners and other data sources.</p> <p>Here are several factors that can get you a business loan regardless of having bad credit:</p> <p><strong>Bank deposits </strong>&ndash; A business with regular bank deposits can put its cash flow to work with <strong><a href="http://www.businesscreditblogger.com/2013/09/16/revenue-based-financing/" target="_blank" title="business credit blog" type="revenue based loan info">revenue-based loans</a></strong>. This program is based on the deposits going into the business bank account on a monthly basis. Typically, a business can obtain a business loan equal to 10% of its annual gross deposits regardless of having bad credit. Another benefit of this program is the time it takes to get funded, which is approximately 7 business days.</p> <p>Keep in mind the loan term can be as long as 18 months with this program, with rates slightly higher than a traditional bank rate. It requires no collateral, financials or tax returns. Repayments are made in small increments every day via ACH from the business bank account.</p> <p><strong>Credit card sales</strong> &ndash; This type of funding program, known as a merchant cash advance, provides businesses with upfront cash in exchange for a portion of future credit card sales. For businesses that have regular monthly credit card sales but struggle with bad personal credit, a merchant cash advance may be a viable option.</p> <p>However, be very selective on what merchant cash advance provider you select. Some providers can cost as high as 38% while others can be as low as 12%. In addition, when it comes to repayment, the majority of merchant cash providers take a fixed percentage of your daily credit card receipt volume until the advance you took is paid back. Other <strong><a href="http://www.businesscreditblogger.com/2012/04/26/business-merchant-cash-advance/" target="_blank" title="business credit blog" type="business merchant cash advance info">business cash advance providers</a></strong> may offer a fixed monthly installment payment for its repayment method.</p> <p><strong>Credit Partner </strong>&ndash; Using a business partner(s) as a credit partner for obtaining lines of credit in the form of <strong><a href="http://www.sba.gov/community/blogs/business-credit-cards-what-every-business-owner-should-consider" target="_blank" title="sba blog" type="business credit card info">business credit cards</a></strong> can be a viable solution to overcome a personal credit challenge. A business partner who has strong credit scores is the best place to look. You may also want to consider someone who may be interested in participating in your business as a potential credit partner.</p> <p>This method does bring risk to the credit partner because they are cosigning with the business to obtain funding. However, it&rsquo;s important to note the type of unsecured business credit cards I am referring to will not appear on the personal credit reports of the cosigner unless they go into default.</p> <p>There are many other types of funding programs that offer small business owners the opportunity to get business loans or access to cash without having perfect credit or subjecting themselves to all the rigorous analysis, cumbersome paperwork, lengthy process and aggravating timelines that comes with a traditional business loan. &nbsp;</p> http://www.sba.gov/community/blogs/bad-credit-stopping-you-getting-business-loans#comments The Industry Word Financing Starting Tue, 11 Mar 2014 23:24:42 +0000 Marco Carbajo 805661 at http://www.sba.gov/community 10 Ways to Maximize Your Home Office for Productivity http://www.sba.gov/community/blogs/10-ways-maximize-your-home-office-productivity <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">If you run one of the 14+ million home-based small businesses in the United States, congratulations. You&rsquo;ve got lower overhead, a shorter commute and the opportunity to be more productive than your office-based competitors.</span></span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">Still, working from home isn&rsquo;t all eating peanut butter out of the jar and wearing your fuzzy slippers. There are plenty of pitfalls that can distract you from getting your work done. Here we look at 10 ways to ensure you&rsquo;re set up for success in your home office.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">1. Carve Out a Workspace</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">Not every entrepreneur is fortunate enough to have a spare room to turn into an office. That&rsquo;s okay. You can use part of a room separated by a curtain or even a closet. The point here is to ensure you have a dedicated space that is only for work.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">2. Set Up Your Day</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">The more routines you have, the more you&rsquo;ll get done. If you have small children at home with you while you work, plan to work when they nap or when they&rsquo;re quiet; otherwise you won&rsquo;t be productive. Plan out your work hours; they don&rsquo;t have to be 9 to 5, but they should be fairly consistent. Also, consider your attire. Some people love working in pajamas or sweats.&nbsp;Other people (like me) get more done by getting dressed in &ldquo;business casual&rdquo; &ndash; for some reason getting dressed to be seen by the world makes me feel more professional, even if it&rsquo;s just me. &nbsp;</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">3. Figure Out When You Work Best</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">Part of those routines you need to set up involve determining when you&rsquo;re most productive. Some people are night owls, and some are early birds.&nbsp;Some need quiet time without phones and instant messages, so getting up early avoids that. You might need complete quiet in your home office. Whatever your needs, don&rsquo;t fight against them.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">4. Have an Ergonomic Set Up</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">You need a comfortable chair with good back support, a decent computer monitor you can easily see and a keyboard at the right height to avoid awkward pressure on arms and wrists. Don&rsquo;t forget your eyes. Your computer should be at the right distance to see without strain; if necessary, see your eye doctor for &ldquo;computer glasses&rdquo; that are made for viewing a computer properly.&nbsp;Two monitors also can help productivity (less time spent jumping between applications), so if you can afford an extra monitor, by all means try it out. </span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">5. Use Smart Tools</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">There are so many free or affordable software programs and apps for small businesses! Find the ones that help you do more. A few options:</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <ul style="margin-top:0pt;margin-bottom:0pt;"> <li dir="ltr" style="list-style-type: disc; font-size: 13px; font-family: Arial; vertical-align: baseline;"> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><a href="http://drive.google.com/" title="Link to Google Drive"><span style="font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Google Drive</span></a></span></p> </li> <li dir="ltr" style="list-style-type: disc; font-size: 13px; font-family: Arial; vertical-align: baseline;"> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><a href="http://www.dropbox.com/" title="Link to Dropbox"><span style="font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">DropBox</span></a></span></p> </li> <li dir="ltr" style="list-style-type: disc; font-size: 13px; font-family: Arial; vertical-align: baseline;"> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><a href="http://www.skype.com/" title="Link to Skype"><span style="font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">Skype</span></a></span></p> </li> <li dir="ltr" style="list-style-type: disc; font-size: 13px; font-family: Arial; vertical-align: baseline;"> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><a href="http://www.freshbooks.com/" title="Link to FreshBooks"><span style="font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">FreshBooks</span></a></span></p> </li> </ul> <p><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">6. Remove Distractions</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">It can be tempting to fold the laundry that&rsquo;s in the middle of the floor, but pretend you&rsquo;re at an office and ignore it. It&rsquo;s important to designate certain hours for work, and certain hours for home life. Occasionally, it&rsquo;s fine to take a break and run an errand, but don&rsquo;t let it encourage you to procrastinate on a project.</span></span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">7. Get Out of the House</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">Many people can&rsquo;t bear being alone all the time in their home offices. Fortunately, we&rsquo;ve become a mobile society, and you&rsquo;ll always see plenty of people at your local coffee shop working on their laptops. Get a change of environment. Try working from a park or restaurant, </span><span style="font-size: 13px; font-family: Calibri; font-style: italic; vertical-align: baseline; white-space: pre-wrap;">if you can be productive there. </span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">8. Find Support in Person or Online</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">It can be nice to meet other home-based entrepreneurs too. Find a local </span><a href="http://www.meetup.com/" style="line-height: 1;" title="Link to the Meetup site"><span style="font-size: 13px; font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">meetup</span></a><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> of peopl</span><a href="http://www.meetup.com/" style="line-height: 1;"><span style="font-size: 13px; font-family: Calibri; color: rgb(26, 26, 26); vertical-align: baseline; white-space: pre-wrap;">e like</span></a><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> you or a </span><a href="http://smallbiztrends.com/events" style="line-height: 1;" title="Link to small business events calendar"><span style="font-size: 13px; font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">local event</span></a><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> whe</span><a href="http://smallbiztrends.com/events" style="line-height: 1;"><span style="font-size: 13px; font-family: Calibri; color: rgb(26, 26, 26); vertical-align: baseline; white-space: pre-wrap;">re you can</span></a><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> share your stories and find support in your small business endeavors.&nbsp;If you spend any time on Twitter or other social media sites, you&rsquo;ll find plenty of folks who, like you, are working out of their homes. </span><a href="https://twitter.com/search?q=%23homebiz&amp;src=typd" style="line-height: 1;" title="Link to Twitter Homebiz hashtag"><span style="font-size: 13px; font-family: Calibri; color: rgb(0, 37, 229); text-decoration: underline; vertical-align: baseline; white-space: pre-wrap;">#HomeBiz</span></a><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;"> is a great hashtag to follow to find content and conversations geared toward people like you.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">9. Keep Learning</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; white-space: pre-wrap; line-height: 1;">Find as many opportunities as you can to develop your business and industry knowledge. This can come in the form of online webinars, Twitter chats, in-person conferences, seminars, books, blogs and magazines.</span></p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;">&nbsp;</p> <p dir="ltr" style="line-height:1;margin-top:0pt;margin-bottom:0pt;"><span style="font-family: Calibri; font-size: 13px; font-weight: bold; white-space: pre-wrap; line-height: 1;">10. Meet Regularly With Staff</span></p> <p><span id="docs-internal-guid-a85d790b-97c0-f5c0-8637-de1206483d58"><span style="font-size: 13px; font-family: Calibri; vertical-align: baseline; white-space: pre-wrap;">If you have employees who also work from their homes, make a point to meet once a week or month so you reap the benefits of face-to-face time. While it&rsquo;s completely possible to work virtually, nothing can make up for that in-person relationship-building time.</span></span></p> http://www.sba.gov/community/blogs/10-ways-maximize-your-home-office-productivity#comments The Industry Word Managing Starting Thu, 06 Mar 2014 14:23:49 +0000 smallbiztrends 803921 at http://www.sba.gov/community When and Why Should You Stick to the Plan? http://www.sba.gov/community/blogs/when-and-why-should-you-stick-plan <p>There was a time, a few decades ago, when I thought sticking to the plan was a good for business. &ldquo;Because that&rsquo;s the plan&rdquo; seemed like a good thing. But I&rsquo;ve changed my mind.<img alt="wall and ladder istock.com" src="http://timsstuff.s3.amazonaws.com/blogs/Wall%20and%20ladder%20iStock_000002393930XSmall.jpg" style="width: 250px; height: 197px; float: right;" /></p> <p>Having a plan is absolutely a good thing. And sticking to the planning process &mdash; which means regularly checking results, evaluating progress, and revising a plan &mdash; is absolutely a good thing too. But sticking to a plan? Just because it&rsquo;s supposedly something people do? No.</p> <p>Years ago, I was one of four friends taking a two-week road trip in Europe. We were young, single and having fun. Three of us were fairly flexible about things, so if we liked one spot we&rsquo;d want to stay there longer; if we didn&rsquo;t like another, we&rsquo;d want to take off early. But the fourth always wanted to stick to the plan. And that was such a pain. We&rsquo;d made the plan before we left, and our trip meant learning. I remember the arguments: he&rsquo;d say &ldquo;but we have a plan&rdquo; and we&rsquo;d say &ldquo;but when we made the plan we didn&rsquo;t know what we do now.&rdquo;</p> <p>Fast forward to today and the first thing we can all see is that business time frames have changed. Business moves faster than it used to. And the business landscape has changed too. There&rsquo;s still a lot of consolidation at the top, and those huge enterprises need to manage longer-term plans in order to be able to steer. But there&rsquo;s also huge fragmentation at the bottom, too, with more than 20 million U.S. companies having no employees, and six or so small businesses, and they move faster. They have to.</p> <p>So assumptions change very quickly. And that, to my mind, is the key to managing a business plan and keeping it useful.</p> <p>First, do a plan that has concrete specifics you can track. Include not just the obvious numbers for sales, costs, and expenses, but also other manageable numbers like web traffic, visits, leads, presentations, calls, downloads, likes, mentions, updates, and whatever else drives your business.</p> <p>Second, set a regular schedule for reviewing plan vs. actual results. Have a monthly task to look at progress and identify problems.</p> <p>Third, learn to distinguish problems of execution from changed assumptions. If assumptions have changed, then the plan should change. If assumptions still hold true, then the difference between plan and actual results is a matter of execution. React to surprises according to what direction they go and what cause and effect you see. Usually, unexpectedly good results are a good reason to look at shifting resources towards the positive; unexpectedly bad results are a good reason to shift resources to correct a problem.</p> <p>And that&rsquo;s what I call the good side of sticking to a plan: have a plan, review it regularly, and revise it as needed. It&rsquo;s way easier to correct your course if you have a plan than if you&rsquo;re just reacting to whatever happened yesterday.&nbsp;</p> <p><em>(Image courtesy of stockphoto.com)</em></p> http://www.sba.gov/community/blogs/when-and-why-should-you-stick-plan#comments The Industry Word Managing Marketing Starting Tue, 25 Feb 2014 02:45:41 +0000 Tim Berry 798621 at http://www.sba.gov/community In A Franchise, When Does The Money Start Rolling In? http://www.sba.gov/community/blogs/franchise-when-does-money-start-rolling <p>You need to know how long it&rsquo;s going to take to start recouping your investment in the <strong>franchise</strong> concept you&rsquo;ve chosen. You certainly shouldn&rsquo;t have to guess how long it&rsquo;s going to take for you to see some green.</p> <p>If you&rsquo;d like to find out when the money will start rolling in, keep reading. I&rsquo;m going to show you how to get that money question answered.</p> <p><strong>Open For Business</strong></p> <p>The day you open your <strong>franchise</strong> business up, you should see some money rolling in.</p> <p>That day&hellip;Grand Opening Day should be a day to remember, especially if the marketing department at franchise headquarters did its job. Customers should be everywhere. Wallets should be out. Money should be rolling in. And, when word gets out that <a href="http://www.sba.gov/community/blogs/franchise-businesses-can-and-do-impact-local-communities" title="link to article about local business activity">there&rsquo;s a new business in town</a>, you should see a good amount of foot traffic (if it&rsquo;s a retail or food franchise) going in and out of your new business.</p> <p>Money will be flowing in. It will feel good. You&rsquo;ll feel like a million bucks. Enjoy that feeling. Savor it like a fine wine or a corn-fed steak.</p> <p><strong>The Money Can&rsquo;t Roll Into Your Pocket Yet&nbsp; &nbsp;</strong></p> <p>The money that&rsquo;s rolling into your new business can&rsquo;t go into your pocket. Not yet. It needs to go back into your business. You&rsquo;ll have expenses to cover&hellip;things like rent, inventory, advertising and utilities. Of course there&rsquo;s payroll. And don&rsquo;t forget that you have to repay <a href="http://www.sba.gov/community/blogs/official-sba-news-and-views/open-business/sba-sets-fees-new-loans-under-150000-zero-getting-loans-hands-more-entrepreneurs" title="link to sba news article about loans">the small business loan</a> you received.</p> <p>That probably won&rsquo;t leave much&hellip;and it&rsquo;s not supposed to. You own a brand-new business&hellip;a startup business. Before you can pocket some of the money that will be coming in, <a href="http://www.thefranchiseking.com/break-even-in-a-franchise" title="link to franchise king blog article on breaking even in a franchise">you need to get your franchise business to break-even</a>.* That should be your short-term goal.</p> <p><strong>What Is Break-Even?</strong></p> <p>That&rsquo;s the point in which your revenue pays your business expenses. Only then can you start thinking about pocketing some of the money that&rsquo;s coming in.</p> <p>But, you knew that.</p> <p>That&rsquo;s because you took the time to write a proper business plan. One that included your <a href="http://www.sba.gov/community/blogs/community-blogs/business-planning-tutorials/business-planning-sales-forecast" title="business planning topics">sales forecast</a>. A good business plan will include projections. You&rsquo;ll have an idea of when you&rsquo;ll be breaking even, what your sales will have to be to get there.&nbsp; &nbsp;</p> <p><strong>Franchise Ownership Is A Long-Term Thing</strong></p> <p>You&rsquo;ve got to be in it for the long haul.</p> <p>If you&rsquo;re looking to replace your salary quickly, it probably won&rsquo;t happen. You&rsquo;re going to have to be patient. Your family will have to be patient too. Hopefully, you&rsquo;ve set aside some funds to get you through those first few months&hellip;or longer.</p> <p>I know you want to see the money rolling in.</p> <p>Choose a franchise that&rsquo;s a good match for your skills. Make sure it&rsquo;s well within your means. Talk to a lot of existing franchisees, and chose one or two to visit in-person. Write a formal business plan. Consult with a franchise attorney.</p> <p>If you do enough right things, the money may well roll in.</p> <p>I&rsquo;m pulling for you.</p> <p>*Non-US Government link&nbsp;</p> <p>&nbsp;</p> http://www.sba.gov/community/blogs/franchise-when-does-money-start-rolling#comments The Industry Word Starting Tue, 18 Feb 2014 14:28:49 +0000 FranchiseKing 796361 at http://www.sba.gov/community Build Business Credit Reports You Can Be Proud About Having http://www.sba.gov/community/blogs/build-business-credit-reports-you-can-be-proud-about-having <p>Business credit reports play an integral role in credit risk assessment and company research. Access to detailed information about a business such as background info, financial data, payment trends, company size, payment history and public filings provide the necessary details lenders, suppliers, investors and potential business partners need. <img alt="build business credit" src="http://media-cache-ak0.pinimg.com/736x/34/5b/7a/345b7a4b9a272237867cae232ae3e1b3.jpg" style="width: 198px; height: 162px; float: right;" /></p> <p>Your company credit reports and scores are constantly changing based on a variety of factors, including payment history, number of trade lines and outstanding balances. It&rsquo;s essential to keep a close eye on your reports and watch out for changes that could affect your ability to acquire credit.</p> <p>It&rsquo;s vital to build and maintain business credit reports you can proud of. Did you know potential business partners and investors may evaluate your company credit files to acquire background information on your business, evaluate financials and review what other companies you&#39;re working with?</p> <p>Building and improving the depth and diversity of your business credit reports will have lasting benefits financially and provide greater financing opportunities. While it may take time to <strong><a href="http://www.businesscreditblogger.com/2013/12/18/how-to-build-credit-for-your-business/" target="_blank" title="business credit blog" type="business credit info">build business credit</a></strong> that has depth and diversity, it&rsquo;s equally important to take the time to manage and protect the good credit your company has already established. To accomplish this you should monitor your reports on a regular basis.</p> <p>Here are five reasons to build strong business credit reports:</p> <ol> <li> <strong>Creditworthiness</strong> - Lending institutions, creditors and suppliers will check your business credit reports prior to extending or increasing your company&rsquo;s line of credit. Additionally, they monitor your reports routinely to assess your company&#39;s ability to pay and may adjust credit terms prior to financial difficulties emerging.</li> <li> <strong>Customer acquisition</strong> - It&rsquo;s not uncommon for potential customers to check a business&#39;s credit record to see if a company is a legal and credible business before working with them. This is not an unusual practice in today&#39;s business environment.</li> <li> <strong>Partnerships &amp; joint ventures</strong> - Various other companies could evaluate your reports if they are thinking about collaborating with you. For example, by recognizing one of the most creditworthy companies, a business could supply first-time consumers a line of credit at very little risk.</li> <li> <strong>Insurance premiums</strong> - Company insurance policy costs are based upon information acquired from your company reports. Insurance companies make use of business credit reports for underwriting insurance policies. Factors that play a role in just how they forecast danger include industry classification, payment trends, trade experiences, and debt to credit ratios.</li> <li> <strong>Government contracts </strong>- Federal government departments also assess company credit records for companies wanting to do business with the government, collecting taxes, and fulfilling government deals. For instance, in order to obtain a federal contract your company must be registered to start marketing to government agencies. This registration process includes <strong><a href="http://www.businesscreditblogger.com/2013/01/08/get-a-duns-number/" target="_blank" title="business credit blog" type="get a duns number">getting a DUNS number</a></strong> from Dun &amp; Bradstreet.</li> </ol> <p style="margin-left:.25in;">It&#39;s crucial to keep track of the health of your business credit reports as it is the basis for decisions other businesses, lenders, suppliers, government agencies, insurance firms and consumers make concerning your company. Monitoring your reports is important so you should regularly check and ensure details regarding your company are accurate and up to date.</p> http://www.sba.gov/community/blogs/build-business-credit-reports-you-can-be-proud-about-having#comments The Industry Word Financing Starting Tue, 11 Feb 2014 19:20:58 +0000 Marco Carbajo 795221 at http://www.sba.gov/community Use Your Sales Forecast and Expense Budget to Define your Startup http://www.sba.gov/community/blogs/use-your-sales-forecast-and-expense-budget-define-your-startup <p>I&rsquo;ve been working on a new startup with some long-time friends and just discovered &ndash; again, for the umpteenth time &ndash; how the interaction between words, concepts, and numbers often demands the concrete logic of core business plan numbers.</p> <p>Specifically, a sales forecast and an expense budget can do wonders for early start-up discussions. Putting specific numbers to things forces definitions and decisions. For the record, our new plan isn&rsquo;t a restaurant; it&rsquo;s a high-tech web-based offering. But it&rsquo;s still confidential. So I&rsquo;m using examples here from a business everybody can understand: a restaurant business.</p> <p><strong>1. The Sales Forecast Defines the Offering </strong></p> <p>I just saw it again but I&rsquo;ve seen it before many times. The co-founders get together and share ideas. If it were a restaurant, it would be about things we could do for breakfast, lunch, drinks, dinner; it would be about price points, cuisines, menus, reservations and so on. And these general discussions become specific when you get to the forecast. They have to get specific about units and prices. That forces founders to focus in on realistic plans we can actually execute.</p> <p>Not that we&rsquo;d define every menu option &ndash; absolutely not. But a good forecast has to summarize at least on average revenue and average cost per meal, and that leads to defining whether meals are breakfasts, lunches, dinners or drinks, etc. The numbers move the general ideas forward.</p> <p><strong>2. An Expense Budget Defines Tasks and People </strong></p> <p>We need to focus practically on what and when we can afford to spend. For a restaurant, we&rsquo;d need to start paying two or three people and we need to pay contractors for remodeling the location, developing the branding, doing menus, and people to start developing the kitchen and such. All of that takes deciding on priorities.</p> <p>The way we do that, in practical terms, is to look at our expense budget. We develop it together step by step: From the first to the twelfth month, how much do we need to pay out, and to whom? We all have different ideas on this, so when we get together, the actual expense budget&mdash;which we can all see and agree on&mdash;helpfully steers us back to the plan.</p> <p><strong>Conclusion: Numbers Define Concepts</strong></p> <p>Particularly when the startup founders&mdash;such as in our case&mdash;all have a lot of experience, love the topic area and are full of ideas, it&rsquo;s really hard to make progress moving from brainstorming to execution. My experience with the sales forecast and expense budget reminds me, once again, how much I like planning as a vital part of the process of starting a business.</p> http://www.sba.gov/community/blogs/use-your-sales-forecast-and-expense-budget-define-your-startup#comments The Industry Word Managing Starting Wed, 29 Jan 2014 20:39:08 +0000 Tim Berry 791781 at http://www.sba.gov/community 3 Ways To Look At Franchising http://www.sba.gov/community/blogs/3-ways-look-franchising <p>Wherever we go, our baggage comes with us. It&rsquo;s there, you know. We just don&rsquo;t always realize it.</p> <p>Take <strong>franchising</strong> for instance. All of us look at franchising in a very personal way. That way is based on our past experiences with franchising. Either as a customer of a franchise business, or as a&hellip;allow me to explain.</p> <p><strong>How We Look At Franchising</strong></p> <p>Another word for baggage is experience. Our experiences dictate our views on things.</p> <p>For example, if you ate a lot of fast food growing up, you bring that experience with you when you think about franchising. For you, a franchise is a fast food restaurant.</p> <p>Another example of how you may view franchising&hellip;albeit an extreme one could have to do with <a href="http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/disaster-loans" title="link to business grants information">a disaster</a>, like a flood or a hurricane that you may have been directly impacted by.</p> <p>You may have had a local franchise owner do the much- needed cleanup and *<a href="http://www.franchisedirect.com/homeservicesfranchises/restoration-franchises-0706/" title="top restoration franchises for sale">restoration</a>. So, when you think of franchising, you picture the truck or van that sat in front of your house for a few days.</p> <p>Are you stating to see where I&rsquo;m coming from?</p> <p>One more example.</p> <p>Let&rsquo;s say that you had an aunt and uncle open a franchise, and fail. Whatever the name of the franchise was that they had to close, it will always be embedded in your mind, even if your aunt and uncle were the ones that contributed to the franchise&rsquo;s closing more than the franchisor. Maybe they forgot about <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/most-new-franchise-owners-forget" title="link to article about what most franchise buyers forget about">this</a>.</p> <p>Stuff happens. Businesses open and business close.</p> <p>Try not to let other people&rsquo;s experiences cloud your judgment. You are not them.</p> <p>Hopefully, the examples I gave you helped cement what I&rsquo;m trying to teach you here:</p> <p>Open your mind. There are a lot of opportunities out there.&nbsp;</p> <p><strong>3 Ways To Look At Franchising</strong></p> <p>Here they are. See if they make sense to you.</p> <p>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Job Replacer</p> <p>Lots of people think about buying a franchise if they&rsquo;ve been downsized.</p> <p>It&rsquo;s no fun being unemployed; I was a few times myself, and it can be quite scary. But, it&rsquo;s also a great time to look at other options. Maybe one of them will involve looking into franchise business ownership. But, there&rsquo;s something you need to know if you&rsquo;re going to buy a franchise instead of get a new job. Your salary is going to be lower than you&rsquo;re used to at first. Read about <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/your-salary-franchise-owner" title="what is your salary as a franchise owner">your salary as a franchise owner</a>.&nbsp;</p> <p>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Goal Achievement</p> <p>This one is for the &ldquo;<em>I&rsquo;ve always wanted to own my own business</em>&rdquo; crowd. &nbsp;</p> <p>Whether you&rsquo;ve lost your job, or are just of working for someone else, this is how a lot of people look at franchising, and how it may work for them.</p> <p>Those looking at franchising in this way need to make sure that they are suited to own a business that doesn&rsquo;t offer a lot of latitude. Franchising is a rule-based business model, and that&rsquo;s why it works. Prospective franchise owners need to have <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/do-you-have-special-personality-needed-be-franchise-owner" title="having the right personality for franchising">the right personality</a>.</p> <p>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Legacy Creation</p> <p>Some of the people I&rsquo;ve worked with over the years have expressed a real desire to leave a legacy for their children.</p> <p>They&rsquo;ve seen jobs come and go over the years, and don&rsquo;t want their kids to have to go through a lot of ups and downs in their careers. They&rsquo;d rather have them be employers as opposed to <a href="http://www.sba.gov/community/blogs/new-year-new-hires-%E2%80%93-growing-your-business-with-new-employees" title="adding new employees to a business">employees</a>.</p> <p>Franchising is looked up (<em>by these people</em>) as a way of creating a secure future for their kids. A place where they&rsquo;re children can hang their hats.</p> <p>It&rsquo;s a noble thing to do, and some franchise businesses are great family businesses.</p> <p>As you can say, there are a few ways to look at franchising.</p> <p>Just make sure you do so from a place that&rsquo;s uncluttered with baggage from your past.</p> <p>*Non US Government link</p> http://www.sba.gov/community/blogs/3-ways-look-franchising#comments The Industry Word Starting Wed, 22 Jan 2014 03:03:29 +0000 FranchiseKing 790231 at http://www.sba.gov/community Optimism Runs High for the Independent Workforce http://www.sba.gov/community/blogs/optimism-runs-high-independent-workforce <p>2013 was a good year for independent workers &ndash; and the future looks even brighter. Self-described contractors, freelancers, consultants, temps, &ldquo;solopreneurs,&rdquo; and microbusiness owners surveyed for <a href="http://info.mbopartners.com/rs/mbo/images/2013-MBO_Partners_State_of_Independence_Report.pdf" title="link to MBO’s Third Annual Independent Workforce Report">MBO&rsquo;s Third Annual Independent Workforce Report</a> are feeling optimistic about their employment status. Check out these positive figures if you&rsquo;re thinking about joining their ranks.</p> <p><strong>Independents have a positive impact on the economy</strong></p> <p>The MBO study reports a 5% increase in independent workers when compared to 2012 &ndash; up to 17.7 million. And with these numbers comes a noteworthy contribution to the economy. Independents generated nearly $1.2 trillion in total income both globally and locally, up a whopping 20% from 2012. They also spent over $150 billion on non-payroll/contractor expenses.</p> <p><strong>Independents hire other independents</strong></p> <p>The vast majority of independent workers are &ldquo;solopreneurs&rdquo; and don&rsquo;t have traditional employees, but that doesn&rsquo;t mean they work alone. Through contract hiring over the past year, 26% of independent workers spent a total of $96 billion to hire the equivalent of 2.3 million full-time workers.</p> <p><strong>Independents want to grow their businesses</strong></p> <p>One in seven independents plan on building a bigger business, which means that close to 2.5 million independent workers will launch businesses that will create additional traditional jobs and ignite even greater economic activity.</p> <p><strong>Independents are feeling less burdened</strong></p> <p>As it becomes more conventional to have an independent work style, independents are finding more tools and solutions to overcome challenges they face. Concerns over retirement, project pipelines, benefits, self-marketing and job security all fell slightly from the 2011 base year.</p> <p><strong>Independents are happy in their work</strong></p> <p>Job satisfaction remains strong among independent workers, with 64% reporting that they are highly satisfied with their work style. Most plan to continue as independent workers, with 77% saying they will either continue as &ldquo;solopreneurs&rdquo; (63%) or grow a larger business (14%).</p> <p>These independents &ndash; representative of all ages, professions, educational levels and geography &ndash; are part of a workforce that&rsquo;s predicted to grow to 24 million workers by 2018. Will you be a part of it?</p> <p>If you&rsquo;re thinking about starting your own small business, <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business" title="link to resources to start a business">check out our resources</a> to get you started. SBA is here to help you succeed &ndash; so let us know how we can do just that.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-matters/early-years-entrepreneurship-step-step-approa" title=" The Early Years of Entrepreneurship: A Step-by-Step Approach to Surviving and Thriving blog post">The Early Years of Entrepreneurship: A Step-by-Step Approach to Surviving and Thriving</a></li> </ul> http://www.sba.gov/community/blogs/optimism-runs-high-independent-workforce#comments Small Business Matters Managing Starting Thu, 16 Jan 2014 11:34:01 +0000 kmurray 789131 at http://www.sba.gov/community Financing Your Small Business With a Microloan http://www.sba.gov/community/blogs/financing-your-small-business-with-microloan <p>Are you starting or expanding a business, and in need of a loan to help make it happen? While there are some larger loan options available, many entrepreneurs &ndash; particularly freelance, online and home-based businesses &ndash; require only a few thousand dollars to get started. If this is the case for you, consider a microloan.</p> <p><strong>What&rsquo;s a microloan?</strong></p> <p>Microloans are loans in what would be considered &ldquo;smaller&rdquo; amounts than conventional business loans. SBA&rsquo;s Microloan program, for instance, provides loans of up to $50,000 to help small businesses and certain not-for-profit childcare centers start up and expand. The average microloan is about $13,000.</p> <p><strong>What can I use a microloan for?</strong></p> <p>Microloans can be used for a number of things, including:</p> <ul> <li> Working capital</li> <li> Inventory or supplies</li> <li> Furniture or fixtures</li> <li> Machinery or equipment</li> </ul> <p>You <strong>can&rsquo;t</strong> use funds from an SBA microloan to pay any existing debts or to purchase real estate.</p> <p><strong>What are the terms and interest rates?</strong></p> <p>Microloan repayment terms vary according to several factors, including:</p> <ul> <li> Loan amount</li> <li> Planned use of funds</li> <li> Requirements determined by the intermediary lender</li> <li> Your needs as a small business borrower</li> </ul> <p>The maximum repayment term allowed for an SBA microloan is six years.&nbsp;</p> <p>Interest rates vary, depending on the intermediary lender and their costs from the U.S. Treasury. In general, these rates are between 8 and 13 percent.</p> <p><strong>How can I get a microloan? </strong></p> <p>SBA provides funds to certain intermediary lenders, which are nonprofit community-based organizations with experience in lending, management and technical assistance. These intermediaries manage the Microloan program for eligible borrowers. So you don&rsquo;t go directly to SBA for a microloan &ndash; you work with <a href="http://www.sba.gov/sites/default/files/Intermediary-List.pdf" title="link to lender list">your local lender</a>.</p> <p>Each intermediary lender has its own lending and credit requirements. Typically, they require some type of collateral as well as the personal guarantee of the business owner. You may also have to fulfill training or planning requirements before a lender considers your loan application.</p> <p><strong>Learn more</strong></p> <p>For more information about microloan and if one might be right for you, contact your local <a href="http://www.sba.gov/about-offices-list/2" title="Go to SBA district office page ">SBA District Office</a> or check out this <a href="http://www.sba.gov/sites/default/files/Intermediary-List.pdf" title="link to lender list">list of participating microloan intermediary lenders</a>.</p> <p><strong>Related Resources</strong></p> <ul> <li> <a href="http://www.sba.gov/community/blogs/community-blogs/small-business-cents/6-step-guide-how-get-business-loan" title="link to 6 Step Guide- How to Get a Business Loan blog post">6 Step Guide- How to Get a Business Loan</a></li> </ul> http://www.sba.gov/community/blogs/financing-your-small-business-with-microloan#comments Small Business Cents Financing Managing Starting Wed, 15 Jan 2014 12:35:50 +0000 kmurray 787261 at http://www.sba.gov/community Small Business Startup: 10 Essential Ingredients Every Startup Needs http://www.sba.gov/community/blogs/small-business-startup-10-essential-ingredients-every-startup-needs <p>So. You think you&rsquo;re ready to start a business. You chose your business name. You got your business logo designed. Your business cards are at the printer.</p> <p>But you&rsquo;re not done. You also must ensure that your business has all of the essential ingredients it needs so it has a fighting chance to succeed. Doing so will enable you to establish the proper business foundation so you can legitimize the operation and credibility of your business.</p> <p>The ingredients listed below are essential for a small business startup and also play a key role in the business credit building process.</p> <ul> <li> <strong>Choose an entity structure</strong> &ndash; Pay careful consideration as to which type of structure you select. Whether you choose an LLC, S-Corporation, C-Corporation or Limited Partnership, knowing which structure is best for your income and tax situation is key for your business.</li> <li> <strong>Obtain a Business Tax Identification Number</strong> &ndash; Also known as a <a href="http://www.sba.gov/community/blogs/guest-blogs/industry-word/why-your-company-needs-business-tax-identification-number" target="_blank" title="business tax identification" type="business tax identification">Federal Tax Identification Number</a> or EIN, it&rsquo;s the corporate equivalent to a social security number but used for businesses. This nine-digit number is assigned by the IRS to business entities operating in the U.S.</li> <li> <strong>Choose a business address</strong> &ndash; A <a href="http://www.businesscreditblogger.com/2013/10/28/business-virtual-office/" target="_blank" title="virtual business address" type="business virtual address">virtual business address </a>or commercial location is ideal for small businesses. It&rsquo;s important to note that your physical business address and business mailing address may be two different locations.</li> <li> <strong>Set up a business phone number</strong> &ndash; Either a toll free number or local phone number is a reliable source for a company&rsquo;s communications. It&rsquo;s key to dedicate a phone number exclusively for business that can also be listed in major directories.</li> <li> <strong>Establish a web presence</strong> &ndash; A company web site and social media presence is just as important today as having a business phone number or email address. The easier a customer or lender can verify and learn more about your business, the better.</li> <li> <strong>Open a business bank account</strong> &ndash; A <a href="http://www.sba.gov/community/blogs/how-open-small-business-bank-account-online" target="_blank" title="small business bank account " type="small business bank account">small business bank account </a>will be your most important tool for managing your company&rsquo;s finances. This will also allow you to completely separate your personal banking activities from your company&rsquo;s.</li> <li> <strong>Obtain a merchant account</strong> &ndash; Accepting credit cards from customers is an essential part of doing business today. From mobile credit card readers to virtual terminals, a merchant account is what is utilized to accept credit cards, get cash and make money as a company.</li> <li> <strong>Get a business credit card</strong> &ndash; <strong><a href="http://www.businesscreditblogger.com/2013/10/16/top-business-credit-cards/" target="_blank" title="business credit cards" type="business credit cards">Business credit cards</a></strong> have many benefits such as higher limits, perks &amp; rewards, business credit reporting and expense tracking. For real personal and business separation, a business owner needs a credit card exclusively for business purchases.</li> <li> <strong>Get a business debit card</strong> &ndash; A useful and convenient tool as opposed to writing business checks. Make sure you add overdraft protection to your small business bank account to avoid and potential overdrafts.</li> <li> <strong>Plan a business funding strategy</strong> &ndash; Many businesses fail due to lack of funding. <strong><a href="http://www.businesscreditblogger.com/2013/12/05/business-credit-analysis/" target="_blank" title="business credit analysis" type="business credit analysis">Analyze your business credit</a></strong> and plan out a short-term and long-term funding strategy. Access to credit is crucial to your business as it may experience unforeseen expenses.</li> </ul> <p>This <a href="http://www.businesscreditblogger.com/2014/01/06/small-business-startup/" target="_blank" title="business checklist" type="business checklist">small business checklist</a> of essential elements is to help you structure your business in a successful way. The last thing you need is to wonder whether your business has everything it needs to satisfy potential customers and/or lenders. Now with this list you can evaluate your startup at a glance and be sure it has every element it needs to operate as a real business.</p> http://www.sba.gov/community/blogs/small-business-startup-10-essential-ingredients-every-startup-needs#comments The Industry Word Financing Starting Tue, 14 Jan 2014 19:51:53 +0000 Marco Carbajo 787111 at http://www.sba.gov/community February 25 Deadline for BizClips Video Contest to Win Great Prizes and Free Publicity for Small Business http://www.sba.gov/community/blogs/february-25-deadline-bizclips-video-contest-win-great-prizes-and-free-publicity-small-business <p>What small business challenges are you facing this year? Help transform these challenges into successful opportunities by making and uploading your small business video story by midnight, Eastern Standard Time, on February 25, 2014. You could win great prizes and free publicity to improve your small business productivity.</p> <p><strong>Enter the Small Business Productivity Makeover Contest Today</strong></p> <p>You could win the grand prize, valued at $3,500, by sharing your story through &ldquo;BizClips: The Small Business Productivity Makeover Video Contest&rdquo; at <a href="http://www.bizclips.score.org" title="www.bizclips.score.org">www.bizclips.score.org</a>. The Contest is sponsored by SCORE and Brother International, a premier provider of print and communications products and services. The Contest celebrates SCORE&rsquo;s 50 years of helping more than ten million small businesses learn how to start a business, grow, and achieve their business goals through free business assistance and education.</p> <p><strong>MAKE a Video about Your Small Business</strong></p> <p>The Contest is easy to enter, but the entry deadline is approaching quickly. Make your 30-60 second video, describing your need for a business makeover and how SCORE could help address your challenges. Or you can also tell how SCORE previously helped your small business. The video can be simple or fancy, as long as it meets the minimum requirements. Here are some great tips on how to make a video: <a href="http://bizclips.score.org/additionalinfo" title="http://bizclips.score.org/additionalinfo">http://bizclips.score.org/additionalinfo</a>.</p> <p><strong>UPLOAD your video to the BizClips Contest website before midnight, February 25, 2014.</strong></p> <p>Don&rsquo;t be left out. The deadline to create and upload your video at <a href="http://www.bizclips.score.org" title="www.bizclips.score.org">www.bizclips.score.org</a> is midnight, Eastern Standard Time, on February 25, 2014. Late entries will not be accepted.</p> <p><strong>VOTE online for your video and ask others to help you get to the final round.</strong></p> <p>Voting is easy, too. All videos that meet the minimum requirements will be eligible for online voting beginning April 1, 2014. Spread the word of your video and ask your friends, family, customers and supporters to vote for you, too. They can also help you win by spreading the word. Public voting makes up 40 percent of the judging criteria. Voting closes at 11:59 p.m., Eastern Standard Time, on April 30, 2014.</p> <p><strong>WIN great prizes and free publicity for your business.</strong></p> <p>The top 25 vote-getters will become finalists, gain significant free national media exposure, and win a <a href="http://bizclips.score.org/prizes" title="http://bizclips.score.org/prizes">Brother P-Touch prize</a>. The Grand Prize winner will be selected by a <a href="http://bizclips.score.org/judges" title="http://bizclips.score.org/judges">panel of small business experts</a> to receive a business makeover with up to $2,500 of products and services from Brother. The Grand Prize winner and a companion will be flown to Washington, D.C. in September 2014 for a special national announcement and awards ceremony at the 2014 SCORE Awards Gala. The grand prize winner will have a professional business makeover video created to be shown at the Gala and promoted by SCORE. The winner can also use the video for its own promotion. The total value of the grand prize is $3,500.</p> <p>&ldquo;This is a unique opportunity for your small business to be in the limelight in front of a national audience. We&rsquo;ll be thrilled to help make the winning small business better, stronger and more productive to meet its challenges,&rdquo; said Ken Yancey, <a href="http://www.score.org" title="www.score.org">SCORE</a> CEO.</p> <p>BizClips, The Small Business Productivity Video Contest launched on November 25, 2013. Don&rsquo;t miss the deadline for this opportunity to help your small business turn its challenges into opportunities. Complete details are at <a href="http://www.bizclips.score.org" title="www.bizclips.score.org">www.bizclips.score.org</a>.</p> http://www.sba.gov/community/blogs/february-25-deadline-bizclips-video-contest-win-great-prizes-and-free-publicity-small-business#comments The Industry Word Managing Marketing Mentoring and Training Starting Tue, 14 Jan 2014 14:12:20 +0000 bridgetwpollack 786951 at http://www.sba.gov/community What to Know About Small-Business Licenses and Permits http://www.sba.gov/community/blogs/what-know-about-small-business-licenses-and-permits <p>So, you&rsquo;re starting a business &ndash; congratulations! You already know that there&rsquo;s a lot to take care of, from <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-your-business-stru" title="link to choosing business structure information">choosing your business structure</a> to <a href="http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/choose-register-your-busi" title="link to information about business registration">registering your business</a>. You&rsquo;ll probably also need a business license or permit &ndash; virtually every business does in order to operate legally. It depends on the kind of business you run, where it&rsquo;s located and what state and federal rules apply. Here&rsquo;s what you should know to make sure you&rsquo;ll be running your business within the law.</p> <p><strong>Why Does My Businesses Need a License or Permit?</strong></p> <p><a href="http://www.stcloudstate.edu/sbdc/documents/ObtainingaBusinessLicenseorPermit_SCORE.pdf" title="link to licenses and permits information">Licenses and permits</a> serve two major purposes: They allow the government to track your business&rsquo;s revenue for tax purposes, and they also protect the public.</p> <p>For example, if your business is involved in <a href="http://www.sba.gov/content/what-federal-licenses-and-permits-does-your-business-need" title="link to information about activities supervised and regulated by a federal agency">activities supervised and regulated by a federal agency</a> &ndash; such as selling alcohol, firearms, radio broadcasting, commercial fishing, etc. &ndash; then you&rsquo;ll likely need to obtain a federal license or permit.</p> <p>Other special state licenses, known as <strong><em>professional licenses, </em></strong>are required for dentists, hairdressers, veterinarians, realtors, physicians and more. These licenses indicate the level of expertise of an employee or business owner and that they&rsquo;ve met a certain requirements when it comes to training or education.</p> <p>State licenses are also required of businesses, such as restaurants and those that serve alcohol, to demonstrate that they meet certain state standards or codes. Particular regulations may vary by state.</p> <p>Defined by local and/or state laws, <strong><em>permits</em></strong> generally regulate the safety, structure and appearance of a community and its establishments. There are a number of different kinds of permits to be aware of, including:</p> <ul> <li> Seller&rsquo;s Permits &ndash; if you&rsquo;re purchasing wholesale merchandise for resale</li> <li> Building Permits &ndash; if you&rsquo;re remodeling or building commercial space</li> <li> Health Permits &ndash; if you&rsquo;re preparing food</li> <li> Home Occupation Permits &ndash; if you&rsquo;re running a home-based business</li> </ul> <p><strong>What About Tax Permits?</strong></p> <p>The IRS doesn&#39;t license your business, but it does require that certain businesses register to&nbsp;<a href="http://www.sba.gov/content/getting-tax-identification-number" title="link to tax id number information">receive a federal tax identification number</a>. You&rsquo;ll also need&nbsp;to register with state and local government agencies for applicable tax permits&nbsp;such as a sales tax license, income tax withholding and unemployment insurance tax.</p> <p><strong>Managing and Maintaining Your License or Permit</strong></p> <p><a href="http://www.stcloudstate.edu/sbdc/documents/ObtainingaBusinessLicenseorPermit_SCORE.pdf" title="link to information about licenses and permits">Once you have</a> your license or permit, you&rsquo;ll need to manage and maintain it. Keep these tips in mind to help make sure you don&rsquo;t lose sight of your obligations:</p> <ul> <li> Keep track of renewal dates.</li> <li> Keep a copy of all licensing applications and forms in your business records.</li> <li> Display your licenses or permits correctly. Most states and localities require businesses to prominently display their business licenses so customers can see them.</li> <li> If you expand your business &ndash; whether it&rsquo;s physical building expansion or launching a new product or service &ndash; you may need additional business licenses.</li> </ul> <p><strong>Additional Resources</strong></p> <ul> <li> <a href="http://www.stcloudstate.edu/sbdc/documents/ObtainingaBusinessLicenseorPermit_SCORE.pdf" title="link to Obtaining a Business License or Permit page">Obtaining a Business License or Permit</a></li> <li> <a href="http://www.sba.gov/content/follow-these-steps-starting-business" title="link to 10 Steps to Starting a Business">10 Steps to Starting a Business</a></li> <li> <a href="http://www.sba.gov/content/basic-zoning-laws" title="ilnk to Basic Zoning Laws page">Basic Zoning Laws</a></li> <li> <a href="http://www.sba.gov/content/zoning-laws-home-based-businesses" title="link to Zoning Laws for Home-Based Businesses page">Zoning Laws for Home-Based Businesses</a></li> </ul> http://www.sba.gov/community/blogs/what-know-about-small-business-licenses-and-permits#comments Business Law Advisor Business Laws Managing Starting Thu, 09 Jan 2014 13:54:31 +0000 kmurray 786101 at http://www.sba.gov/community