Managing

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

How to Know When to Change Your Business Plan

By Tim Berry, Guest Blogger
Published: September 27, 2016 Updated: September 27, 2016

Sometimes you need to stick to your business plan to make it work. Even a mediocre strategy consistently executed over time is better than a series of brilliant strategies that keep going off in different directions. Strategy often takes time.

On the other hand, there is no virtue in sticking to a plan, just for having stuck to a plan. We live with constant change. 

Which brings me to the dilemma that many business owners face:

Do I stick to my plan, or change it? If I change it, then is my plan vs. actual (reality) valid? Doesn’t it take consistent execution to make strategy work?

To which I’ll add;

 “It is better to take many small steps in the right direction than to make a great leap forward only to stumble backward.”
 – Chinese proverb

I’ve been dealing with this dilemma for years, as a business owner, entrepreneur, and consultant. I want to suggest some guidelines to help you decide whether to change the plan midstream, or not.

A Good Planning Process

It starts with having a plan that includes priorities, milestones, and expected results. Also, you have to track results and compare them to what you had planned or expected to see. And also, as you developed those expectations, you should have included assumptions.

Ideally you have that process going on already. Without it, there’s no plan to change, and you are managing reactively. If you don’t have a process of planning in place, start it immediately in order that you have a better planning process later on.

The best time to plant a tree is 20 years ago. The second best time is today. – African proverb

Stay the Course or Revise the Plan?

Take some time each month to review your plan and its results. Once you have the process established, it doesn’t take more than an hour or two to get team members together.

Start that monthly meeting with a good hard look at your underlying assumptions. Identify the key assumptions and whether or not they’ve changed. When assumptions have changed, there is no virtue whatsoever in sticking to the plan you built on top of them. Revise your plan, automatically, when key assumptions have changed.

Then look at the differences between what you planned and what actually happened. Identify key differences between the plan and actual results. Some will be better than planned, and some worse.

For each key difference you discover, and all of them combined, use your best judgment and common sense to determine whether the differences were caused by false expectations or unexpected good or bad execution. Also, consider external and internal factors that may have influenced the results.

Maybe your expectations were too conservative, or too optimistic. In that case, you revise your plan. Use your common sense. Were you wrong about the whole thing, or just about timing? Has something else happened, like market problems or disruptive technology, or competition, to change your basic assumptions?

Maybe you discover you and your team have executed better than expected, or results were better than expected. Hooray. Stick to the plan. It’s working.

And maybe you discover that your execution was wrong, poor, or flawed. If any of those reasons are the case, work on executing better and change the plan.

Do not revise your plan glibly. Remember that some of the best strategies take longer to implement. Remember also that you’re living with it every day; it is naturally going to seem old to you, and boring, long before the target audience gets it.

 

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
2

Comments welcome on this page. See Rules of Conduct.

Can You Really Start a Business With Just a Smartphone? Yes!

By smallbiztrends, Guest Blogger
Published: September 22, 2016 Updated: September 22, 2016

It might seem a bit surprising it’s absolutely possible to start and run a business from your smartphone. At the very least, you can start a business and run the majority of it from a smartphone and without a computer, from your home.

Imagine for a moment that you don’t have a full-fledged computer, and you can’t afford expensive equipment.  That’s not so far fetched, because many budding entrepreneurs have minimal resources, yet most of us have a smartphone these days. 

Or perhaps you simply love the idea of being a mobile. You want the freedom that comes with running a business from your phone.

With the right idea and the right mobile tools, you can run a business without investing in tons of expensive equipment or tying your business to one specific location. Here are some tips for starting a business from your smartphone.

Start with a “phone friendly” business model

This part is essential. 

Certain types of businesses naturally lend themselves to being run on mobile devices, whereas others may present more challenges.

For instance, you probably cannot start a full-service web design firm with just a smartphone. You’d need a desktop computer and some professional software in order to really get the job done. However, if you want to develop mobile apps, there are tools available for you to do that on a mobile device.

Some other businesses that you could potentially start with just a smartphone include:

●Social media marketing

●Consulting

●Event planning

●mCommerce (mobile commerce)

●Videography

●Podcasting

●Writing

●Personal shopping

Think also about business professionals who don’t require a computer or a place of business that customers visit, and require only a small amount of supplies and equipment. Types of businesses include handymen, maid service, gutter cleaning, home decorator, seamstress and car detailing to name a few.  These are still low cost businesses to start and run, and it’s not absolutely necessary they have a computer; instead they can rely on a smartphone. You can often get leads through home-services sites, online yellow pages, social media or word of mouth, directly to your phone­– and you can work out of your home or by visiting clients at their residences or places of business. Be sure to check on any licensing and other requirements in your locale.

Get the right apps

A smartphone is made more powerful and versatile by choosing and using the right software apps.

For some businesses you definitely will need add-on apps.  For example, to run an mCommerce business (the term “mCommerce” stands for a mobile based eCommerce business) you will need a commerce application that is mobile friendly, and a fulfillment or drop ship service.  And as a writer, it might be possible to type by hand on your smartphone’s on-screen keyboard, but wouldn’t it be so much better to use a voice transcription app of some kind?

Also, you will need basic apps necessary to run a business today.  For example, you might need a note taking app to keep track of information and organize tasks. You probably will need some kind of expense tracking, invoicing and/or accounting software app to keep your books straight and get paid.  And many businesses could use a cloud project management app, especially for businesses like event planning where organization skills are central to daily execution.

Master mobile communication

Communication with team members, customers or potential clients is an essential part of running any business, whether you have tons of expensive equipment or just a smartphone to work with.

You’re going to have to work around the limitations of a small keyboard.

Email is one of the most popular communication methods for mobile professionals. While a quick response with some abbreviations or spelling errors might be okay if you’re sending a quick message to your business partner, that’s unlikely to go over well with clients or customers. So if you’re communicating with clients or anyone who might expect a detailed response, you need to take the time to communicate in a way that’s satisfactory. And if you use a voice app to dictate responses, be sure to review the communications for accuracy before hitting “send.”

Consider storing canned responses so you don’t have to always fully type out long emails. 

You can also shore up your mobile communication strategy with apps like Google Hangouts, Skype or Apple FaceTime that let you communicate with others on other devices through voice, video or text chat. 

Get social

Being active on social media is an essential activity for a lot of businesses, regardless of whether or not they’re run on smartphones. But luckily for mobile business owners, most popular social platforms have comprehensive mobile apps to make this function fairly straightforward.

In fact, some social apps like Instagram and Snapchat are only really available for full use on mobile devices. So if you’re running a business on your smartphone, take full advantage of those social platforms by using them to showcase your social media strategy, branding and marketing from anywhere.

Back up important data

While smartphones can be great business tools, many aren’t known for having enough storage space. And what space you have may be eaten up by adding multiple apps.  If you’re running a business, you’re going to need a place to store all of your important documents, images, videos and other files.

For ample storage, add a large data card, but one flexible and secure option is to expand your data storage to a secure Cloud storage app.  That way, even if your smartphone drops into the river or is lost, your important business files will still be available and protected.

Some smartphone companies, including Apple and Samsung, have some cloud storage options that you can use for certain items. But you might also explore apps like Dropbox, OneDrive or Google Drive to store some of your important items in the cloud. With these services, you can also potentially share items with team members using other mobile devices. 

About the Author:

smallbiztrends
Anita Campbell

Guest Blogger

My name is Anita Campbell. I run online communities and information websites reaching over 6 million small business owners, stakeholders and entrepreneurs annually, including Small Business Trends, a daily publication about small business issues, and BizSugar.com, a small business social media site.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

Seasonal Employees: What to Know for the Upcoming Holiday Season

By BarbaraWeltman, Guest Blogger
Published: September 15, 2016 Updated: September 15, 2016

Retailers, food establishments, and some other types of businesses routinely take on more help to handle customers during the holiday season. These extra workers can go a long way in making your holiday season a success. Of course you need to treat them with the same care and respect as you do your permanent staff, such as avoiding any discriminatory practices and providing sufficient training. Also, be sure you consider the following special tax, financial, and legal concerns.

Hourly payment

The Fair Labor Standards Act (FLSA) requires employers to pay the minimum wage rate, as well as overtime, for hourly employees (nonexempt employees). This applies, for example, to salespeople hired for the holidays. The applicable rate you must pay is the federal minimum wage rate of $7.25 per hour, or higher, depending on your state or local hourly rate. Of course, you can pay more, and likely will if the competition demands it and your budget allows it.

There is an exemption from minimum wage rules for workers at seasonal recreation or amusement establishments, but this clearly would not apply to retail establishments. Find more information about employing seasonal workers from the U.S. Department of Labor.

Federal employment laws

Besides the FLSA, there are a number of other laws to which an employer becomes subject when the size of the state exceeds a set amount:

  • Title VII of the Civil Rights Act: 15 or more employees
  • Americans with Disabilities Act (ADA): 15 or more employees
  • Age Discrimination in Employment Act (ADEA): 20 or more employees
  • Family and Medical Leave Act (FMLA) applies when a company has 50 or more employees on your payroll for 20 or more workweeks in the current or preceding calendar year.

While independent contractors are not counted, there are no specific exemptions for seasonal workers. While you wouldn’t want to do anything wrong, regardless of the number of people on your staff, having more than the requisite per law exposes you to claims by workers, so beware.

Affordable Care Act

The Affordable Care Act (ACA) requires employers with 50 or more full-time and full-time equivalent employees to provide minimum essential health coverage or pay a penalty. It also subjects you to annual information reporting obligations. In determining whether you are an applicable large employer under ACA, seasonal workers are excluded from the count. According to the IRS, seasonal workers are defined as those who work fewer than 120 days per year. The IRS says “retail workers employed exclusively during holiday seasons are seasonal workers.”

Unemployment insurance

When an employee is laid off (other than for a serious cause), he or she may be eligible for unemployment benefits. The rules differ by state. For example, in Pennsylvania, anyone who earns at least 50.5% of annual income in any 3-month period is ineligible for benefits. In many other states, a seasonal worker is not barred from collecting benefits.

If seasonal workers collect benefits, it may impact what you pay for state unemployment taxes. Usually your rate is fixed on the experience of claims made against you, and having a number of layoffs can increase the number of claims and hike your rate. This may be a small price to pay for adding personnel during a busy time of year in order to keep your customers happy.

Conclusion

Federal laws are not your only concern when taking on seasonal help. Be sure to check with your state labor department to learn your obligations at the state level. In many cases the rules are stricter than under federal law. If you have any questions, talk with an employment law attorney. 

About the Author:

BarbaraWeltman
Barbara Weltman

Guest Blogger

Barbara Weltman is an attorney, prolific author with such titles as J.K. Lasser's Small Business Taxes, J.K. Lasser's Guide to Self-Employment, and Smooth Failing as well as a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® and host of Build Your Business Radio. She has been included in the List of 100 Small Business Influencers for three years in a row. Follow her on Twitter: @BarbaraWeltman.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

How Net 30 Accounts Help Conserve Business Cash Flow

By Marco Carbajo, Guest Blogger
Published: September 13, 2016 Updated: September 13, 2016

For every business, the cash flowing into a company is essential for covering the day to day expenses necessary to operate a business. It keeps lights on and doors open; cash flow is truly the life blood of a business. Unfortunately, it’s not uncommon that companies of all shapes and sizes have to slow business growth due to lack of cash flow needed for expansion.

To combat this, a business owner may increase the amount of cash coming in by generating more sales and converting those sales into cash as soon as possible. Another way is to conserve the company’s cash flow.

While there are many ways to conserve cash flow such as cutting costs, bartering, re-negotiating with creditors, and cutting inventory; one method in particular is through Net 30 accounts.

By asking for credit terms from your suppliers you enable your business to hold onto cash for a longer period of time. You can obtain products and services your business needs and defer the payment on those purchases for 30 days, thereby conserving cash flow.

This is called a “Net 30 account”.

The fact is the wait between the time you have to pay your suppliers and the time you collect from your customers is the challenge facing many businesses today. It’s all about proper cash flow management. With net 30 accounts you delay when your cash goes out (30 or more days), at the same time you should focus on improving the speed at which your customers pay (receivables into cash).

Several ways to improve your receivables include but are not limited to the following:

  • Require customers to complete a business credit application
  • Offer discounts to customers who pay fast and early
  • Require a minimum deposit with every purchase
  • Issue invoices immediately and have a follow up system for collecting
  • For slow paying customers implement a policy of cash on delivery
  • Extend credit terms to customers who pass your business credit approval process

 

Keeping cash in your business bank account using credit terms such as net 30 accounts is often overlooked by many business owners. Most businesses focus on accounts receivables while missing out optimizing accounts payable.  Keep in mind, establishing net 30 payment terms with suppliers is just the beginning.

The longer the term, the more time you have to pay and keep cash in your bank account. Negotiate the longest payback terms possible such as net 45, net 60 or even net 90 days. Many suppliers will even offer you discounts for early payments which improves your company’s bottom line.

If you can’t obtain better terms than net 30, consider paying your invoices with a business credit card. This provides your company additional time to conserve cash but be sure to pay your balance in full when the statement becomes due to avoid any interest charges.

One other creative way to conserve cash is if a supplier or vendor delivers a product on consignment, only requiring payment when the product is actually sold. If your business has the opportunity to obtain this type of arrangement, it provides a great way to conserve your cash. 

With better cash flow, a business owner will position the company to achieve success by having the cash available to operate and grow the business. If you’re experiencing cash-flow problems or want to maximize your cash on hand, consider using net 30 accounts as one of the proven ways to conserve your company’s cash flow.

About the Author:

Marco Carbajo
Marco Carbajo

Guest Blogger

Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for Dun and Bradstreet Credibility Corp, the SBA.gov Community, About.com and All Business.com. His articles and blog; Business Credit Blogger.com, have been featured in 'Fox Small Business','American Express Small Business', 'Business Week', 'The Washington Post', 'The New York Times', 'The San Francisco Tribune',‘Alltop’, and ‘Entrepreneur Connect’.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

Disaster/Emergency Tips for Small Businesses

Published: September 9, 2016

September is National Preparedness Month. When disaster strikes, it’s only natural to want to protect your family and loved ones. Before disaster strikes, it very important to safeguard your small business, particularly if it’s your main source of income.

Think about the following questions:

  • Do you have insurance if a storm was to destroy business property or equipment?
  • Is there an emergency plan for your small business? Does your staff know what to do in an emergency?
  • Have you developed a checklist in the event of an emergency or disaster that outlines specific actions to take to protect your business?
  • Can you access your business records if they were destroyed?

These types of scenarios can happen at any time. Natural disasters like hurricanes and earthquakes or large-scale emergencies like a health epidemic may have varying degrees of impact on your business operations. No matter what the situation, there are a few necessary steps to take to build your emergency preparedness toolkit.

Create a readiness kit. If electricity is no longer availability or tap water is not safe to drink, you will need alternatives. Keep a kit in your place of business, and include  items such as matches, water bottles, flashlights, batteries, and snacks. Ready.gov has a complete list of basic supplies. Remember, the kit you prepare needs to help you survive for more than 48 hours.

Research and study tips to protect yourself during a natural disaster. The SBA provides specific information on how to prepare for , earthquakes, wildfires, hurricanes, tornadoes, and floods.

Develop a communications plan. In the event of an emergency, your staff will need to know whom to contact and how. Establishing points of contact, a phone tree, or meet up spot in advance will be helpful in disseminating information. Secure backup phones or have a telecommunications system in place. Use social media to keep the public aware you’re still in business, and in the process of rebuilding.

Anticipate disaster assistance needs. Think ahead by knowing how much your property and inventory are worth.   Are you carrying enough insurance to rebuild after the disaster?  If you have disaster losses that aren’t covered by insurance, , considering applying for an SBA disaster assistance loan. These loans can help  businesses of all sizes repair or replace equipment and property that was damaged during the disaster. An SBA disaster loan can also help you cover operating expenses while you recover from the disaster.   

Be prepared all-year round by thinking, developing, and communicating a plan to protect your business. Stay safe!

About the Author:

Ijeoma S. Nwatu
Ijeoma S. Nwatu
Ijeoma S. Nwatu is a digital strategy and communications consultant. She is the Communications Manager for ColorComm, an organization that aims to uplift women of color in the communications field. When not working with clients, Ijeoma can be found speaking about career transitioning and social media marketing. Follow her on Twitter: @ijeomasnwatu.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

Check Your Business KPIs Before The Holiday Season Starts

By bridgetwpollack, Guest Blogger
Published: September 8, 2016 Updated: September 8, 2016

As the fourth quarter of the year approaches, it’s easy to get caught up in what for many businesses is the busiest time of year: the holidays. But we all know that when you’re exceptionally busy, you might not be operating at your best — meaning you might make a few bad business decisions along the way.

That’s why the start of the fourth quarter is a great time to check in on your business progress.

When you first start your business, you can make goals, but it will take time to see how your initial goals measure up to the reality of day-to-day operations. Instead of becoming overwhelmed by the various metrics you could measure on a regular basis, it may better serve your goals to focus on a few key metrics — you may see them mentioned as key performance indicators, or KPIs.

KPIs disregard subjective information like online reviews or social media engagement; it’s all about the numbers. The metrics you choose to track depend on the areas in which you want your business to grow.

You might focus on a few of the following:

 

Monthly cash flow forecast

A cash shortage can severely limit your ability to grow your business. By tracking your checking balance, along with which accounts you expect to receive in the next 30 days and which you expect to pay, you’ll have some warning if there’s a shortage ahead.

Similarly, a positive forecast can help you decide when to order additional inventory or how much money to save to cover costs during any slow periods.

Inventory turnover

How long does your inventory sit on the shelves before it goes home with a customer? Do some products languish and gather dust while others sell out quickly? Reviewing what’s selling and what’s not can help you plan your buying cycles better — while also taking note of customer spending habits and style preferences.

Profit margin

Business success isn’t just about selling; it’s also about pricing products to generate profits once the cash register closes.

Consider the costs of each of your product areas — don’t forget to include shipping or processing costs, or additional packaging needs. Does your price tag cover those costs while still allowing for a healthy profit margin? If not, it’s time to rethink your pricing or reconsider some of your inventory.

Customer acquisition cost

How much does the average customer spend at your business? Is it less than you’re spending to attract them? Review your marketing budget to determine the cost of drawing in each customer and converting those leads to sales. Typically, you’ll hope this cost goes down over time; but if you offer high-priced products or have an upscale clientele, your costs may stay relatively high.

Looking at metrics like these can help you set SMART goals for business growth in the fourth quarter — and well into the coming year. Challenge yourself to review your KPIs quarterly to keep your company on track! Not sure how to give your business the check-up it needs? Meet with a SCORE mentor who can help you analyze the numbers.

About the Author:

bridgetwpollack
Bridget Weston Pollack

Guest Blogger

Bridget Weston Pollack is the Vice President of Marketing and Communications at the SCORE Association. She is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies to facilitate the growth of SCORE’s mentoring and trainings services. She collaborates with SCORE volunteers and develops SCORE’s online marketing strategy.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
5

Comments welcome on this page. See Rules of Conduct.

8 Tips for Building Your Business Support Network

Published: August 31, 2016 Updated: September 8, 2016

Whether you are just branching out or gearing up for your umpteenth year in business, it never hurts to have a supportive network around you. Owning a business can not only be stressful but lonely. Not every family member or friend will understand or emphasize with your entrepreneurial journey. The key is to surround yourself with like-minded individuals who can offer advice, share opportunities and listen to your big ideas. Go beyond your typical inner circle and broaden your network of support.   

Consider the following strategies in either engaging with people you hope to connect with or need to re-engage to strengthen the support around you as well as to look for new business opportunities.

1. Alumni: Reconnect with college and/or high school staff and classmates by letting them what you are doing now and what you have accomplished or plan to accomplish in your business. There might be opportunities to collaborate with university or community college by speaking at the school, hiring seasonal workers or bidding on a project. 

If you have children or are engaged in your local community, this strategy applies to reaching out to the parents and teachers association (PTA) or a similar group within the school.

2. Chamber of Commerce: Join a local or state chapter and meet and support business leaders. Becoming an active member can expose you to other industries, opportunities and like-minded contacts.

3. SCORE: Supported by the SBA, SCORE is a nonprofit that helps entrepreneurs launch and grow their business. There are SCORE locations throughout the U.S. Between workshops and mentorship business owners can access professional support year-round.

4. Faith-based community: Your spiritual relationship with the members at your place of worship can have a positive effect on your personal life and business goals. Lean on faith-based organizations and activities that promote a healthy, productive lifestyle.

5. Extracurricular groups: It’s easy to forget that we form bonds with people we meet through leisure activities like sports leagues, volunteer and travel groups. When not working on or in your business, it’s essential to have a release.  

6. Former co-workers: If you’ve shared ideas or worked well with previous coworkers and staff, re-engage them to share your current business venture. Their skillset might be useful in your next idea or they can provide insight or contacts that you may have not consider.

7. Professional organizations or conferences: Depending on the nature of your work and business, there might be an established network of professionals who meet annually. Conferences and professional groups are instant support systems because they bring together small and large crowds of people who are similar. You can get a lot of inspiration and information by not only attending events but potentially sponsoring or speaking at one.

8. Online groups via forums, private Facebook groups or Slack communities: Thanks to the internet and social networking, interfacing with other business owners across the world is reality. Building connections that go beyond day-to-day business matters, can provide new ideas and a different perspective. 

About the Author:

Ijeoma S. Nwatu
Ijeoma S. Nwatu
Ijeoma S. Nwatu is a digital strategy and communications consultant. She is the Communications Manager for ColorComm, an organization that aims to uplift women of color in the communications field. When not working with clients, Ijeoma can be found speaking about career transitioning and social media marketing. Follow her on Twitter: @ijeomasnwatu.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

How to Organize Your Small Business Startup Costs

Published: August 30, 2016

Launching or transitioning your side job into a full-time venture is stressful, demanding and exciting. One of the first steps is to consider your startup costs, or expenses in the beginning phases of entrepreneurship.

Startup costs will vary from industry to industry and may fluctuate during different seasons within any given year, but particularly the first few years of operation. Think about some of these questions:

Do I have enough capital or other resources to maintain a living? Do you have marketing materials? Should I invest in training programs or professional conferences? Is a lawyer necessary? What are my liabilities? Are my contracts protecting my business and assets? Should I hire staff or do all the work myself?

These type of questions and this line of thinking is good to establish early on to avoid messy financial situations. To keep yourself accountable and organized, place startup costs in categories included but not limited to the following list:

Legal/Paperwork– lawyer meetings and fees, business certificates and related documents

Taxes and any documents related to business-generated income as well as 1099 or similar forms from contracted workers and employees

Professional Development & Education like conferences, trainings, certificate programs

Transportation costs like traveling via train, plane, or cab as well as parking fees.

Equipment like office furniture, trucks, vans, real estate, phones, etc.

Marketing materials such as business cards, website(s), social media management, etc.

Miscellaneous items like business clothing, paying for lunch or dinner meetings, etc.

By listing groups of related business activities and then categorizing them, you can begin to shape the areas in which you need to prioritize your finances, save for a rainy day or completely eliminate or postpone costly expenditures.

For example, if your business focuses on providing creative services like web development, you will need to strategize on what resources you need upfront to complete the job as well as how to minimize expenses to keep more money in your pocket. Unforeseen situations like website or server crashes or hiring additional staff can hurt your income projections but preparing in advance with either a business savings account or itemizing potential expenses, that includes unexpected issues, can alleviate stress and help create efficient systems.

Instead of waiting to cover costs later or jumping into projects without thinking through the financial implications. Entrepreneurship is an ongoing learning experience and journey that involves successes and failures from the very start.“If you fail to plan, you are planning to fail”, a quote attributed to Benjamin Franklin that still rings particularly true for small business owners.

About the Author:

Ijeoma S. Nwatu
Ijeoma S. Nwatu
Ijeoma S. Nwatu is a digital strategy and communications consultant. She is the Communications Manager for ColorComm, an organization that aims to uplift women of color in the communications field. When not working with clients, Ijeoma can be found speaking about career transitioning and social media marketing. Follow her on Twitter: @ijeomasnwatu.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
0

Comments welcome on this page. See Rules of Conduct.

5 Key Tips on Sales Forecasting for Business Owners

By Tim Berry, Guest Blogger
Published: August 23, 2016 Updated: August 23, 2016

Don’t underestimate the value of a sales forecast for running a business effectively. Even if you do nothing else in the way of planning, having just a sales forecast plus regular review and revision can go a long way towards better business management.

Here are five tips that have helped me integrate the sales forecast into my management process for decades.

1.   Set the bar right from the beginning

One of the biggest problems with sales forecasting is the idea that it’s supposed to be accurate months in advance. That’s not the point. It’s about connecting the dots between sales and related expenses, finding the drivers (see #4 below) and tracking results so you can see changes as they happen.

It’s unlikely you will set a sales forecast and then live with it, unchanged. As in tip #5 below, you set the forecast and then watch, carefully, for interruptions, fluctuations, etc.

What you forecast for sales next summer, while you work on it for the present month, is a matter of getting the interrelationships written down so you can track progress and manage change.

In the real world, when you do your forecasting right, you’ll have lots of revisions as time and other factors affect your predictions. Just get it down early, so you can review results later. If you don’t forecast, you’re running blind.

2.   Find the right level of aggregation and summary

Don’t forecast your sales as one number, in dollars. Don’t forecast sales as 100 detailed lines of sales. Find a level of sales groups you can manage. This has to do with the way we, as humans, think. We can’t work with too much detail; but it’s still useful to break things down enough to offer meaningful insights.

The most obvious example is breaking sales into units and price per unit. With that simple breakdown we can later analyze, whether the difference between planned and actual results were caused by price differences, volume differences, or both. And natural divisions, such as channels of distribution, or major product categories, can be very useful.

Find the level of summary and aggregation that works for your business. You’re unique and so is your business. There are no hard and fast rules on this. Make it so it works.

For example, with my software business, we don’t forecast sales broken into dozens of different sub-versions and options; we forecast our three main lines, aggregated and summarized.

The restaurant ought not to do a sales forecast broken down into each of the 75 items on the menu; but rather major sales categories, such as meals, drinks, appetizers, and other; perhaps it could be breakfast, lunch, and dinner.

The bookstore ought not do a sales forecast for each book. Imagine how difficult and inefficient. It might be more useful to forecast for paperback versus hardback, fiction versus nonfiction, books versus magazines.

3.   Match your accounting

Most of the benefit of the sales forecasting comes from the ongoing management of the difference between planned and actual results (as in #5 below). Therefore, to ensure your sales projections is worthwhile, make sure the organization of the forecast in rows or items or groups matches the way your accounting or bookkeeping tracks them.

Match your chart of accounts, which is what accountants call your list of items that show up in your financial statements.

If the accounting divides sales into meals, drinks, and other, then the business plan should reflect those divisions. if your chart of accounts divides sales by product or service groups, keep those categories intact in your sales forecast. If bookkeeping tracks sales by product, don’t forecast your sales by channel instead.

If you’re planning for a startup business, coordinate the bookkeeping categories with the forecasting categories.

Get your last Income Statement (also called Profit & Loss) and keep it in view while you develop your future projections.

  • If you don’t have more than twenty rows of sales, costs, and expenses, then make the rows in the projected statement match the rows in the accounting.
  • If your accounting software summarizes categories for you – most systems do – consider using the summary categories in your business plan. Accounting needs detail, while planning needs a summary.

If your categories in the projections don’t match the accounting output, you’re not going to be able to track plan versus actual as well. It will take retyping and recalculating. You may lose the most valuable benefit of business planning: management.

4.   Look for your specific sales drivers

Most every business has the so-called drivers that lead to sales.  For some businesses, it’s foot traffic; for others, it’s web traffic. Maybe for you it’s downloads. Some traditional businesses look at lead generation, leads, presentations, and closes. Others consider the pipeline related to direct sales deals in the cycle from lead to close.

Use the concept of sales drivers to help develop a sales forecast and then manage the business process that generates the drivers. It will help you track and manage your business better.

For example, in our software business we look at organic web traffic, pay-per-click web traffic, and traffic generated by affiliates, all of which we measure in visits. And we look at conversion rates, which we measure as the percent of web visitors who end up purchasing software.

And, as another example, back in the 1990s when retail sales were important, we measured unit sales per month per store.

Think about what factors drive sales for your business; and how you can use the measurements of those factors to improve your sales forecast.

5.   Review and revise often

Don’t let your sales forecast sit unused. Schedule a regular time for sales forecast review and revision at least once per month. Get your forecast and compare it to actual results. Look for surprises both good and bad. Reward people whose work influenced the good surprises, and talk to the people responsible for bad surprises or poor performance. Revise your sales and marketing programs to take advantage of what’s working well, and correct what isn’t.

Sales forecasting, done right, is a fundamental part of planning. And planning, done right, is management.

As former president and military strategist Dwight Eisenhower once said: “The plan is useless; but planning is essential.”  

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 46 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including his latest, 'Lean Business Planning,' 2015, Motivational Press. Contents of that book are available for web browsing free at leanplan.com .

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Comment Count:
3

Comments welcome on this page. See Rules of Conduct.

3 Technologies for Streamlining Customer Communications

By smallbiztrends, Guest Blogger
Published: August 18, 2016

Ask the typical small business owner which methods his or her company uses to communicate with customers, and email is likely to be at or near the top of the list. 

But what happens as your business grows?  If your business is anything like mine, the volume of email starts reproducing faster than a warren of rabbits. 

Without even realizing it, you and your team may be spending hours each month hunting through inboxes just to find and organize important information.  Email becomes a source of frustration; important communications are buried in individual team members’ inboxes, while the rest of the team doesn’t have a clue who is communicating about what with the customer leading to duplicated effort and potential opportunities falling between the cracks. 

In short, email becomes the problem instead of the solution. As valuable as email is, businesses were never meant to be run out of inboxes That’s when you need specific software applications to help organize the flow of information and track and streamline activities.

Here are three types of software applications that I consider essential for growing businesses today:

CRM System

A CRM or Customer Relationship Management system will help organize your sales efforts, especially if you gather leads from multiple sources and need to act on those leads. 

Beyond organizing the sales process, a CRM application also puts power into your hands to tap into your existing customer base for upselling and repeat sales.  CRM also manages and tracks the effectiveness of your marketing efforts, with the best ones enabling you to measure the ROI from your marketing campaigns.

And finally, the best CRM apps integrate leads and contacts from a variety of sources. One of the problems inside many businesses is “siloed information.”  You may have lots of data but it is spread out here, there, everywhere -- in individual inboxes, in your email marketing system, in your social media profiles, in order entry systems, and elsewhere.  Look for a cloud-based CRM where all team members can log in to and view information pulled from multiple sources and collected in a single place.  

Project Management System

If you are using your inbox to process orders, and coordinate deliverables to customers, you’re doing things the hard way.

A good project management system will enable you to set deadlines, create tasks and make assignments to the appropriate team members. Look for a project management application that can be set up to automate workflow by notifying parties of new tasks automatically, sending reminders, and generating reports -- without manual intervention needed. You will not need to worry about things falling through the cracks internally.

Also, consider a project management app with strong customer communication features. Good customer service often involves managing expectations, including when deliverables will be completed. The best project management systems are cloud based. This enables you to give customers direct login access for whatever information you deem it important they have. Don’t want to give direct access? Set up emailed status reports for customers to receive automatically.   

Help Desk Software System

The third application that can streamline customer communications dramatically is a help desk software.  Help desk enables you to receive all customer support inquiries and issues in a central place, where they can be assigned to someone on your team to handle.

Look for help desk software that offers the strong ability to set up automated responses to inquiries. That way customers know that their inquiry has been received and when to expect a response.

Beyond that, look for a system that includes good knowledge-base features, so that FAQs and common issues can be addressed with information published on your website.  Many customers appreciate having self-serve information available 24/7. An added benefit: good online help information can cut down on live customer service calls and the attendant expense.

Those are my three key applications for small businesses that can streamline customers.  Of course there are other applications.  Which applications have helped you streamline communications with YOUR customers?

About the Author:

smallbiztrends
Anita Campbell

Guest Blogger

My name is Anita Campbell. I run online communities and information websites reaching over 6 million small business owners, stakeholders and entrepreneurs annually, including Small Business Trends, a daily publication about small business issues, and BizSugar.com, a small business social media site.

Leave a Comment

You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment.

New users, Register for a new account and join the conversation today!

Pages

Subscribe to RSS - Managing