COVID-19 relief options and additional resources


Business Planning and the Crystal Ball and Chain

By Tim Berry, Guest Blogger
Published: April 24, 2013

I came up with the phrase “crystal ball and chain” years ago to describe one predictable barrier to introducing a useful business planning process into an existing small business.

The phrase is intended to combine the crystal ball with the ball and chain. It happens because normal people, even good performers, and stars on a business team, naturally worry about changes. And when compensation is involved, and management structure, and raises and bonuses, it’s only natural to worry.

Good planning involves setting performance goals and tracking results against the goals. Milestones and metrics, which mean setting numerical goals and then tracking performances, are essential.

It’s obvious how this kind of tracking can help a business perform better. The plan vs. actual analysis gives the whole team an objective way to look back at what they planned – the milestones and metrics, in this case – and analyze what happened.

Still, good people still worry, because that’s a very human reaction. Are they trying to get the goods on me to fire me later?

Those objections almost always come as objections to the idea of predicting the future. People will say:

"But how can I possibly know today what's going to happen six months from now? Isn't that just a waste of time? Can't it actually be counter-productive, because it distracts us, and we spend time trying to figure out things in the future?'

The right answer to this, from the leadership of the business or business team, is about collaboration and cooperation. Projecting future business activities isn't a ball and chain at all, because in the right planning process the existence of the plan helps you manage effectively.

Here's a concrete example: it's September and you are developing your plan for next year, which includes an important trade show in April. You plan on that trade show and set up a budget for expenses related to that trade show. Even though it's September, you have a pretty good idea that this will happen in April.

When January rolls around, though, it turns out that the trade show that normally takes place in April will be in June this year. Does that mean the plan was wasted time? Absolutely not! It is precisely because you have a plan running that you catch the change in January, move the expense to June, and adjust some other activities accordingly.

In this example, the plan isn't a brick wall you run into or a ball and chain that drags you down; no, it's a helpful tool, like a map or even a GPS device, because it helps you keep track of priorities and manage and adjust the details as they roll into view.

We’ve all seen how technology is changing our attention span and sense of time. And we’ve seen how technology allows us to work at all hours, and from any location. These changes make planning and management, working with good planning that focuses on milestones and metrics, more important than ever before.

About the Author:

Tim Berry
Tim Berry

Guest Blogger

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

Greening Your Small Business – Which Steps and Investments Should Your Business Make?

By Caron_Beesley, Contributor
Published: April 22, 2013 Updated: April 22, 2013

Interested in greening your business? Today is Earth Day 2013, so what better time to consider ways in which your business can play its part in saving the planet and reaping the cost benefits of operating more sustainably.

But where do you start and what sustainability measures are right for your company? With more and more consumers choosing to “buy green” and many of them willing to pay higher prices for it, environmentally friendly business practices are here to stay. For the savvy business owner, the trick is knowing which green initiatives will pay off for your business and which may not be worth the time or expense.

For answers, I turned to Michelle Goodman’s excellent article in Entrepreneur magazine from the fall of 2012, How to Determine which Eco-Friendly Changes your Business Should Make, and to tried and tested tips and information from the Environmental Protection Agency and Department of Energy’s joint venture – Energy Star.

Here’s what they suggest:

Start with the Obvious – Use Less of Everything and Track Savings

Using less of everything – water, electricity, fuel, paper, printer ink – makes common sense. Similarly, ask yourself some basic questions: Can I recycle? What about introducing a lights out policy in meeting rooms that aren’t in use and in the building at night? Does it make sense to let my employees telecommute?

As you look for areas where you can make savings and be greener, try it out for a month and compare your business expenses to previous months. If you can demonstrate clear dollar savings, then getting the entire company behind you is going to be a lot easier. You can also use the savings you’ve made to fund bigger sustainability improvements.

If you run a service business such as a hotel, implement a towel re-use policy or a key-card activated energy-saving system that powers down the room when a guest exits. These can reap huge savings.

Look for areas that make sense to your business. For example, can you dispose of less by buying re-usable versions of the same product? Goodman cites a California hair salon that switched from using disposable latex gloves worn by stylists to color hair – which set them back nearly $3,000 a year – to investing in heavy-duty reusable gloves at a cost of a couple of hundred dollars.

Check out these “Sure Energy Savers” tips from Energy Star for ways to realize quick savings now.

Invest Now to Save in the Long Term

If you lease a facility, then it may not make sense to spend money greening your building’s infrastructure, aside from easy-to-implement fixes like using energy efficient light bulbs or equipment. However, if you intend to be in the space for several years, then it’s worth crunching the numbers to see if It’s worth making longer-term green fixes such as upgrading your AC system. If you are going to be in a facility for five years and it will take two years to pay back, why not do it?

Even modest changes can make a big difference and be paid off quickly. Fixes such as improving insulation and capitalizing on natural light by using frosted windows instead of blinds has the potential to reduce your electric bill by up to 80 percent – a massive saving for small businesses.

Of course this all depends on your location and other variables, but quick fixes such as these do have the potential to generate 15-20 percent in savings, green marketing consultant Shel Horowitz tells Entrepreneur magazine.

Get Help Ascertaining the Savings of Pricier Sustainability Upgrades

You don’t have to go it alone; there are many organizations that can help you determine which sustainability measure will help you reap the best return on your investment.

The Bottom Line

While green measures and investments can have both short- and long-term financial payoffs, the benefits aren’t just in dollars saved. If your company places a high value on green practices, the feeling that “we are all doing good” can really set you apart both to your employees, your customers and community as a whole.

Related Resources

Related Blogs

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Which is the Best State to Incorporate Your Brick and Mortar or Online Business?

By Caron_Beesley, Contributor
Published: April 17, 2013 Updated: April 17, 2013

One of the most frequently asked questions by prospective business incorporation filers is, “which state should I incorporate in?”

It’s a good question and the answer isn’t always clear cut. For example, you’ve no doubt heard about the perceived tax and operational advantages of incorporating in states such as Nevada (with its low filing fees and zero state corporate income, franchise and personal income taxes) and Delaware (with its flexible and pro-business statutes).  But do these advantages really come into play for small business owners? Do you really want to tie your small business up legally with a state other than your own? What if your business operates largely online with customers in many states?

Here’s what you need to know about choosing a state in which to incorporate.

Why Incorporating in Your Home State May Be the Best Option

If you operate a small business and anticipate having less than five shareholders or members of your incorporated business, then it’s widely considered the best strategy to incorporate in the state where you have a physical presence (property, shareholders, employees) – and for most small businesses, this is in their home state.

Why? Even with the benefits of incorporating in states such as Nevada and Delaware, the hassles often outweigh the benefits.

Consider the following:

  • Even if you incorporate in tax-friendly Nevada, if you are operating or doing business in your home state, you’ll still have to pay business taxes on revenue that originates in that home state.
  • If you don’t have a physical address in the state in which you incorporate, you’ll need to hire and pay a registered agent in that state to act as your legal representative. 
  • If you are incorporated outside your home state, you’ll need to file for a foreign qualification in both your home state (if you wish to do business there) and in the state in which you are incorporated. This means double-duty paperwork, filing fees, taxes, and even penalties if you inadvertently skip this important step. You may even have an increased tax liability in your home state because you are registered as a foreign entity there. You are also subject to the same annual reporting requirements in both states.
  • If you register out of state, you’ll be subject to the laws of that foreign state of corporation. These laws may differ from those of your own state (and state laws can vary significantly in many areas). This can have complicated ramifications and may require your presence in court in your registered state, if you run into even the simplest of legal disputes.
  • As a “foreign” business, you may also encounter difficulties opening a business bank account in either or both the states in which you are incorporated in and physically located.

Unless you intend to transact business in states like Nevada or Delaware, filing in these states has very few long-term advantages.  Yes, the tax laws and ease of doing business may be appealing at first, but peel back the onion and you’ll find that, in the long run, it is more economical and time-saving for small businesses to pursue home-state incorporation.

Where Should You Incorporate an Online Business?

Choosing a state in which to incorporate your online business involves pretty much the same steps as a brick and mortar business. For example, if you intend to market and sell to a relatively local market, then filing in your home state will make the most sense.

However, it’s important to get legal advice and weigh the pros and cons. Many small online businesses choose to incorporate in their home state because that’s where they have a physical presence (such as a home-based business) and it’s also often where most of their employees are situated, regardless of where their customer base is.

If your online business grows and you open a physical location in another state, you’ll need to apply for a foreign qualification in each state in which you are doing business (including your original home state). Foreign qualification is technically a form of incorporation, and your company will be responsible for the associated fees and laws in that state. As a rule of thumb, if your business meets any of the following criteria in a state other than your home state, then you should check with the state government and/or a lawyer to find out about applying for a foreign qualification: 

  • Your business has a physical presence in the state
  • Your business has employees in the state
  • Your business accepts orders in the state
  • Your business has a bank account in the state

Disclaimer: The information in this blog doesn’t constitute legal advice. Always consult a lawyer to find the incorporation option that best suits your needs.

Related Articles




About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Managing Small Business Cash Flow – Answers to 10 Commonly Asked Questions

By Caron_Beesley, Contributor
Published: April 15, 2013 Updated: September 16, 2016

Cash flow is the lifeblood of a business and critical in its growth. Small businesses are hugely dependent on their cash flow, and must either cut costs or scramble to find alternative funding when they are not being paid on time. With money tight and bank loans hard to get, a cash-strapped company can easily be pushed to the brink.

But what are the basics of good cash flow management? Are there any cash flow templates you can leverage? Where does your breakeven analysis fit in? And, what strategies can you use to ensure cash is flowing, whether you are in the startup stage or looking to grow an established business?

To find answers to these questions, I checked out an archived SBA Web Chat on – Cash Flow Management – hosted by Julie Brander a business consultant and mentor with SCORE.

Here are Julie’s answers to a series of cash flow questions posed by individual small business owners (but which are universal to us all):

Q: Would you recommend that a start-up venture in the early stages do a cash flow chart and why?

A: A cash flow is the single most important aspect of your business because it focuses on the actual cash that goes in and out of your company. Make a list of all the startup costs or one-time expenses, your monthly fixed and variable expenses, and project your sales to see if this business is feasible. Without knowing your costs and expenses, you will not be able to project your income needed to make a profit in your business.

Q: I struggle just coming up with a template to use to project out my cash flows. I use Excel, but don't use it well. I can look at last months and know where cash went, but I want to look out to the week, one month, one year. Do any tools or templates work better than others?

A: Take a look at this Cash Flow Template from SCORE for a 12-month cash flow. There are other resources online; some are free and some are not. Look into accounting software for this feature as well.

(For more specifics on what to include and why, read: Projecting your Business Cash Flow, Made Simple)

Q: If you are unable to secure credit and credit has been cut or credit lines have been closed, how do you keep the doors open to your business?

A: You will need to sell the inventory that you have and pay cash for all inventory and services that you need until you can build up your credit again. Managing your money with your cash flow chart will help so that you are aware of all expenses. Cutting expenses and increasing sales is always the goal.

Q: How important is it for start-ups to calculate their break-even point and what is the easiest way for a non-financial person to do it?

A: Create a simple spreadsheet that lists all the income from sales each day, week, month and year and all the expenses that the company has to pay out. ( has more information on this topic here: Breakeven Analysis.) There are templates online that you can use; for example, SCORE offers a free Breakeven Chart that you can use.

Q: I have a hard time getting clients to pay on time. If they don’t pay on time, I have a hard time meeting our expenses. Any suggestions on how to get paid quicker?

A: You can offer a discount for COD (cash on delivery) or net 10 days; it could be 2% off for paying more quickly. Otherwise, the only way to get paid quicker is to call weekly and remind your customer that money is due and offer to take a charge card over the phone. (For more tips, check out these blogs: Tips for Collecting from Non-Paying Clients and How to Get Paid Faster With a Better Invoicing Process.

Q: I am in the process of opening a coffee shop. How much inventory should I purchase for startup so that I do not overbuy?

A: With your financial projections, you can guess about how much you will be selling. Buy as little as possible to start—but make sure that you can get a quick delivery, as you never ever want to run out of anything. This is something that you will learn as you are in business.

Q: Is there a set percentage to mark up the prices for merchandise? Also, if I can get a discount from a vendor for purchasing a higher volume, do I sell it at a discount or should I sell it at the price I had before the discount?

A: A mark-up can vary depending on your overhead costs. Higher overhead would require a higher mark-up. Always sell your merchandise for as much as the market will bear. If there is a higher perceived value, people will pay more. The discount from the vendor means more profit in your pocket.

Q: What options do micro businesses (mom & pop) size have in obtaining periodic help needed with small loans to help with cash flow?

A: A line of credit is the easiest way to have money available as needed. You would have a limit and use it as needed and pay only for what you use. If you are not able to get a line of credit, you need to make sure that your sales increase to create cash flow. Give your customers incentives to buy more or offer discounts.

Q: At what point should you consider using a collection agency to help you collect on past due receivables?

A: Collection agencies take 30%, so try to collect on your own by calling and offering credit terms or returns or credit card payment. If the company does not have the money, you will not be getting paid so your only hope is to take back the merchandise if you can.

Q: What is the formula to determine how much cash reserves a business should hold?

A: Always have enough cash reserves to cover your slow months in business. You should be safe if you can have 3-6 months or more to cover all unknown or variable expenses that may come up. Always consider increasing your sales and moving your inventory as quickly as you can.

More Information and Learning Opportunities

Follow SBA on Twitter, Facebook and sign-up for weekly email updates to learn more about upcoming web chats and other learning opportunities.

About the Author:

Caron Beesley


Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley


Subscribe to RSS - Managing