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Month: June 2019

10 Small Business Startup Tips

Posted on June 6, 2019 in Uncategorized

According to a recent Forbes.com article, over a half a million small businesses get started each month while more shut down than start-up. With this statistic, it’s not a surprise that some would be leery in joining the almost 30 million small businesses in the United States. It may also come as a surprise that over half of the working population works in a small business and that most small businesses are home-based. Why then do people start small businesses with these kinds of odds? Because many of us are still deciding what we want to be when we grow up. And once we’ve learned that, we choose to make a go of it on our own.

Starting a small business or a home-based business is not something that should be entered into lightly. More often than not you’ll go through a long period languishing while trying to make your business viable. As with many big decisions in life, starting a business is a very big risk. There’s never an assurance of success. Rather, it is expected and statistically likely that you’ll fail. However, if you’re willing to work at beating the odds and fulfill a professional goal, this may still be the route for you.

I’d worked in libraries for over a decade. I spent the majority of that time in library administration. I knew a good deal about how to run a small business because I’d essentially been doing so for quite some time. However, when you go out on your own there are many pitfalls that can be made in your businesses’ infancy. Contrary to the popular song lyrics, the best things in life aren’t free. Shortcuts will likely come back to haunt you and so too will not putting in the sweat equity needed to not only financially succeed, but to also feel emotionally and psychologically empowered.

If you want to start a small business it has to be a deliberate process. However, it doesn’t have to be an expensive one. It doesn’t hurt for you to do some research. The Small Business Administration is a great free resource. So too are the books. Really, there are any number of tools to help you start-up or navigate the waters of small business. If you’re like the almost 75% of all U.S. business who are non-employers (self-employed with no additional payroll or employees), then you can be sure that there is plenty of information to help you achieve your goals.

Running a small home-based business can be inexpensive, not cheap. Don’t scrimp on the stuff that can really make you appear more professional without breaking the budget. Here are a few startup tips for your business:

1. Get a domain name.

You may not need to register your business’s name with the state. The fact is, that process may be unnecessary and It can be costly depending on the nature of your business. However, it helps if you have a domain name so that you can have a traditional online storefront and presence. That isn’t to say that you need to sell products through your site, it just means that you have a place that you can send people to online to find out more information about you and your products and services.

2. Use social media.

No longer can people lament about how they don’t use Facebook or Twitter, being on social media also lends an air of credibility and savviness to your business. Using social media is inexpensive and easy. There are plenty of online tutorials on how to use social media and by getting yourself out there by using the social media networks, it opens you up to more clients and the ability to interact in real-time with them as well. Also, don’t simply have a presence on social media, depending on your demographic, there are still some people who simply aren’t using social media. Thus, you must also have an easily accessible webpage as well.

3. It doesn’t hurt to use old school marketing tools.

Professional business cards as well as marketing items are now nominal in cost. Don’t just settle for free cards, pay that little extra to brand your items. This way you can be fully in charge of the message you’re putting out there. Think about it, what did you think of the person who handed you a business card that were clearly free ones?!

4. Use accounting software.

Quickbooks, Freshbooks, Nutcache and the list goes on. You can even use Excel if you’re so inclined. Regardless, it’s imperative that you start consistent and accurate record keeping from the very start. Make sure that all of your transactions, big and small, are in a place that will make it easy for you come tax time.

5. Work in the cloud and back it up.

Cloud-based software is available for everything. It also doesn’t hurt to use free ones in this case. Google is the gold standard when it comes to free. However, document creation and retention aren’t the only things you can do in the cloud. Accounting software, website administration, almost anything you can think of can be done in the cloud. Plus, it makes your data accessible anywhere that has an Internet connection. And don’t forget to backup your work. If you’re saving your work to your computer or saving it to a virtual drive in the cloud, be sure that you have a backup. Redundancy is key and it can also be very economical. A good rule of thumb is to have a physical and virtual off-site backup because Murphy’s Law always happens.

6. Be virtual.

Depending on the type of services you offer, there are companies out there that can assist you in getting jobs/projects. Companies like Upwork provide you with a place to offer your services to others and provides you with an online workplace. Being a freelancer has never been so easy. As a freelancer, you don’t have to limit how and how many clients you have.

7. You have to pay some to get some.

Yes, you can start a new business with no cost, however, by investing just a little money upfront you’ll almost ensure a return on your investment. Pay for a virtual fax service, marketing materials and other little things that will go a long way in ensuring that your business isn’t like every other “mom and pop” business. Just be careful not to go all in too fast. Recurring costs, though small, can add up fast. If you have recurring costs it means that you have to earn at least that much money per month.

8. Be tax savvy.

You must be cognizant of what kind of tax impact there will be as a result of your business. It’s common, depending on the type of business you have and if you don’t have employees, for you to not withhold any taxes during your first year. Getting a baseline for what your business will be like is important, just don’t forget that Uncle Sam may hit you with a large tax bill at tax time. Visit the IRS website or speak to a tax professional to help you with getting this sorted out before it becomes a very expensive mistake.

9. Make time for yourself.

When you commit to owning a small business the one thing you’re guaranteed is that it’s going to be hard. Despite how challenging it is, you have to take time for yourself. It’s easy to work long hours and to forget that we aren’t machines. Even if it’s just a 15-minute walk each day or something else that will break up your workday, you must not forget that sometimes it’s best to literally walk away to clear your head. This will do wonders for your mood and your process.

10. Be disciplined.

Sure, we all think that working for ourselves would be the best job in the world. But it’s not until you’re actually doing it that you realize just how easy it is to be trapped by the pitfalls of having no other boss than yourself. That quick television break inevitably turns into a television marathon, sleeping in one day turns into not setting the right habits you need to be successful. It’s easy to say that you’re going be disciplined and fully devoted to the success of your business, but old habits do die hard.

Each day brings challenges and uncertainties. You have to be willing to fail spectacularly. But you also have to be willing to love and nurture your business even on the days when you just don’t feel like it. If you don’t work, you don’t get paid. Despite that, the sky’s the limit and your earning potential is limitless when you’ve devoted yourself to doing what it is that you are passionate about. It’s important to remember that you’re not to give up when it gets hard. Those are the times you have to really dig in and remember why it is that you’re doing it in the first place.

The Key to Small Business Success Requires an Uncomplicated Commitment

Posted on June 4, 2019 in Uncategorized

Virtually every owner or manager will agree that operating a small business requires lots of hard work on the part of both managers and employees. It’s what is commonly known as “sweat equity”. Or in other words, hard work is required to bring the results desired.

Hard work alone is not enough. Additionally, the business owner must be prepared to make a commitment to building and growing the business. That translates to being on the job every day.

Unfortunately, some owners, such as those who purchase a franchise, assume that their on-the-job commitment is not necessary if they hire a manager to run the business. Sometimes that works. More often it doesn’t work so well. Nevertheless, operating a small business requires hard work by the owners and managers.

There are three fundamental steps in the process of the hard work that are not complicated, but necessary for success.

Getting work comes first. Whatever the business does, it must first promote and sell its products and services to the markets served. The business cannot depend on chance. To illustrate, if the business has the cure for the common cold, it must tell the market and provide a way for potential customers to contact the business to purchase the remedy. To get work or sell products and services, the business must make the market it serves aware of its presence and skills as well as how to contact the business. Fortunately, there are many affordable advertising and promotion options for small businesses that will contact potential customers who are likely to buy the products and services available for purchase.

Fulfilling and delivering customer orders is the second step. Whether designing, building, assembling or delivering products or services, small businesses do of good job of getting the work done. What they do not do so well sometimes is fulfilling the order or getting the project done on time.

There may be nothing more irritating or displeasing to a customer than a supplier or vendor who does not fulfill an order or complete a project on time. This happens far too often with small businesses. While it is desirable to get something done the right way even though it may take more time than originally planned, small business owners and managers must strive to meet deadlines or finish projects before the deadline if they want to be successful.

Paying bills and getting paid for the Work performed and delivered is the third step of the process.

Small businesses tend to pay bills to vendors and suppliers before the due date because they think the thought doing so will assure a good credit status with the vendor or supplier if the bill is paid before due. Paying the bill when due is good enough.

On the other hand, they will allow their customers to pay bills beyond the due date.

At the end of the fiscal year, most small businesses will complain that while sales were good, there was little cash in the company checking account. When asked why this is the case, Accountants and Consultants will reply that the cash shortage is in Inventory or Accounts Receivable. Usually the latter is the major contributor to cash shortfalls.

Small businesses do not do a good job of getting paid in a timely manner. It does not have to be that way and it should not be that way. In fact, it is very easy to assure timely payments when a consistent and uniform Accounts Receivable Collection Procedures Program is in place.

Accounts Receivable systems are a valuable asset to small businesses. The consistent application of Accounts Receivable collection activities will reduce costs which in turn improves margins and operation profits.

In closing, a professional Accounts Receivable Collection is not the dreaded last minute phone call to the customer that nobody wants to do. On the contrary, the process begins at the Point of Sale when buyer and seller agree to payment terms required and continues on professional and uniform communication between the buyer and the seller.

What Yogi Berra Can Teach Small Business Owners About Estate Planning

Posted on June 2, 2019 in Uncategorized

According to baseball legend Yogi Berra, “If you don’t know where you are going, you will probably end up somewhere else.” Yogi’s one liners often make me laugh, but they also make me think. His quip reminds me of the importance of having a plan when engaging in any endeavor that will impact our personal situations beyond the immediate here and now. That includes the process of estate planning. Now, I will grant you that Yogi probably wasn’t thinking about estate planning when he offered this particular slice of wisdom. Nonetheless, his words are absolutely spot-on insofar as the importance of planning for that day which we will not live to see. As important as having an estate plan is for all of us, it is of even greater importance for the small business owner. I think it is no exaggeration to say that thoughtful estate planning is an essential component of every small business owner’s overall business plan.

I think of a successful small business owner as someone who recognizes an opportunity to provide a needed product or service, and then invests the time, devotion and energy to developing and implementing a plan to seize that opportunity. I admire those thoughtful risk takers who harness their vision, business acumen and moxie in order to create, nurture and guide a sustainable business venture. I have found the small business owners I counsel to be thoughtful, deliberate and attentive to detail in how they go about the work of managing their businesses; i.e., they plan for the future. However, what I have also noticed from time to time in otherwise prudent and successful small business owners is a lack of any plan for their business when they die or are otherwise unavailable to manage it.

It is easy to understand how even successful small business owners who are otherwise consummate planners might prefer to avoid estate planning as it concerns their business operation. In at least one respect, these successful business owners are a lot like most people; that is, they are not accustomed (or inclined) to ponder their own mortality. It is a subject, even if not loaded with angst, which easily lends itself to defer consideration for “another day.” Yet, the stubborn reality remains that absolutely none of us will get out of this life alive. For the small business owner, Yogi’s wise counsel merits some thought, and action.

If you are a small business owner and have yet to start the estate planning process, let me suggest some relatively easy first steps to get you started. First, locate and then review your company’s organizational and governing documents. If your business is incorporated, these would include the corporate bylaws, shareholders’ agreements and those other documents your lawyers drafted when the business was getting started. If your business is a limited liability company or partnership, you will want to look at the company’s operating agreement or partnership agreement. Review these documents with the following questions in mind:

– How will your death (or permanent incapacity) affect the company’s existence?

– How will your successor be chosen, by whom and how much say do you presently have in that decision?

– Will your death trigger a buy/sell provision by which a co-owner, or the company itself, is allowed to purchase your interest in the business, notwithstanding the wishes of your own family members?

A brief review or discussion with your lawyer of questions like these may then prompt you to begin thinking about your vision for the company’s future when you are no longer able to guide it. A next step might be to consider how you would want the business operated in the event of your temporary incapacity or unavailability. A durable power of attorney will allow you (as the “principal”) to designate someone else (the “agent”) to make business decisions during your incapacity, while allowing you to retain the ability to withdraw or revoke the POA when you are ready to resume control of the business.

The POA itself might serve as the genesis of a comprehensive succession plan, by which you map out a plan to reduce your own involvement in the business and allow others to assume greater management and decision making responsibilities. An orderly transition plan is apt to increase the company’s odds of survival when you are gone. And, such a plan may help you to “let go” of control and devote more efforts to mentoring those who will eventually run the business you created.

Ultimately, you will want to focus your planning on what you want to happen to the business when you have died. Here, a well-designed trust agreement will allow you a great deal of flexibility, both in terms of retaining a degree of control while you are alive, and identifying your intentions with respect to the business after you die. The trust agreement enables you to select those who will administer your stated intentions when you are gone. You can, for example, provide for the sale and/or dissolution of the business over time, or provide for its eventual transfer to one or more family members. A trust agreement allows the owner a great deal of flexibility and for that reason makes it an extremely helpful tool in the business owner’s estate plan.

The bottom line is that you, as the small business owner, have the ability to ensure that with careful planning the company you created will survive your passing. This is a process that can be tackled incrementally over time. Given the uncertainties of life, however, the estate planning process should become a component of your overall business plan. There is no time like the present to start this process. Don’t be lulled into putting this task off for “another day”. None of us know how much of a future we will have. Or, as Yogi puts it, “It may be getting late earlier than you thought.”

© 6/16/2015 Hunt & Associates, P.C. All rights reserved.

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