Survival tips for small businesses

You may a local merchant with 150 employees; whichever, however or whatever—you’ve got to know how to keep your business alive during economic recessions. Anytime the cash flow in a business, large or small, starts to tighten up, the money management of that business has to be run as a “tight ship.”

Some of the things you can and should do include protecting yourself from expenditures made on sudden impulse. We’ve all bought merchandise or services we really didn’t need simply because we were in the mood, or perhaps in response to the flamboyancy of the advertising or the persuasiveness of the salesperson. Then we sort of “wake up” a couple of days later and find that we’ve committed hundreds of dollars of business funds for an item or service that’s not essential to the success of our own business, when really pressing items had been waiting for those dollars. Continue reading “Survival tips for small businesses”

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Hang On To Top Employees

08The best way to keep your top employees is to know them better than they know themselves.  Use this knowledge to create the career of their dreams, and they’ll stick to your company like glue.  The new “biz-speak” for this is called Job Sculpting.

The concept of Job Sculpting as defined by career experts, Timothy Butler and James Waldroop, in the Harvard Business Review, is that good people will stay only in jobs that “fit their deeply embedded life interests—that is their long-held emotionally driven passions.”

To adopt this strategy, spend a lot of effort listening to your company stars.  For each one of them, try to identify what life interests are dominant with them, and then offer them the assignments that satisfy this interest.  It may mean simply adding another assignment to the existing responsibilities, or it may mean switching one set of tasks to another employee.  It may even require moving your “star” employee to a different position altogether. Continue reading “Hang On To Top Employees”

Your Business Checkup

Whether you’re thinking it’s Spring Cleaning Time or time for an annual checkup, your business needs to undergo a checkup each year.  No matter how large or small your business is, you cannot gauge the effectiveness of any changes you’ve made without analyzing the benefits and bottom line.

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Here are 10 questions to get you started:

  • How do your year-to-date sales compare to the last couple of years? Don’t be satisfied if you managed to match them because if sales stayed the same then you’ve achieved zero growth.  With inflation, this flat growth line is a warning sign for more trouble down the road.
  • What percentage of your business is from repeat customers? This is important to know because if it’s too low, then it needs to be improved.  The estimated cost of getting a new customer versus retaining an existing one can be as much as five to one in terms of dollars spent.  Keeping customers is more cost-effective than constantly seeking new ones.

Continue reading “Your Business Checkup”

Your Business Checkup

Whether you’re thinking it’s Spring Cleaning Time or time for an annual checkup, your business needs to undergo a checkup each year.  No matter how large or small your business is, you cannot gauge the effectiveness of any changes you’ve made without analyzing the benefits and bottom line.

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Here are 10 questions to get you started:

  • How do your year-to-date sales compare to the last couple of years? Don’t be satisfied if you managed to match them because if sales stayed the same then you’ve achieved zero growth.  With inflation, this flat growth line is a warning sign for more trouble down the road.
  • What percentage of your business is from repeat customers? This is important to know because if it’s too low, then it needs to be improved.  The estimated cost of getting a new customer versus retaining an existing one can be as much as five to one in terms of dollars spent.  Keeping customers is more cost-effective than constantly seeking new ones.
  • How long has it been since you offered a new product or service?  Loyal customers like to see you changing and progressing with the times.  If you’re stuck for an idea, ask your customers what they need.
  • Do you consider marketing and advertising expenses or investments?  How you look at the money spent in these areas affects your willingness to spend money at all.  Would you look at prescriptions as a waste of money?  Marketing is really investing in you, your vision, and your company.  The old adage that you must spend money to make money is true, but you must spend it wisely.  Spend it on ads that are pulling responses and orders, and if they’re not maybe you need to change publications.
  • Do you know what PR is and how to use it to positively position your business in the media?  I’ll bet that at least one of your competitors does.  Nearly every mention of a company or business in the newspapers and magazines is a direct result of publicity efforts.  Being quoted or featured in an article speaks volumes to your clients and readers who are your potential prospects.  A good PR consultant can do that for you and show you ways to extend the shelf life of that article beyond its publication.
  • Are you listed in the yellow pages?  If you only have a line listing, consider including a small ad in the yellow pages.  If you can afford it, it will pay dividends throughout the year.
  • Do you teat your regular customers better than your drop-ins?  You should.  If your customers don’t feel special when coming to you for products of services, why should they remain loyal to you?  Have a customer appreciation day or a special invitation only sale for your regulars.  Create a mailing list of your regulars.  Send occasional post cards or greeting cards for special events or just to keep in touch.  Learn to recognize them on sight and greet them by name when they visit you.
  • How long has it been since you really talked to one of your customers?  Just as you appreciate when your Doctor takes time to talk to you, your customers will appreciate you if you take an interest in their needs.  If you have a service business, have lunch or coffee periodically with some regulars – even if they only contact you once or twice a year.  The personal touch in an impersonal world will be remembered.
  • How is your business doing compared to your competition?  Every company, no matter what the size, has competition – even home-based businesses.  Is their business growing or downsizing? Is their pricing or service better than yours?  If so, what can you tell potential customers about the price difference?  Think about how you can improve your service to meet or exceed your customer’s expectations.
  • Are your employees happy?  Don’t ask them directly, but observe them throughout the day.  Watch, listen and learn.  Employees who like their jobs don’t watch the clock for quitting time, aren’t habitually late, don’t have poor body language, don’t spend time on personal phone calls, and don’t look like they never smiled.  Observe how they interact with customers.  Not everyone is a match for direct contact with the public, so make sure you don’t have an employee who is driving business away.

I can remember when I was working at my very first job out of school.  It was a service business with just the owner and me at work.  There was direct contact with the clients, and there was never a problem with smiling when talking face to face with them.  I was given the best business tip of my life by that employer, when he pointed out to me that when talking to clients on the telephone I should smile too.  For some unexplainable reason, when you smile as you talk on the phone, the exchange with the client becomes more pleasant and more productive.  It’s as if that smile went right through the phone wires to the person to whom you’re talking.

I prefer Long term Assets

I decided to write a little bit of advice regarding business processes and terms as part of this blog. Feel free to comment if you have any additions to this.

 

To see how well a company is doing with managing their long term assets you just need to know where to look.

Some places you can find this is in the reported total assets, net income, and cash flows that are related to the investing activities of a business. An idea of how a company is utilizing long term assets can be found in their financial statements.

A company that is particular good at this just happens to be one of the largest food companies and goes by the name of H.J Heinz <www.heinz.com> or that famous ketchup company. It has close to 66 percent of its total assets are classified as long term assets. The income statement comes in handy because it displays depreciation of assets over time, and Heinz has had about 299 million dollars worth of depreciated expenses.

Long term assets are constantly looked at to see if some of the assets have loss some of its value which will result in what is known as asset impairment.

Getting rid of long term assets could show an increase or decrease on the income statement, it just depends on the situation.

So, long term assets are classified as assets that have a relatively long life, usually of at least one year.

Second, they are used for the operation of a business, and third, they are not usually resold. In the pass years long term assets were usually referred as fixed assets, but this statement is not correct today because fixed usually apply to something that lasts forever. There is no really set in stone rule to classify a long term asset, but they are usually thought of to last for at least one year with repetitive use. Assets that are not normally used in the everyday operations of a business should not be included in this category, and assets that are available for resale should be called inventory. Also, assets are different from current assets because they are expected to aid a business for longer periods of time, and are used in the day to day operating cycle of an entity.

A very important part of long term assets are its carrying value, or the part of the price of an asset that hasn’t expired yet. It is also known as the book value of an asset. If a long term asset just happens to lose part or all of its money producing potential before the end of its self life than the carrying value is reduced.

Asset impairment occurs when the cash flow of the asset ends up being less then the carrying value. When the carrying value is reduced then it is counted as a loss. Long term assets can be further broken down into three distinct items. They are tangible assets, natural resources, and intangible assets.

A tangible asset is a type of long term asset that is physical like land, buildings, and equipment.

Natural resources are a type of long term assets that is exchanged for economic value and can be obtained from the land, like gas, gold, and ore.

Last a intangible asset is an type of long term asset that doesn’t have any physical worth but have a value based on the rights that is granted to the owner. An example of this is copyright, patent, and trademarks. The way that tangible assets loses value is through depreciation, the way that natural resources lose value is through depletion, and the way that intangible assets loses value is through amortization. Picking long term assets are a very concrete and intricate process. Before choosing a long term asset the management must decide how they will finance an asset one they have it. Companies that generate enough profit can pay for long term assets from the cash flow of their day to day operations. It’s very similar to how an individual pays for the loan of a car or the loan on mortgage.

When companies want issue a long term acquisition then they must do this through capital stock, bonds, or long term notes. A nice place to analyze a company’s long term financing is through the financing activities in the statement of cash flow. When you’re dealing with long term assets you must make sure that you’re using the matching rule appropriately.

The first thing you should do is find the total expense in the current accounting period. Second, you should see how much money is retained from the on the balance sheet to see if the asset will be beneficial in the future.

To solve these dilemmas there should be four important questions that you ask yourself. First, how is the value of the long term asset determined? Second, how much the depreciated value of the long term asset should be allocated against the revenues in the long run. Third, how much money on expenditures such as repairs is use? Last, how would the disposal of the long term asset is recorded in the financial records? Because long term assets are very confusing, they have many alternatives to manage them. It’s best to think of long term assets as something that will provide a particular need or operation over the years.
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For example, you shouldn’t think of a truck on how long it will run, but on how many miles it will drive. Another example is how much paper a photocopier machine will copy, and how many people a hotel will shelter. It’s also important to determine if a business will have the money to finance the asset in the future. Expenditure is known as the payment or a promise to make a payment in the future for an asset such as for a payment of a service or for a new laser printer you purchased for your business.

There are two types of expenditures, and they are capital expenditures and revenue expenditures.

  • A capital expenditure refers to the expenditure of a long term asset like land for example.
  • Revenue expenditure refers to the expenditure for something related to repair or maintenance such as the repair of a bulldozer for a construction company.

Google Check-ins

Some recent announcements from Google have put companies such as Foursquare, Yelp and Gowalla on alert, while others including Facebook and Groupon are also watching very closely.

Google has been systematically maneuvering different pieces of its mobile, local and social strategies, and the way those pieces are lining up poses a significant threat to a number of Web businesses. One of the biggest and most
recent moves has been the addition of checkin capabilities to Latitude, the social and sharing feature of Google’s location-based service Places.
This seemingly simple feature may have an enormous effect
Check-ins have long been an immensely popular feature for location-based services (LBS) because users can share their locations with friends via mobile apps when they arrive at local businesses and establishments.
Companies like Foursquare, Gowalla and SCVNGR have built their check-in services around social rewards such as badges and stamps. Users check in to Facebook Places, Shopkick and Loopt to receive deals from participating businesses, and check-ins through apps from Yelp and others offer a platform for users to rate, recommend and review local restaurants and stores.
So despite being a latecomer to the checkins arena, Google can significantly alter the LBS space in a virtual heartbeat. According to a December 2010 Microsoft-sponsored study entitled Location Based Services Usages and
Perceptions Survey, Google Places is the most widely used LBS ahead of Facebook Places — and that was before the addition of checkins.
Also, Google’s new check-ins feature is unique in that it gives users the added options of setting notifications and checking out from a location.
In addition to the Web’s predominant search engine and the massive user base that goes with it, Google has something else that the other LBS do not — the rapidly growing Android mobile platform. Though an iPhone app for check-ins is said to be forthcoming, Google Places already has apps for the iPhone and Android devices that integrate with its other location-related services such as Google Maps and Navigation.
And Google also has its new HotPot local ratings and recommendations engine, for which it announced a global expansion shortly after the addition of check-ins. So, users can share their locations with friends, rate and review local businesses, all via Google’s services and across all mobile platforms. The only thing missing is a local deals component, right?
Wrong. That’s our guess, at least.
Shortly after its $6 billion acquisition attempt was spurned by Groupon, word spread that Google was preparing to launch its own entry into the daily deals space — Google Offers. The company addressed the rumors by saying that it was exploring several new ways of connecting local businesses with mobile customers, and that a daily deals model was, in fact, one of them. But there were others.
Which brings us to Offer Ads, another mobile initiative of Google’s in which advertisers send coupons to users through email or SMS to drive customers into their physical store locations. The combined synergy of all of these individual Google products is downright frightening, especially if your business relies on mobile apps
— particularly for Android — to provide competing services.

Assuming for the moment that Facebook and Groupon can withstand the competition, what about Foursquare and Yelp? Gowalla and SCVNGR? Shopkick and Loopt? Or the dozens of other lesser-known services?
For businesses that use Google Places to build awareness for their products and services, the convergence of these services creates the perfect storm of mobile, local and social marketing. Between check-ins, coupons, ratings and reviews, merchants have everything they need right on the Google homepage — not to mention Google Analytics
to gauge the individual performances of each service.
All that’s going to be hard to beat

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