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It’s time to shape up your business, and our expert plan will show you the way.

“You have to be pretty lean now, but there are opportunities to grow if you are in a position to take advantage of them,” says Edward Marram, a senior lecturer at Babson College’s Arthur M. Blank Center for Entrepreneurship in Wellesley, Mass. “It’s a good time to evaluate your business, find ways to conserve cash and improve. Then look at where other competitors aren’t making it and go after those opportunities.”

But taking a cold, hard look at your business–which has absorbed so much of your blood, sweat and tears–can challenge even the most tenacious entrepreneur.  So we asked business-building experts to help us develop a six-week shape-up plan. They told us what to look for, how to set goals and measure progress and, most important, how to get to where you want to be. Think of them as your personal trainers and set aside the next six weeks to exercise their principles. You’ll build business muscle, lose resource-draining fat and speed up growth. But first, you’ll have to step in front of the mirror and face those flabby, underperforming areas.

Week 1: Step On the Scale

What figures give you the most accurate assessment of your business?

It’s tempting–but a mistake–to concentrate on gross receipts, says Steve Wilkinghoff, author of Found Money: Simple Strategies for Uncovering the Hidden Profit and Cash Flow in Your Business. “A lot of business owners tend to focus on reaching a sales number and assume the rest will just take care of itself,” he says.

Instead, make a list of what you want your business to provide. A six-figure salary? Jobs for your kids? An asset you can grow and sell for millions? Contributions to a charitable organization? Those big-picture goals will dictate how to structure your business and where to put your focus during the coming year.

Be realistic. Your one-location coffee shop may not provide a six-figure salary, employ a dozen offspring or help save the rain forest. Sizing up your business against others in your industry is important so that you can decide whether you’re happy with your solo storefront or want to try being the next Starbucks.

For good benchmarking information, start with the SBA’s Office of Small Business Development Centers (sba.gov/local resources/index.html) and its affiliated nonprofit business organizations. These information clearinghouses offer free or low-cost counseling in virtually every area of business. SBDCs can help you forecast revenue and sales, measure profit margins and gauge where your business is versus where you want it to be.

The nonprofit Service Corps of Retired Executives also pairs fledgling entrepreneurs with experienced businesspeople who volunteer as mentors. Trade associations often keep industry data and may be valuable resources as well.

Week 2: Find Your Zone

To carve out a healthy share of any market, startups and small businesses have to be scrappy and resourceful, says Jack Trout, an early pioneer of product positioning and author of the 2008 book In Search of the Obvious: The Antidote for Today’s Marketing Mess.

Week 3: Sharpen Your Message

Now that you’ve zeroed in on who your target customers are, it’s time to find more of them.

To start, Trout says, craft a sharp, succinct marketing message. If you can’t explain your advantage in one sentence, you need to simplify it. It will take time to carry it out, but make a plan to test variations of your marketing message across flexible advertising platforms to gauge what resonates with your key audiences. Ask new and existing customers how they found you and why they decided to buy from you. Log the responses and look for common themes to further refine your message.

Also develop a personalized customer outreach effort: loyalty programs, online or print newsletters, blogs or social networking profiles. Whatever you use, it should enable you to quickly update customers with information, offers and expertise. “You have to keep in touch with them and be a specialist in your business,” he says.

Trout rejects any percentage-of-revenue approach to setting a marketing budget (10 percent of revenue is a commonly cited figure). Reaching customers is not optional, so price out the vehicles you know will reach them and adjust as you go. Start tracking which investments are yielding the best returns, and soon you’ll have a view to where your company’s stronger future lies. Then you can confidently begin dropping products and services that aren’t on that path.

Week 4: Spot-Check Your Technology

“It’s all in my head” information management doesn’t cut it for a growing firm, says business technology consultant Michael Johnson of Wain Technologies in Jersey City, N.J. But gorging on gadgets isn’t the solution.

Look critically at the areas where technology would increase efficiency in such a way that it would improve cash flow, customer service or both. Do you need new bookkeeping software to get invoices and estimates out faster? A smartphone app that enables salespeople to send in orders from the road? Separate the must-have systems from the discretionary buys.

Define the business outcome you want from this tech investment, Johnson says. “Are you looking to increase overall sales by 20 percent or cut cost in the field operations by 15 percent?” Unless you set those goals, you can’t tell if it paid off–and can’t decide effectively about future upgrades.

At the same time, be sure to automate good business practices. Buying customer relationship management software won’t fix your sporadic invoicing and collections. Instead, size up what’s holding back your business, figure out a better way to get it done and then choose hardware and software based on your true needs. The last thing you want to do is further embed poor processes, Johnson says.
Finally, he says, don’t skimp on new technology training: “A surefire way to kill a product is to have untrained staff try to figure out a tool while they’re expected to deliver high-quality results.”

Week 5: Build Up Your Staff

More important than the BlackBerry is the employee who’s using it.

Critically assessing employees of a small operation can be emotionally fraught. Often, employees feel like family, or are family. But getting the right people in the right jobs is the only recipe for success.This week, write or update job descriptions for your key people–whether you’ve hired them yet or not–and see if your current employees measure up.

Creating a clear job description will crystallize your expectations, says HR consultant Becky Regan, founder of Regan HR Inc. in Sacramento, Calif. From there, you can figure out whether additional training will lead to improvement or whether the employee’s existing skills are better suited to another position. The introverted sales rep with an aptitude for numbers may be better suited to bookkeeping.

Also think about your most invaluable employees and how to retain them. “One of the primary indicators of whether an employee will stay with a company is his or her relationship with a direct supervisor or manager,” Regan says.

If you’re ready to hire, Regan advocates a step-by-step approach. Don’t recruit until you’ve nailed down the job description and specific requirements for education, training, experience and salary. Pose a set of prepared interview questions to each applicant. Pay attention to what candidates are hesitant to discuss; This can be a clue to weaknesses. Document their responses, and take notes. This way, you’re comparing apples to apples when you make a hiring decision. (Tom S. Turner’s 2004 book Behavioral Interviewing Guide: A Practical, Structured Approach for Conducting Effective Selection Interviews is a good resource.) Always check references before settling on a candidate, Regan says, but trust your gut, too.

Week 6: Develop Endurance

By now, you may have a marketing, technology and employee wish list that outstrips your current budget even if you have made prudent cuts. If so, prioritize your needs and map out the avenues for funding your company’s growth.

Explore the SBA’s online guide to financial assistance, which lays out a wealth of information about types of business financing. The guide also explains what types of investments qualify for SBA-backed loans, which are expected to loosen up a bit this year.

Businesses in fast-growing sectors may catch the eye of a venture capitalist or angel investor who will take an equity stake in your firm in exchange for an infusion of cash. But you’ll have to network in the right circles. One place to start is the Association for Corporate Growth, a professional organization of venture capitalists, investors, private equity firms and other companies. ACG’s annual conference and regional events are open to nonmembers.

In the current credit climate, it’s tougher to borrow from banks, especially if your company doesn’t have enough assets to secure a loan or line of credit.

Until the credit markets thaw, says Babson’s Marram, growing businesses may have to turn to the funding sources that startups use, namely family, friends and credit cards. But meet with your bank anyway to build relationships and keep apprised of options such as small-business credit cards or lease-to-buy programs with tax advantages. Also consider whether leasing will let you acquire or upgrade the tools you need with less cash outlay.

Now is the time to be conservative with your cash, Marram says. “Keep money in the business as much as possible because you’re not able to just go out and borrow,” he says. “Anything that distracts from running the business–any cash that you use to do anything that doesn’t move the business forward, even paying yourself excess cash–is going to inhibit your growth.”

But remember: Growth doesn’t mean bloat. Weigh in regularly by checking your customer relations, marketing strategy, technology plan and human resources to stay a lean business that’s fit to go the distance.

originally published http://www.entrepreneur.com/magazine/entrepreneur/2010/january/204390.html

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Essential Habits Of An Effective Professional Freelancer

By Rob Smith

 There’s very little to stop anyone becoming a freelancer. In a highly competitive and, in most places, saturated market, you need to make sure your reputation as a freelancer is well-managed and continues to grow. It’s very possible to get a good reputation without being the best in the world, and it’s even easier to lose that reputation. In this article, we’ll explore 15 habits that are essential in helping freelancers effectively safeguard and grow their reputation, and we’ll also discuss how to make freelancing work for you. The habits are split into 3 sections:

 ■Marketing

■Business and time

■Specific business areas

1.  The Presentation Habit

 Your website should be at the centre of your marketing strategy. It’s where people go to see who you are, what you’re about, whether you know what you’re talking about and what work you have done. It’s your silent 24/7 salesman, and it needs to be right. Fortunately, what your website needs is straightforward:

 ■Well-presented work with a good description of the roles you played

■A brief history of who you are and why you’re where you are

■Contact details that are easily accessible

■Content that is continually tweaked, added to, and updated

Other than that, you can go wherever you want with your own website — and so you should. Personality is key. Some great examples:

 2. The Networking Habit

 They say that within 6 degrees of separation, everyone knows everyone. So you need to make sure that everyone within your 1st degree (i.e. people you know), know exactly what you do. It needs to be exact as well. If you’re a developer you don’t want people saying you’re a website designer, and so on. Your current network of friends, family, and associates are your free word-of-mouth marketing – so get them talking about you right now.

 Once this is done, your network needs to be extended and enhanced. Register with any social networking platforms that can work for you — LinkedIn, Facebook, and Twitter. Within those places, start getting into the right circles. On LinkedIn you may join some appropriate discussion groups that are either local or skill based. On Twitter you may start tweeting and including appropriate hashtags so more people can see your tweet on that subject.

 There are many ways to network and connect with people, so it’s crucial that a freelancer not be afraid to talk to people and share information and contacts. Learn the networking habit and get yourself known.

 3. The Niching Habit

 Freelancers can get into the habit of not only finding their niche, but creating niches. A niche in this case is an area in your overall field of work in which you particularly specialise. If you’ve become very good at creating websites for golf courses, for example, then that’s a great niche.

 The reasons having a niche is valuable are simple: It’s easier to become an expert in a niche. It’s easier to sell to other prospects within that niche as they can see what you have done before. As an expert in that niche you can charge a premium for your depth of knowledge.

 The key to this habit is to proactively build your own niches. Seek out profitable areas in which you can work and concentrate on building niches.

 5. The Growth Habit

 It’s been claimed that it costs seven times as much in resources to acquire a new client than it does to grow an existing one. So the growth habit is about proactively looking at your clients in detail so you can discover new ways to help them.

 One practical way to do this is to cross reference. Write all your services across the top of an excel sheet, then put your clients down the left hand column. Now place an X in the box where a service you have done matches a client. The boxes without X’s are potential growth opportunities and should all be explored before spending too much energy trying to acquire new clients.

 6. The Time Management Habit

 Lacking good habits in time management could cause you to over-committing yourself at certain times, which could lead to:

 ■Missing a deadline and disappointing a client

■Producing sloppy or inaccurate work

■Causing yourself stress because of the pressure to get everything done

The solution to this is an effective planning mechanism. Estimate how long the work will take you, then add a buffer to your estimation. This will ensure that, if it does take longer, it won’t eat into other projects. A 50% buffer works well. That may sound like a lot, but if you go over by 25% and then there are additional client emendations, you’ll need it. Once you have the total time allocation, add it to your diary. Now, here’s the crucial part: Do not move it, shrink it, or change it in any way. If you have to do something urgent that will interfere with that scheduled work, make sure the time is reallocated elsewhere.

 A simple calendar application like Google calendar or Outlook can help you plan your time as a freelancer. If you struggle with where all that time goes and want to get serious about making improvements in time management, something like Rescue Time can really help.

 7. The Flexibility Habit

 Being flexible, responsive, and effective at what you do will allow you to handle unexpected situations, such as when a client contacts you with urgent needs and expects you to help. Having set aside time in advance for such urgent situations will ensure that you earn a reputation as a flexible worker.

 What happens if nothing comes up to fill that pre-allocated time? Well you might finish that other project early and can add something special. What happens if the whole day is taken up by urgent project? No problem, you had already planned this might happen, so you won’t let anyone down.

 Of course you’re not going to be able to foresee everything, but a certain level of flexibility will allow you to please your clients and be relatively free of stress because of time constraints.

 8. The Honesty Habit

 Agencies will not use you again if you let a client down, and your chance of repeat work is slim to none. In the same way, you should not over commit your time, but stay within your capabilities. We all need to stretch ourselves on new projects and learn new techniques and practices — that’s not what this is about. This is about promising to do a task in a specified time when, in actuality, you don’t have any idea whether it’s feasible or not. Above all else, people appreciate honesty. You’re better off being honest about whether you can handle a project rather than taking the risk of letting them down.

 So how can you grow your skills and help your clients? By being honest and asking some good questions:

 ■“I don’t think this project is right for me. I don’t have much experience in [insert technology here]“

■“I can really help you with the [insert service here] part of this project, but I know another freelancer who can help with it. Would you be happy if I managed the project for you but outsourced this other work?”

■“I’ll need more information before I know how long this project will take. Would you mind if I spent a couple of hours doing some research so I can give you an accurate timescale?”

 9. The Over-Delivery Habit

 Do not deliver your projects early. Sound strange? It’s not. If you deliver early, there’s a possibility the client will think you overcharged, and may expect part of his payment to be returned. They might also expect future work to be completed ahead of schedule, which may set a bad precedent.

 Instead, use the extra time to focus on whizz-bang elements — those extra bits of polish and creativity that will gain you the reputation you deserve and let you grow. For a designer this might mean spending time adding nice touches to your graphics; for a developer, it could mean more time to implement a cool piece of JavaScript to replace the plain functionality you originally settled for. The “over-deliver” will earn you a solid reputation, whereas finishing early could get you into trouble.

 10. The Business Advice Habit

 Although as a freelancer you’re skilled at what you do, don’t assume you’ll be able to do your accounts and bookkeeping, fill in tax returns, produce an invoice or write a proposal all by yourself.

 Seek regular advice from respected professionals to help you with these aspects of running your business. This might include speaking with people who run their own operations and understand the ins and outs better than you do. Learn as much as possible from their experiences and mistakes.

 11. The Email Habit

 Email is toxic. As a freelancer you can easily become what’s commonly known as a busy fool. You might spend a significant part of your day just sending and receiving email without ever getting any work done. Instead, be in the habit of controlling email, and not letting it control you.

 To do this you need to:

 ■Turn off all the little reminders, message counts, and other indicators that may catch your eye

■Configure your email client to run a “send and receive” at longer intervals, maybe as little as once per hour

■Set aside blocks of time in the day to deal with all email, then switch it off; if something is urgent, people will use the phone

■Use the ‘touch it once’ philosophy; fully read and deal with every email you open, instead of half-reading some and coming back to them later

 12. The Project Management Habit

 Some clients will want you to fit in with their processes, while others will not enforce this. You need to have very clear processes for how you start working with a client and start a new project. What questions do you ask a new client? Where do you store the information they tell you? How do you keep track of how close the deadline is? Where do you store all the files they send you?

 Email is not sufficient for this! Things will get lost, forgotten or overlooked. You might prefer cardboard folders or ring binders or whatever works for you — but use something and stick to your own system. There are applications like Basecamp and activeCollab that can help with this.

 13. The Research & Development Habit

 Sounds like a big company thing to do but R&D is essential to a good freelance operation. You need to be ahead of the curve or at the very least on it to be servicing your clients most effectively. Be in the habit of investing time for research and development. Expand your current skills and learn new ones.

 Never designed a billboard before? That’s development.

 Don’t know which email marketing system might help your clients? That’s research.

(Campaign Monitor and MailChimp are good options).

 Set aside time every week to do R&D. Build up a list of blogs that feed you new thinking and new ideas. Listen to informative podcasts (Boagworld is a good one).

 14. The Sales and CRM Habit

 How can you allocate your time and resources and figure out whether or not you need to be hunting for new work or concentrating on servicing current clients? You should know at any given time what your work pipeline looks like, how likely is it all to materialize, and at roughly what value.

 There are various applications out there to help, such as Salesforce, SugarCRM (open source edition), as well as 37signals’ popular Highrise.

 15. The Accounts Habit

 Making sure you have any easy way to produce, send, and track invoices is essential, as is getting into the habit of running your accounts professionally, because such habits will ensure regular cash flow. Applications like Blinksale, Freshbooks or Simply Invoices can help formalise the accounts side of your business and give a good professional feel to how you operate. Clients will need invoices for their accounts — make sure they’re not hand written or unbranded.

originally published at www.smashingmagazine.com/2009/12/21/essential-habits-of-an-effective-professional-freelancer/

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As every small business owner can attest, there are myriad challenges to finding long and short-term methods to save on operating costs and still deliver quality goods and service.  Both established companies and new ventures have discovered the numerous benefits of outsourcing work responsibilities and are opting to utilize freelancers, consultants and independent contractors as a cost effective means to help grow their companies, achieve business objectives and make available much-needed capital for investment in other areas of the enterprise.

There are a number of substantial benefits of employing freelancers and outsourcing vital job responsibilities. By taking advantage of a wide range of services provided by outsourcing, smaller firms gain access to the same level of efficiency, expertise and business development enjoyed by larger firms.  Projects and disciplines that can be successfully outsourced include marketing, communications, creative services, IT, accounting and even administrative services.  One of the main advantages of outsourcing and contracting is that enable small business to manage capital expenditures such as labor and operating costs, office space, health benefits and profit sharing. The inclusion of freelance professionals also introduces a fresh perspective and innovative ideas that will give your projects and services an extra shot of ingenuity and competitive edge. Increased efficiency shifts the focus from peripheral, time-consuming activities allowing owners to concentrate on core, income-generating business and customer service and acquisition.  Because freelancers’ income and reputation are largely based on timely payment for services and repeat business, they are inclined to expedite projects to their client’s satisfaction.

There are a few essentials to keep in mind that’ll ensure that you get the most from your freelance experience. First, be sure to request a resume, and work samples with related projects and cross reference them to ensure that they current job requirements and expertise.  Request a client list to ascertain if they’ve handled similar projects and work scope. It’s also very important that you discuss and agree on a mutually beneficial fee, work schedule and payment structure and be sure to put all relevant details and agreement in writing.

Poll

Do you currently or have you used freelancers for any of the following job responsibilities:

IT

Creative Services

Sales and Marketing

Public Relations

Accounting

Administrative/Executive Assistance

Travel & Entertainment Services

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1. Evaluate your Internet access service. Independent and smaller ISP companies often provide high quality service and support for a fraction of the cost of larger companies. You may be able to save over $100 annually.

2. Use a Payment Service instead of a Merchant Account. Payment Services such as PayPal, eGold or Clickbank are cheaper, faster and easier to manage and boast a variety of features such as low monthly fees, discount percentages and programs that add up to big savings.

3. Re-evaluate Your Long Distance Costs and Service. Use the competitive communications market to your advantage in order to drastically reduce your charges instantly and find the perfect rate for your small business’ needs.

4. Find out if you qualify for a home office tax deduction. If you use a room in your home, regularly and exclusively as an office, you may deduct certain other expenditures, such as depreciation and the indirect expenses of operating your home, on a pro-rata basis.

Your car:

5. Convert personal assets into business assets by contributing them toward your business. Remember, you can only deduct the portion of your car that pertains to business only For example, if you use your car in your business, you can deduct the costs of operating and maintaining your car. To do so, pro-rate or allocate the total cost of operating and maintaining your car between deductible business use and nondeductible personal use.

6. Sign up for MasterCard’s Business Savings program and take advantage of travel and entertainment discount and savings programs.  You can receive substantial through over 40 savings partnerships and networks. This includes automotive, services, transportation, hotel, IT usage, dining, and other travel-related expenses.

7. Use your personal retirement plan is to create significant dollars towards your retirement. There are several tax advantages to doing so and you may also qualify to participate in several retirement plans available to small-business owners.

8. Take advantage of the generous first-year of business depreciation write-off for assets bought and put to use during 2007.  Your business may be entitled to immediately deduct up to $125,000 of new and used personal-property assets such as office equipment, machinery, furniture, fixtures and software) under the “Section 179 deduction.”

9. Invest in a website as a foundation and marketing springboard for your business. It’ll work even when you’re sleeping and is a great marketing tool to help you promote and advertise your services. Sites such as youtube.com, Linkedln.com, ladieswholaunch.com and Ryze.com are great for online promotion, resources, business advice and networking.

10. Research and invest in low cost marketing opportunities. Don’t underestimate the power of Blogging. You can advertise your business, review your products and services, get and receive free tips and advice and show of your business expertise. Tools such as WordPress grants access to use creative plug-in, and you can advertise your products or services.

11. Save on Healthcare expenses by finding a plan that’s right for your business and employees. Fee-for-service (FFS) plans and Managed Care plans are most common among small businesses. Health Savings Account (HSA) are also gaining in popularity because it allows employees to share financial responsibility for the plan and gives them the freedom to select a plan that best suits their healthcare needs. There are also several alternatives such as Health Purchasing Alliance (HPA), Health Reimbursement Arrangement (HRA), and Associated Health Plans (AHP).

12. Use freelancers, consultants and contractors who can work from home and help you save in a number of long-term and short-term ways. Outsource some job responsibilities as appropriate and possible or take advantage of the wide-range of services offered by virtual executive assistants.

13. Join trade associations, the Greater Chamber of Commerce, Small Business Associations and other minority –owned business resources.   They’re source for networking, marketing and advertising, and useful information. Many also provide members access to myriad businesses and individuals that can utilize your products and services.  Many offer discounts to minority business owners, provide assistance with much needed services such as healthcare plans, discount programs and tax advice.

Questions and Answers

Q. Every year I look for different ways to cut down my expenses. Is there one large item I should try to cut back on or eliminate?

A. Actually, there probably isn’t. It’s most advantageous to re-evaluate and streamline your overall expenses in order to stay within budget, and then trim the excess from each. Take a hard look to determine which ones you really need. Eliminating a huge item that you may need later on may set you back and end up costing more than you gained.

Q. Internet is essential for my business, but the yearly cost is pretty expensive. Are there ways I can save money without sacrificing service quality?

A. The market is filled with ISPs that you can use the stiff competition to your benefit.

Search the Internet under keywords like “cheap internet access” or “discount isp” for a list of possibilities. Then, try to renegotiate with your existing ISP. Many will offer service of 2-3 months free or a discount with an annual agreement.

Q. I’ve been hearing about merchant services, what are some of the benefits?

A. Merchant services offer lower transaction fees and programs that help your small business to accept credit cards.  If you have a low volume of credit card transactions, it might benefit you to switch from a merchant account to a payment service like Pay Pal or ClickBank. Through PayPal for example, you can send and receive payments quickly and easily, use their efficient accounting system to keep track of transactions, and the PayPal Plus MasterCard has no annual fee and lets you earn reward points for business or personal travel and entertainment.  They’re a indispensable during the tax season. But be sure to comparison-shop before you sign up.

Q. Can I use my home office for tax deduction?

A. Yes, you may deduct certain other expenditures, such as depreciation and the indirect expenses of operating your home, on a pro-rata basis. Even if you fail to qualify for the home office deduction, you are still allowed to deduct other business expenses that you incur while operating your business out of your home.  Your home office space must be exclusively allocated and regularly used for business.

Q. I travel quite frequently for business. Are there travel programs I can use to minimize expenses and conduct business efficiently while away?

A. Sign up for World MasterCard or MasterCard Executive Business Card for premium travel benefits and rewards programs and access to reliable services and merchants nationally or internationally. You can also choose a single travel agency, and insists that employees use it exclusively to book all business trips. Try one of the new online business-travel booking services such as Expedia, Orbitz or Travelocity. A single agency will assist you in ensuring policy compliance, track unused tickets, collect data for negotiations with suppliers and easily locate travelers in an emergency.

Q. Healthcare plans are becoming increasing expensive, but I’d like to provide benefits for my employees without sacrificing my bottom line. What are some economically feasible options available to me?

A. Consider health savings accounts, an increasingly popular option for small business owners. These are tax-exempt accounts used to pay for certain medical expense and could reduce your small business health insurance costs while giving your employees tax breaks.

The larger your group, the lower your premiums will be.  But remember to shop around for the provider that best suits your needs.

Q. A lot of people have been talking about the benefits of “going green?” Can I do this and save money?

A. The “going green” business trend is great for the environment and will certainly help your company save money.  Here are a few eco-friendly tips that will help put your business in the “green.” Be sure to turn off lights and unplug appliances and equipment when not in use; recycle waste materials, reduce energy consumption, purchase biodegradable office supplies and materials; create and support a wellness program for employees.  Going green is not only a money and energy saver, it’s always an effective way to boost morale and team spirit.

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