Zoning laws play a major role in where you set up and conduct your business. Being aware of what is in force in your area will save you money and frustration. To remain in good legal standing, your business must be in compliance with your local ordinances, so it pays to stay abreast of those that will impact your business. Reasons Laws Exist Zoning laws and ordinances do not exist just to bedevil your business plans. It may seem that way when you cannot operate out of your home or have your factory expansion plans halted. Most ordinances are passed to keep neighborhoods livable and preserve property values. This is why you cannot build a commercial building on a piece of property zoned for residential use. For that matter, you may not be able to construct a home in a rural area if it is against the local agricultural zoning regulations. To be proactive, find out what the current zoning laws are in the areas you are considering doing business. Modify your plans to fit the rules. Alternatively, hire a lawyer and attempt to get a change in local ordinances passed. Business Impact Zoning laws can have a significant impact on home-based businesses. Starting in your home is logical for many new businesses. You are small enough to not need separate offices and not paying rent reduces overhead substantially. If all you need is the kitchen table or even a room in your house, you probably won’t have to worry. However, your local regulations may make it a difficult proposition if you are making products or want to sell to customers from your home. On the other hand, if customers visit to conduct business or employees work out of your home, you may face problems. This is because it can affect: All of these may not be relevant to your business, but it is important to know what the laws are and to figure out ahead of time the impact they can have on your plans. Zoning Laws There are several categories of zoning regulations, including: Each has a multitude of subcategories. This is what makes zoning laws so complicated for the small business owner to figure out. To be sure that you are in compliance, the help of a lawyer or real estate professional is invaluable. Among the most common types of restrictions that local laws establish are: For example, a retail store is covered by several zoning laws that limit how big the building is and how many parking spots it needs. Permit Requirements You can ask for a conditional-use permit if you work out of a structure not zoned for business. You obtain one by filing for a zoning variance or conditional use permit or even a zoning change. This conditional use permit lets you operate your business for the time being in the location, even though the zoning does not permit it. You will have to pay a filing fee, which can cost several hundred or several thousand dollars, depending on the municipality. Have a lawyer work with you and the governing locality to give yourself a chance to get the conditional use permit changed to something more permanent. Staying in compliance with local ordinances and zoning regulations makes it possible to conduct business legally at the location you choose. If you are caught not following the regulations, you may be subject to a substantial fine. It is not worth the hassle. Work with a lawyer, find out what each area requires, and locate your business accordingly.

Laws and Local Ordinances That Impact Your Business

View Resource Laws and Local Ordinances That Impact Your Business
Hanging onto your money and handling it competently is a challenge from the time you are a youngster getting an allowance to when you become a small business owner. For an owner, it can be the make or break factor for being able to stay in business, let alone turning a profit and growing. Why Is Money Management Essential? Even if you have an accountant, you still need to know how to handle your money. That means understanding the basics of bookkeeping, knowing how to make and keep a budget, and paying your bills on time. Competence in money management sets your business up for growth. With it, you pay bills on time and earn a solid credit score. Banks, credit unions, and investors will look positively on you when it comes time to borrow or invest. The more adept you are in managing your money, the better your cash flow will be. That is the lifeblood that keeps your business vigorous. Money from customers and investors needs to keep circulating, paying employees, settling accounts with your suppliers, and keeping the taxman happy. Here is a look at how you can master money management in your business. Basic Steps to Take To Manage Money Use a business bank account. Whatever the size of your business, even if you are just one person working on a laptop at the local coffee shop, you need to open a business bank account. Run all money that is business related through this account. That means all payments from customers go into it, and all bills from suppliers get paid out of it. This is essential for the organization and to create an accurate picture for tax purposes. Use an accounting system. Set up your accounting books right away. Do it yourself using Fresh Books, QuickBooks or another accounting software. You can farm the entire process out to an accountant, handle part of it yourself and have the accountant handle taxes, or take care of the entire process yourself. Whichever method you choose, understand how the software operates, keep on top of what money is coming in and going out, and don’t get behind on logging transactions. Set up a payment system. You need an effective way to accept money for your product or service. This can be as simple as using Paypal, or more complex using a shopping cart and merchant account. The more payment options you give customers, the easier it will be to collect what is due. Offer credit sparingly. Extend credit wisely and conservatively. Check the credit score of your customers before giving them credit. Be clear and consistent with your credit-granting criteria. This will save you hours of angst trying to collect and keep the cash flowing. Learn how to estimate a job. Estimates should be as accurate as possible. Understand what your overhead is, how many hours a job will take you, and the minimum you need to quote to make a profit. If you consistently charge too little in an attempt to keep money coming in, you are leaving money on the table, or worse, you run the risk of eventually going out of business. To make sure you are making enough money, track time and expense for every job. Many accounting programs, like QuickBooks, let you produce a job-costing report for every job you handle. Review the reports weekly to make sure you are charging correctly. Keep your overhead to a minimum. Hire staff only when you can afford it and need them. If they sit around with nothing to do, you lose money. When you are starting out, don’t set up your office in expensive quarters. Spend just what you need to make clients comfortable if they come in, but avoid high-cost decorating schemes. Put your extra money into research and development of new products and marketing. Invest in areas that will produce a true profit. Make a budget and stick to it. Budgets provide structure, which every business needs. They help you decide how much to spend in each area and how much to earmark for growth. Base the budget on expenses from previous years, how the market is doing, how much your suppliers are charging, and your overhead. Be sure to include money for emergencies and to fund future growth. Taking a proactive stance toward handling money radically reduces the risk that you will be caught unawares by a big expense. It will let you keep adequate cash flowing through your business, letting your business prosper and grow.

Money Management

View Resource Money Management
At a certain point, every businessperson needs to know what his company is worth. While it might sound simple, accurate business valuation is quite complex. No prospective buyer is going to take your word for how well your company is doing. When you claim your business is profitable and has great potential, you need to back up those statements with numbers and documentation. Whether you are considering purchasing an existing business, selling your business, looking to attract investors or thinking about going public, here is a look at how to approach the process of valuing your business. Reasons for Valuing Two common reasons for needing a business valuation is because you want to sell your business, or someone has made an offer to purchase it. However, other financial circumstances might require it, like a divorce, disagreement about the value of an estate, or a problem with gift taxation. When you need to figure out what your business is worth, three common approaches for calculating the value of your business are: Each model is appropriate in specific circumstances. Asset Approach With this model, you calculate the net value of all the assets your business owns, taking into account depreciation, and the result is your firm’s value. Assets include land, buildings, equipment, inventory, copyrights and trademarks, customer lists, and improvements to the physical structure. The owner’s discretionary cash for a single year called the owner benefit, is also included in the total asset figure. This method should also account for liabilities, such as outstanding loan balances and accounts payable. These liabilities should be deducted from total assets to yield a net asset value. Prospects love assets like these because they are built-in insurance. If cash flow slows down after he buys, he can sell assets to bring in money. This is the sensible method for retail and manufacturing firms, which are considered asset-heavy. It is usually not the best one to use for a small business. Income Approach With the income approach, which is also called capitalization of income, you focus your attention on cash flow and the return on investment. For example, if your business has revenue of a million dollars and $750,000 in expenses, you will have an income of $250,000. However, businesses are typically not valued based on a single year of income, but their ability to produce continued earnings in future years. The capitalization method uses a capitalization rate and anticipated earnings to value the business. Different industries typically use different standard capitalization rates as a basis for valuation. However, the capitalization rate for your business might be lower or greater than the industry average based on a number of key financial and operational factors. These include things such as business growth, competitive environment, management team and an earnings history. The capitalization rate eventually used for your business will be used as an earnings multiplier. As an example, a capitalization rate of 33% will yield a three-times earnings valuation, and a rate of 50% will yield a two-times earnings value. Market Approach This method is much like what realtors use when tempting buyers to purchase a home. The realtor shows prospects comparisons of what similar homes in particular neighborhoods have sold for in the recent past. Similarly, with a market approach for your business, you use sales figures based on industry averages as a multiplier. This makes it the most subjective of the three approaches. The challenge with this method is that it is easy to over or underestimate the value. A prime example is the internet company with an inflated value, selling for many times its estimated gross revenue before they have made a penny in profit. Documenting Your Work Most every prospect interested in your company will expect proper documentation. When they have an accountant or lawyer perform due diligence before deciding to buy or invest, they will want to check the numbers that tell the financial story of of your business. They want to review at least the following: Naturally, the more complete your company’s documentation is, the higher your prospect’s comfort level will be. By the same token, if you do not have a complete set of books, it sets up danger flags to potential buyers.. This is not reassuring to someone who wants to buy a moneymaking concern. In summary, figuring out how much your business is worth is one that makes the most of a prospect’s perception of the business. It is not a mere number-crunching exercise. In fact, experts consider it more art than science. A sensible prospect will use professionals to help him determine the value of your business. That can mean employing the expertise of an appraiser, broker, accountant or lawyer, or all of them. It is important that you, as the owner, sit down with them and go over your financials and other documentation. This gives you a chance to ask and answer questions, point out intangibles and help them get an accurate understanding of what makes your business so potentially valuable. It also lets you get a close-up view of how they arrived at the business value they did, making you more comfortable with the end valuation.

Valuing Your Business

View Resource Valuing Your Business
Keeping your records up-to-date, in a safe place and for the required legal period is tedious, but essential for your small business. Whether you store them in a shoebox in a manila envelope or use an advanced electronic storage retrieval system, you need a reliable way to keep your records. The size and complexity of your business will dictate what methods you use. The important thing is to have a system in place from the beginning and to use it routinely. Why the Need for Recordkeeping? The primary reasons a small business needs to keep accurate records are: Detail tracking means keeping an eye on your customers, inventory, and sales. Without this data to refer to, you’ll never know if you are profitable or making progress towards profitability. Keeping in touch with new and old customers, monitoring what types of goods they buy, and when, helps you plan your production schedule and marketing efforts. The more personal attention you can give a customer, the more favorably they will view you and your company. When you keep detailed records, you can reference them and keep an eye on preferences and buying habits. Planning is done by tracking where you’ve been, where you are and where you are going with your business. You do that by looking at the day-to-day activities and financial records of your company. It is harder to plan next year’s inventory if you do not have the data about what you ordered this year and last year, and how it sold. Documentation for legal compliance and tax preparation can have grave consequences for your firm if they are not complete. These issues are looked at in more detail below. Legal Compliance The primary records you need for legal compliance are contracts, leases, other legal agreements, licenses, and permits. Contracts come in a variety of forms: It is important to have them available so you can check the terms, conditions and obligations of both parties. You need to follow the terms of the contract in order to keep them legally in force. Always keep the original copy of all legally executed contracts for your legal safety. Government agencies at the local, state, federal and even internationally issue licenses and permits that may be instrumental for your business. Examples include a license to operate your business in a given municipality, a seller’s permit, home occupation permit or food preparation permit. States license certain professionals like doctors, accountants, and architects. You might be legally required to display these permits at your place of business. Contractors might be required to show proof of insurance. If you cannot produce the right licenses and other documents, you can be liable for fines or litigation. Payroll and Personnel There is a broad range of federal, state, and local laws that require any business with employees to produce current and old records for payroll and employment. You need to track many types of information, including: This is a lot of records to keep for the average small business. Hiring a payroll service simplifies the process, as does using accounting and financial software. You can also reduce your record keeping by using an employment agency or by working with independent contractors. Tax Requirements Tax requirements at the local, state, and federal level are complicated and ever-changing. A new business can be overwhelmed by the demands of tax collectors. You need to keep your new records organized, but you also need to hang on to old ones. New records are essential for filling out tax forms for the current quarter and year, but forms going several years back can also be demanded by officials when they audit. Getting the help of a professional accountant to keep your records up-to-date and organized is an investment in peace of mind. When tax collectors from any government level come calling, you will not have to put your business on hold while you try to figure out where everything is. Records should be kept only as long as the government demands and then shredded. For example, tax returns need to be kept on file permanently. However, employee withholding records should just be kept for seven years. Keeping records longer than is mandated for compliance can put you at risk of litigation. It also uses up space and takes time to keep in good condition and organized. So keep your records for the mandated period, and then get rid of them. Your records, whether employment, legal or financial, contain the day-to-day story of your business. You need them to make realistic, useful plans for the future. You must be able to produce them to stay in compliance with legal requirements. Setting up a system for organizing and storing them, then using the system consistently, are essential steps for the prosperity of your company.

Recordkeeping Basics

View Resource Recordkeeping Basics
Selling products or goods to customers is the reason many companies are in business. To be successful, that means you must have the products on hand for them to purchase. However, to be profitable, you will have to make efficiency with inventory control integral to the success of your business. The topic may seem unexciting when compared to sales, marketing, and product innovation. However, inventory management needs to be treated as a critical part of your everyday business endeavors, one that is at the frontline to customer satisfaction. To help you get a handle on this core part of your business, here is a look at the ins and out of managing your inventory. Types of Inventory Inventory is your product stock, the goods you sell, and any materials you need to run your business successfully. Depending on your type of business, there are different types of inventory. Raw materials Raw materials are typically commodities such as minerals, chemicals, steel, wood or basic food items that your business uses to create components or finished products. They may also be things you purchase from external suppliers that have already been assembled or manufactured, such as nuts and bolts, electronic components, and canned food. Raw materials can also include goods that are only partially finished, which you then take to completion. For example, if you sell vegetable juice, the raw materials include vegetables, flavorings like sugar or spices, preservatives, and the juice container you sell. The raw materials for a computer company would include circuit boards, diodes, chips, and the housing for these components. Work-in-Progress Materials What you have in the form of materials and parts that are waiting for you to transform them into something else are considered work-in-process materials. It also refers to partially assembled items that are in line to be made into a finished product. Goods that you have finished, but haven’t packaged yet are also work-in-progress materials. Using the earlier example, cucumbers and carrots are raw material inventory for the juice company. When they have been transported from the storage area and into the assembly line, they now become work-in-progress inventory. Finished products These are items that are ready to be shipped or sold to customers, which can include retailers or wholesalers. These can be stored on the shop floor or in a special storage area. Other Types of Inventory Your company needs a range of goods on hand to stay in business, including items for maintenance and repair, as well as those needed to stay in operation. These types of inventory are given names that designate their purpose. Inventory Costs It costs money for you to purchase inventory, process it, store it, and sell it. In order to make a profit, you must include these costs with other operational costs, balancing all of them against the price you charge for the product. Inventory costs can be broken down into different types as well: Best Practices for Managing Inventory The better you closely manage your inventory, the more efficient and profitable your company can become. Here is a look at three strategies that will help you stay on top of your inventory. Don’t keep too much in stock. If you have too much inventory on hand, you’ll have lots of cash tied up in its purchase. Additionally, you will have added costs for storage. Idle inventory can also become obsolete or get damaged. The way to avoid these situations is by keeping on top of your sales projections through proper forecasting. Track your inventory accurately. Maintain good records as inventory moves through your business. Make sure to take into consideration unusable inventory due to damage or poor quality. Monitor pilferage and other forms of shrinkage. You need accurate records of what you have on hand in order to control costs, maintain customer satisfaction and reach sales goals. Use reliable software to track inventory. An Excel spreadsheet might work if you are just starting out, but it is easy to mistakenly delete a file. It is more reliable to use Quickbooks, Peachtree or one of the other inventory management programs available. They make it easy to track what you have on hand, both at an item level, as well as its associated dollar value. If you want to keep your customers happy, you need to have inventory available to meet their needs. Holding excess amounts of inventory, however, can be costly and put a strain on your company’s finances. Regular inventory monitoring, strong forecasting, and detailed cost tracking will help you manage inventory levels properly. How you manage your inventory can make all the difference in the world in terms of profit margins and the competitiveness of your business. It is worth your full attention.

Managing Your Inventory

View Resource Managing Your Inventory
You need your suppliers. They need you as well. It is a win-win relationship between you and your vendors. However, it takes effort; it does not just happen. Managing your vendor relationships is essential to ensure a steady supply of materials or services that you can use for your products or to enhance your services. This means selecting suppliers with care and building a connection based on mutual trust. When you have a good working relationship with your vendors, you can navigate downturns in the marketplace and respond quickly to a big upsurge in orders. Here are several ways to ensure a mutually beneficial outcome with your suppliers. Evaluation and Selection Select your vendors with care. Don’t rush in and simply choose the least expensive price for the goods you need. Like every decision that has long-term outcomes, base it on thorough research. Follow this process when looking for a supplier: The slow, steady process of researching and negotiating lets you know what you will be paying for, when you receive goods after ordering, and if there are extra fees or expenses involved in the transaction. The last thing you want is to succumb to a fast-talking salesperson with questionable reliability. Managing Vendors Just like any major component in your business, vendor relationships need proper management. It is not usually wise to sign up with a supplier, then put the entire process on autopilot. It is always best if each vendor works with one person in your organization. They should check in frequently with their contact with phone calls and emails, and visit their office periodically. This makes the connection stronger and more personal, enhancing loyalty and awareness. It makes the vendor feel a part of your team. Make sure the person managing each vendor responds to questions and concerns quickly. Without up-to-date information, the supplier can end up providing too little or too much of a material or miss deadlines. You need to show that you respect their time and the resources they have available. You are just one of their customers, not the only one. Your aim is to encourage a strong connection. The only way to do that is with frequent contact. Always pay on time. If something happens where you cannot, get in touch with the vendor immediately. Explain what is going on, set up a payment schedule and stick to it. Nothing will get you on the bad side of a vendor faster than a spotty payment record. Even after you know a vendor well, get everything in writing. Never depend on verbal agreements or someone’s memory. Ask your supplier for progress reports so you can spot potential problems early. Getting the Most Out of Vendor Relationships As in any relationship, you teach your vendor how to treat you. Let him know directly and often exactly what your needs are. Make it clear that you expect good service. Expect loyalty from your vendor and be loyal to them. If they are going through a bad patch, try to help and don’t drop them if they have been a reliable resource for you in the past. Give them referrals. Send them more work when you have it. Don’t make outrageous demands and expect immediate compliance. Feel comfortable asking for discounts if you have been a good customer. How much you get will depend on how much business you send their way, what the terms are and how long you have been working with them. This is also where a good relationship shows its worth. Bring problems with service to the attention of your supplier quickly. Make sure you get the matter resolved, even if you have to keep working your way up the chain of command. Remember, take your time finding the right vendors. Then make the effort to get to know them, their capabilities, and their needs. Develop a good working relationship and keep communication consistent and constant. With reliable vendors as part of your team, your business can grow.

Managing Vendor Relationships

View Resource Managing Vendor Relationships
Time is money, so managing this valuable resource is good for your bottom line. Time is a finite resource, so you need to guard it well from people and events that waste it. Small business owners can be constantly confronted with small emergencies and social interruptions that can eat up their day. Meanwhile, more important goals and tasks get placed on the back burner. The latest app or a new gadget can help, but only if you first decide on your purpose and what is worth focusing on at work. Tips to Manage Time for Small Business Owners Be clear about goals. The best first step is to know what your goals are. Be clear about where you want your business to be in 10 years, five years, next year, next month, and tomorrow. This will help you clear through the clutter of unnecessary demands on your time. Decide what is important in helping you reach your goals, and concentrate on making progress toward them. Try to delegate, though this can be hard for a small business owner. Once you become clear on where your focus should be, you will find it easier to avoid time wasters. Be in charge of your time. Don’t put yourself at the mercy of others who will take minutes and hours out of your day. As a business owner, you, and no one else are responsible for how you spend your time. That means you must develop the skill to say no. Be polite and be firm. Move to productive tasks if you see that what you are doing is not serving your goals. Plan your time. Write out a schedule at the beginning of the day. Include what you must accomplish — the urgent, and what will bring you closer to your short-term and long-term goals — the important. Your schedule does not have to be minute-by-minute. It can be a simple to-do list with space for appointments and for tasks that support your goals. Without a schedule, you will find yourself unnecessarily jumping from one fire to another. With a plan to refer to, you can spend quality time in a focused manner on each task. Moreover, the important doesn’t always get crowded out by the urgent. How do you decide what is important? Use the 80/20 rule that says 80% of your results come from 20% of your efforts. It is the same concept that says that 80% of your money comes from 20% of your clients. So focus your attention on what produces money and results. Applied consistently, you will eliminate unproductive clients or tasks and increase results in the areas where you can gain the most. Delegate. Many small business owners started off wearing all hats. As they expanded, a staff was hired. However, it can be hard to transition from being the one doing the job to the one overseeing it done by others. The results are micromanaging and putting far too much time into tasks that others are being paid to do. When you trust your employees, jobs get done routinely without your input or interference. Unless there is a major problem, let your employees get on with their jobs. Don’t waste your time getting involved in problems at the staff level that don’t require your input. Avoid distractions. Facebook can be a time waster for a business owner just like it can be for an employee. Set aside 15 to 30 minutes every day for social media. Likewise for email: schedule time once or twice a day for answering it. Focus your time and attention on the things that matter for your small business. Take a proactive stance when it comes to your time, and you will be far more productive.

Time Management

View Resource Time Management
Owning your business means the freedom to set your hours, make your rules, and live your dream. It also means the chaos of setting up a company, meeting deadlines, dealing with employees and customers, and the chance to work 10 to 15 hours a day at times. The rewards may be two-sided, but the right to call be called the boss is payoff enough for many entrepreneurs. The job description for “Boss” is one that develops on the fly, and you often learn by doing. Here are some tips to make the transition a little easier. Have Money to Fall Back On Breaking even in your new business takes about one-and-a-half to three years, according to small business expert Melinda Emerson in her book “Become Your Own Boss in 12 Months”. It will cost more than you think and take more time that you planned. You’ll need enough money to cover living expenses and for startup costs. The simplest way to handle this is by starting the business while you still have a job and a paycheck. It is hard to get investors interested until you have customers and products. Cut expenses to the bone. Do whatever you need to do to make sure you have the cash for the first few months. Choose a Field You Love Starting and growing a business may be your dream, but it can easily turn into a nightmare because of the challenges finding startup money, dealing with customers, and weathering market conditions. If you love the field you are in, that can help sustain you over the bumps. Take Advice from Experts When you start a business, everyone has an opinion. One person might question why you’d leave a good job in the first place for an idea that may never work. Another person might suggest that you switch from selling apples to ice cream because the market is better. Rely on experts primarily, rather than relatives and friends for advice. Get guidance from mentors at SCORE, the Senior Corps of Retired Executives and the Small Business Administration. Ask others in the same line of work. Take classes and research trade publications. Base your decisions on respected, educated, experienced opinions. Develop a Business Plan Research and make a plan. Even if you do not stick totally to it, it will start you on the path with confidence and clarity. It does not have to be pages long, but it should at a minimum answer these questions: Get Support This is the time to tap into your network. They know people who know people, and on down the line. Find people who are positive and upbeat when you need an injection of reassurance and encouragement. Be clear about what you need, ask friends to put the word out, whether it is a contact, the best place to buy supplies for cheap or an office to rent. Offer the same back to your network, and keep growing it. Starting a business is a grand adventure in life. Be prepared for surprises, be careful with your money, connect with people, educate yourself. Enjoy it.

Becoming the Boss

View Resource Becoming the Boss
Technology is fascinating, changing daily, and confusing all at the same time. It can help keep you organized, handle tedious chores automatically, and connect you globally. It can also cost you lots of unnecessary dollars if you are not careful. Here are tips based on the experience of other small business owners who have previously navigated a technology minefield filled with the latest and greatest. Establish a Budget The first step in deciding which types of technology to invest in is putting together a budget. The newest gadgets and software run the gamut in price from a 99 cent app to a high-end scanner that costs thousands. Set up a budget and stick to it. Base it on how much you can reasonably afford to invest. Having a fixed amount to work with will reduce the temptation of the newest add-on or gizmo. Be Aware of the Full Cost. New technology is the sum of the sticker price plus the cost of implementing it. Consider these points: Fit the Technology to Your Needs Make sure the electronics you are thinking of investing in match your business lifestyle. If you constantly travel from customer to customer, bulky electronics are a bad investment. Think laptop or tablet, instead of a desktop. Do you really need to upgrade your server? Instead of buying the software yourself, would a Software-As-A-Service, or SaaS offering be more cost effective? Can you rely on the cloud? Look for Compatibility and Security Make sure that new devices you purchase will work with your existing equipment. A great piece of Mac software will not do you any good in a Windows environment unless you buy additional software. Is it secure? This is a very real hazard for a small business. Make sure that what you buy can be protected with the proper levels of security. Taking shortcuts with the cost of security could come back and severely damage your business. What Small Businesses Use A 2013 survey by the Small Business Owners Association listed these four items as essentials: Though the landline is something of a surprise, these rates show how important technology is for your small company. Start with the basics when you first invest in electronics and slowly add what you need. Cloud Computing In the survey mentioned, 43% of the owners polled had switched to cloud computing. In the last five years, cloud-based services have grown exponentially. This offers small businesses a number of benefits: Using cloud-based services offers simplicity and peace of mind, since you do not have to worry about storage and updates. You do not have to pay for software, but instead subscribe to it using a SaaS model. Today, the right technology can help streamline your business and make life easier — if you buy the right type. Do your research when you look at what’s new and exciting on the market. Ask questions before you buy and stick to your budget.

Selecting the Right Technology and Tools

View Resource Selecting the Right Technology and Tools
The decision to create a business plan is an important one, whether you are starting a new business or growing an established one. A solid business plan is fundamental to long-term business success. It serves two main purposes: While the phrase “creating a business plan” may conjure up feelings of trepidation and dread, it will not be as difficult if you break your business plan down into its more essential parts. Why Do You Need a Business Plan? Benjamin Franklin said it best: “If you fail to plan, you are planning to fail.” While a business plan will not guarantee success, failing to have one almost guarantees that you will not find the success you seek. Remember the roadmap analogy? It is an accurate one to consider. The first thing you need to do before creating the roadmap, though, is to figure out where you are heading. In order to do that, you should ask yourself four simple questions.
  1. How do you want your business to look in one year?

  2. How would you like it to look in three years?

  3. Where do you want to see your business going in five years?

  4. What would you like to have accomplished by your tenth year in business?
Seek the answers to those questions, keeping in mind profits, revenues, expansion, growth and other critical drivers and metrics for your business. What Does a Business Plan Include? In order to build the roadmap to reach your intended business destinations in a timely manner, you must include key pieces of information and analysis in your plan. The many moving parts of running your business become the fundamental building blocks of your long-term business plan. Consider each of them a pit stop along the road to business success. Business Concept Your business concept is a summation of your company in a few concise and simple sentences. It should clearly communicate the idea, design or value proposition behind your business so that a customer, investor or potential partner can quickly grasp what you will do and the value it will provide. Keep the concept statement to one paragraph. Business Strategy Your business strategy provides the detail on how you will execute the business concept. It describes your industry, explains your product or service, and the critical factors that will drive your business success. Those factors might include such things as your management team, operational plans or cost advantages. In essence, it is an executive summary that explains why your business is uniquely suited to succeed. Specific things you should consider while creating the strategy section of your plan include: Market Analysis In the market analysis section of your plan, you need to explore the ins and outs of your potential customers or markets. Most importantly, though, is to answer this one question: “How are you profitably going to meet the needs of your target customer?” Competitive Analysis In order to be complete, your marketplace analysis must pay attention to your competitors. This is necessary whether you are an established business looking to expand or a new business interested in taking business away from other established businesses in the area. Questions to ask yourself here, include: Financial Analysis This section of your business plan will look at the financial aspects of your business. As a new business you will need to include: Don’t forget to include plans for assets the business needs to acquire and the costs of the marketing plan the business intends to follow coming out of the gate. Existing businesses need to include cash flow statements, balance sheets, and pro-forma income statements, for example. Keep in mind, you should provide information that will assist potential lenders (banks and credit unions) and investors in approving loans or green-lighting investments in your business. Maintaining Your Business Plan You should not just write a business plan and place it in a drawer. To get the most benefit from it, it should be a dynamic evolving plan. You must adjust your plan as necessary with changing markets, new product concepts, evolving technology, need for additional financing, and goal achievements, just to name a few. An old business plan may not reflect reality any longer, so be sure to revisit your business plan periodically. Having a update checklist helps you to do just that. In the beginning, making a business plan may seem like a onerous task. It can be simpler if you break it down into its individual components. Once you have a plan in place, you will begin to see the effectiveness of how such a simple business tool can take the guesswork out of starting a business or growing one.

Creating a Business Plan

View Resource Creating a Business Plan