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2012

It’s hard to believe but somehow, Labor Day is almost upon us, and with it comes the question of whether you should be open during the holiday, and maybe more importantly, if you are, the question of how to deal with what could be some unhappy employees.Steve-Strauss--in-article-Medium.png

 

First things first: I've noticed an unfortunate trend lately in which more and more large retailers are staying open for important holidays, such as Thanksgiving, New Year’s Day and Martin Luther King Day, when, in previous years, they were closed. Clearly, their accountants crunched the numbers and came to the conclusion that whatever bad may come from being open on these holidays (including some unhappy employees), the good of increased sales outweighs it.

 

But does this thinking hold true for small businesses? After all, we work with a much smaller group of people, sometimes even members of our extended family, and we know that finding competent employees is not always easy. This makes angering or losing valuable employees because of a decision to stay open during a holiday in order to make a few more bucks may seem a bit shortsighted.

 

Click here to read more articles from small business expert Steve Strauss.

 

But let’s assume that, for whatever reason, you need to stay open this Labor Day (or Thanksgiving, or New Year’s or whatever) – then what?

 

There are a few things you can do to make this a successful undertaking.  Start with open communication. If staying open for a holiday is a new idea, begin by communicating clearly with your employees about your decision, help them to understand why it is important for the business, and then, and this is the key part, ask for volunteers to work that day.

 

Why would someone want to work on a holiday? Extra pay, of course.  Whether you have to do it or choose to do it, paying employees a little extra for working on a holiday is a smart practice.  It motivates employees and causes less stress among the rest of your team.

 

If being open for aAug 28 Pull Quote.png particular holiday (or holidays) will be an ongoing practice for your business, then this idea of open communication is not just important around the holiday, but also from the beginning of a worker’s employment. According to the site Payscale.com, it is smart to have written policies that make employees aware that working on a holiday is a possibility.

 

You can use language like, “The Company may schedule work on an observed holiday as it considers necessary. Normally, work on an observed holiday will be paid [insert your pay policy here.] Employees will be given the option of [getting a different holiday off] at another time during the year.”

 

Beyond communication, another important factor to keeping your employees happy when you are open during a holiday is letting them have a say in the matter. For example, at the beginning of every year, you can go over your schedule with the team and indicate which holidays you will be open. Find out which one certain employees would like to work, and which ones they are opposed to working (someone might be fine working New Year’s Eve for instance, and many others not).

 

Then, well before the actual holiday, break up the schedule and give people options of which shifts they would like to work. Not only does this give people a chance to plan their holidays accordingly, but having a choice takes much of the sting out of having to work when everyone else is off.

 

Finally, one last factor is vital to successfully staying open on a holiday: Gratitude. Thanking employees who agree to work that day goes a long way.

 

Do you stay open during holidays?  Share your thoughts below.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss You can read more articles from Steve Strauss by clicking here.


 


Metamorphosis_Body.jpgby Jen Hickey.

 

As an entrepreneur, your ability to speed up and slow down and master those sharp curves is what keeps your business running. But what happens when market forces call for a transformation of your business? Rather than trying to retool that old model to fit new demands, it may be time to shift gears and head up that hill if new growth opportunities present themselves. How such change is navigated will determine whether you’ll be able to make that climb or run out of steam. 

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Selling to your customer’s customers

Barbara Kantor launched Vedante Corp. after moving to Boulder, Colorado from Los Angeles. Building on her 20 years in the wholesale apparel industry, she expected to sell her fashionable “super-reflective” outdoor gear for people and their pets to the same market. And Kantor’s products proved to be a hit at her first tradeshow in September 2008. But then the bottom fell out from the economy and those retailers were afraid to commit to orders. So, to prove product viability to investors, Kantor began selling directly to consumers through Amazon as a third-party seller. Soon, her products were outselling all the other competitive brands, so Amazon began buying direct; her products have been in the top 10 of their category on Amazon ever since.

 

“Even though I didn’t know anything about e-commerce, I learned quickly by seeing what works and eliminating what’s not working,” notes Kantor. “There’s been a huge flux in the industry. It used to be taboo to compete with retailers. Now you see wholesale manufacturers setting up their own e-commerce sites. The old retail rule book doesn’t work anymore.”

 

While Amazon remains Vedante’s biggest customer, Kantor also sells directly to other e-commerce sites and retailers in select U.S. cities. She has also outsourced shipping/packaging to a fulfillment center just outside of a large, centrally located transportation hub—the Denver International Airport. “As I don’t have a lot of overhead, I can ramp up and down very fast depending on what’s happening in the market,” Kantor points out. “While it was not part of the original business plan, the e-business model has helped us grow.”

 

Change can be a small business’s best friend

“Whatever a business starts out as, in terms of size, scope, focus, or control, the competencies needed from leadership, employees, and the organization shift,” notes Karl A. Schoemer, president and founder of VisionQuest Solutions and author of Change Is Your Competitive Advantage. “Change is not singular, but a constant process that will need to be repeated over and over again, depending on what the marketplace demands.” Businesses that can foster a “change adaptive culture’” will be able to identify market and consumer trends earlier and pivot to meet those demands more quickly and effectively. “How well a business can get their people engaged in the change process becomes part of their competitive advantage,” says Schoemer.


Unexpected problems can be golden opportunities

Steli Efti and his partners founded SwipeGood in Mountain View, California in late 2010. Their product, which allowed users to round up credit and debt card purchases to the nearest whole dollar and donate the change to charity, achieved some initial growth by having nonprofits advertise SwipeGood’s service in their marketing emails. As more and larger charities partnered with them, however, those new opportunities did not translate into growth. So, rather than directly targeting consumers, they decided to shift to an enterprise approach and build out a a corporate-giving program. To do that, they needed a sales team and different technological support to convince businesses to buy their solution. But Efti and were frustrated with how time-consuming the process was. That’s when they realized there was a much larger problem that needed solving..

 

While still running SwipeGood, they began devoting one day a week to exploring this perceived hole in the marketplace  “We thought even if the idea didn’t pan out, it would be rejuvenating to explore this new opportunity,” explains Efti. “Once we saw how much momentum and traction it had, we gradually devoted more time to it.” After exhausting all options for growing SwipeGood, they decided to completely to abandon it and devote all their resources to a new venture, Elastic, Inc., which offers startups sales communications tools and a scalable sales force, with the entire platform managed via the cloud. “Often great new ideas fail because they weren’t marketed successfully,” Efti points out. “We sought want to level the playing field for startups, which don’t have the time or money to go out and market and sell their product.”

 

To avoid confusion in the market, the company didn’t officially rebrand itself until the end of June, even  though its internal emphasis had been focused on the Elastic concept for the last eight months “We wanted to be completely sure this idea would work long term before we made it public,” Efti notes. “We didn’t want to cause confusion in the market.” Elastic has grown from its three original founders to 15 employees and has another 20 to 30 freelancers who work on various sales campaigns. Elastic has helped close over 300 deals for 13 different startups, generating millions in sales. And this has also made their investors happy. “While the idea is important, they invested in our team first,” notes Efti.

 

Failure is merely an invitation to a different kind of success

Often roadblocks can lead entrepreneurs to solutions that create better opportunities for growth than their original idea. In late 2011, Amelia Dunne and her partner set out to create a real-time, geo-based mobile app for small businesses to promote deals to local users. However, they found it difficult to find the right people and get objective feedback on the viability of their product.

 

“Most of the people we talked to seemed to like the idea,” notes Dunne. “But we couldn’t get 10 businesses to say yes to the product.” And when they talked to other startups in the Bay Area, they found they were all going through the same time-consuming process of posting ads on Craigslist or meeting potential customers through their networks. Dunne and her partner realized a better tool was needed for idea validation and in February  they started working on the new concept using the code from their original app.

 

“We were going to build it just to move forward with our original idea,” explains Dunne. “But we started getting calls from startup friends wanting to use it before it was even finished. It was clear this was a much larger, more immediate problem that needed solving.” In May, Dunne and her partner publicly launched AskYourUsers.com, a marketplace where businesses can find and hire anonymous LinkedIn professionals outside their own networks for online feedback and consulting tasks. Within a month, thousands of micro-consultants had already signed up, and more are joining every day.

 

Those small businesses that can ‘pivot’ quickly to changes big and small in their industry and larger economy will not only survive but thrive. “Businesses should be constantly looking at what their customers are asking of them and what they need to do to deliver,” advises Schoemer. “Change has its own momentum. You can’t stop it, but you can steer the process in a more productive direction.”

It is no easy feat running two enterprises at once, whether it’s a job and a home-based business or a business and a family.

 

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Yes, we live in the age of the multitasker, where gadgets like smartphones and tablets make such endeavors easier- but easier is not the same as easy. Taking an idea, executing it, making a profit and then keeping it going requires a lot of mental, emotional, physical and financial bandwidth. It demands total commitment, dedication and attention.

 

If you can't give your small business the attention it deserves for whatever reason, it may not be fatal, but it is not good, either. The sooner you can give it your full attention, the better- because that is how you succeed.

 

But there is another important caveat: the timing has to be right. Some entrepreneurs are lucky enough to have the time and resources to move forward at full speed. But everyone else - the part-timer, the weekend warrior, the bootstrap entrepreneur - asks the same question that you are asking: When can I make this my full-time occupation?

Click here to read more articles from small business expert Steve Strauss.

 

Here are the top five signs that you can quit your day job, David Letterman style:

 

5. You are headed in the right direction: Starting a business at home, at night or on weekends requires not only that you keep up with your regular job, along with your home or family commitments, but also that you dedicate most of your remaining time to the business.

 

As such, it will take a while to get off the ground, gain altitude and fly in the right direction. But once you get past that startup phase, once you have a tailwind and are headed in the right direction, you know you are on the verge of being able to let go of your day job.

 

4. You know what you are doing: A corollary to number 5 is that you are past the novice stage and actually know what the heck you are doing.

 

Sure, you can fly earlier, but if you don't really know what does and does not work, you will be more likely to fall than to soar.

 

3. You have reliable custoPull Quote August 21.pngmers: Notice that I did not just say that you have customers, but that you have reliable customers. They are not the same thing. Customers come and go. They stay, buy and fly.

 

Reliable customers, however, are different. They found you and like you and like working with you or shopping with you. Reliable customers give you both the confidence and the financial wherewithal to do without the safety of the regular paycheck, benefits and health care.

 

2. You make enough money to (almost) live on: Again, notice "almost." If your part-time business gives you enough income that you believe you can do even better if you go full time, you are probably right.

 

But this should also mean that you have saved some money. Quitting will hit your wallet, as will ramping up, as will buying your own health insurance and more. Until you quit, the money you make in your extra endeavor should also provide a nest egg for the full-time version.

 

And the number 1 sign you are ready to quit your day job . . .

 

1. You can't NOT do it: When you get to the point that the business is going so well, when opportunities are presenting themselves, when it’s fun and profitable that you miss it and think about it when you are not doing it, when not doing it more costs you money, then you are ready to fly like the wind, my friend.

 

Have you encountered any signs that told you to move ahead with your business? Share them with us below.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strausshttp://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/contentYou can read more articles from Steve Strauss by clicking here.

Neighborhoods_Body.jpgby Erin McDermott.

 

Ross Johnson can see the competition—they’re sitting just across the room.

 

His online-marketing and design-services company, 3.7 Designs, shares space at his Ann Arbor, Michigan office with three other firms that could be considered direct rivals. But more often than not, he says they actually end up helping each other rather than stepping on toes.

 

“Everybody has a slightly different focus, and I think that’s why it works,” Johnson says. A few years ago, he and a colleague leased a fairly large downtown office and, to offset costs, started subletting to other people in their business network. Over the years, the room has come to include some folks who do the exact same line of work, just with a different approach—including one that specializes in Web branding and another that concentrates on print work.

 

“Each firm has their specialty and ideal project or client type,” Johnson says. “When projects come along that require more capacity or capabilities than a single firm has on hand, we can employ the other firms for relief. And vice versa.”

 

His view: A rising tide lifts all ships.

 

Neighborhoods_PQ.jpgJohnson’s company is in what’s known these days as a business cluster—an area where like-minded companies are in close geographic proximity (or very close in Johnson’s case). Ever strolled a city’s Restaurant Row or driven down a highway corridor chock full of fast-food joints or car dealerships? It’s the same concept; only now smaller enterprises in different industries are looking to benefit from closer access to complementary or competing services. The hope is the destination becomes greater than the sum of its parts.

 

It’s an idea that’s been around long before Silicon Valley, Hollywood, North Carolina’s Research Triangle, and Madison Avenue exploited the same proposition on a grander scale. For hundreds of years, travelers have flocked to towns like Mexico’s Taxco for silver or Santa Clara del Cobre for copper, Belgium’s Bruges for fine linen, or Venice, Italy, for glassware—places where hundreds of merchants have historically banded together, drawn by natural resources or other factors, and ended up luring customers as well.

 

“You can go and have your pick,” says Shel Horowitz, a marketing consultant and author of Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet. “It’s not like the market is diluted [for the merchants], it just becomes big enough to support all of them.”

 

Lately, even the U.S. government has gotten into the act. Since 2010, the Small Business Administration and other agencies have been pushing what they call Regional Industry Clusters, including the NorTech technology initiative in northeast Ohio, Smart Grid developers in Illinois, and energy-efficiency startups at Philadelphia’s decommissioned Naval Shipyard. A 2008 Brookings Institute study suggested a federal approach to encouraging industry clusters would benefit regional and national competitiveness and boost the job market and overall economy.

 

Small businesses should try to find organizations in your region that can connect you with other like-minded businesses in your industry,” says Rebecca O. Bagley, president and CEO of NorTech. “In Northeast Ohio, there many small businesses in our advanced energy and flexible electronics clusters that we have connected with larger companies and universities to develop strategic partnerships and collaborations. These relationships have led to funding, research and revenue opportunities that benefit both large and small companies, help to grow the clusters, and also create jobs.”

 

Across town from that Philadelphia Navy Shipyard venture, Frank G. Schaffer shapes and sells gems along one of the city’s original clusters—Jewelers’ Row—the nation’s oldest diamond district, which dates back to before the Civil War. He points to the city’s other historic business clusters—Antique Row, Plastic Row, Fabric Row—as examples of the legacy of merchants forming geographic bastions—for their peers and their customers.

 

In Schaffer’s shop, he works with tools that he says date back generations and have been in constant use for just as long. He acquired his diamond-cutting equipment from a neighborhood jeweler, who in his 90s and nearing retirement passed it along to him. Schaffer himself, now in his late 40s, started out in the business when he was 11 years old, learning the craft from his father. “I’m trying to continue a tradition that goes back to the 1840s,” he says.

 

And although he does a majority of his business at international gem trade shows and had considered a different location, the draw of the cluster has kept Schaffer here—even if he’s unsure about all the advantages of it. “The Street,” as the neighborhood is known among vendors, is struggling right now, hurt by soaring gold prices, the economic meltdown, and the subsequent drop-off in people buying jewelry. “I thought, here we are carrying on the tradition. If you’re going to sell jewelry in Philadelphia, the most logical place to be is on Jewelers’ Row—because everybody thinks about it first,” he says.

 

Still, the neighborhood remains a draw for shoppers—and businesses. In just the last two months, two manufacturers have moved onto Jewelers’ Row, which is traditionally a retailers’ stronghold, and started selling directly to the public. “You have people selling the same type of material and what’s happening on the Internet is coming to the retail sector, where the middlemen can’t survive.” Schaffer, though, is actually grateful for the new manufacturers locating at street-level: “It’s breathing new life into this neighborhood.” And maybe that’s the secret to getting over fears of new competition.

 

“Simply, make your wares better in some way than your competitors,” says marketing consultant Horowitz, “Once you get people to the neighborhood, many of them will go from shop to shop checking out the wares. Then it's up to you to provide a better buyer experience: higher quality, deeper education about the product, more selection, better prices, or friendlier service.”

Without a doubt, this has been an extraordinarily hot summer. The only question seems to be whether this is the hottest summer on record, and in fact, it just might bSteve-Strauss--in-article-Medium.pnge. According to CNBC, “In June, 164 high-temperature records were tied or broken in the U.S., while 262 daily high records for the Fourth of July were tied or broken.”

 

Just reading that sentence makes me want to go get some iced tea, which, if you think about it, is not a bad idea. After all, what else can you do to cool down? Well, it turns out that when Mother Nature cranks up the heat, there are more than a few things you can actually do to help yourself, your employees and even your business survive the summer heat:

 

1. Implement flextime: Of course there are businesses that have to be open from 9 to 5 (i.e. retail establishments), but there are probably just as many that can close during the hottest part of the day (i.e. manufacturers). And, while doing so makes sense, saves energy and maybe even saves the sanity of some of your staff, plenty of businesses fear that they cannot just shut down from noon to 3. What stops them from doing so? History, tradition and maybe fear, but those factors shouldn't actually prevent them from letting logic triumph.

 

Click here to read more articles from small business expert Steve Strauss.

 

By the same token, even if you can’t close the office during the day, it still may be smart to stagger schedules and give different people time off at different times of the day, so that no one person is stuck working in such stupefying heat all day long.

 

2. Cool it down: I have a pal whose boss refuses to buy air conditioners, despite the fact that it has been over 100 degrees there for a week. The boss keeps telling his unhappy employees that the heat wave is an “anomaly.” And of course, it is . . . until it’s not.

 

Aside from the obvious ways, here are some additional ways to cool down the office:

 

  • Use thermal-backed curtains: Thermal curtains regulate a room’s temperature by blocking out the heat in the summer and keeping it in during the winter.
  • Close the shades: Keeping the shades closed during the hottest periods of the day can reduce temperatures by up to 10 percent.
  • Get a swamp cooler: In these devices, warm air is sucked into the unit and pulled through a water system, which significantly cools the air before blowing it back out. Swamp coolers, also known as evaporative air coolers, cost less to install and run than air conditioners.
  • Reverse the fans: Don’t forget that you can always put fans in the window facing outward to suck the hot air out.
  • Shut it down: Turn lights off or down and turn off computers and other electronics that are not being used, as they generate a substantial amount of heat.

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3. Adjust the dress code: While just about everyone dresses more casually these days, work is still work. But with temperatures as high as they are this summer, it might behoove you to allow folks to dress “cooler,” as it were.

 

4. Be prepared: If you or your staff work outdoors, it is vital that everyone be equipped with the proper equipment: white or reflective clothing, plenty of water, hats, etc.

 

5. When summer gives you lemons, make lemonade (or ice cream): It is summer after all, so what about riding the heat wave instead of fighting it? By creating some seasonal-appropriate events, you give people a reason to enjoy work more. Why not buy an inexpensive ice cream maker and make ice cream, set up a lemonade stand, or take everyone for a drift in inner tubes down the river?

 

After all, before you know it, you will be reading an article about how to deal with all the snow. Do you have additional thoughts on how to beat the heat?  Share your thoughts with the SBOC community below.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss


You can read more articles from Steve Strauss by clicking here.

MidYearReview_Body.jpgby Jen Hickey.

 

Like that biannual visit to the dentist, small business owners should be checking the health of their operations at least twice a year to scrape away the plaque and make changes to prevent future buildup. By mid-year, you can gauge whether financial projections and other strategic goals made at the beginning of the year have been met and which need to be re-assessed due to unforeseen operational or industry changes. While a business’s goals vary depending on its stage of growth and the market it serves, every small business should be looking at its financials, staff, and marketing, as well as competition and market trends, and adjusting targets based on what’s working and what’s not. Your business’ ability to adapt to such changes will help ensure its financial health for the next six months and beyond.

 

MidYearReview_PQ.jpgYou can’t grow what you don’t measure

Gayle Lantz, founder and president of Birmingham, Alabama-based WorkMatters and author of Take the Bull by the Horns: A Busy Leaders Guide to Growing Your Business, encourages her clients to look at “internal” factors, such as financial metrics and team performance, and “external factors” like how they’re serving the needs of their market and community. “Every business should be assessing what’s changed, where are the opportunities, and what strengths can be leveraged to take advantage of those opportunities,” notes Lantz.  “Rather than trying to perfect something that’s not working, build upon those areas where you’ve had success.”

 

In her work as a leadership consultant over the last 13 years, Lantz has found businesses often don’t have clear idea of where they’re going. “Progress should be measured in the context of the overall vision for the business,” she says. “Without a clear understanding of that vision, it’s impossible to know what kinds of short-term goals should be set to meet those larger goals.” Small business owners can often lose sight of the big picture because they’re so wrapped up in day-to-day operations or fail to clarify their vision to employees, causing confusion about responsibilities. Knowing which direction to take your business over the long term will help you prioritize goals for the next six months.

 

“We encourage our clients to find the critical metrics that relate to their particular focus,” notes Alex Glassey, managing partner of GlasseyStrategy, a business advisory firm in Victoria, British Columbia, Canada, and developer of the Stratpad, an iPad app that helps small to mid-sized businesses identify and track key metrics. And, Glassey notes those particular metrics will vary by stage of growth. “A startup should be looking at cost of customer acquisition and return on investment (ROI), as well as experimenting with marketing,” says Glassey. “Whereas the focus of an expanding company would be on gross margins, ROI, and revenue per staff.” No matter the age of your business, you can’t escape taxes. So it’s also important to meet with your accountant at mid-year to review last year’s returns, if you have them, and budget for next year’s.

 

An extra set of eyes always helps

Mandy Arnold, who launched Gavin Advertising, based in York, Pennsylvania, 10 months ago, is focused on when money is coming in and going out and making sure she has enough of a cash flow cushion to cover payroll, overhead, and taxes. Part of this strategy involves regularly meeting with her bookkeeper, who handles the day-to-day financials, to measure projections against results. “We’ve managed our business from day one to control overhead,” says Arnold. “As a service company, our biggest investments are in technology and people.” Arnold made sure she had business in the pipeline before she brought in staff. Now, she has six employees.

 

Mid-year is also a good time to look at vendor agreements to see if better terms can be negotiated. “Sometimes it’s worth working with one vendor over another depending on the terms of payment,” says Arnold. “If services are equal, we may choose the vendor with more flexible terms who will pay us in a more timely manner.” To help assess these opportunities, Arnold keeps on retainer a lawyer, who advises her on employee and vendor agreements and client contracts.

 

Don’t forget to look at the intangibles

While it’s important to look at financials over the last six months to see where your business may have fallen short, they’re not necessarily a predictor of future results. “By looking at leading indicators, like customer complaints, a business can take steps to prevent them from turning into returns and poor sales numbers a few months down the line,” says Glassey.

 

Halfway through the year is also a good time to assess how your staff has performed against those strategic goals. “We’re always asking ourselves, as well as our clients, whether the right people are in place to take us in the right direction,” notes Kathy Elster, co-owner of K Squared Enterprises who also co-wrote the book Working with You is Killing Me. When it first ventured into social media, K Squared, a New York City-based executive coaching and business strategy firm, hired an outside consultant to handle the work, but soon realized they needed someone full time to meet growing demand. However, Elster understands the learning curve and cost constraints of bringing in new employees and encourages clients to train the appropriate existing staff in these new technologies. “If someone in-house is a good fit, it’s better to get them the education and support they need to take on these new responsibilities, as they already understand the culture,” she adds.

 

Is your message aligned with your goals?

While more difficult to measure, marketing campaigns should also be re-evaluated every six months. “It’s very important to look at where the industry is going because change is so rapid these days,” Elster points out. “There’s always a more agile business coming up behind you.” Esther believes it’s critical for any small business to stay cutting edge to compete in this economy. “Whether a new or mature business, those clients that got into social media early on as part of their online strategy are doing really well.”

 

Don’t wait to make a change

While it’s important to take a closer look at each area of your business every six months, you should be weighing performance against results more frequently. “Businesses usually find they’ve missed opportunities or warning signals if looking at financials and trends for the first time in six months,” warns Glassey. “We encourage clients to monitor those key metrics weekly, if possible, but at least monthly.” Just as flossing the day before that visit to the dentist will not make up for the last 179 days you didn’t, failing to track the ongoing health of your business will make that six-month review much more painful.

If there is one thing that seems to be a constant challenge for entrepreneurs, new and old alike, it is finding the money to fund their dream. There are various ways to do that of course, but friends and family, savings and bank loans tend to be the most popular methods.

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Let’s talk about that last option for a moment. When it comes to getting a loan, I have good news for you:

 

Banks are interested in lending money; after all, that is their business.

 

Given that, it is your job to make it as easy as possible for a bank to say yes to you. You can do that by showing them that investing in your dream is a responsible, low-risk, smart decision.

 

How? Here are four ways to boost your chances of getting that loan:

 

Click here to read more articles from small business expert Steve Strauss.

 

 

1. Work on your fundamentals: It is your responsibility to show potential lenders that making a loan to your business is a sound financial decision. The first thing banks consider is your ability to repay the loan, so your business must show a profit.

 

You can boost your financial state by:

  • Getting paid on time, getting your accounts receivables up to date and  not letting accounts fall past due
  • Running a lean ship, cutting overhead where possible and keeping an eye on labor costs
  • Increasing your cash flow. Easier said than done you say? Maybe, but it is also true cash flow is king. There are the obvious examples, including raising prices and  lowering overhead, but there are more subtle ways to improve cash flow:
    •      Ask suppliers for trade discounts or longer terms for quick payments or bulk orders
    •      Consider a cash reward credit card for purchasing office supplies and other daily expenses
    •      Minimize interest expense – don’t use high rate cards to support your business and pay down balances as quickly as possible
    •      Ask you banker about different options for payroll, merchant services, etc.

 

2. Have an updated business plan: Lenders want to see that you know where your business is and where it is headed. They want to know why your business is special. By serving as a blueprint for your company, your business plan tells them all that.

 

Additionally, a business plan is your strategy for how you will get from Point A to Point B.

 

Consider: Would a pilot ever fly from New York to Houston without a flight plan? No. A flight plan explains which direction to go, how much gas is needed, important landmarks to look for on the way, cautions to be aware of and so on.

 

Any lender will want to know that you have a vision for your company and a plan to bring it to fruition.

 

3. Have all of your paperwork handy: When applying for a business loan, aside from having a business plan, you will need to share a host of other business information, so you would be wise to have all your documents prepared before applying for a loan:

 

  • Financial statements show that you have your financial house in order.  Example documents include tax returns, internally prepared financial statements, CPS-prepared statements, personal financial statements, accounts receivable agings and Business Debt Schedule
  • A list of applicable collateral
  • Credit and financial information for the principals of the business

 

Again, your job is to show any lender that lending to you is a low-risk proposition and you do that by being prepared and professional. Speaking of which...

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4. Be prepared: Know your financials cold. Be able to explain why you need the amount of money you are requesting, how you will use it, how you plan on paying it back and by when. By the same token, it should be clear that submitting pie-in-the-sky financial projections is a mistake.  A bank wants to know that you know what you are doing. Offering puffed-up financials looks amateurish.  If you need help, contact your CPA or tax preparer.

 

Similarly, don’t cover-up the risk. You need to be willing to share not only the good news, but also the bad and whatever plans you have for dealing with potential risks.

 

Finally, don’t forget that getting a loan is not just a numbers game; there is a significant human element involved. So it would behoove you to cultivate a relationship with a small business loan officer before ever applying for that loan.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss You can read more articles from Steve Strauss by clicking here.

SabotageSuccess_Body.jpgBy Heather Chaet.

Are you sabotaging your success? It’s a question reminiscent of all those articles you see in the grocery store checkout aisle outlining the demise of a romantic relationship or swimsuit season diet. But forget the long-lost ex or what the bathroom scale says. Instead, focus on those net profits and that marketing plan. Are you sabotaging your business success?

Of course, you would never purposely do things to hurt your bottom line or derail your company’s health, but there are decisions owners make every day that negatively impact their businesses. Some are obvious, others less so. Take a look, be honest, and see how you may be undermining your business venture without even knowing it.

SabotageSuccess_PQ.jpgDoing it all yourself

Spending each waking moment involved with every single aspect of your business may seem like a necessity early on, but that devotion can be a liability in the long term. “The successful entrepreneurs I’ve talked to all say one thing: When you need help, ask for it. It will really save you time, money, and effort,” reveals Susan Urquhart-Brown, small business coach and author of The Accidental Entrepreneur: 50 Things I Wish Someone Had Told Me About Starting a Business, via a radio interview with Roger Wood. Tasks that do not need your specific attention—especially those that you may not be an “expert” on—should be delegated (i.e. to your IT guru or that organizational-ninja assistant). This frees your time and energy to tackle management issues that require your leadership, and builds loyalty among those employees given the ability to thrive in their respective jobs.

 

Ignoring the books

You love creating your product and interacting with customers, but your business is just that: a business. As the owner, you are (probably) the chief financial officer. You need to know the numbers. Period. From balancing budgets to bill paying, spot-on bookkeeping is essential for your future. If you aren’t growing as a company, chances are, looking at the books will tell you where the problem is. "The numbers are literally where the rubber meets the road. If your data isn't accurate, nothing will be. Taking the time for a proper accounting of your books makes your business more efficient and profitable over time," says Jonathan Hoenig, an investment manager and columnist at Smartmoney.com. If bookkeeping isn’t your strong suit, learn. Take courses, watch tutorials, invest time to become savvy about accounting basics—and hire someone who is more knowledgeable to go over your numbers quarterly. It’s money well spent to keep your business on fiscal track.

 

Maintaining an outdated website

Remember, Google is now a verb. As in: “Customers will Google you.” What will they find? According to an April 2012 SMB DigitalScape study, six out of 10 small and medium-sized business websites lack a phone number on their contact home page, while almost 75 percent of small business websites don’t include an email address to contact the company. "No communication is more important to the health of your enterprise than your website. Maintain a usable and accurate website—or risk turning off new opportunities before you ever even know they exist," emphasizes Hoenig. Every week, review your website as if you are a customer. Is the contact information current? Are those product details and prices correct? Check out the websites of your competitors, and see how your site compares. Create a web presence that is relevant and top-notch, like your business.

 

Avoiding social media

Yes, Google is a verb. So is Facebook. And tweeting goes way beyond bird talk. Today’s most successful businesses of any size engage customers in ways other than offering 10-percent discount coupons in the local paper or free shipping. You must learn to dance the social media mambo. Overwhelmed by Facebook, Twitter, Pinterest, and all of the rest? On her blog, Melinda Emerson, the leading small business expert known as SmallBizLady and contributing social media and small businesses writer for The New York Times, offers this wisdom: “Start with one social media platform…you do not need to do everything. Figure out where your best target customers are hanging out online and make sure you are a part of the conversation.”

Keeping ineffective employees

Not even Donald Trump, the man synonymous with the phrase “You’re fired!”, enjoys telling folks they need to find a new job. Letting someone go is often a complex decision, and, in the small business environment, where one missing contributor drastically impacts the daily workload of other team members, it makes that hard choice an easy situation to avoid. “Employees are either your biggest asset or largest liability,” offers Hoenig. Remember, employees who have consistently poor morale, lack of professionalism, or a dubious work ethic not only affect quality control and customer retention, they can negatively influence the productivity of good employees.

 

Getting too comfortable with the status quo

You got into the small business world for a reason. You had a passion, you saw an opportunity, and you took it. You strive for a consistent and stable business, but flexibility is key. "Maintain the flexibility to adapt to new markets and opportunities as they arise,” Hoenig points out. “This is one example of where small businesses have a much greater advantage over their larger counterparts: the ability to move quickly and change as the game does." Failing to stay up on current legislation issues, new technology, or the latest marketing trends hurts your bottom line and negates one of your main business assets: your size.

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