Monthly Archives: June 2016

The ABCs of Crowdfunding

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Fundraising today has become revolutionized with the increased popularity of crowdfunding.  Corporations, small businesses and individuals worldwide are finding access to much-needed funds thanks to organizations like Kickstarter, Indiegogo, GoFundMe and more.

What is crowdfunding?

Crowdfunding focuses on appealing to the masses for a small donation.  These donations may be $10, $40, or $100.  Depending on the person planning a campaign, a reward may be offered in exchange for a donation.  Either way funds are raised and products are launched.  For start-up businesses this works well since they now have customers who are invested in the business.

How it works

For crowdfunding to work, a clear goal and deadline are essential.  From here the creator of the crowdfunding project advertises the campaign ensuring a highly active social media presence.  Once the deadline is met funds are transferred into the creator’s account.  Once the creator receives the funds they issue out the reward where applicable.

Crowdfunding and social media

Successful crowdfunding is linked to social media presence.  The more of an online presence you have, the higher your chances are of having a successful campaign.  That being said, crowdfunding can be successful for people with a smaller social media presence provided they have a network of family and friends willing to donate and spread the word.

Tips to a successful crowdfunding campaign

Besides having a project, deadline, and time frame, a successful campaign needs to have a few more essentials behind it. To help ensure a successful campaign follow these five tips.

1 Have a small network of friends and family willing to participate in the campaign.  These friends and family can donate and share your campaign on their social media networks.  The more people who know about your campaign the more coverage it receives.

2 When it comes to rewards be creative and imaginative.  Think outside the box.  What will draw people to your campaign?  A spa voucher or a holiday in the Alps are a couple of suggestions. Vary your rewards according to the different donation sizes.

3 Pitch your idea well.  How you pitch your idea is key to successful marketing. Include in this pitch how the donations are going to grow a business or fund a personal campaign. A video with a clear call to action will give your pitch that added professionalism.

4 Show that you are personally invested in your campaign.

5 For the majority of your campaign, live online.  A high social media presence is essential

What you should know about hiring the new generation of workers

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The new generation of workers, also known as Millennials was born between 1982-1996.  Thanks to technology and the mentality that “everyone deserves a trophy” these workers are complex with a desire to be empowered and included in decision making.  The key to working with the new generation of workers is to embrace authenticity.

Debunking Myths

Viewing the new generation of workers as entitled, selfish, or arrogant may seem well-founded. By debunking a couple myths, companies should be better able to understand how millennials view the world.

Myth #1 No respect for authority

The new generation of workers contains a high level of respect and loyalty which needs to be earned. As a result, companies with millennials need to work on being the company that millennials can respect and give their loyalty to.  If this is done, companies will have on their staff some of their fiercest employees to date.

Myth #2 No drive or ambition

Millennials live in the present.  This does not mean that they do not plan for the future.  Instead they focus on what needs to be accomplished in the here and now.  This makes for time efficiency since millennials will focus on completing their tasks asap.  By doing so they have more time to focus on other tasks or invest in their families and social lives.

Companies need to break down their long-term goals into smaller goals.  These smaller goals are revealed to the new generation of workers as stepping stones.  This goes a long way in keeping millennials on a company’s workforce while simultaneously achieving long-term company goals.

Five keys to successfully manage millennials

Since the new generation of millennials often clashes with their superiors, the following five keys will go a long way in assisting companies in creating a thriving work environment for their young employees.

Key #1 Respect and authenticity

Adapting your company style to fit with each employee will go a long way to reinforce your value of their authenticity.  The more respected and valued these young employees feel the more loyal they become towards the company they work for.

Key #2 Be flexible

These young employees are familiar with making their own decisions, being asked their opinion and being free to pursue what appeals to them. Companies need to mimic this environment where possible within their company’s boundaries.

Key #3 Share ownership

Provide a higher level of responsibility where the employee can exercise their expertise, independence, and decision-making.  Doing so channels “entitlement” towards company loyalty and respect for authority.

Key #4 Be Open-minded

The new generation of employees is highly innovative. As a company be open to millennial’s ideas and where possible give them the space to pursue those ideas. In the future, you may be thankful you took the risk.

Key #5 Be affirming

Positive incentives and rewards encourage the new generation of workers that their efforts and contributions are necessary to help their company succeed.

New Overtime rules effect on small business

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The new overtime rules for the United States holds the premise that employees who work over 40-hours a week and earn a weekly salary less than $913 will be eligible for overtime pay.  This is a significant increase from the current weekly salary of $455.

Given that overtime laws have not been reassessed since the 1970s and that many businesses have seen increased profit since the return of the economy from 2009, US government decided it was time to address labor overtime laws.

President Barack Obama signed the final rule May 18,2016 which will go into effect December 2016.  In the meantime, small businesses have the remainder of 2016 to carefully strategize their company budgets in order to adjust to these new overtime rules.  For small businesses the implication is significantly larger than their larger counterparts who are able to absorb these new costs.

How are small businesses affected?

How much small businesses will be affected depends on multiple factors: the amount of consistent overtime, the amount of employees content with working overtime, money as a motivating factor for employees, and so on.

Since monthly expenses will increase for small businesses, their workforce may reduce to match available income.  Startup businesses may take longer to get off the ground due to not having the capital outlay to pay for necessary overtime.

Another consequence of these new overtime rules affects those employees seeking to gain more experience, develop their skills or prove themselves deserving of a promotion.

Employees will also have less flexibility in their hours because any time off will go unpaid.  Investing in employees via training and time off to study may reduce in order to pay for overtime.

Overall the effects of these rules on small business are quite significant.  As with any problem, solutions are always around the corner.

Potential solutions

The new overtime rules may not affect all small businesses, that being said, it is wise to understand law changes and how to cater for them when needed. Here are a few solutions, small businesses may want to look at:

1 Invest in automated time-tracking system.  With today’s technological advances, purchasing or developing a system that will help employees keep track of their time will go a long way in identifying those who work overtime.  Knowing the exact hours worked by employees will help a small business pay overtime where it is due.

2 Consider outsourcing work to contractors.  Contractors do not fall under these labor laws instead they need to adhere to contract law.  Hiring a contractor or two to assist with workload will help avoid paying overtime while keeping small businesses within their budget.

3 Reduce employee salaries from a set amount to an hourly rate.

Office design to increase productivity

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Regardless of where you work, productivity is essential to excellent work.  Day after day, employees or self-employed business people find themselves in an office. Unbeknown to most people is the reality that office design can either increase or decrease productivity.

For office design to increase productivity a few minor adjustments can be made to revamp and energise your office space.

Lighting

The most important feature of any office is its lighting.  Poor lighting can cause irritability, headaches, fatigue, etc. The more natural light an office receives, the more relaxed and productive employees are.  Where possible allow natural light to permeate office space.  Alternatively, invest in natural light bulbs.

Colour

A good splash of colour brightens up any room.  Colour preferences vary per employee as does the saturation of the colour.  Either way, increasing colour in office space will improve productivity.

Some suggestions to add colour to an office include pictures, mugs, pens, or other preferred items with the chosen colour.

Nature

Bringing nature into office space by placing a pot plant in an office or on a desk helps with productivity and attention.  Plants or flowers also release oxygen which clears the air of unwanted bacteria.  A breath of fresh fragrant air is a must to increasing productivity.

Declutter

A clean office space and desk go a long way to increasing productivity.  Everything needs to have its own place.  Create a filing system that is easy to follow and efficient.

Ergonomics

Since most employees and business people find themselves sitting in front of a computer for most of the day, ergonomics is vital for productivity. The computer monitor needs to be comfortable to the eyes and neck.  The chair needs to provide support to the back while the employee’s feet are flat on the floor.  There should be ample space for the employee’s body to move comfortably while working at a desk or on a computer.

Move around

Sitting in one location without taking a break is not conducive to employee health or productivity.  Office space should provide alternative areas for employees to work. A comfortable chair in an office will help an employee sit somewhere else while pondering a specific topic or scenario.

A change of scenery, body position or a break rests the mind which continues to subconsciously mull over the day’s situations or deadlines.

Balance privacy and spontaneity

The temptation to say goodbye to open plan office and hello to booths may be quite high given that most business people or employees desire their conversations to be private.  Don’t get rid of all the openness just yet.  Rather create a culture where people can engage in private Skype, conference or phone calls.

In the same breath, provide employees with nooks or small lounges near the coffee bar or other similar conversation starter points.  This will encourage employees to engage in spontaneous brainstorming and conversation while providing a place to sit comfortably with a cup of steaming coffee.

How to entertain clients successfully

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Entertaining clients forms a crucial part of creating a lasting first impression.  A client’s time with you needs to be memorable.  When your meeting concludes, they should leave impressed and prepared to do business with you.

Entertaining clients successfully may take considerable effort and time; however, it is well worth it to secure business and establish your company as reputable.

Preparation is king

Preparation is your ground work.  Everything rides on how well you know your client and how prepared you are for potential mishaps or scenarios.

Find out what your client likes and dislikes; if they have any allergies; their preferred dining experience or other outings.  The more you know about your client, the more attention you can pay to the finer details of your meeting.

Plan for potential problems.  Does your client need to be collected from the airport?  Think about what you need to do to ensure that your client arrives at your rendezvous on time without any mishaps.  Where necessary provide a chauffeur, GPS coordinates, etc.

Book your reservation in advance.  Make sure that you specify the location of the table you want according to your client’s preferences and meeting purposes.

Familiarity ensures smoothness

When it comes to entertaining clients successfully, your networking skills and circles come into play.  This is when you use your contacts with a concierge, top chef, maître ’de, top receptionist or manager. These contacts will be able to pull the necessary strings to ensure your meeting is ideal.

Have a selection of reputable restaurants at your disposal.  The restaurants you frequently take clients too will have a higher rapport with you thus ensuring quality service.

When you book your reservation, be sure to deal directly with the manager or maitre’ de to assist you in both your booking and other requirements.  The manager will assist you in placing a specific meal order, ensure food allergies are taken into consideration when preparing the order and so on.

While you book your reservation and plan the meeting with the manager, request your preferred server.  These are the people you know will give you excellent service.  Be sure to tip your server generously for their special attention to you and your client.

Attention to detail

As you prepare to successfully entertain your client, attention to detail is imperative. Request a personal visit from the chef at a certain point in your business meeting – a pleasant surprise for your client. Ensure that your table has hors d’eourves ready upon your arrival.  Paying the bill in advance is another finishing touch since it permits you and your client to leave the restaurant or event at your preference.

Marry food and entertainment

What is better than food and entertainment?  Up your entertainment a notch or two by combining your dining with an orchestra, a visit to the opera, or a more adventurous excursion.  Whatever your decision, ensure your client is well informed of any dress codes or necessary items.

 

Handling Small Business Stress

Handling Small Business Stress

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There are only two ways to make a living in this world – working for someone else or working for yourself.

If you’re an employee, unless something serious goes wrong, you have a reasonable expectation of stability, certainty and knowledge of where your next paycheck is coming from. Depending on your employer, you may have good benefits and potential to advance in your career. The risk-reward ratio of a salaried job is low to medium and suits the majority of people just fine. But, as the saying goes, nobody ever got rich working for a salary.

As a self-employed person or small-business owner, however, you are entirely responsible for your own income – and, if you have employees, for their income, too. There’s always the chance that you will be wildly successful, but that possibility is tempered by the very real risk of failure, sudden changes in the market, and a host of other risks. The risk-reward ratio is high and, for a small percentage of people, worth it.

Accept that you will undergo stress

If you’re considering working for yourself or starting your own company because you’re tired of working long hours, many rounds of golf with clients, or getting up at whatever time of day you feel like it, prepare yourself for failure right now. Because, as any successful small-business owner will tell you, it’s going to take a massive amount of very hard work, long hours, and the ever-present risk of losing it all. It can be a very high-stress venture and knowing how to deal with that risk could make the difference between pushing through the lean times and packing it all in for a nice, stable salary. Your first step is to accept the fact that you are going to experience stress and prepare yourself to deal with it.

Focus on what’s in front of you

It’s always a good idea to have a plan A, B, and C in place to deal with foreseeable contingencies; however, it’s impossible to foresee every scenario, so don’t spend all your time planning for what might go wrong. Have one or maybe two backup plans in place, then focus on what you’re trying to achieve – after all, the cost of reward is risk. Deal with each problem as it arises – don’t spend fruitless time worrying about what may happen. At the same time, don’t put off dealing with an issue for too long; both of these habits will cause you far too much unnecessary stress.

Have a release valve

For some self-employed people it’s a daily walk with the dog, for others it’s a weekly art class. Whatever it is, everyone, no matter how busy, needs time away from work to allow the mind to shut off, focus on other things and remember that there really is more to life than work. Unfortunately, for too many people that ends up being the instant gratification of alcohol or drugs, so take the time to find something worthwhile. Before you even choose the name of your new company, find something that can serve as your release valve and stick with it – you’ll thank yourself later for it!

How to Position Sales and Specials to Increase Profits

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Sales, specials, discounts and one-time offers are often a quick, simple way to boost your business. They help you attract new customers, offer long-time customers a reward for their loyalty, and encourage occasional customer’s incentive to buy more items. An added bonus, sales can help you move excess stock that’s taking up valuable space earmarked for new products.

Reduced price offers are, however, risky business. Offer too big a discount and you won’t make any profit; offer too little discount and it hardly seems like a deal. Here are three ways to tackle a special to help maximise your profits.

1 Crunch the Numbers

The first thing to do is to work out the golden median – what discount will allow you to still make a profit but will seem like a worthwhile deal to customers? This is where a good understanding of your income, expenditure and cost of sales comes into play. Depending on how big your profit margin is, you could potentially offer a significant deal. If it is a small margin, you need to be careful to take into account the hidden costs of the product, like warehousing costs, shipping, and other money already spent. Don’t be afraid to ask your accountant to help you work out the figures.

2 Find creative ways to offer a deal

It’s not just about slashing prices. Sometimes, you could gain more effect by offering a bundled deal, where two complementary items are sold together for a small discount, but in a way that showcases the benefit of having both. Alternatively, you could offer discounts for quantity – buy three, get a fourth free, or buy bulk for a discounted rate.

You could also offer discounted rates to specific groups. For example, a retail store offering senior citizens certain items at cost price on one day a week would encourage them to buy several additional non-discounted items during their shopping. Another situation, an internet service provider could offer registered university students a certain amount of data per month for free. It pays to be cautious with these kinds of deals, though – they should be limited time offers, as long-term discounting could cause you more harm than good.

For service-oriented businesses, you could consider offering certain customers a retainer deal – they get up to a maximum amount of hours or service from your company for a fixed rate every month, which can certainly help in the quieter, leaner months of the year.

3 Go seasonal

Depending on what you’re selling, you could consider offering seasonal deals. A clothing retailer catering to school kids could offer special deals at various times of the year – back to school or beginning of the vacation. A service-based operator could offer an annual discount to long-term customers at a quieter time of the year to encourage additional business.

Lastly, a little tip – be very careful of offering reduced prices when your cash flow is tight. You could end up doing yourself more harm than good. It may seem like a great way to drum up extra sales, but unless you are sure of making that profit, it could be too big a risk for your business.

A Simple Guide to Profit & Loss and Your Balance Sheet

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You have a great idea for a small business. You’ve done all the research, you know there’s a need for your product or service and you even have a few great marketing ideas. Unfortunately, you’re not exactly a financial genius. You know profit is a good thing and loss not so much. However, when people start asking anything more complicated than are you making any money, you’re at a bit of a loss.

Even if you employ a top-notch accountant to deal with money matters, it helps to know what position your company is in. To help demystify small business finances, let’s look at the basics – P&L and the balance sheet.

Profit and Loss Statement

At its simplest definition, profit is what is left over after you subtract your costs from your income. From this point, it becomes a matter of going into detail. What are the costs? Are they recurring or once-off? Do you have a single type of income or are there various categories – for example, a property company could get income from rentals, property sales, or investments. Each of these is a different kind of income, or revenue that needs to be shown as its own item on the statement, but counted together, they are all income. Costs could include salaries, consumables, marketing and a host of others.

Loss, however, is not the same as costs, or expenses. Loss happens when income minus expenditure results in a negative figure – in other words, when you’ve made less money than you’ve spent. This could be because of any number of factors, including unexpected expenses, failure to make enough sales, or a sudden increase in costs. At the same time, loss can be deceptive – for example, just because you haven’t sold your inventory doesn’t mean it doesn’t have value. That’s where the balance sheet comes in.

Balance Sheet

A balance sheet shows your company’s overall situation when it comes to assets and liabilities. Assets are anything you own, including income received, property, inventory, investments, equipment, anything that has any kind of value that you owner. Liabilities are anything that causes a drain on your finances. This can include normal operating costs, maintenance fees, even depreciation in the value of fixed assets. The balance sheet takes all these factors into account to show the total balance of equity in your company.

Of course, the deeper into company finances you go, the more complex it can seem, but if you can get a handle on these two important statements, you are well on your way to being in control of your own company finances.

How Much is Your Small Business Worth?

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There is any number of reasons why you could need to know what your business is worth – applying for a business loan, deciding to expand, or to sell out at a profit. You might even be a buyer looking to invest in or purchase a small business, wanting to find out whether it’s worth it or not. But how do you accurately assess the value of your business?

There’s more to it than just looking at your profit margins. We’re taking a look at three important things to look at when assessing the value of a small business.

Financial Value

The first, and probably most logical, place to start is the financial value of the business. This is reasonably straightforward to calculate, although it is advisable to use the services of a good accountant or financial manager to make sure everything is taken into account. The simple calculation is Assets – Liabilities to get the fixed value, plus average profit over the last three years to gauge potential income.

Market Value

Market value has less to do with its financial value and more to do with whether it has potential to grow beyond its current position. There are several questions you can ask to determine market value:

Where does your business sit in relation to other, similar businesses in the market? Who is your target market and what are they doing at the moment? Does your product or service have any unique selling points that could attract investors or buyers? What is the potential for growth in the market generally and this company specifically? If there room for growth or is the market saturated? Look at other, companies of similar size to find out how they have fared in the last year – has there been a significant number of closures in the industry or is it booming?

These questions aren’t going to give you a financial value, but will help you gauge whether it is worth selling, investing in or buying this kind of company.

Reputational Value

Even in difficult market conditions, some companies have such a good reputation for customer service, product excellence, market presence, and goodwill that they are a good choice for any investor. Such companies tend to have repeat business based on their positive reputation and relationships with customers.

Fortunately, it is a lot easier to find information on a company’s reputation than it used to be, say, twenty years ago. With social media, online reviews, publicly available reporting information and even something as simple as email, it is reasonably easy to find out if the company has a good – or bad – reputation.

It is always extremely risky to take on a company with a bad reputation, although it is possible to publicize the fact that the company is under new management and that things will change. Counter-intuitively, it can also be extremely risky to take on a company with an impeccable reputation; there is always the possibility that the reputation relies heavily on some seemingly magic combination of factors that could shift under new management.

Whether you’re the current business owner, a prospective investor or someone looking to buy a business, remember this – the value of a company lies in more than just the money it makes, and a savvy investor will take that to heart.

Business Best Practices

Learning Business Best Practices From The Big Companies

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Best Business Practice – Learning From the Best

Every day, thousands of start-up companies are born. The majority of them will fail, but a few will succeed and it’s all because they followed a few simple strategies that are followed by large, successful corporations.  If you’re thinking of opening your own small business, or already own one, try these tips to help you grow your business in the right direction.

Management

Whether you’re a one-man operation or a small group, effective management is essential for success. For the single-person operation, make sure you manage your time, efforts, resources and relationships with clients well. If you have a few employees, be certain that you are managing them to the best of their ability – ensuring you have people with the right skills for the job, making certain their talents are being used to your best benefit, and keeping an eye on how their time is being used. If you aren’t maximising the time they spend at your offices, you need to reconsider how they work.

Service

No matter how big or small, delivering the best possible customer service is absolutely vital. For a large company, one or two disgruntled customers can be managed, placated, or even written off if there’s no pleasing the customer. For a small business, the loss of one or two repeat customers can be disastrous. Define your customer service strategy, make sure you and your client understand what will be delivered, how it will be delivered, and when it will be delivered – then stick to that!

Finances

Especially if you’re quite busy, it’s easy to let the finances slide. Sure, you may be sending out invoices and getting money in, but is that money being properly managed? Are your bills, taxes and salaries being paid on time and accurately? Is there any way you could be investing some of that money to help it grow? If you have plans to expand and need a business loan from your bank, do you have clear cash-flow projections, income and expenditure analysis? Unless you are a financial whizz-kid and are able to not only do your work, manage your company and keep all the finances perfectly in order, you may need an accountant – even a part-time or freelance one.

Skills transfer

One of the greatest risks with a small company is specialisation. The more niche your product or service, the more difficult it is to find the right people to do the work. And even if you find those people, there’s no guarantee they will be around forever and if they leave, they take not only their skills, but everything they’ve learned with them. This can cause a massive skills shortage for your company. Make sure that all knowledge gained within your company is shared, written down, kept alive, so that it can be passed on and not lost along with a prized employee.

Marketing

Effective marketing is absolutely critical for any small business. If nobody knows you exist, they won’t be able to use you – it’s really that simple. You don’t need to spend millions on that marketing, though. Look at current marketing that works – use social media to its best advantage, be present in your marketplace, keep your brand story alive and active. If you find something that works, use it – just don’t use it to death, and don’t use just that idea.

Keeping a small business running takes plenty of effort, but it can be done. Use these techniques to help make sure your business works, and you could see your company grow beyond your dreams.