Posts Tagged ‘planning’
Renting a Space for your Small Business – Six Factors to Consider
Friday, May 10th, 2013
Whether you need to lease commercial office space or retail space, it’s important to take the decision seriously. If you’re like most start-ups, your rental space will be a significant investment – both in up-front deposit costs and in monthly commitments. So before you rent that space, consider these six factors:
1. Location, location, location
Obviously, location is particularly important for retail businesses. The closer you are to your customers, the more business you’re likely to get. But location is important even if you’re renting office space and will rarely see customers in your own office.
Think about your employees or potential employees, for example. A luxurious office in a less-than-desirable part of downtown might turn off otherwise excellent employment candidates. And, of course, your own commute to your office is important to consider, if possible.
2. How much space you really need
Too many small business owners with big dreams end up in an overly-large office or retail space. Take some time to carefully consider how much space your business actually needs, and don’t get any more than that.
Also, think about what you may be able to do to cut down on the space you need. Can you store some files at home or in a small off-site storage unit? Can you use all your vertical space to avoid needing extra storage room?
3. How much you can afford to pay in rent
Obviously this is going to be one of your number one questions, and it’s one that you should really consider extra carefully. If you can’t afford to pay your lease for a month, your business could take a huge financial hit. So look at your current or expected earnings, and lowball the estimate. Don’t forget to factor in the related costs, such as insurance, utilities, and even hidden costs in the lease, such as the landlord’s ability to pass on increases in taxes or other operational costs.
Often, your ability to rent a place can be limited by your creditworthiness. If you’re just beginning, you may want to get some leverage by building credit with a business credit card. In addition, having a credit card or line of credit on hand as an emergency fund can help if account receivables don’t come in on time to pay your rent, as you’ll have some sort of short-term backup plan in place.
4. The nitty-gritty of the lease terms
Unless you’re a lawyer, it’s probably a good idea to hire one to review the lease terms with you. Again, this is one of the most important decisions you’ll make as a small business owner, so it’s worth putting the time and money into having an expert check over your lease.
According to the Small Business Administration, some things you should check for on your lease include:
- Expenses you might incur beyond rent
- Maintenance and repair terms
- The ability to sublease
- Flexible lease terms
- The ability to lock in the rental cost for a long period of time
5. Potential extra costs
As noted above, one thing you should look for in your lease terms is potential extra costs. For instance, unlike an apartment building where the landlord is usually responsible for maintenance, you may be responsible for a good portion of the maintenance of your commercial space.
You’ll also want to look into how much you can expect to pay for utilities. If possible, negotiate to have utilities included in your rent payment, which can at least make them a predictable extra cost.
6. Other options besides renting
Finally, before you sign a contract, look into other options that you might have besides renting. It’s a huge commitment, and can be a very expensive mistake if you don’t do it right. Most small business owners are better off working at home, meeting clients at coffee shops, or even selling products through distributors rather than renting their own space.
Another increasingly popular option right now is co-working. A co-working space allows you to rent a small desk space or even an office where you can meet with clients. This gives you the opportunity to work with other entrepreneurs, to get out of the house, and to rent at a minimal cost.
As with every business decision you make, you’ll want to walk into this one with both eyes wide open. Plan for the worst, but expect the best, and your first business space rental will be great.
Run Your Business From Your Smartphone
Monday, May 6th, 2013
Can you run a business out of something that can fit in your back pocket? PC World says yes. Running a small business from your smartphone — virtually — is possible with the many apps available, on iTunes and Google Play, like videoconferencing programs and PowerPoint assistants.
You can sell products, keep track of mileage, calculate the amount of time spent on a project, build spreadsheets and complete other tasks, too, with a variety of apps.
What apps would best serve a small business owner who wants to rely more on a smartphone? Forbes has several suggestions for making a business productive this year.
EchoSign
If you’re a traveling sales representative, you could use EchoSign to manage, send and sign documents from your smartphone. EchoSign alleviates the need to carry large paper contracts because users access documents from the mobile device instead. If you’re a small company of 1 to 5 users, the app is free, otherwise you’re looking at spending $299 to $399 for a global or enterprise license.
The Right Hosting Service
Email is definitely a business necessity. You should get reliable VPS hosting, which allows business partners, employers and customers a fast and secure way to share files and data. VPS hosting at MyHosting.com provides email benefits such as push email, which decreases a user’s reliance on SMS Messaging, a dated technology. Customers’ emails, contacts, tasks and other information also are saved on the server. This data can be automatically synched on a new device.
Evernote
Forbes’ David K. Williams recommends Evernote for Business because it’s a multi-platform app that specializes in note-taking. Improved support, simplified billing and business notebook features all for the small price of $10 per month (premium version), per user. It’s great for capturing and organizing everything from photos to emails to web sites. It’s the ultimate brainstorm tool and you can download for PC, Mac, Android and iOS platforms.
PayPal and Money Center Smartphone Apps
Most major banks and PayPal have advanced smartphone apps. Even some of the smaller regional banks have good apps. As an entrepreneur on the go, make sure you have your bank’s app and understand the features. Many will even give you a free dongle that will allow you to swipe a credit card using your phone.
Speaktoit
Speaktoit is the top-rated virtual assistant for Android or iOS/Windows, according to Forbes. However, the app will target productivity for businesses this year. More features are being added, including calendar/meeting scheduling. Users can schedule meetings via voice through their Assistant. The app will remind users of their daily agendas, also via voice. Reminders can be given so users will know to book an airplane flight or a room in a hotel. Speaktoit also will partner with financial news services to give automatic updates on financial news and stock quotes.
Vandrio
So far, we’ve highlighted apps to help you run your business. Now, we share a company that can create a custom smartphone app for your business. Having your own app enables you to connect with your customers wherever they are. Custom app creator company Vandrio does this well, and the costs are incredibly affordable for a small business to have a custom app.
Long gone are the days when business people were tied to their desks with their traditional land-line phones, large personal computers, paper calendar and a cumbersome file cabinet filled with space-hogging documents. Although office time probably is a necessity for most business people, mobile apps and smartphones make it easier to take on many tasks, while growing their business on the open road.
6 Tips for Creating a Competitive Pricing Strategy
Friday, May 3rd, 2013
One of the best ways for small businesses to stay competitive is through pricing strategies. As part of your overall marketing and business plan, your pricing strategy is quite important. But, it can also be one of the most difficult parts of your plan to put together.
Here are six tips that will help you take advantage of your pricing strategy to stay competitive in an increasingly competitive marketplace:
1. Figure out what you can actually afford to charge
First, you need to understand what you can actually afford to charge. If you’re making absolutely no money keeping your business afloat, you’re not going to be selling products for long.
Understanding what you can afford to charge means carefully looking at the costs of your products or services, including the overhead costs that are often more difficult to spot. Then, you figure out how much money you need to keep your business afloat (preferably while keeping your personal budget going, as well).
A good rule of thumb for managing overhead costs is plan on spending 80 cents of every forecasted dollar. This gives you a 20% buffer and if you hit your forecast, you have a nice profit margin.
2. Focus on introducing new and better products
According to an interesting Entrepreneur article on this topic, the best businesses don’t simply focus on competitive pricing. Eventually, the free market will find the price that consumers will pay for a particular product or service, and you’ll just have to stick close to that to remain in business.
But if you don’t want to be completely controlled by these market forces, innovate. Focus on introducing new and better products. Yes, you’ll need to have a pricing strategy for all these new things, too. But if you can get a leg up on the competition with better or more innovative products, you won’t have to be constrained as much by the going price.
3. Keep careful track of costs
Obviously, as you’re creating your pricing strategy, you need to keep track of your costs. Putting your business expenses on a business credit card (compare here) instead of a personal credit card can help you keep track of your spending. All business owners prefer to have a larger profit margin, but getting your profit margin to grow is all about understanding your costs. Cutting costs while keeping your products and services similarly priced will raise your business’s profits.
If you’re not already familiar with basic bookkeeping for your business, it’s time to get there now. And if you need to run more complicated cost and profit margin calculations, it may be best to hire an accountant.
4. Consider lower introductory prices
When you’re just starting out, you can often break into the market by setting your prices lower than those of your competitors. This works if you just want to get your products into the hands of many people, or if you’re breaking into a new local market.
While your prices are set lower, though, you may not bring home much profit. In this situation, it may be wise to look into credit cards or a business line of credit that can help keep your business afloat until you have the customer loyalty you need to raise your prices. Once your prices are higher and your profit margin is better, you can use some of your extra revenue to pay down those credit card balances.
5. Understand how price affects image
Psychology is probably the most difficult piece of setting a pricing strategy, since the way consumers think has much to do with what they’ll pay for a product. Most of the time, consumers will shop for the best value – the lowest price among very similar products.
However, be careful to not set your prices too low if you want to position yourself as a luxury brand. Too low a price for certain products or services could lead customers to believe that your brand’s offerings are shabby, sub-par, or simply not as luxurious as you’d like them to be.
6. Talk to distributors, if necessary
You can’t actually tell your distributors what they have to price your items at, but you definitely can have conversations with them. Explain to distributors why your pricing strategy is important, and how it will benefit both you and them to follow this strategy. Selling to distributors means lower revenue per unit for you, but it usually means higher volume and greater access into the market, and faster.
If you’re having trouble coming up with your business’s pricing strategy, you may want to call in a professional. Those who are more familiar with marketing could help you find the best prices for your products and services. Otherwise, you may just need to do some market research into your competitors, and try out different prices with consumers to see what sells best.
What are some other tips you can share in addition to these six?
A List of One: Navigate Your Daily Chaos toward Larger Goals
Wednesday, February 20th, 2013Why do so many New Year’s Resolutions fail after the first six weeks? People fail to achieve their goals for lots of reasons, but we’re not focusing on excuses here. We’re focusing on solutions. 
The typical day of an entrepreneur or small business owner is crammed with surprises and distractions, and the long list of longer term, strategic, goal-oriented activities often gets pushed to the following day, then again, until so many days slip by that those big goals become completely ignored. This is akin to treading water instead of swimming and wondering why the shoreline fades in the distance.
One useful tactic to help you get back on track with your goals is to create a List of One.
Each day, amid the minutiae and distractions, focus on completing one goal or one milestone toward a larger goal. You can have a larger list, but each day, just pick one key milestone and make material progress. If you complete your List of One, then create another List of One and apply the same focus and tenacity to completing that task. One step at a time.
Yes, the process is as simple as it sounds, and you’ll find that more gets done when you chew one bite at a time of the metaphorical elephant we call building a small business.
What’s on your List of One today?
How a Cultural Pendulum Becomes an Entrepreneur’s Advantage
Friday, November 9th, 2012
When we find ways to level the playing field for small businesses and entrepreneurs, we share them.
The slowest of the herd get eaten.
The view for the middle of the pack never changes.
But those at the front eat first and best.
The Reality
There is no perfect crystal ball, but information does exist that can give us a competitive advantage. We don’t need perfect foresight, just better information sooner than our competitors. Relying on trends and patterns identified exclusively for a slice of society, such as stock markets or fashion, may provide minor insight into what we should do now and what we should plan to do in the future, but isolating a piece of society to forecast the future may be severely limited in value.
The Challenge
The challenge is to identify patterns so we don’t fight trends we can’t control. We must find ways to harness the natural energy within markets so that our businesses benefit from motions we cannot control but can be leveraged to our advantage.
Waves oscillate. Capital markets oscillate. People, populations and political winds oscillate. Oscillation is a given within both nature and man. When we tune our businesses to the right oscillations, we compete and serve our customers more effectively.
The Approach
If you could identify a pattern that has held up for thousands of years, that oscillates with regularity and integrates broad cultural trends to show how humankind collectively swings like a pendulum back and forth between a “We” mindset and a “Me” mindset, would you have an advantage over your competition?
If you had information that enabled you to target belief systems, worldviews and attitudes instead of simply age groups or other narrow demographics, would you have an advantage over your competition?
Yes.
The Solution
When we find ways to level the playing field for small businesses and entrepreneurs, we share them.
Pendulum is a program you should seriously consider.
Entrepreneurs need a better way to figure out what people need now and will need in the future, not what they needed yesterday.
Entrepreneurs need to know what marketing angle will be most effective in reaching people.
Entrepreneurs must avoid investing in marketing that may have been previously successful but will likely flop now and in the future.
Patterns have emerged through the oscillation of our culture over time. Pendulum has uncovered a tantalizingly interesting pattern that can benefit us and our customers, which is why we have decided to share this with you while exploring it ourselves.
History, if you will listen to her voice, may stutter sometimes, but she is a brilliant teacher.
Starting a Restaurant?
Monday, October 29th, 2012From the “Ask ActSeed” files…
What is your advice on starting a restaurant?
How would you approach it?
1. Check out the resource documents on the site: “The Restaurant Wizard“, where you can find introductory information about food and labor cost control, reporting, setting up a chart of accounts, and more.
The site’s owner, Scott Armstrong, is a consultant to restaurant owners and based in southern California. If you like his articles, he may be a good consultant for you to consider engaging. These articles have a lot of helpful business tips unique to operating a restaurant.
2. For the general business-starting issues, join ActSeed’s Entrepreneur Group. Here, you have a blueprint for starting any business – restaurants included. Even if you are just in the idea stage, this will help you. ActSeed generates scores for the preparedness of an early stage business in 7 core areas, so you can quickly determine where you need some additional preparatory work before launch and during the first few years of operation.
Here’s a link to a 5-page overview about ActSeed’s business blueprint process and how it will help you get your company off the ground.
Beyond the Best MBA Program: Understanding and Navigating Real-World Business Policies for Small Businesses
Friday, October 26th, 2012
In recent months, ActSeed has covered a range of topics entrepreneurs may need help understanding, including health care laws and new insurance mandates. Tax loopholes and small business incentives are also increasingly presenting challenges, as Juliana Davies explains below.
Ms. Davies is a business education writer who focuses on such things as what a top online MBA is worth. Her expertise in US tax policy and enterprise law have helped many new business school graduates get off on the right foot.
In the corporate world, large companies are often touted as “job creators.” However, experts have recently been calling this assertion into question, since small startups and emerging firms are often far more instrumental in filling new positions with qualified employees, particularly during hard times. Due to lopsided corporate policies that tend to favor large businesses, smaller companies must adopt various strategies for succeeding within the current market.
An April 2012 article by The Nation reported that many current business policies do not take company size and generated wealth into account – and as a result, wealthy corporations can often receive the same tax benefits as smaller businesses. One example is the research and experimentation tax credit first implemented by Congress in 1981, which initially targeted the economic recession at that time. However, the credit’s structure allowed large companies to be compensated for R&D projects that were well within their budget. Boeing, for instance, received a credit of $137 million last year – despite only paying federal income taxes once in the last nine years. Another company that has exploited US tax policies is Bechtel, one of the world’s largest telecommunications companies. Despite annual revenue of roughly $33 billion and a workforce of more than 50,000 employees, the company has remained family-run and retained less than 100 shareholders. This qualifies Bechtel as an “S Corporation,” a title that relieves the firm of paying federal income taxes.
Some other unfair policies concern interest generated overseas. While tax law states that interest-generated income earned anywhere in the world is taxable in the United States, companies like GE have circumvented this statute by using an “active financing exception.” This rule states that businesses with captive finance companies in other countries can exclude from their tax reports interest generated by these subsidiaries. Other companies, such as Pfizer, have exploited legal loopholes by building facilities and registering patents in overseas “tax havens” such as Luxembourg and Ireland. At the same time, Pfizer incurs most of its research and development, manufacturing and advertising expenses on American soil. This has allowed the company (the world’s largest pharmaceutical manufacturer) to declare a loss for the last four years – and receive a substantial amount of monetary compensation from the US government.
Though these policies put smaller firms at a strong disadvantage, experts say they can employ certain strategies to navigate the inherently unfair corporate structure. Forbes contributor John Greathouse encourages startups to think unconventionally when it comes to business strategy. “[Implement] a bold and unpredictable go-to-market strategy and [modify] it as soon as your competitors believe they have you figured out,” he wrote. “You can also keep your competitors off-balance by introducing new products into new and unexpected markets, distributing existing products via new channels and serving novel customer segments.” These efforts, he says, will prevent competitors from deciphering – and eventually, emulating – the startup’s strategies.
Fast Company contributor Aaron Shapiro urges small companies to “borrow from big businesses” using various strategies that have historically proven successful. First, he urges startups to focus their energy on “being the best at one very particular thing”; this mindset allows for organic growth through customer loyalty and word-of-mouth. He also notes that, while user experience is key to building a successful brand, companies should also establish a firm strategy for generating revenue in the early stages of development. And while some smaller firms are hesitant to institute bureaucracy at the workplace, he explains that “the b-word” is often seen as a benchmark of success for large companies – and such a system provides structure and reinforces company expectations for all employees.
While various policies of the corporate world may benefit large companies moreso than small ones, experts agree that fledgling businesses can overcome the disparities through streamlined structure and innovative thinking. These are the companies that will most positively impact job creation in the United States – but until more balanced policies are adopted, burgeoning firms must implement alternative strategies for success.
Julianna Davies is a writer and researcher for MBAOnline.com.
Insurance for Startups, Small Businesses and Entrepreneurs
Wednesday, June 6th, 2012
Most early stage businesses have two great challenges related to business risk:
- Navigating the myriad complexities of business insurance and group health insurance plans and
- Being able to afford a plan once you’ve figured out what you need
When we were young, most of us received a barrage of vaccines to inoculate us against deadly disease and boost our immunity to health risk. Securing business insurance at an early stage does the same thing for our companies. A little bit of insurance planning can mean the difference between your company’s survival and death.
After receiving inquiries from hundreds of entrepreneurs wondering how and where to start their HR and business insurance planning or where to find affordable group health insurance plans, we created a solution.
ActSeed has partnered with some premier companies in the field of HR outsourcing and small business insurance services. Now, all you need to do to get started is complete the form below, and we can get you connected to experts in HR and insurance who can answer your questions and help you put together an affordable plan of action. If you are having trouble with the form, just send us an email to: info (at) actseed (dot) com.
Protect your people. Protect your business. Protect yourself.
Business Formation: A Little Planning Saves You Money
Thursday, April 19th, 2012Starting a new business venture is an exciting time full of hope and dreams. Unfortunately, the formation of a new business entity is also filled with complicated, bureaucratic formalities that can confuse and frustrate even the most experienced entrepreneur and add unneeded additional startup expenses.
When to Incorporate? One major expense that often arises when starting a new business are the legal fees associated with incorporating. One primary question that many entrepreneurs do not ask themselves or their partners prior to forming a corporation is, “Do we really need to incorporate?” Without any doubt, forming a corporation has many advantages, but is it a vital expense that is necessary when starting a new business?
The beginning of a new business venture is an experience filled with thoughts and emotions that it will grow into the next Apple or McDonald’s, but until that happens, do you have the money to spend on incorporating? More importantly, will your organization financially benefit enough to offset the formation expenses? Apple was in business for almost a year and McDonald’s was in business for over fifteen before they were formally incorporated.
Where to Incorporate? In addition to the normal expense for forming an entity, incorporating in the wrong state can also have a significant impact on your business. Different states have different tax benefits for incorporating in that state. Just because your business is physically in Minnesota does not mean you can’t incorporate in Delaware of Nevada where there are benefits may be more advantageous.
When to File for Incorporation? Another commonly overlooked detail is when to form an entity. Incorporating just before or on December 31 can be costly. For example, some states, California being one of them, requires all entities to pay an $800.00 yearly fee. I have seen clients come in December 30 wanting to setup an LLC before the December 31 and then after it was formed, they could not understand why they had to pay the state $800.00 when they were only in existence for 2 days. Furthermore, the company will have to go to the expense of filing tax returns for an entire year even though they were only in existence for two days. Remember, closing an entity is more complicated than opening one so it’s important to get it right the first time.
Compliance. Compliance of Federal, State, and local laws can also financially burden a business. If not found and resolved quickly, business and corporate compliance issues can be very costly to any organization regardless of size. Professionals, such as lawyers and accountants, who usually bill their time by the hour, derive a significant portion of their income from answering questions and fixing mistakes or “messes” made by their clients. Many of these mistakes can cost a client hundreds if not thousands of dollars. What makes matters worse is that so many of these costly errors could have been avoided with some forethought.
For example, many of us drive our cars for business purposes and deduct the gasoline, maintenance, etc. for the car. However, if the vehicle is not properly titled in the name of the business, the tax deductions could be disallowed. Your CPA or tax attorney will spend a time reviewing the latest case law or IRS regulations looking for a strategy to get the deduction. All the time expended by your attorney or CPA is usually billed by the hour and could have been avoided had the vehicle been properly place in the name of the business from the outset. Most attorneys and CPAs will tell their clients that it costs a lot less to prevent problems than it does to fix them.
Other legal and tax expenses that can be avoided are:
Annual Minutes: Not preparing these can be a real issue as annual minutes are reviewed by other parties for business loans and other activities. No minutes? No loan.
Loan Documents: One benefit to owning a corporation is the concept of loaning money to a shareholder as a tax strategy. This is a perfectly legitimate corporate benefit, but if the corporate documents to do not accurately reflect the loan, the IRS could disallow the loan and convert that money into taxable income.
Timely Filing of All Documents: Failure to file everything from taxes to various Federal and State government reports can be very costly and you may also incur penalties for late filing. Again, this is east to avoid.
Summary
The formation of an entity is a process that can be confusing, arduous, and costly if not handled properly. Don’t rush into it lightly or recklessly. Using the services of a company like Legalzoom or other companies may only impede your decision and cost you more in the long run. Do your own due diligence and seek the guidance of a licensed attorney and CPA before you form any entity. The money you invest in their time should save you needless headaches and let you focus on the future and not wasting time cleaning up the past.
[NOTE: Thanks to Michael S. Duell for this guest author contribution. Mr. Duell is the Director of Business Operations at Ruyle & Ruyle, a firm that includes small business corporate law as one of its specialities. If you are looking for a good boutique law firm that caters to small businesses and startups, consider Ruyle & Ruyle.]
Is Your Business UPS or USPS?
Wednesday, February 29th, 2012The business world is a sea of constant change. To survive, entrepreneurs and businesses have to be proactive and adaptable to the changes.
Recently, there was a debate on Capitol Hill regarding another bailout for the United States Postal System - an entity that has repeatedly refused to adapt its strategies to accommodate the current market.
I won’t debate if the post office should be granted further subsidies with our tax dollars. Nonetheless, the recent request from the USPS did stir some thoughts on their continual failure to remain both competitive and profitable. This led to a recent discussion I had with a colleague regarding how much more effective private companies are doing the same work than an organization funded with tax dollars does.
A prime example is United Parcel Post. UPS is a massive organization in the package delivery business. Similarly to post office, UPS has longstanding ties in this country; both have labor unions to negotiate with, and other similar operating costs. While UPS and USPS have many similarities, only one, UPS, has been profitable. In 2010, UPS posted a net profit of almost 3.5 billion dollars while USPS reported losses of over $300 million. This amount is even more remarkable when you consider that despite billions of dollars in Federal bailouts, the post office can’t seem to make a profit. On the contrary, UPS has made steady profits for decades in spite of growing competition from Federal Express and other carriers – including the Post Office. This is a prime example of the private sector working more efficiently than a publicly funded entity and that, in this instance, bailouts have not worked.
But how does UPS succeed where the Post Office doesn’t?
I would argue that innovation is fundamental for entrepreneurs to to survive greater competition. Innovation forces even large companies like UPS to continually usher in change to its corporate infrastructure. When was the last time you heard the post office inventing something as oppose to always playing catch up with everyone else? 
So how can a small business, or startup, or any private company be innovative with new businesses techniques and avoid the trap of catching up? There are many answers but I routinely utilize the following:
- Think outside the box. Looking at a situation or problem from all sides and taking it apart can lead to new breakthroughs and answers to questions or problems.
- Hire people that question the organization rather than simply saying “yes sir.” The best employees I have ever had argue and challenge me. It also demonstrates to me they care about the company enough to take on “the boss” and not just blindly comply for the sake of a paycheck.
- Look at what your competitors are doing. You don’t have to be the one who created the mousetrap to be successful – just make it better. Apple never invented the mouse for the computer.
Looking at the history of UPS, I am sure you will find many instances where creative thinking, a staff that questions the status quo, and inventing better products and services has made them far more successful than the Post Office.
At your next team meeting, ask the staff, “Are we UPS or USPS?” and see what kind of response you get.
[NOTE: Thanks to Michael S. Duell for this guest author contribution. Mr. Duell is the Director of Business Operations at Ruyle & Ruyle, a firm that includes small business corporate law as one of its specialities. If you are looking for a good boutique law firm that caters to small businesses and startups, consider Ruyle & Ruyle.]
