Posts Tagged ‘business loan’

10 Ways to Grow Your Business

February 12th, 2013

Is your business already as big and profitable as you want? Then read no further. For those who realize that growing your business is a never-ending necessity for its survival, as well as for your own economic well-being, this list is intended to help you focus on that task. What can you do to get your business beyond the sustenance level? All of the ways of growing a business outlined below have been successfully used by others and, with some planning and investment, they’ll work for you too.

1. Sell more to your existing market The first thing that comes to mind when thinking of growing your business is getting new customers. But the customers you already have are your best bet for increasing your sales; it’s easier and more cost-effective to get people who are already buying from you to buy more than it is to find new customers and persuade them to buy from you.

2. Know how to ask for referrals Getting new customers is the obvious approach to growing your business. One of the easiest ways to do this is to ask your current customers for referrals. But notice the verb. Doing a great job and just assuming that your customers are passing the word about your business isn’t going to do much to increase your customer base; you have to actively seek referrals. During, or after, every job or sale, ask your satisfied customer who they know who has a use for your products or services. Notice I didn’t say, “who they know who would be interesting in buying your products or services”. Don’t make your customer have to decide who wants to do business with you, just who could use what you’re selling.

3. Reduce your costs Keep in mind that the point to growing your business, is to grow your bottom line. And the difference between pre-tax and post-tax money can make this a very effective growth strategy. There are two main approaches to cost cutting; liquidating your “loser” products, and improving your inventory turnover.

4. Innovate your product or service Discovering and promoting new uses for your products or services is a great way to both get existing customers to buy more and attract new customers. Think duct tape, and how little would actually be sold if people thought it was only for ducts.

5. Extend your market reach There are several ways of growing your business by making your product or service available to a new pool of customers. The most obvious is to open stores in new locations, such as opening a store or kiosk in a new town. A new location can also be a website with an online store. Another approach is to extend your reach through advertising. Once you’ve identified a new market, you might advertise in select media that targets that market.

6. Capture a niche market Remember the analogy of the big fish in the small pond? That’s essentially how this strategy for growing your business works. The niche market is the pond; a narrowly defined group of customers. Think of them as a subset whose needs are not being met and concentrate on meeting those unmet needs. A nursery, for instance, might specialize in roses.

7. Diversify your products or services The key to successfully growing your business through diversification is similarity. You want to focus on the related needs of your already established market or on market segments with similar needs and characteristics. An artist might also sell frames and framing services, for instance. Or a mountain bike rental business might switch to renting skidoos in the winter season.

8. Participate in trade shows Trade shows can be a great way of growing your business. Because trade shows draw people who are already interested in the type of product or service you offer, they can powerfully improve your bottom line. The trick is to select the trade shows you participate in carefully, seeking the right match for your product or service.

9. Franchising The stories of entrepreneurs who have become both well-known and well-heeled due to franchising their small businesses are countless. If you have a successful business and can develop a system that ensures that others can duplicate your success, franchising may be the fast track for growing your business.

10. Exporting Expanding into international markets can also be a powerful boost to your business’s bottom line. Like franchising, this is a way of growing your business that requires quite a commitment of time and resources, but can be extremely rewarding.

Don’t let this list overwhelm you; pick one or two of these ideas that are suitable to your business and your circumstances and get your plan for growing your business underway. While you probably won’t experience growth right away, whichever way of growing your business you choose, you will see progress if you keep at it, and will successfully transform your business into all you want it to be.

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Posted in action plans, best practices, business goals, cost, entrepreneur, management, marketing, profit, small business

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5 Ways to Improve Your Biz in 2012

December 7th, 2011

It’s a new year, a new cycle and a new beginning. And that means it’s a good time to put into place the strategies, techniques and tactics that will move your company’s position forward. You know you want to make it happen, so get ready to make some changes. Here are five good ways to make 2012 the best year ever.

1. Stop multitasking. The fact is that multitasking causes you to be less productive, not more. Your brain can only do one thing really well at a time, and being good at multitasking is really only just being good at switching back and forth quickly. Focus all your attention on the one task at hand and only switch to the next when it’s completed.  Try turning off everything that distracts you in your office for at least part of the day, and then don’t just get busy, get working.

2. Stop doing everything yourself. Change your organizational structure from a wheel to a hierarchy. Your business can’t grow if everyone works for you, and all decisions need to come through you.  Create an organizational chart with you at the top and your employees, contractors and consultants below you in a tree-structured hierarchy. Who are your “captains” and who are your “soldiers”? But remember, no matter what title you bestow, everyone is “hands-on”, because after all this is small-business.

3. Once your business has grown to the point of needing employees, you will want to continue to grow it by establishing a superior team. Only hire the best people, and pay them well. This is your best place for leverage so plan on paying more. If you want to get the best people, typically, you need to pay in the top 10%. And to keep them you’ll have to challenge them, motivate them and demonstrate your appreciation. Yes, you will be a manager.

Take your time hiring the best person for the job. If an employee is not working out, fire them in the first month. With proper training, few people’s general effectiveness changes after a month. Remember the old adage, “Be slow to hire and fast to fire”.

4. Stop trying to use social media to sell your products or services. Use social media for customer service and to build prospect relationships by answering questions in your company’s area of expertise. Use your social media properties to establish yourself as the go-to authority in your niche. The business will search you out. Then put on your salesperson-hat and close the deal. Don’t expect anything more.

5. Do not outsource the math. Commit to understanding every number in your three key financial reports; the profit and loss statement, balance sheet and cash flow statement. Insist that your accountant explain and review them with you every month. If you do not understand where your business has been, you can’t forecast where it is going. It’s better to make all your business decisions based on the hard facts of you company’s performance, not a hunch or your “feel” for where you are. 

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Posted in , action plans, best practices, bookkeeping, business goals, entrepreneur, management, profit, small business, strategic planning

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8 Tips for Establishing Business Credit

March 11th, 2011

As a smart entrepreneur you will want to establish your company’s credit as separate from your own. Realize that your personal assets might be on the line if your business uses your personal credit. You want to be able to distinguish your personal credit from your company’s business credit. It will take some extra effort, but you’ll have a stronger business in the long run. The following eight topics are crucial to giving your company its own credit identity.

1. Separating your personal credit from your business credit protects your personal finances if the business fails, but it also protects the business just in case there are problems with your personal credit. Ideally you will want to incorporate your business or form an LLC to establish business credit without a personal credit check. Sole proprietors and partnerships by definition are personally liable for the business, so if separate business credit is your goal you’ll want to avoid those options.

2. Establish your business’ identity. You’ll need a Federal Employer Identification Number (EIN) for your business as well as separate bank accounts that are under the legal name of your business. Make sure you have all necessary licenses and permits and designate a separate phone line solely for your business. All these things give your business more clout when creditors are reviewing your business potential.

3. Pick a bank and stay there. Loyalty counts in the credit markets. Try to keep your capital in the bank and earning as much as possible. 

4. Open business credit files with the credit reporting agencies that are designed for businesses such as Dun & Bradstreet and Experian. They report on business credit similarly to the way companies track your personal credit. Once you have credit established for your business, you can report your payment history to these agencies to build your credit score. Proactively call to set up your file with a D&B Representative. When applying for business credit, submit your D&B report with your credit application.

5. Obtain business credit cards that are not personally linked to you. Your bank is a good place to start looking for a business credit card.

6. Contact a few vendors and suppliers that report to D&B and ask them to extend a small amount of credit to your business. Vendors that report to D&B build your business’ credit. Vendors that don’t report to D&B don’t build your business’ credit. Pay your bills on time and you’ll soon have solid relationships. If a vendor won’t give you net 30 days terms, then pre-pay your first couple of orders and ask for credit again. You’ll probably get it.

7. Borrow against an asset that your business owns, then make your payments on time.

8. Don’t spend beyond your means. Don’t run up lines of credit that you can’t hope to pay. It will not only destroy your credit, but also your business.  Spend wisely but regularly, and try to keep costs low.  By spending and paying in a timely manner, you’ll develop good business relationships and begin to see your credit score rise, which will ensure that if the time comes when you do need more money to keep your business going, you’ll not only have access to it, but you’ll get better terms.

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Posted in , banking, best practices, business goals, cash flow, entrepreneur, financial management, profit, small business

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The Basics of Writing a Business Plan

January 6th, 2011

While there are no strict rules for writing a business plan there are some business plan writing guidelines that you can follow that will ensure your business possesses a professional and effective plan. The amount of information and level of detail included will depend on the intended audience. For external audiences such as investors, lenders and government agencies your plan will be much more detailed and in-depth. For internal audiences such as upper management or board of directors the information can be less detail oriented and more goal focused. In either case all information should be factual with evidentiary back-up. To be effective, you should include the following sections and headings:

Executive Summary:
Sometimes this is the only information that potential investors read so it is essential to give a summary that highlights key aspects of the plan, including the goals and objectives. Usually this section will cover no more than 2 pages.

Description of the Business:
Start-up plans, history and legal establishment of your business.

Operations:
Outline the specifics of your business. Include facility requirements and equipment as well as any outsourced operations.

Management Team and Employees:
Include information on key employees and managers including skills and salary. This section should also include recruitment strategies and salary forecasts.

Product or Service:
Include detailed descriptions of products and services, patents and customer base.

Market Research and Economic Assessment:
Include information on who your customers are and how to reach them. Also include information on the economic environment, market conditions, competitors and supply and demand issues. Analyze the different competitors as well as their products, and especially what you will offer that they do not.

Selling the Product or Service:
Specify the sales process. This will be dependent on the type of business to be established. Will customers be attracted by advertising and promotion alone, or will it require salespeople to obtain business? Is the nature of the business that it will need inside or outside salespeople, or both? Will the owner or partners be the salespeople? Will salespeople need to be hired, or will the sales function be contracted out to a marketing representative company?

Financial Plan:
Do a complete assessment of all the financial elements in your business. Include a balance sheet, profit and loss statement, cash flow, break-even analysis, assumptions, business ratios, and any other pertinent financial reports.

Strategy and Implementation:
Include specific goals and dates as well as management responsibilities. It is also very important to include the potential business risks and the actions that can be taken in each scenario. This will show that you have done your due diligence by thoroughly researching and analyzing the upside as well as the downside of the business. It may also enable external and internal stakeholders as well as investors to feel secure in knowing exactly what the back up plans may be if something were to go wrong.

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Small Business Banking Mistakes

September 2nd, 2010

Entrepreneurs are so busy working on their business rather than in their business–as they should be–that sometimes your friendly neighborhood banker can end up robbing you blind! The following are four common banking mistakes made by busy small business owners.

Only Banking at One Bank: As a small business owner with 100 things to do, it is easy to settle in with one bank and do all of your banking activity through that one institution. This can have a number of ill side effects. When it comes time for a loan and your bank denies you, if you don’t have a relationship with another bank, you may be out of luck. Secondly, you should make banks compete for your business. Don’t simply give all of your business to one bank by default. Shop around for the best deals.

Failing to Focus on Collateral in Loan Application: When you are submitting a loan application, you may be asked for an executive summary. Make sure that your executive summary focuses on why you are a good risk for the bank. Don’t talk about your exponential growth or potential. Bankers want to know about the facts of your financial situation: your assets, liabilities, and what you can offer as collateral.

Relying Too Much on Line of Credit: If you run your business on a line of credit, as many entrepreneurs do, you may be setting yourself up for disaster if your bank decides to reduce or eliminate your credit line. This can actually happen and has happened to many small business owners during the current recession. Try to wean yourself off your line of credit if at all possible.

Carelessness With Bank Fees: Small business owners remember: Cash is king. You must avoid bank fees at all costs. What a careless way to let your money literally vanish into thin air. Don’t get too lax with your banking, even during those busy weeks and months, because when you look back at your bank fees you will realize what a hindrance they can become to your business if they are a recurring issue.

Don’t fall victim to these common banking mistakes. This may mean you need to hire a part-time bookkeeper, but in the words of the E-trade commercial baby, avoiding these mistakes can “save you a pantload.”

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