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Posts Tagged ‘Small Businesses’

Small business origination doesn’t have to be a hassle. In our electronic day and age, the Internet has made small business origination loans almost instantaneous. There are several professional and high quality small business loan origination services available now that use the Internet to quickly find affordable financial assistance to beginning small business owners.

 
Why Small Businesses Fail

A novel could be written about the reasons why small businesses fail. One of the major reasons is from miscommunication between owners, or owner and investor. Take a new restaurant for example: A passionate chef and a wary investor will most likely butt heads when it comes to what makes the most financial sense to each one. And there is guaranteed to be some disagreement along with what each believes to be money well spent verses too much.
 
Undercapitalization

According to business researchers, the general rule of thumb for beginning small businesses needing a loan is “to have a sum of money at least equal to the projected revenue for the first year of business in addition to anticipated expenses.” For example, if the restaurant owner believes he or she will make $200,000 in revenue for the first year, with $250,000 in building and starting up expenses, than they should have no less than 350,000 available. Otherwise, the restaurant owner could be faced with huge amounts of debt or bankruptcy.
 
Poor Planning

Without an accountant, advisor or proper funding, small businesses can aim high but end up falling short and blow their opportunity to do it right and become successful. The first step they can take is to get the assistance from a small business origination service that help small business owners reach their financial goals and give them the assistance they need to be successful in all areas of their business.

For small businesses looking for the perfect credit services, there are plenty of professional organizations who specialize in giving small businesses quality, affordable loans.&nbsp

When it comes to small business banking, this can be a confusing issue for those just starting out. Some banks will use this situation to get the most out of those customers and independent advice on small business banking is always a good idea.

One of these issues regarding the finances of small businesses is the problem of staff. Offering staff enough incentive to stay with the smaller firm and not succumb to the added bonuses and attractions of a larger corporate firm is a hurdle to be overcome.

Small business banking dictates that large salaries and perks are not possible. However, there are some things that can be done. There are schemes that are currently running where small business managers can offer their staff the chance of private healthcare plans. These are discounted to the company and also have the added advantage of reducing time employees take off work sick. This is a bonus to small business banking as no money is lost through sick employees or having to find temporary staff and pay their wages too.

While some may think this wouldn’t be enough to keep staff it has been found that eighty per cent of employees actually liked the idea of voluntary healthcare benefits. ‘Voluntary’ is always a good word to use for staff benefits as it is also widely known that employees feel happier about their jobs when they are in charge of decisions that affect themselves. In fact, a quarter of those employees polled stated the choice of healthcare benefits as a deciding factor when choosing an employer.

Staff are the most important asset to any small business and healthcare plans are just one aspect that small business banking would advise is on offer. Other choices encompass pension schemes, bonuses and gyms, depending on disposable income and numbers of staff as to whether or not it would be viable.

A choice of some benefits as well as good treatment of staff can be the deciding factor over whether or not a small business will retain staff or not and is just one of the issues they face.

Another necessary problem that small business banking advice would suggest is that of keeping an eye on your charges. If you think you have suffered unfair small business banking charges, then you must find the time to act to reclaim them and not just put up with it. Hundreds of thousands of people have done this successfully.

Despite claims for unfair personal banking charges being currently on hold, this is not the case for business banking. The difference is that business accounts are covered by Common Law rather that Consumer Law and to this end, need to be worded differently. Always make sure you keep accurate records in case you ever need to claim back unfair charges.

It also pays to direct all mail concerning overcharging to your local branch rather than head office as this will ensure that if your case makes it to court it will be a court local to you. Always make sure you read the small print before trying to claim back small business banking charges. There can be nothing worse than shouting about a discrepancy and finding you were in the wrong.

Be on the lookout for excessive charges. It is only lawful for the bank to charge a fee in relation to what the inconvenience has actually cost them. Charges over and above this are seen as penalties and are not enforceable. Go back over old statements and records and work out exactly what you are owed. Your first step should be to write to the bank and request your unfair charges back. This often has favourable consequences and can remove the need for lengthy and costly court proceedings.

Take a close look at the court action choices open to you. Listen to what the bank has to say and if you decide to proceed, inform the bank of your choice. You will often find that this is when they back down and repay your charges to avoid the bad publicity.

Above everything else, ensure you keep a close eye on your small business banking. Avoiding the charges in the first place saves a lot of time and hassle that most small businesses can ill afford.

When Sen. John McCain delivered the keynote address at the National Federation of Independent Business 2008 National Small Business Summit last month, he did much more than speak to several hundred interested small business owners. He pushed the concerns of a significant voting bloc to the forefront of the presidential campaigns. In fact, both Sens. McCain and Barack Obama have spent much time specifically addressing the No. 1 issue among small businesses — healthcare. And it’s about time.

Recognizing that healthcare costs have become unmanageable for many entrepreneurs, Sen. McCain said, if elected, his administration would introduce healthcare reform that would provide hardworking Americans more options and expand portability of coverage.

Sen. Obama, who was invited to speak at the Summit but did not attend, responded to Sen. McCain’s remarks by reiterating that small businesses need more options to access quality, affordable healthcare coverage. We also know both candidates recognize that implementing health information technology and addressing an inequitable tax structure should play a part in any comprehensive reform package.

Over the past few weeks, it’s been encouraging to see the candidates discuss the issues facing the small business, especially the rising cost of healthcare. But they — and all of our country’s leaders — must realize that entrepreneurs deserve more than just discussions. Because the truth is, these job creators, those on the front lines of the healthcare crisis, are the voters who will be electing the next president, and they are demanding the next administration and Congress implement real change that makes healthcare more affordable for working Americans.

According to a recent NFIB survey, 81 percent of small business owners and 52 percent of employees do not feel the presidential candidates are adequately addressing issues that are important to them, specifically healthcare. In fact, nearly three-quarters of those polled say fixing healthcare should be a top priority for the next president, and nearly 80 percent agree that “it is important to me to vote for a presidential candidate whose healthcare plan makes sense for small business.”

A similar survey showed that the small business community comprised 43 percent of U.S. registered voters and nearly 32 percent of the electorate on Super Tuesday. These numbers prove that small business is a powerful, motivated group in a position to demand substantial solutions to the healthcare crisis from their candidates.

Both candidates are focused on reforming our ailing healthcare system and have begun to recognize that small business must be considered in any proposed legislation. The National Small Business Summit may have ended, but small business’ commitment to achieving quality, affordable healthcare has not.

We’re at the beginning of long and productive discussions with both candidates to ensure the needs of small businesses remain at the forefront of the healthcare debate. Because we know that solutions to America’s healthcare crisis must start with small businesses, the backbone of the U.S. economy. When healthcare is fixed for small business, it will be fixed for America.

The failure rate of small businesses is painful to see. With a little preplanning and consistent efforts in the right areas …. this doesn’t have to happen.

 

First, I see far too many people who think starting a business means the till is their personal money and owning a business means not having to work. They don’t come into prepared and give up far too easily when they realize people are not beating down their door to do business with them.

 

So what are the biggest reasons behind the high failure rate of small businesses …. and what can YOU do about it?

 

1. early burn out (poor planning)
2. no capital
3. no business plan / expectations / strategy

 

Burn Out:

 

Owners try to be both managers and technicians in the business and it drives them batty. They love doing something, so start a business, but then find that as it grows they have no life. You must be ready to start a business and then step out of the “do” part of it so you can remain energized and expand efficiently.

 

One useful metaphor is to think of your business as if you were going to franchise it. You will need to hire relatively unskilled people to operate the business – you cannot be at 20 locations at once. So you develop operations manuals and specific processes that are easy to train new people on. This lets you step outside the operation and assign it to someone. You can then use your time for strategy, growth, or personal development. You won’t burn out.

 

Capital:

 

You need money to grow a business. The presence of ops manuals and a clear business plan are impressive to those who provide money. Getting capital will be vitally important to your success. Getting yourself set up with a Dunn and Bradstreet number, a business specific credit card, and other credit-building assets is urgently important.

 

Business Plan:

 

You’ve heard this before – no business plan, no success. It doesn’t have to be formal, but it must be well thought out. Get help if you can. There are links in the Recommended Resources at Small Business Resources Cafe which can help with that.

 

Looking from a different view …. many small businesses are actually quite successful, IF, they have a good product or service at the right time and have good luck. Seriously, alot of small business success happens because of timing and luck than skill.

 

The trouble starts when those two run out. It is usually timing that goes first : The economy changes, a better widget comes out after yours, your product/service/industry gets bad press, etc. This is when the business spiral downwards. This is when you have to use your brain and know when to seek outside help.

 

It’s rather easy to make a go of a small busness with luck and timing on your side. It takes a solid plan, discipline and strong problem solving skills when you lose those two attributes.

 

My best advice is to build your business to grow. Then plan that it will dip …. and plan for the dip by reinventing your business with new ideas and thoughts. Often these innovations come from an outsider, such as a consultant who can view your business objectively. Then, your job as the owner is to listen and respond accordingly!

 

Above all though, never forget that business is about making money, and making money is about sales. If you concentrate on sales and manage cash flow, then you should be able to make it out of the start up phase and grow a very healthy business for the long run.