1. Know Your Market.To succeed in your home based business start up, find out what your customers want and give it to them. Ensure there is a demand for your product or service by carrying out market research. Know who your target market is. For example, will you be selling to local people or small businesses.Tip: Have a dedicated space in your house for your business and keep it completely separate from your home and family life.2. Be Original and Different.There are a lot of boring companies and products out there. Use original thinking and novel ideas to leap ahead of the competition. You can be different in the way your product is delivered and packaged or add a feature that no one else offers.Tip: Do not try to be different by having a lower price. Add value to your product or service and charge accordingly.3. Pricing.Build in all of your business costs into the pricing of your product or service. That must include marketing and advertising costs, travelling to visit clients, your salary, professional fees and how many sales you hope to make for the effort you are making.Tip: The right price is what your customers are willing to pay and should not be based on your operating costs.4. Decide How Your Business Will Operate.What is your home based business start up going to do and what does it need to do in order to succeed. Do you need a production line, stock or storage space. Are you going to provide a service, if so what tools and equipment do you need.Tip: Try not to buy brand new. Borrow or use free promotions and 30 day trials.5. Selling.As an entrepreneur you will be wearing many different hats, salesperson being one of them. Decide on your method of selling: Is it going to be phone, online, direct or affiliates. Once your business is turning a profit, you should aim to spend at least 50% of your time selling.Tip: Do not take rejection personally. It is a part of business.6. Business Management.Know what is working and what is not working for your home based business start up. You must keep on top of taxation, insurance and accounting. How will you manage the work flow if the business does better or worse than expected. If the business takes off will you need more staff. If so, where will they come from and how will you train them.Tip: Cut out that part of your business which is not making money. Do not be emotional about it.7. Financial Planning.Always do a cash flow forecast to determine your home based business start up costs. Can you carry these start up costs until cash comes in. If not will you need funding. When forecasting do not assume or guess. Base your figures upon experience. Yours or somebody else’s.Tip: Cash is king. Keep an eye on cash flow and make sure your customers pay you on time. Do not give credit unless you absolutely have to.8. Funding.If you need to raise funding for your home based business start up, consider the following sources: Your own savings, credit cards, bank overdraft, venture capitalists, business angels (wealthy individuals) or banks. You may be able to obtain government cash or cash in kind, in the form of training or innovation from the government.Tip: borrowing from family and friends can be more trouble than its worth. Look at other alternatives first.9. Outsource.When you begin your home based business start up, you will be doing all the jobs yourself. But as soon as money starts coming in, start to delegate. This can be in the form of outsourcing the mundane tasks to others. For example, your charge out rate may be $35 per hour. Outsourcing a particular task may only cost you $20/hour.Tip: Think like the business owner, not the employee. Cut costs.10. Wealth Mindset.Having a wealth mindset involves having a burning desire to succeed, faith in yourself and the business and perseverance, amongst other things.Tip: You must acquire this vital quality or you will fail.
Work-Life Balance Tips for Small Businesses
People involved in small business get a bad rap for their workaholic ways. You know because you either know someone who is involved in small business or you are that person. Let’s look at some facts about small businesses in San Diego and then ways people involved in small business everywhere can a better create work-life balance.
According to the U.S. Small Business Administration, 99.9-percent of the 27.5 million businesses in the United States are considered small firms with fewer than 500 employees*. According to the San Diego Regional Chamber of Commerce, the majority of companies in San Diego County are small businesses with 50 employees or less. One out of every five small businesses in San Diego County are in the business services segment which includes consulting, engineering, accounting, research and management. The additional types of business segments in descending size order are wholesale trade, manufacturing / repair, transportation, consumer services, specialty construction, builders, retail, finance/real estate/insurance and an “other” segment (the unclassified small businesses in the county). In San Diego County, the average number of people employed by a small business is 7.3 people.
Everyone related to small business – the owners, the employees, the people who cater to and support small businesses – here are three tips for more balance in your life:
1. Schedule time off. Small business owners value the importance of sticking to a schedule and deadlines. Decide how much time you can schedule to relax, be social or spend time with family in the next week and also how much time you would ideally like to have for such activities in the future. Then, schedule time away from work. Maybe this upcoming week you can only dedicate one hour away from everything work related; block out that hour on your calendar immediately. Knowing that your ideal amount of time is two full weekdays per month, a small business owner can set aside those specific dates in February now. Once those days are on the schedule, they must be respected as if they are meetings with the most valuable client. Commit to taking the time off for the things that matter most outside of business and protect that scheduled time.
2. Turn off the cell phone. This goes for small business owners and anyone who has ever thought about work outside of the workplace. Especially when spending time with others outside of working hours, turn off the distractions of business. By removing the distractions of phone calls, text messages, instant messages, e-mails and phone alerts for a short time, you can truly relish in your time away from the office.
Do you (or the small business owner you know) feel anxiety rise up inside of you when you merely consider turning off your phone? What if you took up the challenge of turning your phone off for one hour next week? Maybe it’s turning off the phone for the hour you’ve scheduled for yourself and your family. Maybe you turn off your phone before you fall asleep or leave it off while you get ready in the morning. Another suggestion is to shut off your phone during your commute if you drive. Since you shouldn’t be on it if you are driving, turn it off and turn up your favorite tunes. Whenever you decide to turn off your phone, you are claiming that time for yourself, which is a crucial piece of the work-life balance equation.
Once you’ve turned on your phone again and realized that your business or work hasn’t imploded or exploded, your anxiety will be less the next time you cut off this type of communication. And what if your business does start to implode or explode? If you are not the sole person in your business, then someone will get ahold of you through your significant other, neighbor, friend, coworker or someone will show up where you are to tell you. If you are the sole person in your business, find another business owner in the same situation and work out a trade where you ensure each other’s businesses don’t go awry. Which brings us to the next point.
3. Appoint a second-in-command for when you are inaccessible. You will take time off whether it’s an hour next week or a full month next year, and you don’t want to worry about your work during that time. That would eliminate the balance. Select a second-in-command and let the person know in what circumstance they will be in charge and how to reach you if a true emergency arises. (You may want to clarify what you consider an emergency with this person.) Let everyone in your company and important vendors know who is in charge in your absence moving forward. That way if something comes up in the hour you are in a business meeting or at your child’s play or in the month you are on vacation abroad, all employees and important vendors will know who to go to. Your second-in-command acts like the gatekeeper to your time away and assesses when he or she needs to contact you. Finally, when setting up your away messages with the times and dates you will be out of pocket, list your second-in-command’s contact information. Your away message may be on your website, in your social media messages, in an e-mail bounce-back message, on your store’s door, and on the phones in your business. If you’d like that breath of fresh air without the worry, then take the steps needed to prevent work from finding you unnecessarily while you are claiming more life in your work-life balance.
With the majority of businesses in United States and in San Diego County operating as small businesses, work-life balance is necessary to continue and grow. By scheduling time off, turning off the cell phone and choosing a second-in-command, you can protect and freely enjoy your time away from the small business you run, work for or support. Here’s to work-life balance in small businesses everywhere!
* The U.S. Small Business Administration sources data from the Office of Advocacy estimates based on data from the U.S. Dept. of Commerce, Census Bureau, and trends from the U.S. Dept. of Labor, Bureau of Labor Statistics and Business Employment Dynamics.
The Benefits of Having Management Accounts Prepared for a Small Business
Small business owners should prepare management accounts alongside financial accounts. Management accounts are important for tracking, recording and reporting financial information for management purposes. There are no set standards for preparing managerial accounts and any business can design their own style according to their operation and business needs. There are several benefits associated with these accounts. Not only can small business owners enjoy the benefits of creating a competitive advantage but can also leverage the way they do business in their markets.Reduce ExpensesManagement accounts can help a small business to lower its operating costs. The information from these accounts will help the business owner to review the economic resources and other business operations. It helps them to understand the cost of doing business in their current situation. They will know the costs of producing goods and services and find out if cheaper raw materials will affect the quality of the final products and how consumers will respond. This will help them to source for cheaper factors of production and reduce the cost of doing business.Improve Cash FlowManagement accounts involve a review of the budget in comparison with the actual expenditure. This is a good way for small businesses to understand their roadmap to the future. Management accounts will go through the company’s financial history and come up with a master budget for the entire business. The owners will then know when to spend money and which items are either necessary or unnecessary.Business DecisionManagement accounts also help the small business owner to make appropriate decisions based on financial facts. Without these accounts, many managers make decisions based on qualitative analysis – this can be dangerous in the long run. Management accounts provide quantitative analysis for several decision making opportunities. Small business managers will be able to have a clear understanding of the implications they expect when they make their business decisions.Increase Financial ReturnsSmall businesses can increase their financial returns using managerial accounts. This is because the accountant can prepare a financial forecast showing consumer trends, potential sales and the effects of pricing strategies in the economic marketplace. The small business owner will be in a better position to know the amount of products to produce in the current market prices in an anticipation to beat the competition in any future price changes.Determining Production QuantitiesA company’s intention is to produce more than one product or service using the same resources. For example, a baker will produce cookies and bread using the same resources. A good accounting firm will make use of the workers to perform both auditing and preparation of management accounts. This will help business owners to understand which products to produce most and which ones to reduce. This is a complex process that involves market demand analysis, capacity verifications, and costs of production and financial ratios that can be achieved through management accounts.How Far To Process ProductsSmall business owners are often unable to clearly tell whether to process a product further or sell it in whatever form. Some think it would be more profitable to add value to the product while others prefer to sell it raw. Management accounts will help a small business owner to understand how far a product or service should be processed to maximize profits. The accounts show what happens when factors of production are increased even by one unit.