Friday, September 27, 2013

Managing Stress Begins with Knowing Its Source

Stress has long been known as a common curse of the entrepreneur. While there is no easy prescription for this problem, a helpful remedy is for entrepreneurs to get together and share their problems and frustrations.
When entrepreneurs get together, here are some of the factors they identify that increase stress.

When the initial vision of success gives way to disappointing sales. As one example, a business venture began based upon a single product that the owner really believed in -- a product that often drew praise when demonstrated ... but wouldn't sell. The owner heard over and over from prospective customers that the product was "a clever idea but I can't use it in my business." Stress was the by-product as this entrepreneur had to tear himself away from this single product, look at the facts, and begin again -- this time producing for the market, not for himself. A new product was the solution.

Partnership conflicts and coordination. When you start a business, friendships as well as investments are on the line. The backgrounds and talents of partners can make a difference. For instance, one partnership's co-entrepreneurs had very similar backgrounds, making the division of labor problematic.

Abandonment of reliable careers. The pressure to succeed is multiplied when new entrepreneurs find themselves taking a severe cut in their personal incomes in order to pursue their own business.

Overcoming bureaucratic barriers to small business marketing efforts. The difficulty a small company often has in dealing with layers of big-business bureaucracies can cause a great deal of strain. Reaching the CEO of a larger corporation may require a level of aggressiveness unnatural and, therefore, stressful to a small business owner. This frustration had been so great for one owner that he decided to direct his marketing efforts exclusively at other small companies.

Being too dependent on one company. Another business mentioned that his company had to swallow a very large loss on a major project when the single large firm his company had depended upon for its market suddenly ended the relationship.

Eric W. Leaman
Organization for Entrepreneurial Development
Unleashing the entrepreneurial spirit.
Change your mind ... and EVERYTHING changes

Budgeting and Your Small Business

“I have always thought that one man of tolerable abilities may work great changes, and accomplish great affairs among mankind, if he first forms a good plan, and, cutting off all amusements or other employment’s that would divert his attention, make the execution of that same plan his sole study and business.” - Benjamin Franklin (1706–90)

Many business people run their businesses without a planned goal… by the seats of their pants. In trying to survive from week to week and from month to month, such people overlook an important management tool, budgeting. Budgeting can help just as a map helps you to keep on the right road.

Budgeting is a tool for dealing with the future. It helps you turn expectations into reality.

An increase in profit should be the first consideration when you think about the prospect for your business in the next year. Making a profit is the ONLY reason for being in business! Working up a budget helps you to determine whether or not your profit goal is within reach.

 Why Budget
A budget is a plan that enables you to set a goal and list the steps that are necessary to reach that goal. Thus, a budget helps you think about what you want your business to do in the future. By planning, you are in a better position to act to prevent crises.

In its simplest form, a budget is a detailed plan of future receipts and expenditures - projected profit and loss statement. Thus, once the period for which you have budgeted is completed, you can compare actual results with anticipated goals. If some of your expenses, for example, are higher than you expected, you can start looking for ways to cut them. Conversely, if you have fallen short of your goal, you may want to look for ways to increase your income.

Budget makers can start either with a forecast of sales and work down or with a forecast of profits and work up. Most businesses use the latter method. In other words, you decide what profit you want to make and then list the expenses that you will incur in order to make that predetermined profit.

 A Plan For Increased Profit
Before you can use a budget as a plan for increased profit, you have to be sure that your present profit is what it should be. In a business, the year-end profit should be large enough to make a return on your investment and a return on your own work-pay.

Value Of Owner's Service.
Skilled crafts people who own businesses are kidding themselves if their firms' profits are less than they can earn working for someone else. Your net profit after taxes should be at least as much as you can earn if you worked at your trade for a weekly pay check.

Return On Investment.
The year-end profit is too low it does not also include a return on the owner-manager's investment. That investment includes the money you put into the firm when you started it and the profit of prior years which you left in the firm - retained earnings

Your Targeted Income.
After you know what you made last year, you can set a profit goal for next year. Be sure that your goal includes a return on your services and a return on your investment.

Friday, September 13, 2013

5 Mistakes Women Business Owners Make

We came across an archived article on that struck a chord with several contributors. If you are a woman running a business, do you see yourself in any of these? We'd pose the same question to Advisors working with women-owned businesses.

The 5 mistakes are listed below. The link to the complete article is after the jump:

1) Running your business impulsively
2) Setting prices too low
3) Avoiding Sales and selling
4) Under-utilizing social media
5) Getting by instead of getting ahead

Did you recognize yourself or anyone you know? View the complete post and share you thoughts!

Wednesday, September 4, 2013

The Ten Commandments of Small Business Ownership

I. Establish the Strategic Direction of the Company ... Mission Statement!

II. Build Loyal Employees

III. Hold Employees Accountable

IV. Continue Upgrading Management

V. Build Strong Relationships ... vendors, customers, and advisors.

VI. Keep Margins and Markups as Low as Possible

VI. Always Produce and Provide Quality

VII. Strive to be the "Low Cost" Producer

VIII. Grow ... but do so prudently and profitably.

IX. Create Excellence in Operations and Execution

X. Control the NUMBERS!