JoAnn Laing's Blog - All About Small Business

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All About Small Business
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JoAnne Laing’s Blog

Sat, 09/18/2021 - 22:12

All About Small Business: Click here to enter the site https://joannlaing.wordpress.com

From Idea to New Business

Tue, 09/07/2021 - 19:18

To start a new business, you begin with a process.

Having a process makes the first dozen plus steps to starting a business more manageable and hopefully more successful.

Here are some of the steps you should include in the process that launches your new business.

  • Upfront check-out your idea.  Run it by family and friends, industry experts; do research.  Does your business idea make sense?  Is there a need or want in the marketplace for it?  Is the marketplace big enough and is it expected to grow?  Also, checkout competition; what are other businesses doing; how will your business be unique?  Are you passionate about your business idea and will it fuel you through the challenges of starting a new business. 
  • Select a name.  What your business is called is important.  Does it reflect what your company does?  Is it easy to pronounce?  Is the URL available?  Check its meaning in other languages where you might conduct business and/or the languages used by your customers, vendors, partners, and others you will be doing business with; make sure it does not have a meaning you do not want.
  • Write a strategic business plan.  Your plans may change along the way, but you will have a starting point and make adjustments.  Include your vision, culture, offerings, financials (revenue, expenses), profit margins, capital expenditures, staffing, competitive analysis and your business’ advantages, partnerships, planned acquisitions, etc.  Your business plan will come in handy as you meet with bank managers, potential investors, possible hires, and hired experts.  There are a number of online templates to get you started.
  • Decide on your business formation structure.  Unless you plan to work as a sole proprietor, you should look into creating a limited liability corporation.  To learn about the different business structures, go to the Small Business Administration website (https://www.sba.gov/business-guide/launch-your-business/choose-business-structure).  Also, an advisor, such as an accountant or lawyer, can guide you. 
  • Select your business location(s).  Consider where you live or want to live; as well as look at where are your target customers (if you are retail you will want to be easily accessible), business partners, and potential hires.  Further, you should consider the costs, benefits, and restrictions of different government agencies.
  • Register your business.  Your location and business structure determine how you will need to register your business.  Register with federal, state and local agencies; if you do not register your business, you could miss out on personal liability protection, legal benefits, and tax benefits.  Then stay up to date with registration requirements; some states require you to provide reports soon after registering depending on your business structure.  Also, check with your local tax office or franchise tax board, if it applies to you.
  • Get a Tax ID number.  You willneed to file for a Taxpayer Identification Number (TIN), which the Internal Revenue Service (IRS) uses to administrate tax laws, unless you are a sole proprietor or a LLC without any employees.  It is issued either by the Social Security Administration (SSA) or by the IRS. However, if you plan to have employees, you will need to get an Employer Identification Number (EIN) that they can use for filing taxes.  An EIN can be applied for online if your business is located in the United States or U.S. Territories, and you’ll first need to have a TIN to apply for an EIN. 
  • Apply for licenses and permits.  Learn about the business licensing requirements and the permits you need depend on the city, county and state in which you are doing business as well as the kind and size of business you plan to start; then apply for them.
  • Get a business bank account.  Choose a bank that goes the extra mile for small businesses is vital to your success.  Look for banks that offer dedicated business checking accounts with low or no fees, small starting deposits, ATM accessibility in your area, interest-earning accounts and online or mobile banking tools geared toward making small-business processes easier.
  • Get business insurance.  If you are not protected with the right insurance, accidents, natural disasters, and lawsuits could put out of business.  Select the type of business insurance you need.  The federal government requires every business with employees to have workers’ compensation, unemployment, and disability insurance.  Some states also require additional insurance.  Then, assess your risks, find a reputable licensed agent, and shop around for the best prices and benefits for your business.
  • Set your business culture.  How you do business, your mission/purpose and values, is important for hiring, developing, and retaining employees as well as establishing partnerships and building your customers.  Be transparent and consistent with your culture.
  • Create a brand.  Decide what the emotional resonance of your company should be and then use that to inform all your branding choices: images, graphics and how products make customers or clients feel.  Once you’ve decided on a look and feel, stick with it. Consistency of messaging is vital to brand awareness and success.
  • Build a website.  A good business website is a fundamental part of the business creation process, and it is nearly impossible to do effective business without one, much less reach your growth and sales potentials.  Get a web presence up and running by the time you’re ready to launch.
  • Plan, execute a digital-marketing strategy.  Digital marketing is going to be important to how you promote your business and engage your customers.  The voice you use must reflect your business and be consistently applied across channels.
  • Get business insurance.  If you are not protected with the right insurance, accidents, natural disasters, and lawsuits could put out of business.  Select the type of business insurance you need.  The federal government requires every business with employees to have workers’ compensation, unemployment, and disability insurance.  Some states also require additional insurance.  Then, assess your risks, find a reputable licensed agent, and shop around for the best prices and benefits for your business.
  • Set your business culture.  How you do business, your mission/purpose and values, is important for hiring, developing, and retaining employees as well as establishing partnerships and building your customers.  Be transparent and consistent with your culture.
  • Create a brand.  Decide what the emotional resonance of your company should be and then use that to inform all your branding choices: images, graphics and how products make customers or clients feel.  Once you’ve decided on a look and feel, stick with it. Consistency of messaging is vital to brand awareness and success.
  • Build a website.  A good business website is a fundamental part of the business creation process, and it is nearly impossible to do effective business without one, much less reach your growth and sales potentials.  Get a web presence up and running by the time you’re ready to launch.
  • Plan, execute a digital-marketing strategy.  Digital marketing is going to be important to how you promote your business and engage your customers.  The voice you use must reflect your business and be consistently applied across channels.

Starting and owning a business is a full-time commitment, one that owners put their all into.  Make sure you start your business off well to enhance your chances of having a successful small business.

Once In A Life Time Opportunity For Small Business – Seize It!

Fri, 08/06/2021 - 17:42

Not since the end of World War II have small businesses had the opportunities afforded them with the easing of the pandemic.

Small business leaders should take lessons from the company managers of that period and move boldly into this holiday season and beyond.

One excellent example from that post-war period is the Lionel Manufacturing Company, along with Ohio’s American Flyer Manufacturing Company, these companies competed against German and Czech companies in the model train sector before the Second World War. With conflict’s disruption of normal trade patterns and shifting to wartime production of miniature warheads, both companies ceased making large batches of model trains. Moreover, women replaced men in their workshops as males were drafted for combat engineering duties.

In August, on the day Japan surrendered and Lionel’s defense contracts automatically cancelled, the company owner order his staff to clear wartime equipment and ramp up the train dies. Within two weeks, the company was producing model trains for delivery to stores in time for the Christmas 1945 season.  By contrast, American Flyer chose a more leisurely conversion aiming for 1946.

The Lionel owner contacted Sears Roebuck whose Christmas catalogue was already finalized without trains and offered to have enough trains for delivery in time for the holiday season. What he demanded in return was five years exclusivity. Between Sears and holiday sales in Chicago’s Marshall Fields and New York’s Macy’s, Lionel became the industry leader for the next 30 years.

One added bonus for the company, there was enough work needed that men returning to their company jobs did not replace the women who had kept it going but rather supplemented them.  Many stayed on until the company was sold and manufacturing shifted to Asia.

The Pandemic and this year’s sales explosion coupled with distribution disruptions being experienced means nimble small businesses can also prosper widely in this holiday season and earn additional sales in the months beyond.

Like Lionel’s owner, it is important that small business leaders start now building inventory, establishing new sources of material, adding lines of credit, and training staff to meet the groundswell of buying expected this fall and winter.

Suggested key components to capture opportunities:

  1. Establish and enforce rules about job location, mask wearing, and lines of authority.
  2. Find additional lines of credit to assure ability to procure supplies.
  3. Train staff in best procedures in a post-pandemic world.
  4. Seek new sales by identifying potential clients who are also seeking or need new suppliers.
  5. Improve operational support by streamlining support functions.
  6. Leverage multi-channel marketing.
  7. Focus the company on growth and bolstering morale; consider adding inventive for achieving goals.
  8. Above all, be flexible and recognize it is a new world out there..

Preparing For Inflation

Tue, 07/06/2021 - 17:15

We could see high inflation* (when the cost of goods and services increases rapidly) in late 2021 and beyond.  It would befit the small business owner to be prepared. 

Let’s look at how inflation can affect your business and what you can do to contend with it.

Evaluate Revenue Streams – Ideally do this before inflation actually occurs.  If your offerings are discretionary or if it is unlikely that you will be able to compete on price during a time of inflation, your business model may be in serious jeopardy.  Reconfigure your revenue forecast to accommodate inflationary pressures and make necessary adjustments in advance of rising prices.

Borrow Now, if you have to – As interest rate are expected to rise.  Begin by securing an operating line of credit at today’s rates to buffer the impact of cyclical lending needs later.  Also, consider borrowing now for capital that will result in a reduced cost structure and/or more secure revenue streams.  

Ask for a fixed-rate loan (instead of an adjustable-rate loan) so your interest rate stays the same regardless of economic conditions.  The larger and longer the loan period, such as for a mortgage, the more important it is to have a fixed-rate loan.

If you have a variable rate loan, they are going to renew at much higher rates during times of inflation; pay these loans down as soon as possible. 

Wages – It is not feasible to lock in your employees’ wages; they are going to, at a minimum, demand cost-of-living increases.  Plan for wage increases.  Also, consider hiring interns and freelancers who you can get at a fixed rate and do not have to pay benefits to.

Inventory – One way to fight an anticipated inflationary scenario is to lock in prices early.  You can do this either through options/futures contracts or simply by signing long-term contracts with suppliers. 

If you cannot lock in prices, consider stocking up on inventory.  Purchasing goods before price increases could put you in a much better competitive position than your competitors.  But, don’t risk cash reserves just to buy inventory.

Finally, renegotiate with your suppliers and ask suppliers for discounts.

Efficiency And Productivity – Spend time improving your processes productivity.  Look for areas of waste; then spend time and effort implementing ways work can be done more efficiently.  Conduct timely technology and services audits.

Reduce Other Costs – Consider relocating to a smaller, less expensive working environment.  If you rent, lock in the amount you pay.  Eliminate finance charges by paying on time.  And, prepare for the possibility of workforce reductions should the economy enter a period of prolonged inflation.

Prices – There are going to be some costs that you can’t lock in ahead of time, so you may be forced to raise the prices of your products or services to offset higher expenses.  However, smaller businesses are reluctant to raise prices when they already see business tailing off due to inflation and increasing the risk customer alienation.  A couple of ways to raise prices include: giving your customers some warning, saying and/or posting we need to raise prices starting on this future date to continue delivering the top-notch offerings that you’re grown accustomed to; and consider frequent small price increases rather than one or two big price increases. 

Customer Loyalty – Reprioritize your customer loyalty initiatives.  To prevent your customer base from moving to lower priced alternatives, secure your customer base by creating value added incentives to encourage them to stay with you.

Receivables – To minimize customers taking advantage of you by not paying on time and then you having to bridge cash shortfalls, reduce collection issues by tighten up payment terms, possibly instituting penalties for late payments.  Stay disciplined in collecting payments.

Investing Funds – With inflation and the value of the US dollar decreasing, the purchasing power of your cash will be dramatically lower after just a few years.  Any funds that you don’t expect to use in the near-term should be invested in assets that protect you against inflation; talk to your financial advisor about possibly investing in treasury inflation-protected securities (TIPS), mutual funds, and ETFs.

In summary, inflation can be a nightmare for your business if you are not prepared.  However, if you prepare before we start seeing higher prices, you can mitigate the effects of inflation or even benefit from it.

* Inflation is a period in which the overall prices of everyday goods and services start to rise.  Business cost of materials and labor rise squeezing profits.  Rising costs may or may not be able to be passed on to customers depending on the price elasticity of demand for of your offerings.  When inflation causes costs to rise, often interest rates will spike.  Inflationary pressures cause customers to try to delay payments in order to be able to pay with “cheaper dollars” so business cash flow suffers.

Satisfy Customers and Generate Sales

Sat, 06/05/2021 - 16:24

People, like butterflies, are emerging from the pandemic lockdowns.

During the pandemic many people changed their living habits, became isolated, more concerned about hygiene, and purchased more things online, and perhaps gained weight.

Besides purchasing more items online, they also broke other shopping habits.  Fortunately for small businesses new ones are developing.  Most immediately, there is going to be a period when buyers will experiment with new buying channels to fit their emerging lives.

Smart small businesses leaders will see this dynamic as an unparalleled opportunity to add new customers and welcome back old ones.

As early surveys show, consumers and businesses are eager to buy.  They have pent up demand and also new fashion, food, and hygiene needs.  Small businesses need to step-up their game in their local and online stores, making both more user friendly as shoppers seek new venues.

Consumers and B2B buyers have also learned to look for different ways to satisfy their needs.  Thanks to various aid programs, they have more money to spend and reasons to do so.  And they are not limited to what, where and how they previously bought.

Fashions for the office have changed, requiring wardrobe additions.  Grooming has become more demanding as has the foods people eat which are changing.

In the new era of socializing, people want to: look well turned out yet comfortable; order the best food and beverages for these activities; update their abodes to meet new lifestyle and for others who come visiting; and in general lead different lives.

Small businesses need to spruce up their local and online stores to draw the attention of these new and former shoppers.  Once in their stores proprietors need to concentrate on four area to compete in this new economy: curation, personalization, immediacy and now.  Plus beyond sight and sound, local businesses can add to their inside edge by being able to appeal to the senses of smell, touch, and taste.    

Let’s look at each area and consider the added sense advantages.

Curation – yes, curation can be done online; but in person it can be so much better.  Make it easy for your former and new customers to shop.  Put together kits of your products such as complete outfits, ingredients and recipes for meals along with decorations and beverages (perhaps provided in partnership with other stores), and essentials for body/home/transport make-overs.  By customers not only seeing your offerings with accompanying sound, they can more fully experience them with smelling, touching and perhaps tasting.

Personalization – of course, personalization can be done online; but by seeing the responses of your customer you can immediately refine and sharpen your personalization while adding to your knowledge bank their likes and dislikes.  Remembering and using names is important, as are colors and preferences.  Providing samples of products to try can lead to greater sales.

Immediacy – a light, very brief touch on the shoulder or elbow can provide familiarity without being too intrusive.  After months of isolation, people crave contact of friends and family.  A friendly, but not overly friendly, shop keeper who smiles and adds just the right touch can become a more trusted source of products and services.

Okay, you might think this might be creepy; but consider the success of airline attendants in 1st or premium class who make their passengers feel at ease with these same gestures.

Now – online can provide next day and often delivery in a few hours…for a price.  Stores can do better by having the products available now for an outfit to wear, a meal to prepare, a personal or home project to complete that day.  Many people put off activities until they are pushed for time; local stores can meet that last minute challenge.

Above all, view this period as one of opportunity.  Be smart and draw the consumer and businesses to your local and online stores to gain long-time customers and greater sales.