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All About Small Business
Updated: 1 hour 6 min ago

Year-end Preparations

Wed, 12/01/2021 - 18:11

Year-end is a busy time both professionally and personally.  As a small business owner or manager, you have an even longer list of things to think about.  But devoting attention to your business not only helps you end 2021 in the best way possible, it also sets you up for success in 2022.


Here are some activities you should consider focusing on.

Accounting/Finances

  • Run standard financial reports, such as an income statement, balance sheet and a cash flow statement.  Doing so gives you an opportunity to look at the big picture and a guide to your company’s financial position and health. 
  • Compare the amount earned in a period of time (4th quarter 2021 or all of 2021) versus the amount spent through your income statement; it is also called a profit and loss statement.
  • Look at your balance sheet to determine if you are profitable; it does this by comparing everything the business owns(physical inventory, property or equipment, trademarks, and invoices the business needs to collect)against everything the business owes (pension plan obligations or invoices needing payment).
  • Analyze cash flow statement to identify where cash was spent, trends for operating (revenues and expenses), investments (assets purchased and sold), and financial decisions (loans and repayments) activities throughout the year to see if you generated or lost money.
  • Calculate a few metrics to get a better handle on your business: current ratio (current assets divided by current liabilities) ideally should be between 1.5 and 2; debt ratio (total debt divided by your total assets) anything below .3 is considered fair; and gross profit margin (divide profit by total revenue) shows what percentage of your income is actually profit.

If you do need some adjustment (such as more sales and/or fewer expenses), financial documents show you where adjustments are needed and tell you how much you need to adjust.

Also, if you’re in the market for funding, expansion, or mentorship, financial documents are often required to let interested parties see the financial records of your business. 

You might also want to also speak with your accountant or CPA about any questions you might have.

  • Get your tax documents together.  You may need to fill out tax forms, which may include Form 1099-NEC and Form 1096, W-2 Forms and W-3 Forms, State and federal payroll returns (Form 940) or quarterly (Form 941). 

Plus you should compile your income, both business and personal, if relevant.  Gather all your deductions.

  • Verify vendor or supplier information for contact information (contact name, email, telephone number, mailing address); make sure to include any new relationships started during the year.  If time permits, evaluate your vendor relationships and look for opportunities to negotiate better terms for 2022.
  • Reconcile accounts receivable, the invoices remaining unpaid and past due by customers for work completed and/or goods purchased.  Collecting accounts receivables will give boost your cash flow and start 2022 in a better position.
  • Check on payroll and benefits.  Handle any issues or corrections that need to be made before year-end.  Ensure taxable fringe benefits (such as company car, third-party sick pay) and other benefits (such as health and life insurance, transportation subsidies, educational reimbursement) are accounted for.

Human Resources

  • Do an audit of the information you have on all your employees. Make sure you have the correct phone numbers, addresses, and payroll information for each one. 
  • Update the status of new hires or former employees, including access, if any, to computer systems or financial information.
  • Use year-end incentives to reward individuals and your team(s).  Yes, money is always welcome, but also consider paid time off, flexible schedules, perhaps a gift or a party as a way to say thank you as well increase employee satisfaction and morale as you close out the year and head into 2022.
  • Consider conducting a drive for charity for a give-back to your community and as a possible business benefit.
  • Consider whether you need to hire worker or there are areas where you can cut back on your team?  To better suit your business needs, think about adjusting hours, rearranging schedules, and whether some employees can work remotely.  Instead of a new employee, consider a part-time person, seasonal worker, gig worker, or a college intern.
  • Celebrate your business successes.  Document and share the accomplishments and wins achieved during the year by individuals, teams and the business as a whole.  These activities are a great way to build camaraderie, increase morale, and end the year on a high note.

Information Technology

  • Backup your computer, plus ensure all data is stored as securely as possible.  Important files such as accounting documents, point-of-sale systems, customer information, valuable emails, creative and proprietary briefs, employee records, and other critical business information should be put on external hard drives or in cloud-based storage systems.
  • Download your important files and reports, even if you have them on a cloud-based system like Box or Dropbox.  Create two separate digital copies and store them in separate locations, plus have one offline/hard/printed copy that is store in another location.
  • Evaluate your filing naming conventions.  Consider implementing a company-wide file-naming system, such as Name-Date-Invoice#, if you don’t already have one; it will keep your file organized and make finding documents easier for everyone.
  • Backup your contacts and/or cell phone to the cloud or a hard drive, especially if you don’t have a cloud service that regularly conducts a backup.  Make sure you have current information for your most important business contacts.

Other Year-end Activities

  • Take an inventory count. Conduct a count of physical products and material as close to December 31st as possible.  Investigate any significant discrepancies between actual and recorded inventory.  An annual physical inventory is not only important for tax purposes, but is a great way for you to evaluate what products sell well and identify which ones don’t do as well.
  • Contact suppliers about slow-moving inventory; unless it is obsolete, perhaps they will be willing to exchange it for something you can turn over more quickly.
  • Conduct a physical asset count.  Check for all assets on your books.
  • Check business licenses and permits, they may need to be renewed.  Some are subject to sales taxes; others are subject to testing, inspections, and/or certifications.
  • Ensure intellectual properties that need to be protected from potential theft by competitors through registration and then being in commerce “consistently and in a high-quality manner.”  Ownership then must be renewed every ten years.
  • Know and follow-through on your business’ annual compliance requirements, which vary by state and by business structure.
  • Audit your website.  Check to make sure all your website links are functional, that your contact information is up-to-date and works.  Update images or headline to keep your site looking up to date.
  • Update your business goals.  With input from your team(s), customers, partners and financial statements, assess your 2021 goals and determine whether you fulfilled them or where you fell short; perhaps you need a last minute push if your goals are within sight. 

Or,

  • If, unfortunately, you are closing your business be aware of and follow the dissolution process defined by your business’ structure.

In all the hustle and bustle of doing business through the end of the year, don’t forget to take some time to do some year-end preparations; it will be time well spent and get your business in good shape for the new year.

Now if you are super ambitious, why not get a start on 2022?

Plan 2022 Goals – with your 2021 learnings, set your goals for 2022 and write them down.

Develop Action Plans – create an action plan to help you achieve each goal.  The best goals are specific, measureable, attainable and time-based.

Plan Time to Keep Financial and Tax Records Up-to-Date – set aside time to update both on a quarterly basis as well as to meet with accountants and/or financial advisors.

Create Your Marketing Plans – think about what areas of marketing you want to focus on.

Assess Employee Engagement – review your compensation and benefits to ensure they remain competitive.  Develop possible promotional paths going forward to foster loyalty and keep your best performers.  Plan company get-togethers (barbeques, hikes, etc.) that are advantageous to everyone.

May 2022 be your best year yet.

Communication Challenges with Remote Workers

Sun, 11/07/2021 - 16:50

Business communications have become almost too challenging in this new pandemic environment.

In the hybrid world, business owners and leaders worry that organizational cohesion is being lost.

Remote works offer communication challenges including:

  • Use of jargon or over-complicated, unfamiliar or technical terms
  • Emotional and taboos; physical barriers to non-verbal communication
  • Expectations and prejudices; cultural differences
  • Information overload; lack of attention, interest, distractions, or irrelevance to the receiver
  • Differences in perception and viewpoint
  • Physical disabilities such as hearing problems or speech difficulties
  • Use of technologies
  • Organizational development
  • Work-Life balance

The effects of these communication problems on remote employees include:

  • Miscommunication
  • Lack of connection
  • Lack of collaboration
  • Lack of trust
  • Feelings of alienation
  • Over-communication
  • Personal aversion to interaction

To ease these challenges, here are some best communication practices for owners and leaders to deliver news, updates, and remediation:

  • Be an active listener
  • Ask effective questions
  • Understand and know your audience
  • Listen to nonverbal communication
  • Over-communicate effectively
  • Begin and end powerfully
  • Timing is everything
  • Get comfortable being uncomfortable
  • Have fun!

If you want to learn more about communication challenges and solutions with a remote work force as well as suggestions for what you can implement right now to enhance communications with remote workers, listen to a panel of experts discussing this on Biz-Bytes at https://youtu.be/AH61k8lac9g

Being a business leader requires constant adjustment to changing challenges.  With remote workers becoming more common, you need to operate effectively in this new world.  Most of you will.

Logistic Bottlenecks Can Kill Your Business

Fri, 10/01/2021 - 16:01

How small businesses must adapt to the changing logistics world

Logistical considerations have always played a strategic role in business, today more than ever.  Logistics can spell the difference between success and failure in business. 

In recent years, changes in the business environment have forced small businesses (and larger companies, too) to pay particularly close attention to how this function relates to others.

Here are a few tips on logistics optimization for small businesses; how you can minimize bottlenecks.

Understand the objective

The principal purpose of logistics is to get merchandise from one location to another.  First from the vendor to you.  Second from you to your customers.  You want to do so in the most expedient, cost effective manner possible with transparency of doing so along the way.  Not having your offerings can mean missed revenue.  But, having too much is costly.

Strategies

Many companies manage logistics by developing competitive strategies considering postponement and speculation, standardization, consolidation, and differentiation. They may conduct formal or informal logistics audits, redesigned systems to provide more effective support, and take steps to ensure continued appraisal of opportunities over the long run.

Government regulation, the health of the nation’s transportation system, energy restrictions, custom and trade restrictions, and technological developments all represent important considerations in the formulation of a logistics business strategy.

Strong customer focus

Logistics is not only about delivery. It is also about investing in your customers from your business beginning to its end. Customers are essential to the logistics flow. They expect assurance and constant updates about the product. If there is any change in shipment date, delivery issues, then let the customer know about it instantly.

Once an order is placed, make sure the customer can track everything online. Invest in an excellent online shipment tracker to allow your customer to be updated about the website or app, and they need not call customer care every time.

Offer your customers options

Flexibility is required, customers expect retailer to offer many options that can fit their needs and lifestyle. Therefore, it is relevant in order and logistics fulfilment.  A lot of customers abandon their cart while choosing the requisite delivery option; often it is because they did not find the right delivery approach they were looking for. Many want door-to-door shipping options relevant, while others look pick-up as another variable option for them. With many delivery methods, you negate the risk of losing them at the last step.

Spend on visibility and collaboration

Regardless of your strategy, you can’t run an effective supply chain without visibility and the ability to communicate to customers and suppliers quickly.  Collaboration will help you keep inventory low while keeping lead times at a minimum.  Your supply chain is core to running your business.   

Track Costs

Break down your logistics process and have a clear view of what each element costs you.  You can’t control costs if you don’t know where you’re spending.

Also, with this knowledge, you can directly or indirectly transfer the cost to the customer.  You must know how much it costs to move the item from point A to B if you are going to make the right pricing decisions.

Get competitive quotes

Comparing different providers is basic business procedure, but it’s amazing how many SMBs go with the first logistics company that comes to mind.  Use the internet to search for the ideal service provider.  Obtain quotes from multiple carriers and check if the prices are negotiable; make sure you are comparing like for like.  Always get at least two or three quotes for any sizable expenditure.

Planning is the key

Prepare your inventory and choose reliable suppliers as the first step in your logistics chain. Whether you are managing your in-house logistics teams or outsourcing it, you need to have complete control.  Ensure that you review the commitment and forecasts regularly for calculating the safety stock as well as contingency plans in place just in case there are delays or diversions.  That doesn’t mean stockpile inventory, but you should have plans that include alternative sources and the ability to shift goods from one location to another.

Improve sales and operations

Effective sales and operations (S&OP) planning can help you understand when you might need new equipment or overtime.  Accurate forecasts help you plan inventory, so you have enough of the right products in place to meet demand.  The S&OP process can provide insight into upcoming promotions, new product introductions or other demand changes.  With this information, you can ensure you have enough (but not too much) inventory on hand.

Outsourcing

Outsourcing, more or less, the entirety of your logistical needs can free up your time and allow you to focus more on innovating and growing your business.  This may not be the most cost-effective option, but it could be the simplest and most convenient.

Consider teaming up with a partner

Most logistics companies set their prices based on volume, and teaming up with a partner could provide a more cost-effective way to meet your needs.  Take into account not only the specific details of the logistics company, but also the specific needs of your partner. 

Try a small business logistics service from a major provider

If the size and budget of your business cannot warrant investing money in a specialized logistics provider, perhaps it could be beneficial to explore what some of the major shipping and transportation providers offer. UPS, FedEx, and DSL all offer services that cater to small businesses.  Given their reputation for reliability, this could easily be a viable option for your business.

Consider an industry-specific provider

An industry-specific provider would know the specifics on how to handle and care for the product being delivered, especially if it is fragile, perishable or high-value.  You may spend more money on an industry-specific provider, but consider the risk of hiring a provider that does not specialize in your particular market.  If a product is mishandled or damaged, that’s money down the drain.

Work with a third-party logistics company

Many small and mid-sized businesses believe that working with a third-party logistics company (or 3PL) is too expensive for them, but that may not be the case.  A good 3PL can help ensure that you get reasonable rates, fast delivery, and the most productive warehouse and storage teams.  It will have many of the necessary visibility and collaboration tools available to help you; further they can help you with packaging, warehousing, handling, tracking, paperwork, labeling, and even business partnerships.

Leverage Technology

Today it is possible for you to keep tabs on a wide range of events affecting your product’s transportation.  Both you and your customers should be able to tell where the item is at any given point in time.  By giving customers direct access to tracking information, you rid yourself of the burden of having to keep them updated.

Supply chain and logistics are vital for the success of any business.  Without a well-thought-out logistics management plan, you’ll place your entire business strategy at risk of failure. 

Every business must learn to master logistics, all parts work together, to make it more organized, cost-effective, and efficient for both you and your customers, stand out from the competition, and boost customer satisfaction.

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.