Category: SME
Don't start it, buy it!
Why should you buy a business versus starting
your own? Here are ten solid reasons:
1) The success rate for businesses purchased is much higher than the success rate for a new business startup. Just ask your accountant.
2) An established customer base means immediate cash flow! Enough said.
3) It is much easier to find capital to buy an existing business than to start a new one. Why? See reason #2 above. Bankers are not dumb. They know the statistics. Bankers are much more willing to lend money when there is an identified source of repayment already in place.
4) Many sellers are willing to carry-back financing at very reasonable terms. Why? For income tax reasons. They would prefer to defer any gain over a longer period versus taking a gain all at once. And if a seller is willing to carry back any part of the purchase price, it tells you the seller believes that the business will continue to succeed under your management.
5) Projections for a startup are nothing more than an educated guess. Projections for existing businesses for sale are based on historical results. Which is more reliable?
6) Startups always, I repeat, ALWAYS cost more to start than expected. For the money you will end up spending to start that new business (which may or not succeed) you could have probably purchased an existing business with immediate cash flow.
7) You may actually need to come up with less cash for your down payment plus working capital when you buy an existing business than you would need if you started your own business. Why? With owner carry financing and a performing track record, your existing business purchase is very bankable. A new startup is not very bankable. The cash required to get the new business to a cash flow positive is unknown. And it eats cash.
8) An established web site presence. Although each business will vary, most businesses rely to some extent on a business web site. The longer a web site has been established, and the more traffic that web site receives, the more value search engines place on that site. This is important as your web site ranking determines your placement in search engine results. In other words, building a new web site is not enough. Customers still need to find it. A quality, established web site can be a real asset, something that a new startup will not have.
9) Many businesses listed for sale are actually very fairly priced. One can often find a business for sale that will sell for three to four times cash flow. Think about it. Four times cash flow equates to a 25% annual cash return on investment. 25% will usually cover all debt service and still leave a decent return for the investor.
10) Less brain damage. Just ask anyone who has been ‘wrung through the wringer’ by starting their own business. Always wondering if customers would really come.
Think about it. It really is a pretty easy decision.
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Originally posted 2018-04-19 08:01:00.
Computer Consultant Startup: Identify Your Business Skills
Computer consultants need to have the right mix of business and technical skills to succeed with small businesses. Do you have the right skill-set to be a successful small business computer consultant?
Since you’re taking the time to read this article right now, it’s a good sign that you have what it takes to become a computer consultant. You’re in the small minority of people who have recognized that this is a business and needs to be run like one.
A Good Computer Consultant Has More Than Just Technical Skills
It’s not about playing with the latest routers or wi-fi device or VPNs or firewalls. Sure, you have to have a certain amount of skills to make a successful computer consultant because people are buying your expertise. At the end of the day, though, it’s a business.
In order for the business to be successful, you have to know a few things about getting revenue in and keeping your expenses down. You also need to forecast and be able to bill, negotiate, and network properly.
There are a lot of stubborn techies out there who think that studying the Windows Server Resource Kit is going to tell them what they need to know about running a business. Not true. It’s going to teach you about registry keys and directories and things like that.
Even a Computer Consultant Needs a Good Resume
If you’re currently self-employed, you may not have an up- to-date resume, but for most people looking to transition into the business to become a computer consultant you probably do have a resume. Take out a copy of your resume and a yellow highlighter marker and go through and highlight every sentence or phrase in your resume that describes a project or a job or a skill that you think would be relevant or marketable to the owner of a small company.
Categorize the Items on Your Resume
Go through it and look for all the phrases and the jobs and the projects that you’ve worked on for the past couple of years and think about what’s going to catch the eye of a typical small business owner or manager. Once you’ve done that, go back through each highlighted item and mark whether it was IT related, whether it had to do with understanding how to run a business or whether it had to do with being able to communicate effectively.
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Originally posted 2018-04-18 23:23:00.
Common Mistakes Small Businesses Make and How to Avoid Them
Unfortunately very few start up businesses make it beyond their 3rd year. Failure is usually down to a number of clearly identifiable mistakes, which if small business owners are aware of, can increase their chances of survival.
Here are the top 10 common mistakes which small businesses tend to make.
<b>Lack of Market Research</b>
When a budding entrepreneur comes up with an idea for a new business he assumes that because he would buy such a product or service then everyone else will. This may be the case for day-to-day necessities but for other items this is usually not so.
It’s important that when you start up you carefully research the market to check that:
– There is demand at a level which would lead to a sustainable business
– People are prepared to pay the price required for you to make a decent profit
Undertaking market research may appear time consuming but the effort will pay off.
<b>Poor Record Keeping</b>
Some business people are not born administrators; they feel more comfortable getting out there and ëdoing the business’. Paperwork is too easy to ignore but can never be put off indefinitely.
Sales, purchases and other expenditure must be carefully documented, so you know whether you are making a profit or not. Invoices must be issued on time and chased up promptly if there is a delay in payment. It’s all very well having the sales but poor record keeping can hold you back.
Having your paperwork in order will also save you time when it comes to your accountant doing your year-end books!
<b>Insufficient Capital</b>
When starting off it’s easy to decide what capital is required for fixtures and fittings, machinery and stock. What many new business owners forget about is the cash needed to fund day-to-day requirements, i.e. cash to pay expenses before your customers pay you. This is known as your working capital requirement.
Small businesses can fail because they have insufficient cash to start off to meet these immediate expenses. If you wish to survive make sure you set aside enough cash to meet all your needs for the first few months.
<b>Ineffective Marketing Or None At All</b>
You cannot afford to treat the cost of marketing as an unnecessary expense. A business with no marketing is like waving in the dark ñ you know you are doing it but no one else does!
There are many ways to promote your business on a small budget; it’s just a case of being inventive and creative. What ever you do, don’t assume that people will quickly know you are in business ñ they won’t, unless you tell them.
<b>Ingoring Changes In The Market Place</b>
As a small business owner it’s very easy to get immersed in your business and not see what is happening around you in the market place. Always keep your eyes and ears open to what the competition is doing and what your customers want. Don’t get left behind.
<b>Owner’s Attitude</b>
Attitude is everything in business. Don’t forget that the real boss in your business is the customer. Running a business may make you feel important but don’t let this develop into an ëI am better than you’ attitude. Do this and you will quickly chase your customers away.
<b>Spending On The Wrong Things</b>
Being in business can be exciting, especially as the cash starts to roll in! However, don’t be tempted to spend it on a new car, a house or just a good time. If you are to own a successful business then you have to keep some cash back to fund future growth. A business cannot grow without cash, so commit to spending business money on the business.
<b>Dependent On A Small Number Of Customers</b>
Don’t fall into the trap of setting up a business just because one person says they will buy from you every week or month. Setting up and running a business, which is dependent on one customer, is not a recipe for success. What happens if, one month after you have spent all your cash to set up your business, that customer says he has changed his mind and has decided to buy elsewhere? Unless you can find other customers very quickly you are faced with closure.
Before embarking on a new venture make sure you have a sufficient number of customers such that if a few go elsewhere you can still continue trading.
<b>Growing Too Quickly</b>
Surprisingly, growing too quickly can be a problem. You have to be disciplined enough to only take on work you can handle. If you are tempted to accept too much you could end up disappointing not only the new client but also your existing ones.
Also, don’t under-estimate the impact rapid growth can have your administrative burden. As I mentioned earlier, getting behind on the paperwork can have an equally damaging effect on your business.
<b>Trying To Do Everything</b>
Finally, the problem most small business owners have is the fact that everything falls on their plate. Inevitably this is how it’s likely to be in the beginning, when the limited budget means that staff are a luxury, but as the business grows be aware that you cannot continue to do all tasks. There will come a point when you become inefficient and not have enough time to complete everything in sufficient detail. Taking on an extra pair of hands will increase your costs but you will be surprised at how much time will be saved, allowing you to do what you do best ñ getting the business in.
Take a look at each of the mistakes and make sure that you don’t fall into these traps.
More info’s and free registrations (restricted to pros), please join our live seminar
Originally posted 2018-04-18 00:34:00.
Civilization 4 and Why I Hate My Office Phone
If you’re familiar with the strategy PC gaming series “Civilization”, you probably know that it’s only slightly less addictive than crack. I’ve never tried crack, but the “word on the street”, so to speak, is that it’s a bit hard to let go of. I recently purchased Civilization 4, which is the latest in the Civilization series. That in itself isn’t so interesting, but what happened to me at my job as a result of it most certainly is. I work as a network administrator for a large insurance company in Illinois.
Part of my job is to repair PC’s as needed, which is quite often considering how many there are around this place. I informed my coworker, also a big civilization fan that I had the game and he suggested I bring it in for a little test run. Against my better judgment, we decided to play a hot seat game during work. “Hot seat” means that one player takes a turn, followed by the other, which is only possible with turn based games such as Civ. We both figured that there would always be one of us to answer the phone in our little repair-shop cubbyhole so we didn’t see how we could possibly get caught. Boy were we wrong! About four hours into a game things started getting interesting.
My civilization found his civilization and we started going to war against each other, as one might expect. I sat down for my turn and my coworker decided to head off to the bathroom. The phone rang, and I didn’t pick up so that whoever was on the other end wouldn’t hear the Civ theme music or the explosive sound of my Panzers running over his infantry. What I failed to remember is that our advanced phone system allows anyone to communicate with us on an open speaker phone provided we aren’t on the phone already. My boss utilized this function since no one answered while I was taking my turn…o.k., actually while I was taking my turn and bragging out loud to myself about how well I was doing in the game. I found myself in his office that afternoon, but luckily I was only reprimanded and not fired. Not only did I get into trouble, my coworker continues to make jokes about it at my expense.
I hate my office phone.
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Originally posted 2018-04-17 23:43:00.
Clutter out, Color in: Make Your Office Work for You
Is your workspace working for you? Research shows that your environment makes an impact on your mood. So it may be time to give your space at the office a makeover to liven up things at work.
“Now you can change your office decor as often as you change the ink in your printer,” says Anna Griffin, designer of the Anna Griffin Inc. line of desk accessories. “A change of color and pattern in your workspace can help to motivate, destress and even improve your disposition.”
The key is to add variety to your area so that you don’t get bored with the same surroundings and decor day after day. Griffin offers the following tips to help you create a pleasing and invigorating work area.
* Clear the clutter. The first step in producing a pleasant cubicle space is to make it clean and organized. This will help you stay focused on your work.
* Accessorize. Disposable desk accessories in fun colors and patterns will add instant pizzazz to your workspace and can be replaced whenever you need a change of ambience.
The “Rose” and “Elsie” collections from Anna Griffin Inc. are fresh, fun and, best of all, affordable. They feature four different patterns in eight coordinating office items, including file sets, magazine and pencil holders, paper, letter bins, journals and photo albums. The Rose Collection is full of rich, vibrant color in Old World floral patterns, while the Elsie Collection is sophisticated and playful, incorporating retro, pastel abstract and floral designs.
* Decorate your workspace to look like home. Because you spend so much time at work, choose a color or style and start decorating. A small area rug can add color and texture to your space, and a favorite lamp or lamp shade can cast just the right light. You can personalize with touches like a decorative basket as an “in box” and fun prints and paintings for the walls. Don’t forget photos of your family, friends and pets. They will bring a smile and help reduce your stress level.
* Just add water. A desktop fountain, fresh flowers or a fishbowl can add ambience and a sense of style and tranquility to your office space.
* Don’t forget the finishing touches. Use a pre-made slipcover to add style and color to that tired old desk chair. Switch out those boring manila folders with decorative patterned ones. They make work fun! Show some individuality with your mouse pad. You can purchase a mouse pad featuring an art masterpiece or cartoon character, depending on your theme and mood. A whimsical clock, fun paperweight or funky plant could be just what you need to make the space more “you.”
More info’s and free registrations (restricted to pros), please join our live seminar
Originally posted 2018-04-17 19:24:00.
Choosing a Company Name
When forming a limited company the name of the company can be an important decision. Some people may choose the first name that they think of and others may select a ready made company for speed or because they like a particular name. However, many businesses may prefer to select a company name that either clearly distinguishes itself from its competitors or contains something unique or personal. Company names can be chosen for different reasons.
One of the most common ways of selecting a company name is to use something personal. A quick look through your local newspaper will probably introduce you to many personalised business names. Johnson Consulting Limited, T Smith & Son Limited, Stephens & Barley Limited are some fictional examples of what may be found. This may instantly make a company recognisable locally, it can be deemed as more personal by its customers, and often works well within geographical areas. However, it does little to tell new customers what your company does.
A popular choice for a small business is to choose a name that is ëdescriptiveí. This tells prospective clients exactly what your company does. Examples of this may be to call your business The Window Company Limited, City IT Consultants Limited or The Advertising Agency Limited. Whilst this does serve to reinforce your primary business it offers little differentiation and may easily be adapted by competitors.
A less personal option is to use a company name that is ëassociativeí. This type of company name helps to create an image or connection to your business activity. It is less direct than using a descriptive name but helps to position your companyís name within the market through peoples understanding of what words mean. For example a flick through the Yellow Pages will offer plenty of examples of this. A hairdresser called Classic Cuts or a printer called Selectaprint Limited are examples of what may be found. These names offer some differentiation but may not ultimately set your company aside from its competitors.
An alternative is to choose a company name that is ëfreestandingí. These names are completely abstract and not related to the companies business activities. A fictional example may be to call your catering company Zedoc Limited. There are many popular brand names that illustrate this point. Consider, Kodak, Gillette, or Mars, these names will probably be instantly recognisable to you and conjure up a particular product or business. This is a good way of setting your company aside from the competition but it is important to consider the market that you operate in. Will your prospective clients know what your business is offering?
Choosing a company name may be a simple process, but it is not uncommon for people to deliberate over names for quite some time. Whilst company names can, and often are, changed during the life of the company most people like to choose a name that they like from the outset. Therefore consider your market, how much you want to differentiate from your competitors and what your company name should say about your organisation. Once the decision is made focus on the important business of making your company a success.
More info’s and free registrations (restricted to pros), please join our live seminar
Originally posted 2018-04-17 01:35:00.
Business Merchant Accounts, Business-Merchant-Accounts
Business merchant accounts are critical to have if you want to accept credit cards. Business merchant accounts are not limited to those computer consultants reselling products either. They are a good idea for any sale, especially when you are selling to new clients.
If you have a business merchant account you will not have to chase down outstanding debt. The cost is not that high and you don’t have to buy traditional credit card processing equipment. Now they have what is called a lab terminal, which allows you to use your web browser to manage the transactions. The systems are completely secure and most business merchant account providers team up with larger companies that offer great advantages.
Costco’s Business Merchant Account
One of the biggest secrets we learned about business merchant accounts is that Costco provides a fantastic deal on credit card processing through Nova Systems. It’s such a great deal it can actually pay for your entire Costco membership. Here are some particulars:
All of the monthly statement and gateway fees are waived – savings of $25 – $50 per month
Very competitive discount rates on Visa and MasterCard.
You can add on processing for American Express and Discover – you will find that even though American Express transaction fees are higher, it is a very popular card with small businesses.
The charges billed are transferred quickly and directly into your business bank account – this is a lot faster than doing your billing or invoicing once a week or so.
Paypal
Paypal is a popular alternative to traditional business merchant accounts. Paypal is very easy to set up and the set up is free. There are restrictions though on what you can do and how you can withdraw your money. The largest drawback is the negative connotation of being an ebay related service where people sell garage sale stuff as a hobby.
The Bottom Line on Business Merchant Accounts
Business merchant accounts will help you get paid faster. There are fees involved but the customer convenience and no hassle approach to receiving your money make it worthwhile. There are different business merchant accounts available so do your homework and choose the one that makes the best sense for you.
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Originally posted 2018-04-16 22:19:00.
Cheaper is Not Always Better
I work for a large insurance firm in the northwest, in an office with over 500 other employees. Management recently decided to replace our existing phone system as the old system was no longer meeting our needs. I and my co-workers were under the impression that they were going to update the system, as in “make an improvement”, and that we would have late model phones with technological advancements galore. Boy, were we in for a surprise.
One day a few weeks ago, we all came in to find new phones on our desks. These were not the state-of-the-art communication devices we had in mind. Instead of the sleek, sophisticated, caller IDing, multi-line handling, LCD displaying wonders of the modern age we all dreamed of, there was a simple phone with a keypad on the receiver…not unlike what you might have had at home 15 years ago. In addition to the new phone, there was a sheet which explained in graphically painful detail exactly which series of buttons one would have to push in order to make this thing function properly. We had to now enter a digit to put someone on hold, enter a three digit code to transfer someone (one digit, dial tone, two digits) and enter a ridiculously long series of numbers to access our voicemail.
Needless to say, we were in shock. I knew it wouldn’t take long before the roars of complaining would drown out the usual office din. Sure enough, by lunchtime our office manager came in to tell everyone that we were simply going to “try it out for a while” and that the company had saved thousands by choosing this option. I and the other employees were fairly certain that we had already lost thousands in reduced productivity that morning alone. Oh, well…it’s their company, we just bring in the money for them.
For the next few days, we tried to get used to saying “hold, please, while I transfer you”, removing the receiver from our faces and trying not to curse as we made a lame-duck attempt at pressing keys, listening and pressing more keys. It was a nightmare. We were getting pretty fed up with it, but just assumed that this was what we would have to deal with. Then, out of the blue, we came in one day to find real phones with real features at our desks. No more looking at the receiver while we frantically tried to key in numbers fast enough not to drop the call. No more ten digit voicemail “pins”. No more of having no idea who was calling or where the call came from. Ahhhh, relief at last.
Later the same day, we heard a rumor circulating around the office that the VP of operations had returned from a two week trip to New York. His words, upon seeing one of the phones management had originally purchased on his desk were, “get rid of them”. All it took were those four words from a higher-up to set things right. Unbelievable.
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Originally posted 2018-04-16 14:37:00.