Attention Small Business Owners

The first thing you need to do to save money is to keep accurate records of your inventory and other business records. Take time to describe your assets, and jot down how you bought your property. Take time to insert dates of services and placement as well as other details, since you will need these records come tax day to save money.

You have a tax cut on space in your home. A certain amount of area in your home is a write off. I think about 6′ by nine unless you have a larger home business.

You can save money on business expense. Keep all your records and receipts on paper you buy, computers you invest in, or any other business necessities you may. You can even write off printers, fax machines, computers, or other losses that apply to your business.

You can also receive child allowances. If you have children and work at home, you can receive up to $1500 back from the IRS. Learn how and talk with your tax accountancy to see if you are eligible.

When you travel for business jot down how much money you spend in gas. Write in wear and tear of your vehicle and meals. You can get money back from the IRS, providing your travel and meals are for business purposes only.

If you have a business computer do not use it for anything other than business. The IRS will pay you back 100% if you use the machine for business owner. Buy a personal home computer for game player, etc.

You can get money back for phone expenses, fax expenses, bank fees, and utilities and can get money back for paying your rent. If you pay rent, keep your receipts so that you get a couple hundred returns.

You can save money on entertainment. In addition, you can save money on listed property, intangible assets, depreciation items, repairs, home improvement, real property, computer software, and more.

About Keeping Score In Small Business

Imagine you are at a baseball game and the scoreboard is not working. Imagine further that neither of the managers is keeping track of balls and strikes, or outs, or runs. How would the manager decide when to bunt, swing away or steal? How would the players know which base to throw to? Further, if no records are kept, how would they know who their best hitters are? How does each hitter do against right or left handed pitching? I don’t think either of the managers of these teams would be in a position to devise an effective strategy for winning the game. If the talent of each team is roughly equal, strategy will determine the outcome of the game. In fact, the weaker the talent of any team is, the more important strategy becomes.

Of course, this does not happen in the real baseball world. But it certainly happens in the small business world.

Accounting is nothing more than keeping score. It is a virtual certainty that the failure to measure results in a timely manner will result business owners discovering what has happened after it’s too late to do anything about it.

Keep in mind that measuring results goes well beyond basic accounting activities. For instance your company may be quite profitable and successful and the owner may enjoy a flexible entrepreneurial work schedule. The company spends a significant amount of money on advertising but there is no method in place to measure the amount of business derived from each type of advertisement. As long as the company keeps making money no one is concerned. However, there may be money being wasted on advertisements that are ineffective or do not generate enough business to justify the cost. If, at some future date, it becomes necessary to reduce advertising expenditures, how will the owner know which campaigns to eliminate? It’s too late to obtain the information necessary to evaluate the alternatives.

There are many easy to use software products available that require no accounting knowledge. They will allow you to know what has happened in the past, what is happening now and, if used effectively, will allow you to know what will happen next.

GPS Tracking For Small Business

The refinement of GPS units and their manufacturing process is allowing lower overheads and more discreet tracking than ever before. As the technology improves, companies become more in tune with efficient manufacturing techniques, which in turn can reduce costs for the consumer. This ultimately leads to heightened usability, as well as affordability for the small business. Additionally, this is perfectly legal for private use, which means it can be a great asset to business, with no legal expense or hassle. If you’re involved in transport, or have unique or expensive goods, your business could almost certainly benefit from this advancing technology. If you’ve ever lost stock to theft, or felt out of the loop with your fleet’s movements, GPS might be something you should consider.

The main benefit of GPS over other forms of tracking is its precision and accuracy. Because the process involves interplay between satellites, this is a tremendously advanced technology, and a fine science. As a consequence, you can expect accurate results, with a guaranteed margin of error of only on metre, to anywhere on the planet. Additionally, communication is virtually instant, allowing you to quickly find the information you’re looking for. For the small business, this transpires as a great way to locate your resources, regardless of time pressures. Additionally, it can allow you to track the progress of orders across the world, and to find out where your goods are at any given time. This could be advantageous if, for example, you were buying stock from abroad which was to be transported by boat. The GPS tracking would enable you to know where your consignment is, and allow you to gauge how long it is likely to take, so you can prepare in advance. In terms of saving time and money, GPS tracking is a tremendously efficient technology which any small business can exploit, to ensure the fullest comprehension of your business’s geographic dimension.

Small Business Secret Weapon

Overseeing the daily operations of a business is an enormous task if one hasn’t the necessary skills or, frankly, time to manage it all. Enter the secret weapon: a Virtual Assistant, or VA. VAs work with clients to identify tasks or projects that need to get done but for whatever reason are only marginally completed, left for eight months on the list of “things to do today” or become a fond memory of what might have been. Once identified, the client has the VA complete those tasks or projects.

The services a VA offers depends on the needs of the client and the skills of the VA. A few of the most common services include: general administrative support, writing/editing services, event planning, concierge services, business procedure development and start up assistance to new businesses. If a company needs something done, there is a VA out there who can do it.

Collaboration with a VA could be seen as unnecessary or costly to some but it’s important to consider the value a VA can offer. Clients only pay for the services the VA provides and nothing more because they are contract workers not employees. In turn, clients use this new found time to do business, not juggle it.

Whether an increase in profits, improved organizational procedures or a much-needed vacation is part of the business plan, working with a VA can help any small business realize its goals. VAs provide the professional support and peace of mind of not having to go it alone. That, indeed, is true value.

CRM Application in Small Business

The need for CRM Application for small business:

  • Collection and analysis of customer information.
  • Integration and availability of mission critical data, for all the employees on demand any where any time.
  • Automated sales, to facilitate faster provision of product-centric services synchronizing with the changing trends.
  • In order to plan your marketing strategies, which in-turn will ensures quicker turn-around time to product-centric services.
  • Using a CRM application to plan your marketing strategies, ensures quicker turn-around time to product-centric services..
  • Fully scalable web-based feature-rich streamlined approach.
  • Secure as well as low risk data base.

In order to select the most efficient CRM application that will be a perfect fit to your unique special requirements, you will need to make sure of the following …

  • Research your business requirements and your end goals.
  • Enhancing business activities from around the globe from a single location.
  • A full scalable web base.
  • Click away feature-rich techniques.
  • Easy to customize to your organizational set-up.
  • Satisfaction more than exceeds cost.
  • Low risk solution
  • Zero skills adaptability.
  • No additional infrastructure requirements.

CRM applications, provides world class technical expertise in combining, consulting and analyzing your critical business problems. With its excellent cost-effective customer-centric services, it ensures to boost your business image as well as credibility in the market.

Small Business Technology

Web Site

This is a low cost and efficient means to give you 24/7 customer support, sales and communication, not just in your geographic area, but around the world. Your Web site can even be a tool of internal communication for your employees. The big hype of making tons of money “over the Internet” is exaggerated, but your Web site can be an excellent communications and advertising tool — which leads to indirect profits — and even a direct money making tool if developed properly. A good website explains your product or service and introducing perspective customers to your business. Remember to focus on the customer when designing your website, not yourself. Focus on benefits and advantages that you offer.

Email

Neater and cheaper than faxing, faster then FEDEX or the Post Office. Email is the premier tool for communications. For example, one of my client companies had telephone bills that reached into the thousands of dollars per month; after implementing a simple email system their phone bill was $68.00. They actually communicate more frequently, but email has cut down on expensive faxing costs. The danger of email comes from junk mail, viruses and bad email etiquette.

Junk mail can be dealt with by using simple filters. For example, Microsoft Outlook comes with built in junk mail filters which work quite well. Leverage the systems you have before running out and spending money. Email etiquette is really up to your corporate culture. Some companies have no problem with employees CC’ing every one in the business and others regulate against it. Just figure out what works for you and then let people in your business know what you prefer. Email opens the doors to great advantages but equally dangerous threats. That is why you must, absolutely have the next item on this list.

Anti-Virus Software

Viruses will attack your computer systems. The only question is will you fight back. Protect your data! In the 21st century information is more valuable than cash! An Anti-Virus program will alert you to a possible virus infection, and be able to get rid of the virus before significant damage occurs. Most modern anti-virus software programs will also protect you from other types of malware, including spyware, bots, and other such internet dangers. Any anti-virus software from a reputable vendor will suffice. Be sure to turn on automatic updates as new viruses are created every day. Also, make sure to schedule a full virus scan every week; I schedule them for non-working hours.

Local Area Network (If You Have More Than 1 PC)

Increase productivity and communication within your company by networking all the computers in your office. With a network you only need one printer for multiple users, or one Internet connection. Collaboration and communication within your office is vital, and if you always have to get up and share disks or memory sticks with others, you’re wasting a portion of your day just walking from desk to desk. Even a small network of two or three computers requires maintaining. In order to decide whether your support provider is a good choice, you should assess their familiarity with the different types of computer network:

Peer-to-Peer Network

In this type of network, no single machine is more important than any other machine. Each person decides which files will be shared with the network by setting permissions on a folder-by-folder basis, and each user may limit others in the workgroup from accessing portions of his or her hard drive. While a peer-to-peer network can get the job done, especially in a small business, the main drawback is the volume of passwords and privileges that reside on each machine. In addition, having users access information off another user’s hard drive could slow down processing speeds. This type of network is only recommended for small, low traffic offices.

Server-based Network

A server-based network contains one or more computers that have a central management role in the network. Servers can control file storage, e-mail, printer access, Internet access, security management and backups. There are software packages available that allow you to set up a server-based network, such as Windows Server, LINUX or UNIX. Ideally, a server should be a dedicated machine that is not used by any employee for any other purpose. For example, a server generally maintains a security database outlining who belongs to the network and what privileges each user has. Users can then access data from any networked machine, based on their individual passwords. Servers can also allow you to centralize your data, simplifying access and backup. Another server option is an “applications server,” which runs all the company software. This option can save money on software licensing by limiting the number of people who can use a single program at any given moment.

One question to consider when using a server-based network is how fast you can access any backups of the server if the system crashes and you need to restore data.

Back-Up System

If your business catches fire, if your hard disk crashes, if your computer is stolen — where will your data be? Across the border? In 10 feet of water? Back it up, store it off-site and sleep soundly. A recent customer recently lost over 10,000 files (email, contracts, original artwork, etc.) none of which was backed up. We were hired to try to recover the missing information. Do you know what a headache it was to manually get back SOME of those lost files? Some businesses never recover all of their data and subsequently, go out of business.

Office Productivity Software

The most common software applications in all businesses are a word processor, spread sheet, desktop publishing, and presentation software. These basic business programs will enable you to create, edit and manage information, publish your own brochures, make your own newsletter, and make exciting presentations. There are numerous productivity suites on the market, including some excellent online editions, such as Google Apps, that are free.

Other must have products/services include:

Desktop Faxing: If you must fax, at least stay at your desk, instead of walking to a fax machine. And don’t print paper from your PC just to fax it. Fax right from your PC, it saves time and a few trees. A desktop faxing software installs a working fax machine as a printer on your computer so you never have to leave your desk.

Accounting Software: Save time, reduce mistakes and see instantly what your money is doing. Some accountants will give you a discount if you provide your financial information in computerized format. In selecting an accounting software, be sure to work closely with your accountant, your computer consultant and even your business bankers.

Contact Management: You used to rely on just a Rolodex but now you can track thousands of clients, potential customers, partners and associates with software. Also you can keep a record of every communication with clients to minimize mistakes.

Computer Hardware

None of this software does any good if you don’t have a good computer system. If your computer is old and not working efficiently then upgrade it or just buy a new one. An old computer that runs slower than your workers is more costly than upgrading or purchasing a new machine. Employees will always complain that they need a faster computer. Here is a simple test to determine if they genuinely need a new machine: Who waits for who? Does the worker wait for the computer, or does the computer wait for the worker? If the worker waits for the computer then (and only then) is it time to upgrade.

Technical Support

Where are you going to turn if you need technology help or advice? This is the million dollar question for many small businesses. In some cases, you might know someone that “knows computers.” While this can help in a pinch, your best bet is to rely on computer industry professionals. They can be more expensive than the kid next door but a reputable technology professional can save you much grief and aggravation in the future. Remember, your computer tech will have access to your precious business data so make sure it is someone professional that you can trust.

Hopefully, this article has given you an understanding of what technology investments your business will need. Remember, you don’t need to buy all of them immediately, but eventually you will need to invest some of your hard earned money into computer systems that will make your life, and your business, better.

Small Business Tax Tip

There is a general rule in tax law that says all “ordinary and necessary” business expenses are deductible. I’ll spare you the details about the arguments over this phrase, but suffice it to say that it basically means that in order to be deductible, an expense must be a legitimate expense that pertains to your business.

So what personal expenses do you have that could legitimately pertain to your business? Well, let’s take an easy one: Subscriptions. Do you subscribe to your local newspaper? Can you deduct it? Well, do you need to keep up on your competitors’ advertisements in the paper? Do you need to keep abreast of the job market via the classified ads to make you more effective at hiring and compensating employees? Any other reason you might need to read your local paper? If so, you can deduct it. Same with your local business journal, The Wall Street Journal, and various industry and trade publications.

Next is clothing. The IRS says any clothes suitable for wearing outside of work are not deductible as a “uniform.” So a pair of blue jeans, or even a business suit is not generally deductible. But if your company name is printed on your shirt, jacket or other clothing, that item becomes deductible.

If you have kids, I don’t have to tell you how expensive they are. Well, how would you like to deduct their allowance? The cost of their clothes? Heck, even the cost of their college education? If your kids work in your business, you can pay them reasonable compensation for doing so. So when Johnny needs a new pair of jeans and a leather jacket, put him to work! You give him a paycheck, he buys the clothes, and you’ve just turned a personal expense into a business deduction. The same can be said for building a college fund. If your children work for you, you can pay them and put the money in the bank for college costs. Note that even if your children are young, you can pay them to appear in an advertisement or brochure promoting your business.

Please note that the IRS will scrutinize payments to family members, so you must make sure you dot your i’s and cross your t’s. Make sure the kids actually work for you, that their pay is reasonable, and that you keep track of their hours, pay any payroll taxes due and treat them like any other employee.

Even your vacations may be partially deductible. Try arranging a trip around a business seminar in the location of your choice. There are usually plenty to choose from. Only the expenses for the time actually at the seminar will be deductible, but so will the airfare, many of the meals and much of your hotel costs. If your wife and kids work in the business and there is a legitimate reason for them to attend the seminar, their costs may be deductible as well. Keep in mind there are limitations on this technique, so check with a tax advisor before making your plans.

These are a few ideas that could save you hundreds or even thousands of dollars over the life of your business. If you think about other expenses in your life, I’ll bet you can come up with even more. Remember to consult a qualified tax advisor before implementing any of these ideas, be reasonable, and always make sure the expenses are legitimate. You have every right to arrange your affairs so as to result in the lowest tax you are legally required to pay. Just don’t cross over the line of common sense and reasonableness.

Insuring Small Business

Typically all small business’s need General Liability insurance. As the name states, it will provide standard coverage for your premises and operations. It is up to you what your limits should be, but they should be ample enough to protect you in the worst case scenario. Most businesses will need to go beyond a general policy and get some form of specialty insurance which is specific to their industry. Listed here are some of the available types of insurance:

  • E-commerce – Insures against any loss incurred due to internet intrusions such as hacking for customers personal information.
  • Auto – This is very important if your business owns or utilizes any type of vehicle. It is separate from the General Liability policy.
  • Workers Compensation – If your employee gets injured on the job you will be covered. Some businesses are required by law to have Workers Compensation coverage depending on the number of employees they have. This varies by state so make sure you check with your state government.
  • Errors and Omissions – Anyone who gives advice or performs a professional service needs this coverage.
  • Umbrella – Gives you excess coverage over and above your General Liability Policy. It does not provide excess coverage for Workers Compensation.

Evaluate your risks carefully. Always think of the worst case scenario and plan accordingly. Your business can survive an unfortunate event if you have properly insured it.

Marketing Small Business Online

The formula can be summarized by the acronym CTPM.

The “C” stands for content. This means your business website must contain valuable content that visitors want and desire. Your content is like honey to bears, it will attract your prospects and keep them coming back for more.

The “T” stands for traffic. This means in order for your business website to survive and be effective it must generate massive amounts of visitor traffic. There are many ways to generate traffic to your site to include but not limited to search engine optimization, email marketing, article marketing, backlinking, etc. Your website must use a traffic building system or it will disappear into cyberspace.

The “P” stands for pre-sell. This means that your website must warm-up your visitors and put them in a buying mood before you try to sell them something. Pre-selling is a soft-selling process whereby you give visitors free information, sign them up to your newsletter or give them a free gift related to what you later want to sell them. In essence you prepare them for the hard sell by first getting acquainted with them and gaining their trust and confidence

The “M” stands for monetization or making money. This is the ultimate objective. Your website must make you money or it will serve you little to no purpose. Monetization is when you convert your visitors into buyers and then into long term customers who provide you residual income.

Now if you follow this CTPM process you will have a very successful website on your hands and make lots of money. So build a website that incorporates CTPM and you will be laughing all the way to the bank, guaranteed.

Financial Yardsticks for Small Business

Your Assets

Tracking your equipment, furniture, real estate and other holdings should be easy. But to have a true idea of the value of your business, you also have to track changes in the value of those assets. More than one small business has found itself located on a piece of land that’s worth more than the business itself. Similarly, you also will want to track the declining value of assets such as computers and office furniture.

Your Liabilities

On the face of it, this is easy — liabilities are what you owe. But what you owe isn’t always as obvious as a bill from your landlord. Payroll taxes are a liability that depend on the size of your payroll. Loans are a clear liability, but in repaying them you’ll want to be able to track how much of a payment is applied against principal and interest.

What does it Cost You to Produce What You Sell?

If you’re buying a finished item for resale, this is relatively easy. It’s trickier if you have to calculate all the factors, such as labour, that go into manufacturing a product. .

What’s it Costing You to Sell What You Sell?

Advertising, marketing, labour, storage and the catch-all category of overhead — it’s useful to know how much it costs you to get a product sold as well as what it costs you to create it.

What’s Your Gross Profit Margin?

This is calculated by dividing your total sales into your gross profit. If your gross profit margin is staying consistent or trending upward, you’re probably on track.

Being able to track a declining margin can give you a heads-up that you must adjust your prices or your costs. In the worst cases your gross profit and profit margin disappear altogether. At that point, you’ll be like the fellow who lost money on every sale but figured he could make it up in volume. Don’t do it.

What’s Your Debt-to-asset Ratio?

This ratio can let you know how much of the stuff you have in your company is actually owned by someone else — your lender. Having this ratio climb can be a bad sign. It can happen as part of a major expansion, but it can also indicate that you’re getting in over your head.

What’s the Value of Your Accounts Receivable?

This is the money you are owed. If accounts receivable are on the rise, you may be getting a warning that the folks you sell to are starting to stumble.

What’s Your Average Collection Time on Accounts Receivable?

This is probably one of the most aggravating pieces of information for cash-strapped businesses, because it tells you how many days you’re acting as ‘banker’ for the people who owe you money.

What Are Your Accounts Payable?

The flip side of accounts receivable. An increase in your accounts payable may merely reflect a larger amount of purchases overall. But an increase that hasn’t been planned or managed can be an internal warning that your company’s financial strength is waning.

What’s Happening With Your Inventory?

There are occasions, even in this just-in-time business world, when building up a significant inventory can be a good thing.

If prices for items you sell or use in production are relatively low, putting some of your money into inventory may make sense.

Being able to track your inventory can tell you whether business is increasing or slowing down. It also tells you how much money is tied up in this unproductive asset.