Small Business Consulting Helps Small Businesses To Survive And Thrive

The global financial crisis has affected businesses of all sizes and from all over the world. However, the small ones were most affected by it and makes an already cutthroat industry even more challenging than it already is. If your company is in trouble and you want to get back on track, you can seek advice from a small business consulting service. An expert consultant can therefore serve as the lifeline for any business.

During times of economic downturn, small business consultants can help business owners to come up with a recovery-action plan. This is what every business needs in order to overcome the challenges posed by the economic market. Furthermore, it is also what spells the difference between survival and defeat for your business with such a competitive industry.

The first benefit of a small business consultant for struggling business owners is in terms of re-focusing on your tasks. These professionals have the knowledge and expertise to cope with whatever challenges are being thrown to your business. Hence, they can provide the support you need through this difficult time.

These professional consultants can show you ways in which you can bring your business on the right track. They can provide assistance in any of the following: developing effective marketing strategies, setting practical goals (short- and long-term), and business planning. The main focus for these small business consultants would be to demonstrate more creativity in your business. At the same time, they can provide the professional guidance needed so you can make informed decisions that will affect your business' performance in the future.

The support system provided by expert consultants to your business can go a long way. The experience they have gathered in the industry will give them the edge when properly tracking your performance and what else you need to do to improve your current standing. They can even suggest new tips and techniques to apply into your business to improve all aspects of your business operation and move it forward.

Most consulting processes will follow a distinctive pattern in order to help small businesses to survive and thrive in the economic downturn. First, a small business consultant will try to get to know more about your business. They will conduct a comprehensive discussion with various personnel handling the different departments in your business, or the business owner itself, if you have limited manpower. The next step involves designing a plan of attack and recovery action so you can identify opportunities to take advantage of and overcome any hurdles that is preventing your business from reaching its goals.

The best thing about small business consulting is that they do not leave you when that is done. Instead, they help to implement the plans you have made and supervise it until you regain stability in your business. Thus, you need to choose a consultant with several years of experience so you can be confident they know what they are doing. Expert consultants tailor their services according to the size and needs of your business so you can leverage them to facilitate growth.

Psychological Reasons Promotional Products Are The Most Vital Part Of Your Business

The current economic atmosphere has made the majority of Americans cling tight to their wallets like never before. People are less willing to spend money on the little things that are not vital to their existence. Everyone is looking for a bargain, and becoming and remaining a successful business owner is becoming more and more difficult.

At least that is how a lot of business owners think. A few business owners are thriving and prospering in the current climate, and what likely sets them apart from their counterparts who are failing is the courage to remember how they gained their success in the first place.

Marketing is key to most businesses, and if you are one of the fortunate few who does not require a marketing plan, please stop reading this now. For those of you that are seeking out new business, take heed of the psychology that determines whether or not a customer decides to do business with you instead of your competition.

This author has a deep and abiding love of guerrilla marketing. The act of physically seeking out business through telephone calls, promotional events, print advertising, and relentless footwork. These techniques have been proven time and time again to be highly effective, especially for those companies with the tenacity to do so on a regular basis.

There is a reason that big chain stores send out brochures and catalogs to their customers...they work! Take a visit to your local Wal Mart, and you will see dozens of customers doing their shopping based on what they found in an advertisement prior to paying a visit.

There is an old adage that says that you need to spend money in order to make money, and there is a tremendous amount of truth in it. It is vital that you present a prospective customer with something that makes a great first impression, and nothing makes a strong statement like a well designed, professional business card, flyer, or brochure to go along with your winning smile.

The following is a list of seven psychological reasons quality promotional products are a vital part of your business:

1. When someone is in the market for a product or service, they typically will seek out people who are good at what they do. Consequently, they believe that someone who is good at their profession is successful. They expect everything about a business to be perfect. Nothing shatters that mental perception more quickly than a poorly designed brochure or business card that was printed on your personal computer.

People assume (and they are generally correct in their assumption) that successful people are successful because they are able to focus on small details. Your mystique and uniqueness can be quickly undermined by a perforated edge or a logo that looks like it was designed by a third grader. If you expect success, you must demonstrate success. Today's consumer demands excellence, not only in the quality of your work, but in your methods of procuring business.

2. The nightly news is rife with stories about unsuspecting consumers being taken advantage of by companies that promised one thing and then did another. For this reason, consumers are highly cautious. A business card printed on Avery business card paper and run through a home laser printer is something that literally anyone can do with relative ease. Professional promotional products make customers feel more comfortable doing business with you. The last time someone handed you a business card with a perforated edge, how long did it take before it was in the trash?

3. Put yourself in a hypothetical customer's shoes for a moment. How comfortable are you going to feel writing a sizable check to a company that does not care enough about their business to produce a decent printed explanation of what they offer? How much research are you going to have to do before you decide to do business with a company that hands you a black and white business card with a list of your services? The world revolves around the consumer, and they expect immediate gratification for their desires. How likely is a consumer to do business with you instead of a competitor if they do not immediately trust you? Furthermore, how much steeper is that proverbial hill to climb if you are not able to offer a good looking printed product that reflects your dedication to your trade?

4. Size matters. Despite what every girlfriend you had in high school told you, size is very important to a potential customer. Nothing implies size and success like a professionally designed promotional product. If you hand someone a business card that took next to no effort to create, consumers instantaneously view you as suspect, demonstrating a lack of professionalism, and a tiny one man operation whose future is in question. To the contrary, a glossy business card with a substantial thickness elicits a sense of trust. It sounds a bit on the silly side, but most professionally designed business cards have the approximate thickness of a greeting card. Professional products feel like a gift to a customer and help you build rapport and trust.

5. Customers need to see things in writing. Bids and proposals simply do not look nice when they are printed on plain white paper. Professional letterhead makes a proper statement, and is a demonstration of the professionalism of your business.

6. Name recognition is subconscious. If you are able to remember the first time you ever heard of Nike, it would be a surprise. However, with no effort whatsoever, you can probably name ten products that they produce. This is because the big companies of the world have done a fantastic job of producing a brand through advertising cleverly and using a myriad of promotional products to burn their company into your memory forever. You can, on a much smaller scale, and for far less money, do something similar for your business in your own community.

7. First impressions are literally everything. Setting the tone for your future business dealings with a customer determines the likelihood that you will gain a customer's immediate business and any future business. There seems to be a belief that it is important to cut corners and costs, and the first thing that a lot of businesses tend to cut out is advertising. Advertising is the lifeblood of a company, and without professional marketing materials, the odds of gaining any new business goes down drastically. Your feet don't have holes in them, so don't shoot one into them by skimping on the little things that keep your business looking as professional as it can possibly be.

I worked in business to business sales for nearly a decade. I never took a business seriously unless the business card they handed to me could be used as a coaster. Your invoices and letters should be on professional letterhead if you expect a customer to take you seriously. Business cards, brochures, flyers, banners, and any other kind of printed marketing materials should be professionally designed and look perfect if you intend to use them to brand your business and inform your customers about what you do.

Why Stay at Home Moms Are Great For Home Based Businesses

All different types of people are great in home based businesses however there is one type of person who seems to do especially well in this industry and that is stay at home moms. This can apply to women who already stay at home or women who work who would like to work from home. I believe one of the reasons why this type of moms are so great is that they have great motivation. After all what will motivate you more than your children and wanting what's best for them?

If you are already a mom that stays home you have one really great advantage and that is that you already have more time freedom than women who work a full time job and have kids. Being a stay at home mom is no walk in the park, in fact it's one of the hardest jobs imaginable but at least you are more in control of how you are able to spend your day and you don't have a boss telling you what to do and when to do it. This time freedom is what will make you really successful.

Even if you are only able to work a couple hours a day you can still be really successful. Some stay at home moms work their business while their kids are napping or while they are playing peacefully with each other (for however long that lasts haha) and that is all the time they need to build a successful business from home.

Also, depending on the age of your children it might also be possible to work after they have already gone to bed. Just a few small pockets of time through the day make a big difference and can really help you to build a business that can change your life forever.

Finally a lot of stay at home moms crave the ability to talk to other adults during the day and this will give you a sense of being social and getting to have "grown up" conversations which can keep some women sane through the week.

Should You Or Shouldn't You? What to Consider Before Starting Your Business

Three main aspects to consider when starting a business are your personal level of commitment (starting a business is hard work), your business plan (do you have a viable idea that is positioned for success?) and the legal issues (starting it right leads to fewer problems down the road).

Your Commitment - Running a company is completely different from having a job. Skills that made you a valuable employee may not be relevant in your new role, and you're certain to need many additional skills you've never needed before. Think about your available time, drive and money before you turn in your resignation. The beauty of starting your own business is that you can set the hours and work part- or full-time. But if you aren't starting with clients already in hand, you'll need extra time to find some.

In terms of capital, savings, venture capital, banks, angel investors, government funds and credit cards are the main sources to consider. How will you cover your expenses until your revenues grow? Another important issue is your "why." Why do you want to work for yourself? Some people prefer to be self-employed while others perform better as an employee. Knowing yourself and being clear on exactly what you want to accomplish can play a major role in keeping you focused and motivated when you hit hurdles.

Your Business Plan - Taking the time to write up a business plan allows you to see the big picture. Somehow when it's all down in black and white you notice areas that need further clarification or maybe even an entirely new strategy. You'll also need a written plan if you're going to seek outside funding sources. The Small Business Administration has a great free tool. The organization SCORE is also a good resource, with many local offices nationwide. Your plan should include a description of your product or service, your competition, operating procedures, marketing, personnel and financial projections.

Legal Issues - There are different legal structures for businesses, and you'll need to understand them in order to decide which best suits your purpose. The four main business structures are sole proprietorship, partnership, corporation or limited liability company. You will want to understand the pros and cons of each. In terms of staffing, be aware that the IRS has received new funding to find contractors who are misclassified employees. The IRS has also recently changed the rules for unpaid internships. From now on, if an intern's work is benefitting your business you are required to pay. If you're going to use independent contractors and interns to help get your business going, learn the specific rules to avoid back taxes or penalties.

Building The Right Creative Community For Your Business

Right from prehistoric times, people have always been very social beings. We like to share stories and experiences, we like being inspired by and inspiring others, and we like feeling that we're needed, that we're not alone.

Creatively, that's a huge advantage. When we asked what creative people like most about working for an organisation, the biggest response was the community. Creative people like hanging out with other creative people. It gives us a sense of belonging, being part of something bigger, being part of the team.

Creative people love hanging out with other creative people. It stimulates them, stimulates collaboration, and allows them to bounce ideas around.

Being with like-minded people is incredibly stimulating and engaging. Conversations spark interest and open all sorts of doorways to new arenas of thought and interest. And it also makes good creative sense.

Working with a team allows creative people to get different perspectives on things. We each see the world differently, so hanging out with other people triggers fresh insights. It allows creative people to play to their strengths and tap into the strengths of others. It allows them to learn from each other and so grow their own skills.

So whatever you do, make sure your creative people get to network and hang out with others. Work out ways to help your creatives build networks, blow off creative steam, and develop sounding boards and avenues of inspiration.

But here's the caveat. Collaboration isn't just about hanging out in your own business: creatives also need to hang out with creative people from other businesses and other industries.

Tapping into the creative wisdom and talents of others is a major creative tool - but collaboration often gets restricted to the creative team or project team. Businesses are great at getting the people together within teams to bang out solutions, but the collaborative action stops there.

It's one thing to collaborate within a creative team and another altogether to collaborate with people outside the team, even outside the company and the industry. That's when you start getting really interesting input and ideas.

They also need to hang out with people whose main focus isn't creativity. That gives them a larger view of the world, new perspectives, and helps them get into the heads of other people from other worlds.

This isn't just good for business; it's good for the soul. Sometimes you just need to play: empty your head and have an outlet other then work. Don't leave that for people to do for themselves. It should be on the blueprint of building your creative human capital. Make sure you create opportunities for these things to happen.

Break down the us-and-them mentality between creatives and everybody else. Find ways to collaborate, not just inside but outside the camp. Nurture a culture of collaboration. That doesn't just happen - it takes effort and planning. In return, their collective creativity takes a huge leap forward and they learn new skills.

How to Run a Successful Small Business

Almost anyone who has ever learned business management, or has ever been interested in building their own business, had probably come across the following:

Business strategy

Breakeven point

Financial reports

Cashflow

Business plan

Positioning

Market segmentation

Whilst knowing these terms is very important indeed, why is it them that so little small business owners actually practice them? Why is it that the small business owner so quickly deserts those promises they made when they set up their business? What's actually happened to this cashflow they said they'd keep an eye on, what happened to their business strategy? What is actually going on with these businesses once they are set up and set off, where do they all eventually go?

Let's unveil the mystery behind the failure of small businesses.

What happens to small businesses- here are some statistics.

Unfortunately, statistics are pretty bad, Coming to think of that, they are quite cruel and evil. If you think about it, just looking at them can potentially discourage almost anyone who has set his mind on building their own business. Who in the right mind would want to do this after reading this;

According to the NY Times, only 48.8% of small businesses actually survive the first 5 years. That is 48.8%!

Undoubtedly, this is a quite scary fact and it does actually make you think twice if not three times, no?

But, fear not, if we look straight into the eyes of the statistics monster, we can see what is actually happening to these businesses, we can see right through it and crack down what is happening on that first year of running your business, what is going on there that makes all that positive energy go to waste. And even worse, what is actually happening there that makes that business owner, lose faith, stop dreaming and even bit himself up for even trying. What makes him eventually crawl back to this life of compromise, the same life only a few months ago he wanted so much to escape from. It is actually quite sad to think how many tried to follow their dreams, failed and gave up.

So what is in fact the real reason for all those failing new businesses?

Well, there are many reasons.Some would say it is;

The fierce competition.

Bad market analysis.

Poor marketing.

Wrong product.

Low demand.

Incompetent employees.

Lack of strategic planning.

Bad economy.

Virtually, any management term you can think of, can make your business collapse quite easily. Any one of these can kill this dream of yours.

But let's start climbing a little bit. Let's try and nail the real reason for failing businesses. Let's climb to the top of the problems.

Let me tell you a secret, those reasons look good in business articles and in management magazines, a lot because they sound good and they are quite fancy management terms analysts like to use. These Business analysis and senior managers love those terms so much they keep using it in their jargon, so much so,until the small business owner feels inept,under educated and wants to run and hide on it's first crippling fear that his business is not good, and that he is a dreamer and has no business setting a business of his own.

So what is the real reason? Let's say that you have overcome your fear and you are feeling quite confident. You set up your business. So why does it eventually fail?

What is the real reason?

The real reason is lack of control over the business!

Let's climb up a little bit further, up to the top.

The real reason is-lack of time!

Let me ask you a question. As a business owner, what is your real profession? Can you give an honest answer?

What if I told you, that your real profession is in fact a firefighter?

The firefighter is quite an accurate description for a small business owner. Let's talk a little bit about firefighters.

Firefighters don't really know what their day will be like. They are in waiting position. Suddenly they get a call, they rush quickly and get on the fire engine.They turn on all the sirens and red flashing lights,drive like mad to the scene of fire, often arriving late.

Use everything they have, to try and put out that fire, and then go back to the starting point, back into this waiting position until the next fire. From one fire to the other, their energies dwindle and their level of energy and vitality drops. They carry on with their day,hoping that no new fires will start. But they can't really know for sure.

Test yourself: Are you a firefighter?

Do you:

Guess how many expenses you have

Guess what your income is

Forgets to send invoices

Late to meetings or ill-prepared for them

Don't keep deadlines

Give up well deserved on income

Your pricing is low and you compromise on the price even more

Don't do enough to get new costumers

Don't plan!

All the answers are correct

3 Tests To Qualify For A Small Business Loan

Banks and other lenders are really only concerned about one thing; getting repaid.

After all, that is how they still make the bulk of their revenue; making loans and getting repaid both interest and principal.

Thus, to qualify for a business loan, you simply have to demonstrate that your business can service the loan request - meaning being able to make the loan payments for the life of the loan.

Most lenders will perform the following 3 analysis calculations to determine if your business has the cash flow to service the proposed new loan.

1) Spread The Financials:

Banks / lenders will require three years of past financial statements at a minimum. The reason is to see if your business could have serviced the loan over the last three years. If it passes this test, then your business should be able to service the loan for the next three years.

Thus, they use your past business performance to determine what your future performance should be.

To spread your financial, most lenders will do the following for each past period that your business provided financial statements:

Take your net income (that is your net profits after all operating costs, taxes and interest payments).

Add back any non-cash accounting items like depreciation (deprecation is not an ongoing cash expenses but an accounting anomaly to reduce taxable income for tax reporting purposes only).

Add back any one-time charges or expenses - expenses that are not expected to reoccur in the future.

Then subtract out the interest charges for the proposed loan - only the interest portion at this stage as interest payments are considered regular business expenses.

This results in the true net positive (hopefully positive) cash flow of the business - cash flow that will be used to pay the principal portion of the business loan.

Now, if your business's cash flow at this point can cover the principal portion of the loan, you have almost pasted this test.

Most lenders will not just want to see if your business's cash flow meets the minimum principal portion of the proposed loan but would like it to cover 25% or even 50% more. The reason is that should your business have a slow period and revenues decline by say 25% or 50% - your business's cash flow would still be sufficient to make the loan payment.

Example: Your business requests a $100,000 loan for three years with a monthly payment of $3,227 - broken down as interest of $449 and principal of $2,778.

Therefore, your monthly cash flow should not only cover the $2,778 in principal but say 1.25 times more or $3,473.

Also, keep in mind that this cash flow figure should not only cover the proposed loan's principal but the principal payments of all the business loans the company has.

Principal payments are not income statement items and are not accounted for based on normal operating income and expenses but are balance sheet items and are paid out of net income (after all operating expenses).

Interest charges from loans are an operating expense and accounted for when the financials are spread.

Financials could be spread monthly, quarterly or even annually - depending on the types of financial statements requested or the policies of the lending institution.

If you can past this test via your past business performance, then it is highly expected that your business will do the same in the near future.

2) What If Scenarios:

Here, the lender will perform a series of "what if" scenarios on your financial statements.

For example, they may take your total revenue per period and reduce it by 10% or 20% - keeping all other items (your expenses) the same.

Then, spread those numbers again to see if your business could still service the proposed loan - e.g. still have the cash flow to make the payments.

Again, reassuring the bank or lender that your business would still be able to repay them should your business hit a slow period.

3) Debt-to-Equity Ratio:

Lastly, while your business may be able to service the proposed loan's payments, banks also want to ensure that your business is not over leveraged - meaning that your business does not have too much debt in comparison to its equity.

Let's say that the entire market declines or crashes and your revenues fall so low that you are forced to shut down the business. In this situation, would you still be able to repay all your lenders - including this proposed loan?

Thus, lenders look to a safety measure known as the debt-to-equity ratio.

Measuring your debt-to-equity is simply taking your Total Liabilities and dividing them by your company's total equity.

The higher this ratio, the more risk the business has as it is relying on too much outside debt financing.

A ratio over 3 (meaning that the business has three times the debt as it does equity) is too much risk for most lenders to feel comfortable with.

Most businesses will have a debt-to-equity ratio between 1.5 to 2 and are considered safe to their prospective lender.