Working Capital

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Analyze Your Product And Services Profitability

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Given the number of times we've had clients ask for help evaluating their product or service mix this past year, I figured it was time for a bit more of a technical discussion. So get that fresh cup of coffee and use this entry to begin to ponder how your products or services help -- or hurt -- your business.

Knowing the profitability of each individual product/service you provide can help you make decisions to improve your bottom line. You may want to discontinue products and services that aren’t particularly profitable while promoting the ones that improve your overall results.

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Time IS Money So Get The Best Return On Your Investment

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Have you ever reached the end of the day and wondered where all your time went? Playing catch-up to retrieve wasted time is what keeps many business owners welded to their business premises way outside of ‘normal’ business hours.

For many business owners a number of their customers, suppliers and employees are likely to be friends as well as business acquaintances. This overlap of private and business relationship can lead to requests for assistance or for special deals that can make serious inroads on their time. A lot of small business operators go slowly broke doing work for friends at discounted rates or for free. ‘Discounted rates’ translates as ‘at less than your market value’ and that means more hours you have to put in to make up for the lost profit.

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12 Days for a Start-Up Business

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The holiday season is around the corner and while recovery from the global financial crisis is, well, not exactly in full swing… I thought it was time to address the vital question of what it takes to start a new business. Much like the larger-than-life gift-wielding icon from the North Pole, many people question whether or not starting a new business on the back end of recession is a good idea … or the figment of over-active entrepreneurial spirit?

Well in some ways it’s a better time and easier than it ever has been. The competition has been winnowed out, and many businesses are quieter and less obtrusive in their marketing. New technology options including the Internet, e-marketing and outsourced suppliers offering SaaS (software as a service or "cloud computing") make it possible for you to do a lot without emptying your bank.

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Avoid Budget Blowouts

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A budget is an important management tool. Being a projection of your income against your expenses you can check it at any time to see how well or how poorly your business is doing. The value of a budget is in direct proportion to the accuracy of the figures you use to create it. Here are some precautions to take to keep your budget figures accurate.

Use Realistic Projections

Since a budget is based on projections there’s always an element of uncertainty involved in estimating inputs. It pays to be conservative regarding things such as sales forecasts. If they turn out to be better than estimated, that’s great and provides the opportunity to distribute the extra around to advantage.

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Building Your Loan Package

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If you're ready to ask your bank for a business loan -- whether for a credit line or a term loan -- before you make your request be sure you have your ducks in a row. This is your chance to demonstrate to your banker that you're a sophisticated business person well worthy of the loan.

So, how can you help your loan process along? Make sure you have all the following documents and information ready to go.

Business profile. This document describes your business, including annual sales, number of employees, length of time in business, and ownership. A very important part of this profile is the professional resume of you, the owner.

Business plan. If you're a new business this document

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Perils of Unplanned Expansion

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When sales are increasing and new opportunities can be sensed, many a business owner’s thoughts turn to expansion. But unplanned expansion can be as detrimental to your business as no growth at all. Fast growth can destabilize a business giving its owners a false sense of well-being while the additional revenues eat up more operating dollars than expected. If expansion is on your agenda, keep these things in mind.

Watch Your Overhead

The biggest danger in expansion is the erosion of a low overhead structure by unjustifiable purchasing or from simply being too busy to keep track of what is happening. Overhead expenses that were under control in the stable business situation now grow rapidly to cover extra expenses associated with a