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Teach the Young: A Frank-ly Kind Act
6 years ago
Thursday, February 26, 2009
The Economy's Silver Lining
The fall of major corporations and the roller-coaster stock market have shown that these are not normal times. Factor in jobs and businesses being turned over faster than pancakes on a hot skillet, and you might be a little worried about your future as an entrepreneur.
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Is Your Small Business Ready for a Part-Time CFO?
Have you ever felt like there is a hole in your company's financial planning? You are not alone. Unless a business owner has a strong background in finance, it's almost impossible to balance tasks such as increasing sales, managing employees, and improving the product or service of the company while properly handling the finances with a view to the long term. Even if a small business owner is diligent about putting time aside each week to focus on the company's finances, it's easy to feel like you are treading water simply tending to monthly expenses instead of developing a long-term financial plan.
One smart solution is to hire a part-time, or "floating," chief financial officer (CFO). An experienced part-time CFO can look at small business financials with the eye of a well-trained surgeon. He or she can create cash flow statements and revenue projections, negotiate with vendors, collect receivables, and implement a strategy for reducing bad debt. A superb CFO can create near-magical spreadsheets, often dubbed "dashboards," which allow users to punch in numbers to see how one cost changes net profit and cash flow. If you're planning to raise capital, a CFO can also help you with the business plan, projections, and tax issues.
If you plan to approach a bank for a credit line, you'll be in better shape with clean financials. It's also wise to have your CFO with you during bank meetings. The same holds true if you're hoping to "exit" your business via an acquisition, particularly if your likely acquisition candidate is a public company.
While it's good to have checks and balances in place by keeping your bookkeeping, accounting, and CFO services separate, if you're not happy with your bookkeeper or accountant, a CFO service may be able to make informed recommendations for both. But be sure to ask if the CFO service gets a referral fee. That may be okay with you, but full disclosure says a lot about the people you are hiring. If your company grows to a point where it needs a full-time CFO, your part-time CFO service may offer recruiting services for a finder's fee (or not), help you read through résumés, interview candidates, and negotiate salary.
Many of the temporary CFO companies focus on middle-market and even Fortune 1000 companies and specialize in "interim" CFOs. Smaller companies may find it more advantageous to work with local, sole proprietors.
One such firm is Beyond the Bottom Line, which offers "CFO on Demand" services to companies in the Northeast. Founder John Gillespie has worked with Fortune 1000 companies, startups, and nonprofits. Prior to launching the company in 1998, he was COO and CFO of Innovation Luggage. Gillespie says the fees the firm charges range from $125 to $250 per hour. "It depends on the situation and how complex the assignment is," he says. "Sometimes we're simply keeping the books and closing them at the end of the month. Other times we're doing forensic accounting." A dedicated community activist, Gillespie gives nonprofits a break on fees.
Another firm with a similar mission, but a larger territory, is B2B CFO. The company has 98 partner CFOs across 42 states. B2B CFO works with smaller clients such as dentists and doctors, but also caters to larger companies with up to $75 million in revenue. "Our fees are flexible and fit within the budgets that our clients can afford," Ania M. Kubicki says, speaking on behalf of the firm. "Some clients pay our partners as little as a few hundred dollars a month." Both B2B CFO and Beyond the Bottom Line offer clients a complimentary financial "fitness" analysis prior to beginning work.
It is always challenging to take on another expense when you're trying to build a company, but the fees for a part-time CFO may be offset with reduced fees from your accountant, as your financials will no doubt be in better order. To find a floating CFO in your area Gillespie suggests asking your accountant for a referral, or calling your state CPA organization or area chapter for the Financial Executives International (FEI).
Source: http://www.allbusiness.com/banking-finance/personal-finance-financial-planning/11700585-1.html
Online Request for SBDC Counseling
Looking at Your Options for Business Funding
One of the critical aspects of opening a new business or expanding an established one is finding appropriate business funding. You have a few options for acquiring the necessary startup capital, each with its own particular set of nuances that may or may not coincide with your business model.
Determining the size and scope of your business is key when approaching potential lenders, as they may require you to provide an exact plan on how you intend to repay the debt.
Primary Types of Business Funding
When looking for business funding, you have three primary sources at your disposal. And because the process of acquisition can be involved, having your "numbers" in order should help you streamline the process.
Small business loans: This is probably the most common way to fund a new business startup. Small business loans can derive from numerous sources, such as banks, credit unions, the U.S. Small Business Association, or angel investors. With this business funding type, potential sources look at the business plan, personal credit history, and several other factors.
Merchant cash advance: This differs from small business loans because your advance is based on potential credit card sales. A merchant advance is ideal for small and mid-size businesses that find it difficult to get business loans or venture capital from banks or leasing companies. This type of funding almost always requires a credit card processing agreement with the funding merchant.
Unsecured business loans: Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different service packages, including credit card debt, personal loans, bank overdrafts, credit facilities or lines of credit, and corporate bonds. The interest rates on unsecured business loans can be in the double digits for those with less than perfect credit or no credit history at all.
Choosing a Funding Type
Before going into negotiations for a small business loan, a merchant cash advance, or an unsecured business loan, make sure you know exactly how much funding is needed and how that funding will be spent. Here are some things to consider when applying:
How much money do I need? For a small business startup, determining the startup capital estimate should be addressed in your strategic business plan. Accuracy is important, so be sure to list any and all expenses you anticipate facing in the opening months of operation.
How will I spend the money? When asking for business funding, many lenders will ask you to outline in detail how every dollar you request will be used. A small business loan is often needed for operations (new employees, marketing, etc.), assets (equipment, real estate, etc.), or to pay off current business debts.
When will I repay my small business loan? You will explain in detail how this small business loan will serve as the catalyst for business operations. Use financial statements and cash flow projections to convince the lender that the loan will be repaid through the expected long-term profitability of the business.
If the loan is denied, what is my next move? Portraying a confident and determined attitude can let lenders know that rejection will not discourage you from starting or growing your business. Chances are that your application won't be successful in your first attempt. Therefore, try to access all possible avenues of business funding to increase chances of success.
Source: http://www.allbusiness.com/banking-finance/banking-lending-credit-services/11767625-1.html
Determining the size and scope of your business is key when approaching potential lenders, as they may require you to provide an exact plan on how you intend to repay the debt.
Primary Types of Business Funding
When looking for business funding, you have three primary sources at your disposal. And because the process of acquisition can be involved, having your "numbers" in order should help you streamline the process.
Small business loans: This is probably the most common way to fund a new business startup. Small business loans can derive from numerous sources, such as banks, credit unions, the U.S. Small Business Association, or angel investors. With this business funding type, potential sources look at the business plan, personal credit history, and several other factors.
Merchant cash advance: This differs from small business loans because your advance is based on potential credit card sales. A merchant advance is ideal for small and mid-size businesses that find it difficult to get business loans or venture capital from banks or leasing companies. This type of funding almost always requires a credit card processing agreement with the funding merchant.
Unsecured business loans: Unsecured loans are monetary loans that are not secured against the borrowers assets. These may be available from financial institutions under many different service packages, including credit card debt, personal loans, bank overdrafts, credit facilities or lines of credit, and corporate bonds. The interest rates on unsecured business loans can be in the double digits for those with less than perfect credit or no credit history at all.
Choosing a Funding Type
Before going into negotiations for a small business loan, a merchant cash advance, or an unsecured business loan, make sure you know exactly how much funding is needed and how that funding will be spent. Here are some things to consider when applying:
How much money do I need? For a small business startup, determining the startup capital estimate should be addressed in your strategic business plan. Accuracy is important, so be sure to list any and all expenses you anticipate facing in the opening months of operation.
How will I spend the money? When asking for business funding, many lenders will ask you to outline in detail how every dollar you request will be used. A small business loan is often needed for operations (new employees, marketing, etc.), assets (equipment, real estate, etc.), or to pay off current business debts.
When will I repay my small business loan? You will explain in detail how this small business loan will serve as the catalyst for business operations. Use financial statements and cash flow projections to convince the lender that the loan will be repaid through the expected long-term profitability of the business.
If the loan is denied, what is my next move? Portraying a confident and determined attitude can let lenders know that rejection will not discourage you from starting or growing your business. Chances are that your application won't be successful in your first attempt. Therefore, try to access all possible avenues of business funding to increase chances of success.
Source: http://www.allbusiness.com/banking-finance/banking-lending-credit-services/11767625-1.html
Wednesday, February 25, 2009
Grow Your Business
Now that your business is established and in place, you're probably finding out that you face increasingly complex issues requiring more sophisticated research, market analysis and strategic planning. In addition, you are probably thinking about expanding your business through overseas markets and/or government procurement. The following questions are probably just a few that you are wrestling with:
- How can I increase my profitability?
- What new products or services can I develop?
- Should I update my old products?
- Should I apply for patents, trademarks or copyrights?
- How frequently should I revise my strategic plan?
- As an entrepreneur how do I deal with human resource issues?
- What tax-saving devices should I be using?
- Does the company have sufficient insurance coverage?
- How can I develop my leadership skills?
The Pennsylvania SBDCs work with existing businesses to assist their expansion, help them deal with their growth, and put them in the best place for future growth and success. Growth issues such as financing, finding new markets, dealing with personnel issues, and strategic planning are addressed both in our educational programs and in one-on-one consulting sessions.
The best news a business owner can hear is that demand is high. The worst news a business owner can hear is that their business cannot meet the demand. Consulting with the Pennsylvania SBDCs can help put your business on course for steady growth at a pace that meets your market's demand.
Source: http://www.pasbdc.org/index/services/grow.asp
Online Request for SBDC Counseling
Want to start your own business? get ready to make costly mistakes
I immersed myself to full time entrepreneurship within the past month and I am amazed at all the costly mistakes I’ve made. Here is a list.
1.) I didn't take the time to learn about SEO (search engine optimization).
1.) I didn't take the time to learn about SEO (search engine optimization).
I knew nothing about it and even though a seasoned entrepreneur told me that it is something I have to do, I ignored her. (Not because I did not trust her but because I did not understand what SEO is). If you are starting a website, take the time to learn about SEO.
2.) I placed everyone I ever emailed and everyone I know on my mailing list.
2.) I placed everyone I ever emailed and everyone I know on my mailing list.
That is a waste of time and money. I ran into a distant relative at the store and she asked, “What, are you writing stories now?” (She was referring to my newsletter). That is when it hit me. Not everyone is interested or needs to know about what I do. And what kind of image am I projecting by just emailing everyone I know without learning if they are interested first? Do not waste the time. Only add people that you know are interested. This way you will not waste the money for paying a higher rate for a larger list when using services like constant contact or vertical response.
3.) I ignored the free services given to budding entrepreneurs and paid a ton of money for business coaches. I thought that the free services are useless. I strongly believed that I have to pay top dollar for quality service/coaching. Now I have learned that non profit organizations, like SCORE or Queens Economic Development Corp., offer one-on-one consulting, workshops, and seminars, that no entrepreneur should miss.
4.) I worked all the time.
3.) I ignored the free services given to budding entrepreneurs and paid a ton of money for business coaches. I thought that the free services are useless. I strongly believed that I have to pay top dollar for quality service/coaching. Now I have learned that non profit organizations, like SCORE or Queens Economic Development Corp., offer one-on-one consulting, workshops, and seminars, that no entrepreneur should miss.
4.) I worked all the time.
This costs you your health and your relationship with your loved ones. All October I spent working the regular business hours, after the kids are in bed, while eating dinner, while doing homework with my oldest, and on weekends. I now believe that this is unhealthy. This November I am committing myself to a schedule. I will do a comparison post in December letting you know what it is like to work all the time versus a schedule.
5.) I tend to rush things.
5.) I tend to rush things.
Trying to get things done too fast can cost money and lots of it. One of the services my organization offers is networking events. In October, I collaborated up with QEDC, and the turnout was great. I then rushed to put together another event on my own in a matter of weeks. Bad idea. Events and any other kind of services need to be thought through and planned months ahead. Planning is key to getting people to participate. Stay tuned for more virtual and face-to-face networking events I will be offering. Feel free to join.
6.) I planned in my mind rather then on paper.
6.) I planned in my mind rather then on paper.
There is something powerful about writing/typing a plan out versus just thinking it up in your head. On paper, it is visible and clear. In your mind, it is whatever you imagine. I am entering Queens StartUP!, business plan competition. Stay tuned for updates on that as well.
I made these mistakes. Please learn from them and avoid making them.
Source: http://www.workitmom.com/articles/detail/5928/want-to-start-your-own-business--get-ready-to-make-costly-mistakes
I made these mistakes. Please learn from them and avoid making them.
Source: http://www.workitmom.com/articles/detail/5928/want-to-start-your-own-business--get-ready-to-make-costly-mistakes
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