The SBA says that in the last decade, the small businesses of America employ over half of all private-sector employees and created up to 80% of all new jobs annually. Hats off to you, the small business owner for that accomplishment. We certainly need you in today's economy.
But yet in the same breath, being a small business owner is very risky. In fact, government data says in recent years for every 10 companies with payrolls started in the U.S., eight close. The question is why do so many close? I suggest we should provide more support to American small businesses in form of training, financial incentives and access to capital from our banking system. But also small businesses need be aware of what big business is aware of - some basic business trends they can watch to help monitor the health of their own business.
Most small business owners monitor the cash of their business, the numbers. This is a good thing. I hate to hear one of my clients say at the end of the year, "where did my money go?"
Business owners need to pay attention to the numbers but there are other pointers they should pay attention to also. These indicators are not as easy to track as the money but are no less important.
One area is employee morale. This indciator can be a very important one for small businesses as they depend on their employees for first impressions with customers, work quality and performance. If you have unhappy employees, eventually you will see a dip start in your sales. As a business owner, you can talk to your employees about how they feel about the work environment. Typically, as the owner, you are not that far removed from all of your employees and having a conversation would be a good thing. But if you are uncomfortable with this method, try watching them and seeing what their actions tell you - look at body language, listen to the informal talk going on and check on performance.
You can't afford to have poor employee morale because it spreads to other employees and like an infection, you have to treat it sometimes in a not so pleasant manner. Research shows employees want to do a good job and work in an environment that empowers, engages and trains them. So take some time and have all staff discussions, show them where you want to take the business and the role they play in it and where necessary, encourage them to participate in trainings and create a culture of customer focus where both the person buying and person selling are seen as your business's customer.
The second indicator to watch is how is the marketplace changing. We all have been told to change with the times. I know I often talk with my father about how times have changed and why I do what I do when he did not have to at my 46 years of age. As a small business owner, you need to be consistently looking for information leading you to make the right decisions on your customers, changes, products and your business's future.
Also doing some internal looking is good. If you notice your referrals are down, it could be a sign of customer dissatisfaction. So go talk to your customers and find out why. Check into your competition to see what they are doing differently and then make changes to your plan. You know what happens when you assume - so don't do it. You might look into your customer service policies and make changes there from what your own customers tell you or your competitive intelligence tells you. Don't be afraid to change things up in your business.
A third area is to revisit the business plan you hopefully wrote when you started your business. This is a living document and should be revisted and updated annually or more often depending on your business. As humans, we tend to stick to plans once they are written down. If they remain in our heads, they don't seem as real to us. For example, I wanted to start this blog several months ago but it never happened until I put it in my to do list and now I work hard to have a new entry every week - but not before I wrote it down.
Also a business plan helps you see what is important and not get lost in the every day hustle and bustle of just running a business. You don't want to be quilty of spending 50 hours a week doing day to day operations and spend less than 10 hours a week trying to steer the business, attend to employee needs and think about the future of the business. You have always got to stay looking at how you can improve and plan for changes.
The final area to watch is your attitude as the business owner. You went into the business because you had a passion for the business. Have you noticed it slipping, you not enjoying the customer interaction as much or do you bury yourself in your office to avoid dealing with employees? Your attitude is what sets the example for your employees who interact with your customers who provide you with a reason to be in business in the first place. Do a look at yourself and see what could be improved? Heck if you are still as passionate about your business now as when you started it, then you found your calling and share that passion with others. It is good for the soul.
Well let me know what you think. Share your thoughts and opinions and let's get talking about small business in Southeast Missouri.
The latest news, expert advice, and growth strategies for small business owners
Happy Holidays - Yes a Little Late
Happy Holidays even if it is a little late. Just like my birthday (happens very close to Christmas) I got caught up in the swinging of things and let a few others go. But never fear I am back and here is another fascinating edition of small business news for Southeast Missouri.
I got a bit of good news today - a client of mine was able to obtain a small business loan. This client is one of six clients whom I feel are very fundable but the banks in the area are just not making loans to them. We did all the work, prepared the client for the bank's requirements and they still wait. Maybe this one client will be a signal that they are going to loosen up in 2011.
I hope you will let me know what you want to read about in this column as I improve my skills in blogging. Please remember this is my first blog attempt and I am sure there are many others much better than me.
Well here is my weekly tip for you taken from INC Magazine October 2008 issue. Norm Brodsky is a very wise person having been an entrepreneur many times over and now serves as an advisor to INC magazine. In his monthly article, he writes the following tips on how to best run your small business:
Tip #1 - Know how to read the financial statements and then use them to help you make decisions on running the business.
Tip #2 - The sale is not a sale until you collect on the sale.
Tip #3 - Don't let your short term liabilities grow bigger than your short term assets. If you do, you are headed towards bankruptcy. I talked to a client about this very topic today. They did not realize they had done this but once we did the financial analysis, there it was just like the wart on Cinderella's wicked step-mother.
Tip #4 - Always look for the long term implications of your decisions. You should always ask yourself - what will this decision do to my company 5 years down the road? Remember, building a great company takes time and there are no shortcuts to greatness.
Tip #5 - Always make sure you have cash in the business before you go spending it.
Tip #6 - You have only associates in business no friends. A lesson that is hard to learn but once learned it can save you a lot of money and pain. This is true for your suppliers and employees.
Tip #7 - Focus on the gross margin not sales as it tells you the real story of your business's performance. It can be found on the income statement.
Tip #8 - Know your competition - the direct and indirect competitors. Don't let them sneak up behind you and catch you by surprise.
Tip #9 - Make sure you, as the owner, pay attention to the culture example you are setting for your employees and your customers.
Tip #10 - Always remember you have a life outside of work. Give work its due but your personal life is also deserving of attention.
Well happy holidays and look for more in the near future.
I got a bit of good news today - a client of mine was able to obtain a small business loan. This client is one of six clients whom I feel are very fundable but the banks in the area are just not making loans to them. We did all the work, prepared the client for the bank's requirements and they still wait. Maybe this one client will be a signal that they are going to loosen up in 2011.
I hope you will let me know what you want to read about in this column as I improve my skills in blogging. Please remember this is my first blog attempt and I am sure there are many others much better than me.
Well here is my weekly tip for you taken from INC Magazine October 2008 issue. Norm Brodsky is a very wise person having been an entrepreneur many times over and now serves as an advisor to INC magazine. In his monthly article, he writes the following tips on how to best run your small business:
Tip #1 - Know how to read the financial statements and then use them to help you make decisions on running the business.
Tip #2 - The sale is not a sale until you collect on the sale.
Tip #3 - Don't let your short term liabilities grow bigger than your short term assets. If you do, you are headed towards bankruptcy. I talked to a client about this very topic today. They did not realize they had done this but once we did the financial analysis, there it was just like the wart on Cinderella's wicked step-mother.
Tip #4 - Always look for the long term implications of your decisions. You should always ask yourself - what will this decision do to my company 5 years down the road? Remember, building a great company takes time and there are no shortcuts to greatness.
Tip #5 - Always make sure you have cash in the business before you go spending it.
Tip #6 - You have only associates in business no friends. A lesson that is hard to learn but once learned it can save you a lot of money and pain. This is true for your suppliers and employees.
Tip #7 - Focus on the gross margin not sales as it tells you the real story of your business's performance. It can be found on the income statement.
Tip #8 - Know your competition - the direct and indirect competitors. Don't let them sneak up behind you and catch you by surprise.
Tip #9 - Make sure you, as the owner, pay attention to the culture example you are setting for your employees and your customers.
Tip #10 - Always remember you have a life outside of work. Give work its due but your personal life is also deserving of attention.
Well happy holidays and look for more in the near future.
Welcome to my first attempt at blogging
Welcome to this effort to reach out to more of the entrepreneurs and small business owners of Southeast Missouri. I hope you will come back to this blog from time to time as I plan on weekly updating it with tips and news about the small business world. I really would like for this to be a vehicle for you to communicate to me also.
For my first entry, let's talk about making money online with a green slant. I was reading the other day in Success magazine about six websites you can take your talents to and market them online. I know from my many discussions with prospective and current small business owners, getting the word out on their products at a low cost is incredibly important to the success of their business. So I thought let's talk about these websites and see what you have to say. So feel to share your experiences with them and help us all.
Website #1 - etsy.com - is aimed at the arts and craft section of entrepreneurism; people who want to sell their arts and crafts can work with this website to have their product posted and offered for sale; right now around 800,000 items are sold each month on it for about $12.6 million; the website charges a listing fee and percentage of the sale price. Any experience with this? I do know they will not take certain products so make sure you check out the list before you try to submit.
Website #2 - clickbank.com - this website is all about the digital world; if you sell ebooks, software or other digital products this is probably the place to be on; the topics vary from a to z so go in look around and see what you can add.
Website #3 - fotomoto.com - reminds me of a song from my high school days in 80's; but it helps you sell your photography by processing development orders, arranging payments and making prints of the order picture or other products using your picture; they will even ship to your customers; so if you are an amateur photographer like I was at one time, this might be a way to get your pictures out there for sale.
Website #4 - liveperson.com - if you have a question about a business topic or any topic, then you can go to this website and find an expert person willing to talk to you about the topic on a cost per service basis; you could be one of those experts charging others for your time while talking to them about a topic you have in depth experience with.
Website #5 - associatedcontent.com - if you like to write, then why not get paid for it; this website pays contributors to write articles on a variety of topics that consumers want to know about; while you need to know the topic, you also need to be able to write in a way to optimize your article.
Website #6 - volusion.com - if you want to sell your product on your own website (not like etsy.com) then you might want to take a look at this site; they help you build, grow and manage your online store; they will help you create your own website, help market it and provide ongoing consultation and support.
So if you have had any experience with these website, share with us and start up a chat. I know I will learn from you.
Until next week, take care and have a happy Christmas.
For my first entry, let's talk about making money online with a green slant. I was reading the other day in Success magazine about six websites you can take your talents to and market them online. I know from my many discussions with prospective and current small business owners, getting the word out on their products at a low cost is incredibly important to the success of their business. So I thought let's talk about these websites and see what you have to say. So feel to share your experiences with them and help us all.
Website #1 - etsy.com - is aimed at the arts and craft section of entrepreneurism; people who want to sell their arts and crafts can work with this website to have their product posted and offered for sale; right now around 800,000 items are sold each month on it for about $12.6 million; the website charges a listing fee and percentage of the sale price. Any experience with this? I do know they will not take certain products so make sure you check out the list before you try to submit.
Website #2 - clickbank.com - this website is all about the digital world; if you sell ebooks, software or other digital products this is probably the place to be on; the topics vary from a to z so go in look around and see what you can add.
Website #3 - fotomoto.com - reminds me of a song from my high school days in 80's; but it helps you sell your photography by processing development orders, arranging payments and making prints of the order picture or other products using your picture; they will even ship to your customers; so if you are an amateur photographer like I was at one time, this might be a way to get your pictures out there for sale.
Website #4 - liveperson.com - if you have a question about a business topic or any topic, then you can go to this website and find an expert person willing to talk to you about the topic on a cost per service basis; you could be one of those experts charging others for your time while talking to them about a topic you have in depth experience with.
Website #5 - associatedcontent.com - if you like to write, then why not get paid for it; this website pays contributors to write articles on a variety of topics that consumers want to know about; while you need to know the topic, you also need to be able to write in a way to optimize your article.
Website #6 - volusion.com - if you want to sell your product on your own website (not like etsy.com) then you might want to take a look at this site; they help you build, grow and manage your online store; they will help you create your own website, help market it and provide ongoing consultation and support.
So if you have had any experience with these website, share with us and start up a chat. I know I will learn from you.
Until next week, take care and have a happy Christmas.
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