Items tagged with SBDC Business Tips Articles
The new rule from the U.S. Department of Labor affecting overtime for white collar workers goes into effect December 1, 2016. It may have a profound effect on many small businesses and organizations who have salaried employees. Below is a brief overview of the new rule and the resources available to help.
Currently, white collar salaried workers who meet one of the five categories of eligible exemptions: executive, administrative, professional, outside sales and some computer employees, and are also paid $23,660 a year ($455 per week) or more, are exempt from overtime pay. The new rule effective December 1st raises the required level of pay to $47,476 per year ($913 per week) to remain exempt from overtime for those salaried workers meeting one of the categories of exemptions just mentioned.
Many small businesses struggle with cash flow problems. For some businesses, it is the number one problem of concern. Cash flow can be described various ways. One way is this: how cash moves or “flows” from the time the business pays for the expense of cost of goods or service (cash out) until the time it is collected by the business from the customer (cash in). The length of this process can determine the extent of the problem a business has with its cash flow. The longer the period of time from expense to collection, the larger the cash flow problems the business may have. The longer it takes the more cash a business will require to cover cash needs. What causes cash flow issues? Your cash may be tied up in your customer’s “pockets” through aging of accounts receivable or tied up in inventory that is not moving fast enough. In addition, your prices may be too low causing your gross profit dollars to be less than they should. Gross profit dollars are used to cover overhead expenses. Finally, your overhead expenses may be too high. It could be one of these reasons or it could be a combination of these reasons causing cash flow problems.
Cash flow and accountability are what makes or breaks many small businesses. Accurate recordings of transactions, along with proper assessment and processing, give small business owners a firm base on which to make decisions and create opportunities for growth.
Understanding and recording the sales, expenses and other basic business financials should be easy enough for small business owners. Understanding the accounting needs of a business is not always so simple. What type of activity is considered bookkeeping, and when do you need an accountant instead? What is the difference between the two?
There is, and it is a simple but important one. Bookkeepers record a small business’ daily transactions, while accountants verify and analyze that information. A bookkeeper’s area is daily financial transactions, which include purchases, receipts, sales and payments. Recording these items is usually done through a general ledger or journal. Many small businesses use software to keep track of their entries, debits and credits. These efforts culminate in a trial balance, which means the final total of debits and credits match.
Could you, would you, should you take a vacation? Most small business owners would answer this with an emphatic “no way.” The answer should really be, “Yes, WAY!”
You could take a vacation, all it takes is proper planning. Be intentional about taking time off, get it on the calendar as far in advance as possible.
Anticipation of taking a vacation will help you prioritize your to-do list. For example, you have a list of things which you’ve been putting in that “I’ll get to that when I have time” folder. Take that list and assign tasks to yourself and your employees then promptly complete the tasks. You will find that having these chores finished will make a difference in how relaxed you’ll feel on vacation.
Tax season is over but now is the right time to recap and implement strategies to have an easier process during your next filing season. The beginning of the year for small business owners is usually somehow stressful mainly because of tax season. You are having to put all the business paperwork together to file taxes. No matter whether you’re a sole proprietor or corporation, if you sell goods or services for financial gain, you should have an accounting structure in place and if you collect sales tax you must send that money to the government. It’s theirs anyway. Tax returns and payments are due by April 15th or the first business day thereafter.
The first questions you will be asked when filing taxes is: What is your accounting period? For almost every business it’s from January 1 through December 31 of the same year. The year is broken down into quarters and typically you should be paying an estimated tax to both state and federal offices each quarter. But to pay taxes is necessary to keep a record of your sales as well as your expenses. The best way to keep up with it is with preparation during the year.
Lately I have been thinking of the word “trust” as it relates to business. Most people would say business is based on good relationships and good relationships are built on trust. In fact for some businesses, relationships built on trust are everything.
Trust means someone has our best interests at heart and will strive to act in a manner that protects our best interests along with theirs, however difficult it may be at times. We trust our professional advisors will give us good advice and challenge certain ways we do things in order to protect us. We trust our suppliers not to push the latest promotion but to promote items that will benefit our business, even if it means they do not make the monthly sales quota. We want to deal with those we trust and I believe once we find those who are trustworthy, we will continue to do business with them and overlook the minor glitches and modest but necessary price increases. Trust can even be a competitive advantage.
lead·er·ship - ˈlēdərˌSHip/ noun Meaning: the action of leading a group of people or an organization.
Defining Leadership is a hard task. Leadership is subjective in many cases and is defined in many ways. Leadership can be defined as many things in various situations involving different people. You do not have to be the Mayor of your city, or the boss of your business, or the head of the organization in order to be a leader. I would say in most cases leadership is not fostered by the title you hold but gains its power from the actions you take.
The Angelo State University Small Business Development Center is excited to announce that we will be hosting the live simulcast event Leadercast Angelo State right here in San Angelo, TX. With the help from our partners and sponsors, we will participate as a host site in a live broadcast presentation that originates from Atlanta Georgia. This is an annual experience with the purpose to instill leadership values and inspire individuals to achieve more in their daily lives.
If a picture is worth a thousand words, then your logo must be worth a million!
Your logo is the face of your business. It is a key element when it comes to advertising your business and is at the center of all of your branding. This is why it is important to have a logo that you can use anywhere, put anywhere and send to anyone.
Many small business owners run into the issue of not having their logo saved as a digital file. This makes it very difficult for print companies to replicate or create marketing materials for you. In order to better understand your logo files, I would like to explore some of the different file types and explain why it is easier to work with some files as opposed to others.
I am continually fascinated how our past experiences shape our future decisions. Such was the case when I landed my first teaching job. The principal called to offer me a fifth grade teaching position and before I accepted, I asked one question, “May I ask about the procedure on how flags are raised and lowered each day at school?”
Her answer surprised me, “The janitor takes care of that.” To which I replied, “I would like to have the fifth grade class be in charge of the flag.” Having students, studying American history as fifth graders, raise and lower the flag was a natural fit. The principal said “Yes, that would be nice.” And I had my first teaching job!
So how did the desire to be in charge of the flag become so important for me. Simple. When I was in the fifth grade, only boys were crossing guards and only the boys raised and lowered the flag. All I wanted to do was participate in the raising of the flag. So fast forward many, many years and I was able to provide that opportunity over a ten year period to about 700+ fifth grade students.
It seemed like a good idea at the time…starting your own business that is. After all, how hard could it be? All I have to do is buy or make something and sell it to someone who wants or needs it. Simple. All you had to do was establish a legal business structure, set up an account with the State Comptroller’s office, find a business location, and obtain some financing. You jumped through some hoops to get all that done and now you are in business and you are doing well. Or are you? How do you know?
Many new small business owners never print any kind of financial statement until the end of the year when they have to file a tax return. They have gone 12 months without knowing if they are making a profit or showing a loss. They have been operating in the blind. It’s kind of like flying an airplane with no gauges or windows, except once a year. Operating this way assumes that as long as you are still flying, everything must be good. The problem is that you can’t tell if you’re on course, or if your altitude is sufficient to keep your from running into mountains, or if your speed is sufficient to maintain flight.
I thought it fitting to pay a tribute to our good friend and economic development partner, San Angelo Chamber of Commerce President Phil Neighbors, who many of you know passed away unexpectedly a week or so ago. During this time I have reflected not only on Phil’s positive personal life, which came to light for many of us, but also his professional life as a leader and partner in San Angelo’s economic development and business development.
My reflection has shed light on something. We can take for granted, people and their positive influence especially when they tend to be low-key as Phil was known to be. When they are gone we realize the impact they had and the void they will leave. Many have related Phil’s positive influence on community endeavors, the Chamber of Commerce, City of San Angelo, Angelo State University, Howard College, SAISD, Goodfellow Air Force Base, and many others. All of us marveled at his boundless energy to be involved and make a positive difference. His absence will be an emptiness we will all feel.
Time is running out for those who wish to enter the San Angelo Business Plan Competition for new ventures. The deadline is Tuesday, Feb 2nd at 5pm. There is a cash prize of $15,000 for first place and $10,000 for second place, plus both first and second place come with thousands of dollars’ worth of in-kind services from local service providers. But the deadline is tomorrow!
The purpose of the business plan competition is to encourage local entrepreneurs to create new ventures or for existing business owners to create a new entity. The creation of new businesses will help the economy, especially since the oil and gas industry are currently in a down phase. The competition is open to anyone who wishes to create a new entity in San Angelo or its Extra-Territorial Jurisdiction (ETJ), which is 3.5 miles outside of the city limits.
Those entering the competition should be committed to job creation. Preference will be given to business plans that create primary jobs. Primary jobs are those created when a business generates 80% of its revenue from outside San Angelo market area. The initial entry will cost nothing more than time to put together a two page maximum overview of your proposed business.
Many small businesses will need a commercial loan or a line of credit from a bank at some point. Especially when times are slow or the company is struggling, banker relations can become strained. When the banker is worried, he may start asking hard questions. Let us look at some ideas on how to deal with this situation and how to make your banker a partner all the time, not just when things are going well.
The key to excellent relations with your banker is having excellent communication. To have him on your side, he needs to understand what you are doing and to be confident of what to expect in the future. You must reach a point in your relationship with him that you tell him what is happening before it happens. The better able you are to project, the more confidence he will have.
Opportunity is knocking for Entrepreneurs in San Angelo. Will you answer?
The ASU-SBDC is partnering with the ASU College of Business and The Business Factory to bring you an unparalleled opportunity to receive guidance and support in building your small business dreams. The San Angelo Business Plan Competition is your opportunity to develop a viable business plan that will create a business in San Angelo.
The competition consists of three phases. The first phase is your initial entry into the competition. You will need to submit a two-page business overview with details about your proposed business. It will need to include the essential elements of your new venture such as; the product or service you will offer, information about your target market, your potential for revenue generation, and the economic impact for San Angelo. This business plan overview needs to be submitted by February 2nd.
As the year ends, it is the perfect opportunity to look back and recap the things that happened in your business during 2015, or maybe take on that idea of starting your business and make it happen. Many times as business entrepreneurs, the dreams we have for our business are limitless, but different factors can be affecting your business at the moment. Don’t hesitate and take control of those factors you can manage as soon as possible. It is never too late, and in business the sooner the better. Below is an important way to make a positive change in your business.
Invest in human capital – More than 50 years ago, the famed management guru Peter Drucker was the first to assert that workers should be treated as assets, not as liabilities to be minimized or eliminated. Therefore, getting the right people should be the most important step when you are hiring employees. You might invest time and money by doing so, but it is almost certain that it will be an “investment” and not a “cost.” Investment in people will pay off like investments in other assets. It’s a long-term strategy. The last thing a company should do for short-term gain is asset-dumping. Everyone knows that without good people, good products cannot be developed, good services cannot be delivered and good customer relationships cannot be maintained.
When a small business owner opens his or her business, it is usually with much excitement and some trepidation. And, it is after a lot hard work and a ride on an emotional roller coaster. The owner opens the doors for the first time with hope. Hope that the future will now be brighter. Hope that customers will come…and purchase. Hope that customers will love them and want to come back. Hope that maybe the business will become a legacy to be left to their children.
The world is a changing environment as witnessed by recent events in Paris France recently. Some of the tragedies that occurred took place in small businesses. Additionally, weather emergencies such as floods, tornados, hurricanes, and earthquakes can have severe impacts on businesses. Vandalism, burglaries, theft, and robberies may also be threats to business. Modern times have added cyberattacks as a threat the business community must guard against.
The question I want to raise here is how well are you prepared to deal with any of the events mentioned above? Security of people (employees and customers), property, and data must always be in the business owner’s thinking. It must be something for which there is a plan.
What about backup systems? Do you have processes that can be implemented if your power goes out? Or, processes that implemented in case you lose internet connectivity while your internet service provider (ISP), bank, or cloud based accounting provider endures a denial of service attack? Do you do weekly and/or daily backups of your business computer? Where do you store these backups?
Attention all Entrepreneurs!
In an effort to further business development in San Angelo, The Business Factory, ASU Small Business Development Center, and the ASU College of Business are bringing back the San Angelo Business Plan Competition for new ventures. Winners will be rewarded with cash and other in-kind services.
The goal of the competition is to give startup entrepreneurs and existing business owners an opportunity to build new ventures in San Angelo. Contestants will develop viable business plans and compete for first and second place prizes.
The initial entry will cost nothing more than time to put together a two page overview of their proposed business venture. The overview should briefly address the essential elements of the business plan as outlined in the competition guidelines. If selected for advancement to Phase II, there will be a $50 entry fee. Phase II is drafting a business plan and Phase III is the finalization of the business plan and a formal presentation of the business plan to the judges.
A critical element to any successful small business is developing a marketing plan. Large businesses have the ability to invest massive amounts of resources into their marketing efforts while most small businesses do not have that luxury. The key for smaller businesses is to figure out how to get the best bang for their marketing buck.
Linda and Mike Boyd own a small business in Colorado. They say the key in coming up with a good strategy is not be intimidated by the marketing process. Mike says, “For many years we let what we didn’t know about that discipline stop us from doing anything. Once we stopped trying to figure out marketing and instead did things that would make us more visible to the people who wanted to be our customers, stuff started to happen.”
Online marketing plays a vital role in the overall marketing plan for your small business. If you are wanting to attract new customers, see more traffic online and in stores, increase sales and keep people coming back for more, then you may want to explore Google Ad Words. Google Ad Words is a form of online advertising in which you are able to select specific target markets and locations that you can advertise to directly. You can select your target audience by choosing keywords your potential clients would already be searching for. You are able to focus your ad on specific geographic areas or span your marketing across the globe.
Creating an account for Google Ad Words is free. You can sign up today and explore the site and the different options available to you. You only pay for advertising once you have set up a campaign and people begin to click on that ad in order to view your website or call you directly. These type of ads are called “pay per click”. Once you are ready to begin a campaign you will be asked to set a budget. This will give you the control as the business owner to determine how much you would like to spend and over what period of time. The standard ad will run for at least one month. Google will ask you to determine how much you are willing to pay each time someone clicks on your ad. When you create an average daily budget Google will multiply that by the number of days in the month and that will create your actual budget. Some days your ad may perform better than others, this means one day you may spend a little over your daily average and some days you will spend less. This allows flexibility in your advertisement. Ultimately you will not be charged over your per month maximum budget. Please keep in mind that even if a potential customer does not click on your ad they have still seen it and this is called an impression. Impressions paly a huge part in creating your top of mind awareness of your services in a potential clients mind. So the next time they need something they will think of your business first.
I can say emphatically that I have never utter the phrase, “Well, that’s not in my job description.” Perhaps it’s because I have had jobs that span the entire working spectrum – delivering furniture, to cleaning boarding and kennel runs and working with a chain saw. With each one of these jobs, I was one of the owners of the particular business.
As an owner, you perform all the jobs which your business requires you to do in order to keep the business running and being profitable. As your business grows, you will find yourself considering hiring an employee.
In order for you to hire an employee, you will need to write a job description. Job descriptions serve a myriad of purposes. Having a job description will help you write your help wanted ad, ensure your applicants and employees understand their roles and serve as a basis for performance expectations.
This past week I had the opportunity to spend some time defining what “leadership” meant to me and how it is important in the work environment. Leadership is a term we use very often, but many times we miss perspective of its real meaning. As business owners, we encourage our staff to be leaders,to set an example. But, it is also common to see some businesses missing that key component, leadership, to be successful. If you are in business or planning to be in business, you might find yourself looking for leadership, either in staff, mentors or even within yourself. The idea of leadership can be overwhelming for many. Therefore, after reading different articles, I found the following important things to remember when talking about leadership.
When attempting to define leaders it can get confusing because they fluctuate from position to position, from range to range; they fluctuate according to the goal you want to meet. Leadership has nothing to do with seniority or one’s position in the hierarchy of a company. Leadership doesn’t automatically happen when you reach a certain pay grade. Hopefully, you find it there, but there are no guarantees.
We first begin learning about competition in our youth. Maybe it is with our siblings, neighborhood or school friends, or other family members. For some, it was about who was the best batter, or fastest runner, or mud pie maker. Later, this carried over to classmates as we entered and progressed in school. It became about who made the highest grade, or was the best trumpet or flute player, or who could throw the ball the farthest, or make the most goals.
Hopefully along the way, we learned to be good sports in both winning and losing. Competition has one a benefit. When we are striving to be competitive we are working hard at improving ourselves and getting better at a given task. In the end, whether we win or lose, we are better and stronger. So, competition is a good thing.
One of the things that small business owners have told us they like is networking with each other in order to learn about and implement new and better ways of running their business. At the ASU Small Business Development Center, we are good sounding boards for our small business clients. Besides helping them with various technical business issues, we share ideas we have learned from our business ownership and management experience, as well as things we have learned over the years. Clients have told us many times this is a valuable part of our services that help them expand or start their businesses.
Networking events are important and lead to valuable resources, connections, and opportunities. Small business owners want to meet with other owners, to share ideas and learn new and better ways of solving their business problems, and to take advantage of opportunities. These opportunities can mean working together as business owners. They can also mean coaching and mentoring each other.
Services now make up a majority of our nation’s economy and service industry employment accounts for over 84% of all private sector jobs according to 2010 numbers from the US Bureau of Labor Statistics. Most would agree ours is a service economy. Marketing your service business is necessary because of increased competition for services.Before you embark on marketing your service business, it is important to understand how a service business differs from a tangible product-based business. The factors that make a service business different are: services sell intangibles, employees and the business are inseparable, services are variable, and services are perishable. Below is a brief discussion of these four factors.
You want to open a business. You know almost exactly how much it will cost to start; supplies, furniture, rent, utilities, etc. But, what about sales tax? As a new business owner this will be one of the first taxes you will pay once you start selling your product or service. After setting up your company either as a sole proprietor, partnership, LLC, etc., you will need to visit the State Comptroller’s Office to find out about your sales tax responsibility.
Unfortunately, collecting, calculating, reporting and paying sales tax can be confusing, overwhelming, and sometimes complicated for first time business owners. To help you understand sales tax, I would like to share some general information I discuss with my clients during their visit for an advising session.
As a young professional, I am constantly striving to find the perfect work-life balance! It seems like a simple concept, but in reality it can be very difficult to achieve. As entrepreneurs and small business owners, you probably face this challenge daily. You probably find yourself always asking what the formula is and how you can keep your family, clients, and yourself happy. As you try to balance your duties in the different areas of your life such as work, family, and friends, it can become extremely overwhelming. The idea of the perfect balance is different for each individual. In trying to create that perfect balance for myself, I try to follow a few basic steps to help keep me moving towards a balanced work-life.
Focus on the things that matter to you….
See if you can solve this riddle: “I will work for you 24 hours a day, 7 days a week, and 365 days a year. I will never call in sick and I am never late for work. I will even be at work while you are home and I will attract the attention of 80% of the mobile market.” Who am I?
If you guessed… a sign, you are correct. This riddle was adapted from the Signage Foundation for Communication Excellence and the International Sign Association, ISA. According to the ISA, your business sign is your handshake with the buying public. This visual “handshake” directly impacts the success of your business.
Consider the information from the University of San Diego study of 187 businesses and their usage of signage. The study indicated the addition of a pole sign will increase gross sales by 15.7%. Even with compelling research, some business owners fail to recognize the importance of an effective sign.
At the Angelo State University – Small Business Development Center, we will interact with over a thousand people each year that either want to start a business or are in business. Of those that want to start a business, a small percentage will come in and tell us they have an idea for a business but they do not know if it is a good one and want to know our thoughts about their idea.
It is never a simple question to answer. There is no way to just say yes or no. Making the decision to start a business requires a lot more than just having a good idea. It involves a lot of research into the industry and into the market. It involves understanding the difference between the industry and the market.
Beyond understanding that difference is that you have to decide if the idea is an opportunity. What is an opportunity? For businesses, an opportunity is a problem for which you have found a solution. Ideally, you solution either the only solution to the problem. The next best situation is when your solution may not be the only solution, but it is the best solution.
In his books Borrowing for Your Business, and Borrowing to Build Your Business, former San Antonio banker George M. Dawson discussed seven questions asked in any borrowing situation. I believe these seven questions can help any business borrower better understand how lenders evaluate their loan proposal. Below are some thoughts using the seven questions.
First, how much money do you want? This question seems straightforward but some borrowers have not determined how much they really need. Lenders want to know the borrower has taken the time to pin this down as accurately as they can. Remember to allow for contingencies, as the unexpected may happen. Another key is to borrow enough so you do not have to go back to the lender asking for more right away. Borrowing too little may just be enough to get you in trouble.
There are many things that are great about owning a small business, but entrepreneurs say there are many aspects that aren’t as glamorous. Running a small business requires considerable sacrifices, according to a new study from email marketing provider Constant Contact that surveyed business owners. Specifically, 56 percent of the small business owners surveyed said they feel like they can never be away from their business, while 51 percent don’t have time to focus on themselves. Also, more than 40 percent don’t take vacations or see family and friends as much as they would like.
Owning a small business can also be a drain on your personal finances. The research discovered 41 percent of owners have all of their money tied up in their business. In addition to all the sacrifices they make, small business owners face a variety of challenges. Because most owners are in charge of everything from sales, marketing and operations to customer relations, payroll and accounts payable, the entrepreneurs surveyed think the struggle of having to wear so many different hats is the most difficult part of their job.