What Does Google Want From Me?

Everyone who has a business on the Web seems to want their Web site to show up at the top of a Google search result. I want, I want, I want is all those poor folks at Google hear from business owners. LOL!!! But what about Google? What about their needs, what about their wants?

Believe it or not, Google wants all of us business owners out there with aspirations of showing up high in the search engine rankings, they want us to be most importantly focused on providing high quality content for the customer. They tell us to write our Web site content first and foremost for the customer, write for the search engines second. If we write with the customer’s needs in mind first, it will naturally follow that our search engine results will climb higher and higher.

How do you write for the consumer first?

• You write with honesty and integrity.
• You put what your company really does, not misleading text with the intent of tricking your way to the top of a search engine.
• You consider how people are reading your content on a computer monitor and you have lots of white space. Because, on the Web, the more white space you have the easier it is on the eyes of the reader.
• You intermix appropriate graphics with easily eye scan-able text.
• You make sure all of your graphics have alt-tags that meet accessiblity standards.
• You use <Headings> for your paragraphs.
• Liberal use of bullet lists.
• You change your content look occasionally with italic or bolded font.

When I do my Web site design consultations I tell folks there are two people you’re designing your Web site for, and one of those two is not you the owner.

Now is your time to share with us. Please and thank you in advance, please share with us what you feel are some customer friendly Web sites.

Thanks,

Chris Nastav, KC Web Specialists, LLC, www.kcwebspecialists.com
Experts in how business gets done on the Internet (913) 908.5642

Are You Ready to Be a Business Owner?

You’ve been thinking about starting your own business for some time now. You’ve been debating on pros and cons, asking yourself if you were ready to become a business owner, calculating the risks involved. You have even played with different names for your company. So, are you ready? Let’s talk about it. Let’s consider different aspects of starting, owning and running a successful business. It will help you make a decision and answer the question: Am I ready?

 

What’s your business idea?

Every business starts with an idea. Look around you and notice all things in your space now. Everything you see, be it a pencil on your desk, a cup for your tea, a book on a shelf has started as someone’s idea first. It all begins with a concept, with a thought. When you look around you see how amazing it is that all those thoughts somebody once had, materialized as things on your room, ideas in books, etc. So if you have a business idea, don’t dismiss it, see the possibility of it materializing in your life. Treat it seriously and give it attention, then it has a chance of becoming a reality. Spend time with your idea. Consider the following questions: What do I want to offer? Who would my customers be? Why would they want to buy from me? Where do I want to set up my business? How do I want to run it? What profits do I want to produce?  You might not have all perfect answers to these questions yet. Sometimes we start out with a vague feeling that working for ourselves and doing what we love is a possibility but we don’t know exactly how it could manifest. Give it time and attention and be willing to get the answers. Start a notebook where you can write down all your ideas, thoughts, questions to be answered, and you will see your business idea emerging and taking shape. 

 

What’s important in it for you? Why are you drawn to it? 

Find your inner connection to your business idea. Define for yourself, why you want to do it. Why is it important for you to have this kind of business? What inner values and needs is this business going to serve? In short, how is it going to serve you and will you love it? What are you going to really like about it? What are the aspects of it you are not too crazy about? The more emotionally connected you feel to the idea, the greater a chance of it materializing and being successful. The emotional connection gives the idea the life, opens a possibility. It makes you more receptive to it. It also makes you go back to the idea itself and rework it if necessary to fit your values, tastes, and preferences.

 

Will it work? How do you do the research?

The biggest question antrepreneurs ask is “Will it work?” The simplest answer is: “Nobody knows for sure”. There is always a risk associated with starting a business. But you can do two things. First, it really helps if you are OK with the risk and accept it as a fact of life. There is always a possibility of things not going according to the plan. The second thing is that you can minimize the risks by doing the due diligence such as market research, financial planning and projections, writing a business plan. See if anybody else is doing what you want to do or something similar. How successful are they? What makes them successful? Research Internet for similar businesses. Contact their owners and ask them questions about how they run it. I find that when you are ready for the answers, people are very willing to give them to you. Join professional organizations that will put you in contact with other business owners in your industry. If your idea is very unique, test your target market (your prospective customers) on their readiness for your products or services. Ask your friends to be a focus group if appropriate. Will the market research answer all your questions? Probably no, but you will be much more in ther knowing about the market and its possibilities.

 

Do you have the necessary experience? Is it crucial that you do?

You need knowledge and/or experience in two things – your specific industry and in running a business. Both the industry specific and business experience come from working at the similar business to the one you want to establish. It’s very helpful if you’ve had a chance of observing a similar business in operation. But, I have known very successful business owners who jumped into industries totally new for them and were able to create a tremendous success. So the question is how much experience do you need? Can you substitute it or supplement it with knowledge from books, courses, and school? If so, how do you need to educate yourself? Answer these questions honestly and see what you have to do to feel that you have what it takes.

 

The risks involved in owning a business versus not going for your dream.

Nobody can really foresee all the risks associated with opening a new business. Ask yourself this: Am I going to regret it in 5 years if I don’t do it? Answer this question honestly and it will give you a meaningful clue as to how important this business is for you. On a scale from 1 to 10, how unhappy are you going to be in a few years if you decide not to go for your dream? It might be that you would be at 2 or 3. In that case, I would go back to your business idea and examine it to see how it fits with your life purpose, inner values, and desires. If you are 5 and above, weigh the risks of starting the business versus the risks of not going for it and feeling unfulfilled, unhappy and not living on purpose. The choice is your, but remember that the price we pay for stability and a “peaceful” life is sometimes much higher in terms of stress of feeling unfulfilled.

 

Timeline and action plan.

So, are you ready? If the answer is yes, get into action. Write out a plan for yourself. List all the things that need to happen before you quit your job and dive into your own endeavor. They might include such items as take a course at a local college, talk to other business owners, research Internet, and hire a business coach. Decide what you are going to tackle first, what’s important, what’s a priority. Create a timetable to keep yourself on track and accountable. Once you commit yourself to action, the providence will move too and the Universe will supply you with whatever you need: the right teachers, opportunities, and contacts. When you say yes to your dream, your dream will say yes to you.

Margaret Moczkowski

Business Success Coach

Momentum Coaching

www.YourBusinessEvolved.com

Economy Gotcha Down? Why You Need To Make A Marketing Push Now

Right now you, along with just about everyone else, is afraid to spend money.  The current uncertainty and “dooms day” reports by media about an impending recession have got people scared to do much of anything but cut back on everything.  I get it!  I do!  Even I have cut back my spending on non-essentials, but not on marketing and growing my business. 

Over the years, I’ve fallen victim to budget cuts and slow economies resulting in a “pink” slip (once after returning from a fun and restfull vacation – what a bubble buster).  This is because when things slow down businesses look at the first things they “think” they can cut, and that typically becomes marketing. 

But I have to tell you that NOW is the time to boost your marketing efforts.  How are you going to make business better when you all but terminate communications to customers?  I’ve never quite understood this rationale. 

Think about it this way – right now you have a unique opportunity to build customer loyalty by being a business that really cares and wants to make life easier for customers.  Trust me, what you do today, during tough economic times will be remembered by customers and create a long-term relationship that will only grow your business.  There are ways to do this affordably but still get your point across.  What you need now more than ever is pure determination.

Here are some tips for promoting your business and building loyalty during economic down times:

• Couponing – show you care by offering discounts at your store/business.  Everyone is looking for a bargain right now
• Regular, ongoing discounts – this can come in the shape of a customer loyalty or membership program where anyone who signs up receives a regular discount every time they make a purchase.  OR you can run a long-term promotion open to any and all customers, supported by store/window signage, advertising, etc.
• Incentives and trials – maybe as part of your sales promotion you offer a free gift or service.  This will not only bring people in to try your store/product/business, but people love free stuff and they often will want to let others in on their “big find”. 
• Other freebies – complimentary services including consulting.  Anything that is a “bonus” offering.  This is the time when you will need to go above and beyond for others.  Call it “The Secret”, “the universe at work” or what you will, but I’m a big believer that when you go above and beyond the call of duty for others that it will come back to you. 
• GET OUT THERE!  Now is not the time to sit behind your desk or counter all day.  You are the best marketing tool your business has so get out there and tell people about your business.  One client of mine does a particularly great job at this.  She went to Kinko’s and had business card-sized coupon cards made and she hands them out to everyone she meets.  Believe or not, she has gotten a pretty decent return on an idea that cost her about $25.  Mostly because she is really determined to build one-on-one relationships with everyone she meets and turn them into customers.

No matter how you decide to connect with customers right now the key is communicating it.  That means you will still need to advertise, but maybe you cut back on the number of outlets and pick only one, three or four that directly target your customer.  It’s also a good time to pursue an affordable element like PR as media are looking for all kinds of information to provide readers on how to save money, especially with the holidays coming up. 

The reality is that most of your customers are going to start flinching a little bit when they have to pay full price.  What you have to do is show them you get it by giving them more for their money, or be willing to offer discounts to drive sales.  Many of you might not be willing to reduce your prices but wouldn’t you rather get the sale and make a little bit less than not get the sale at all? 

 

Jennifer Fortney, Cascade Communications

So you work for yourself…that means you’ve got a lot of free time, right?

You’re home…so you’re not doing anything, right? Let me tell you about the Cubs game last night!

Hey, Honey, would you pick up the kids from school since you’re home?  I’m getting my hair cut, and it’ll only take you 20 minutes…

Hi, Neighbor!  Since you’re home all day, could you stop by, and let my dog out a couple of times tomorrow?  I’m not going to be able to do it because I have to travel for work.

If you’re an entrepreneur working from home, these requests for your time and attention probably sound familiar.  It’s tough enough to manage your own urges to go to the mailbox, throw in a load of laundry, forage in the refrigerator for a mid-afternoon snack and surf the internet.  When your neighbor or spouse makes an urgent request of you for assistance, you want to give it.  You take a quick mental inventory of your afternoon but realize there’s nothing scheduled there, even though you know that there’s so much you have to do.  How do you maintain your boundaries without burning bridges – and guarantee that your time is spent doing exactly what needs to happen for your business to succeed?

Try these three steps to help preserve the sanctity of your time – and the success of your business:

1.       Fix it in space and time. That means putting everything on your calendar as an appointment.  No doubt you put your appointments with others on your calendar, but it’s a lot less likely you put the “soft” tasks there as well.  It’s crucial to put these amorphous but essential tasks on your calendar as appointments with yourself.  This discipline gives you an at-a-glance perspective of what’s really happening in your day. Marketing, sales calls, product creation, administration, brainstorming, networking – if it needs to happen for your business to succeed, then it needs to happen on your calendar.

2.       Take a breath before you say “Yes.” If you have a hard time saying, “No,” then buy yourself a moment before you have to make a decision by saying something like this:  “Wow, I really want to do X, so let me check my appointments for this afternoon and get right back to you.”  Then go ponder your calendar that is chock-full of appointments (see step #1), and make your decision based on that, rather than the urgency of the other person’s request.

3.       Suggest an alternate time you could help this person.  Let’s face it, our spouses, neighbors and friends are often critical supports in our lives and businesses, and we don’t want to always say no to their requests.  So when you look at your calendar, find an after-hours time when giving them your time and attention works for you.  If they desperately need your help during work hours, you also have the option of moving work tasks to the evening or weekend.  But make sure you move that task on your calendar, too. This ensures you count the cost before bumping work tasks into your personal time.

There are two things to remember about time – It’s your most valuable resource and your time bandwidth is finite – It does not expand based on need.

If you prefer a visual approach to understanding the complexities of time management, click here.

Sound familiar?

Michael Shapiro – Dynamic Management Solutions, Inc.

Eat That Frog or How To Deal With Procrastination

Procrastination is an issue every, and I mean every solopreneur, has to deal with, at least to some extent. In my business coaching practice I have not yet met a solopreneur who did not have an issue with putting things off, at least occasionally. So if you are struggling with it, don’t feel bad, you’re not alone. With that said, let’s now move to how to deal with it effectively so it doesn’t slow you down or stop you from going after your dreams.

If you find yourself putting off an important project, finding all kinds of excuses to start it later, and if you feel this has been going on for too long, here are some thoughts and tips to help  you get out of the impasse:

1.  Create positive energy around the project. Think how important the project you are putting off is to your overall success. Imagine having it finished and implemented and imagine how your business benefits from it. Let the positive vision of your success pull you forward.

2. Break it down. Big projects are usually overwhelming. Break it down to a few major steps. Then break it down some more till you get to manageable small steps you feel you can safely take. Organize your steps in the order you will approach them and you have your plan of action. Make a time commitment to work on these small steps, either so many hours a day, or so many times a week, whatever feels right for you.

3. Schedule time. Once you make your time commitment, block time in your planner to work only on the steps of your project. Don’t allow yourself to do anything else in the designated time, no email checking, now looking at Dow Jones (this has become a popular distracting activity lately).

4. Eat that frog. That’s the saying that straightens me out when I’m finding myself looking for excuses. The frog is the project you are dreading. When you eat it, it’s gone, no longer on your list, no longer weighing on your conscious.

5. Reward yourself. Every step of the way reward your progress. Especially when you accomplish the steps that were difficult for you. Make a reward plan when you create your action plan. Simply think of a nice think for you to do when you reach each milestone of the project. The trick here is to actually do it and enjoy the rewards you planned.

So eat that frog and prosper.

Margaret Moczkowski

Business Coach

Momentum Coaching

www.YourBusinessEvolved.com

For a complimentary coaching consultation, please go to: http://yourbusinessevolved.com/GettingStarted.html

Marketing a Small Business Requires Patience, Perseverance and Persistance

After a long day of simply running your business it can be difficult to sit down and make time to focus on marketing.  Even I sometimes stop at the end of the day and think “do I have to?”.  And you do if you want to maintain the business you have and continue to reach new customers. 

Building a brand and marketing your business is a long-term, ongoing process that doesn’t stop after the first ad, sales promotion or media story.

Actively marketing your business requires patience, perseverance and persistance.  It is the number one way to ensure your success and make your dreams of running a thriving business come to fruition.  However, it is a stumbling ground for most who are full of ideas but never seem to get around to implementing them.  That’s why you need to put them on paper and prioritize your marketing goals. 

Here are some of the marketing priorities that should be on your list:

• Brand Identity – logo creation: Does your logo/brand represent your business the way you want people to perceive it?  Building a brand identity you’re happy with is crucial because it is how customers will “see” you; identify with your company.  It must have longevity.  You can’t afford to brand a logo only to change it and start all over again. 
• Website – In today’s world, your website is the first step customers will take in the buying cycle – research.  It is in many ways the first impression they will recieve on your business so you have to make sure it’s up to snuff. Chris Nastav, KC Web Specialists, has provided plenty of great tips for your website here.  Review them, learn them and use them. 
• Key messages – what are the 10 key messages you want to be sure to communicate about your business in every marketing element?  In your elevator pitch? 
• Marketing Tactics – outline how you plan to communicate to your audience(s) about your business.  Is it through advertising (what kind, where and when), using PR (what’s your story), direct mail or email, sales and/or cross promotions, sponsorships, etc? 

You wouldn’t construct a building without a blue print so why would you build your business without a business and marketing plan?  Putting your marketing ideas on paper, making them real, will help you see the game plan or vision for your business.  It will also, most importantly, keep you on task with what you need to do and when.  Don’t stress about marketing your business.  Create a plan and a timeline of implementation that you review weekly.  It will give you direction and much needed peace of mind. 

Jennifer Fortney, Cascade Communications, www.cascadecomms.com

Does Your Web Site Make the SEO Grade?

How well does your Web site do in comparison to your competitors with regards to Search Engine Optimization (SEO)? HubSpot provides a free online Website grader tool that allows you compare your site to another Web site and see your overall SEO grade. http://www.websitegrader.com/ Once you get your grade you may want to consider working with your Web site developer to implement some of the suggested changes. Every little bit helps when it comes to getting noticed on the Internet. 

Give this tool a try and consider sharing the success you find by raising your grade?

Chris Nastav, KC Web Specialists, LLC, www.kcwebspecialists.com
Experts in how business gets done on the Internet (913) 908.5642

Top 10 Challenges Facing the Successful Entrepreneur or What Keeps You Awake at Night?

1. Awareness – What do you know?

• Do you know where you’re going and how you’re going to get there?
• Do you know what you’re good at – and what you’re not?
• Do you need to know how to do everything in your organization?

2. Needs, Resources, & Roles – What about the hats?

• Can you wear all the hats – fill all roles?
• Will you recognize when it’s necessary to stop wearing all the hats?

3. Time Management – Where did the day go?

• Have you become a “fireman,” putting out fires most of the day?
• Are you focused on details at the expense of a bigger-picture perspective?
• Do you hear yourself saying “Why can’t there be more hours in the day?”

4. Sole Responsibility – But being the leader has perks, doesn’t it?

• Such as – The buck always stops here?
• And – Are you ever “off” work or “on” vacation?

5. Focus & Vision – Can you see clearly now?

• Do you have a laser-like focus?
• Is your vision too far ahead of your organization’s position?

6. Managing Growth – Will it grow on its own?

• How will you scale the organization and get it to the next level?
• Do you set aside time for association development, no matter how busy you are with existing work?
• When is the right time to add an employee, manager or management team?

7. Employees – Do I have to be good at HR, too?

• Are you able to hire the right employees and managers?
• Do you know how to provide effective feedback?
• Does loyalty to friends who are employees cloud your vision?

8. Delegation – So you hired the right people, isn’t that enough?

• Can you delegate … or do you say “I can do it quicker and better myself, or I don’t have time to delegate!”?
• Can you tolerate mistakes or different approaches?

9. Feedback – Where’s mine?

• Is there anyone who will engage you in passionate debate about a business idea?
• Where do you get objective feedback?

10. Giving Credit – Does your ego get in the way?

• Is it enough to be good at what YOU do?
• Can you give credit where credit’s due?

Can you answer these questions?

Michael Shapiro – Dynamic Management Solutions

Opportunity

As much as I would like to believe otherwise, we must plan for the worst and hope for the best with today’s economy. One need only read a newspaper, magazine, or blog to learn that the end may be at hand. Like all things, however, the truth lies somewhere in the middle.

The dire prognostications – There is information circulating that a number of small business were not able to survive the credit squeeze despite the actual viability of their companies, and this fear has caused many to pull back very aggressively as a defensive posture.  This defensive posture has lead to order cancellations, layoffs, and outright panic.  The recent release of retail numbers shows the worst performance in three years.  The tech sector and, consequently, Silicon Valley are significantly reducing or eliminating funding in private placement investments.  The defensive actions being taken by VC firms in the Silicon Valley may be the best barometer of changes to small business models due to the high percentage of private dollars being in play.  A recent meeting at Sequoia Capital (a leading venture capital firm) sounded the alarm to their CEOs – pull back expenses, pare staffing, and only take cash on a must need basis.  From this viewpoint, things could not seem any worse.

The flip side of the coin – I am not suggesting that the worst is over, but, moreover, one must also consider the opportunities that exist within this type of economic environment.  The opportunities, however, are hidden beneath the fear gripping our nation, and it is important to take a deep breath and think about what you would consider an opportunity for your business.  For some, that means acquiring a company, moving to a new office space, changing or adding a product, investing in research and development, etc.  I recognize that everything I just mentioned involves spending money, but there are many companies and individuals who are in a position to partner, lend, or invest in a solid business.  In fact, many pension funds have been investing more heavily in private equity funds than the stock market.  Money is moving around, but, once again, investors and banks are being extremely prudent in where to place their money.  When has a prudent investment decision ever been a bad idea?

The takeaway – The economy is not going to rebound overnight, but I think most have accepted that idea.  It always makes sense to review costs, regardless of the circumstances, and making prudent borrowing and/or lending decisions, purchases, and investment decisions is always in vogue.  Take time to think about the perfect of combination of opportunities that would help you grow your business – write them down and think about them often so that you can keep your mind open to what is happening around you.  Opportunity is half luck and half planning, but knowing what you need and want gets you a good portion of the way.  There is no doubt that there will be victims of circumstance in this economic cycle, but that is not a reason to sit back and wait to be one of them.

Kirsten Francissen – www.jkbayconsultancy.com

Why is PR So Hard To Understand?

Gosh, I get this question almost on a regular basis.  There have been several times that I’ve begun to talk about PR at a networking event or with a potential client and I see their eyes glaze over.  They’re completely lost.  Since then, I’ve refined my definition of PR for those who are brave enough to ask what it is exactly that I do.  I simply say “I generate positive media stories for clients”.  They reply “OH….”, with eyes that are still slightly glazed over.

The trouble that everyday people have in understanding what PR is and why it’s relevant to their business (or more importantly how it works and exactly what it is they’re paying me to do) is that it’s not advertising, direct mail, direct email, cold calling, sponsorship, brand design and a number of other marketing elements where you can see something; feel something in your hands.  There’s an intangible to PR.  That is until you actually get a news story and you not only see the story but also begin to feel the impact of it on your business.

The process of generating PR includes a press kit (a tangible) and then media relations (the intangible).  This is where the professional you hire spends time, which you pay them for, sending emails, making phone calls and pitching your story to the media.  It is the most frustrating part of the process to understand. 

It’s like my cat.  I think she’s precious, great personality, understands certain commands, but if she doesn’t want to do something or simply can’t be bothered with it right now she will ignore it or look over it.  I can’t control her and you can’t control the media.  Because of this, I’d be highly leery of any professional who says that “they can get you this or that” media guaranteed.  There is no guarantee, but PR is one, of not the most, valuable aspect of your marketing plan you can have. 

There’s one reason why PR is so different from other marketing elements and that’s because it’s a journalism-based industry.  Sure advertising degrees and such come from journalism schools, but they aren’t required to take all of the classes that their journalist counterparts are.  In fact, I would say that some of my best media contacts today are also people I graduated journalism school with – they sat next to me in editing and reporting.  That means that a good professional not only understands the media, every kind of media, but, more importantly, they know how to create and write a good newsworthy story. 

I encourage you to become your own journalist and look at your business from a different perspective.  What are your burning questions about PR?  I want to hear how I can help you better understand the process. 

Jennifer Fortney, Cascade Communications

What Good is a Job Description?

Without a well-crafted job description, both employer and employee often lack a mutual understanding of roles, responsibilities, and anticipated levels of performance. A good job description also spells out the knowledge, abilities and skills required to perform a job successfully.

A business owner can use a well-written job description not only as a valuable aid in the job-recruiting process, but also as an outline for reporting relationships and working conditions. A well-crafted job description can also be used for:

• Compensation - Job descriptions can be helpful in developing a standardized compensation program with a minimum and maximum range for each position.

• Performance management – A well-written job description can define measurable performance goals based on duties in the job description.

• Training and employee development - You can use your employee job descriptions as incentives for employees to pursue classes, seminars and other career development activities in order to enhance their skills and experience.

• Recognition and rewards - You can use the descriptions as a baseline for performance, and as a tool to encourage employee performance “above and beyond” the job description in order to receive recognition and rewards.

• Discipline - If necessary, you can use the job description to illustrate that an employee isn’t adequately performing job functions.

When it comes to writing a job description, flexibility is important. It may be wise to create more generic job descriptions that emphasize expectations and accountabilities, rather than specific tasks, thereby encouraging employees to focus on results rather than job duties. A more wide-ranging job description is also easier to maintain–it doesn’t require modification with every minor change in duties.

When creating a job description, start with a three – four sentence, high-level summary of the position, e.g.

“This position encompasses the management of all corporate financial and accounting functions. This position requires a comprehensive understanding of the structure and function of the organization across all levels, including financial acquisition and expenditures and relationships with outside vendors and customers. This position has focal responsibilities for maintaining smooth functioning during times of financial change.”

The next section is a list of six to eight (no more) essential, primary responsibilities. Think high level. These are the responsibilities or domains that the person “owns”. Instead of saying “empty the trash in the office and kitchen” say “responsible for the removal of all trash in the company.”

The third section includes responsibilities that are shared with other employees, e.g. participate as a member of the Management Team. Again no more that six to eight responsibilities.

Finally the last section lists the skills, education, and experience to be successful in this position.

Revisit this document every so often, with your employee to see if it still reflects what you and the employee understands is his/her job.

Do all your employees have accurate job descriptions?

Michael Shapiro – Dynamic Management Solutions, Inc.

Google Moved the Cheese

One of the many things that Google looks for when determining where to put you in the native search results, is how often your content changes on your Web site. To some extend we used to get credit for moving content around within our Web site. Bringing an article to the front page from back pages. Moving a product from the products page to the featured product of the month section on the home page. Etc..

But Google recently set the record straight by saying those kinds of things no longer constitute change on your site. They used to give us some credit, but no longer. So, see my other post about Content is King. You need to find new ways on your Web site to give the world something new and fresh to constitute change on your site.

Anyone wish to share the creative ways you’re changing the content on your site? Not your blog, but your Web site?

Chris Nastav, KC Web Specialists, LLC, www.kcwebspecialists.com
Experts in how business gets done on the Internet

Financial Focus for the Small Business Owner

There is no doubt that the current financial situation is creating stress for almost everyone.  While the focus is on the banking sector and concern for their liquidity issues, many small businesses have felt the credit pinch first.  I have anecdotal evidence that small business owners are being denied credit terms from vendors and their credit lines are being reduced or eliminated.  Sadly, the small business is being squeezed more than any sector even though small business represents a good portion of the “fuel” that powers our economy.  Does this mean that all is potentially lost?  The answer is a resounding NO.   However, there are some proactive measures one can take to mitigate risk and limit the need for credit to ride out the storm.

One must remember that the very basis of our economy is entrepreneurship, and we have experienced ebbs and flows of this principal throughout our history.  In order to survive the tumultuous nature of the marketplace, the small business owner must be prepared for volatility in a time where there is little safety net.  This is a scary sounding statement, but pragmatism is the first step towards good planning.  The greatest issue facing our economy and your business is the great unknown.  Will we face a complete failure, a moderate failure, or has the situation been overblown?  The answer, of course, depends on whom you ask, and it is a losing proposition to make sense of the various and contradictory voices.

What should be the plan of attack when the enemy is the great unknown?  First, don’t panic.  Second, think through some items that seem obvious, but, for many, are still on the to-do list:

1. ASSETS – Review Portfolios – The Financial Times is reporting that US investors sold $74bn in mutual fund assets in the last month.  If you have stocks with significant gains, consider paring the position and placing a stop loss order (a standing order that will sell the stock if it falls below a predetermined price) for the unsold balance.  Work with your financial adviser to determine if holding on to losing positions makes sense.
2. FDIC – Consider the dollar amount housed in payroll and personal accounts.  While there is discussion to increase FDIC insurance to a maximum of $250,000 from $100,000, this change has not taken place.  Consult the link to the FDIC if you have questions about coverage.  http://www.fdic.gov/consumers/banking/facts/index.html – Remember, the FDIC protects money market deposit accounts but DOES NOT protect mutual fund money market accounts.  Review the following link to understand the difference between a mutual fund money market and money market deposit account if you unsure.  http://www.fdic.gov/consumers/consumer/information/fdiciorn.html
3. REVIEW forecasts for the fourth quarter of 2008 and the first quarter of 2009 so that you can validate pending orders, accounts payable and receivable for the next 6 months.  Many vendors are willing to spread out delivery cycles in lieu of outright cancellations.  This can prove to be a win-win for everyone involved.
4. COMMUNICATE and spend a little extra time with your clients to validate the value proposition of an ongoing relationship.
5. CREDIT – Banks are still renewing lines of credit, but be prepared to go through a 3rd degree interview when you have been a great client for many years.  Be sure that your balance sheet is in good order, and understand potential weaknesses.  Underwriters are being required to be extremely judicious with credit funds.  On the flip side, consider what you alternatives are if your credit line is not renewed or approved.  Can you renegotiate terms with suppliers and vendors? – even 10 days will make a difference if you are need of some credit terms.

Remember that planning and forecasting are your greatest allies when waging a war with the great unknown, and developing insight and a plan for a best and worst case scenario will help relieve some pressure.  The confusion and uncertainty will not abate for a while, and it is important to create a perspective that will last for the long haul.

Kirsten Francissen, JKBAY Consultancy