The #1 Thing You Can Do to Make Google Love Your Web Site

Do you want Google to love your Web site? There’s things we as Web developers can do to your site to help with that, but there’s one really huge thing we cannot do. And it’s probably one of the most important things Google wants. 

One of the biggest things Google looks at when determining where it’s going to rank your site is the size of your company on the Internet.

What do I mean by size? Open Googe and seach for your company name. Be sure to put your company name in “quotes”. For example “KC Web Specialists”.

How many pages of search results does your company name take up? Not how many links on a page. How many pages full of results are about your company?

The bigger your company is on the Internet, the higher up you will show up for all those key words you’re hoping to show up for.

You get bigger on the Internet by having people link to your Web site. Writing a Blog. Linked-In, Face Book, My Space, Submissions to eZines, online newsletters, submissions to local newspapers, having your company sponsor events or speak at events that are written by other people on their Websites. Submitting your site to link site.

These are just some of the things you can do to make your company bigger on the Internet.

So how many Google search results pages does your company show up on, and where can we submit our site to get bigger on the Internet? Please let us know.

Thanks,

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

Enhance Customer Experience to Win Business in the Down Turn

In a down turn, large businesses slash staff which often leads to poorer customer service – for the small business owner it’s easier than ever to win over these disgruntled customers and increase your market share.

It’s a massive advantage to be a small business in this current economic climate.  Small businesses are generally more flexible, agile and much quicker to change or adapt than their bigger competitors.  That’s why I’m telling my clients that there’s no better time than now to seriously consider some changes to their business that will quickly enhance customer experience.

With the ubiquitous technologies available to all levels of business these days, think about the systems you could quickly integrate to win and keep new customers.  Think about how you currently interact with customers and what improvements you could make.  Think outside the box.

Maybe I’ll go in to more details on these areas individually in later posts, but to keep you thinking:

Customer information:  A spreadsheet or the database within you financial package just doesn’t cut it when you want to precisely track client activities and communications.  Can’t afford a CRM package?  Think again.  Zoho offers a hosted online CRM package FREE for 3 users.  Microsoft offers their comprehensive Dynamics CRM product as a hosted service at an affordable monthly price.

Customer enquiries:  Many customers choose to email enquiries and expect a fast response.  If you’re on the road and without access to your PC and email for hours then you will lose customers.  You need to get mobile!  Receiving email on your mobile is very simple in most cases and allows you to provide the fast response customers expect.  Do you have Small Business Server 2003/2008 already?  If so, you already have the ability to natively receive email on Windows Mobile devices, iPhone 3G and many other new phones and PDAs that support Exchange ActiveSync.

Collaborating with customers on proposals, specifications etc:  Old way – you go to customer and present, wait a few days, customer responds with issues, wait a few days, you go back to customer and present, wait a few days, customer comes to you with changes….yuk.  New way – online collaboration and meeting tools allow you and the customer to work on documents together, track changes and versions and generally work smarter together.  Heard of Windows Sharepoint Services?  It’s free and provides some of this functionality.  Want the solution but can’t afford the infrastructure to run it?  Check out Microsoft’s newly released Business Productivity Online Suite.

Seriously quick and low cost (or cost free!) ways to improve your customer experience through technology.

Clayton Moulynox – Evolve IT Australia
We fix business problems, not computer problems -  Develop, Solve, Evolve.
Follow me on Twitter: @claytonhm

Buried in Resumes…

One might think that filling a job vacancy in this economy is a piece of cake – so many people out of work – how hard could it be? Well… a client called the other day from Salt Lake City. He needed to replace an IT Director who left suddenly due to a bad accident.

Several days ago, he put a job posting up on CareerBuilder and Monster. Now he had almost 300 resumes to consider and the clock was ticking loudly – corporate wanted a decision made within 3 days. He had no idea how to approach the task in such a short time frame.

Here’s the system I recommended he use… By far it’s not the only system – It’s just one that’s worked for me.

1. Print all the resumes. I know it’s a terrible waste of paper and ink but compared to the drain on your eyes, back, and neck trying to read them all on screen, it’s a fair trade off.
2. The first thing to look at is location – where does the candidate live. Most likely you won’t  want to bring in out of town candidates – too costly either for you or the applicant – so out of town or country go immediately to the “NO” pile. Local candidates read on.
3. The next thing to look at is the appearance and appropriate professionalism of the resume itself. Your looking at an example of the kind of work this person would do for you if hired. Some more resumes will go to the “NO” pile.
4. If there’s an education or credential requirement, go straight to that section of the resume. There’s no point spending time on candidates who aren’t fully qualified.
5. Now it’s time to read the content. Is the experience relevant? Has the person “hopped” jobs? Do the dates leave any questionable gaps? At this point, write questions on the resume then classify it as belonging in either the “A”, “B”, or “NO” pile. Don’t agonize – you can change it later as the bar gets raised and what you initially thought was an “A” becomes a “B”. Remember, “A” is fully qualified and very interesting. “B” is good in most areas but lacks something.
6. Now that you’ve made it though all the resumes, turn your attention to the “A” pile. Read them again. Rank them in order of 1 – 12. Above 12 goes to the “B” pile. You’re now ready for the phone screen. 3 or 4 will fall out here. What’s left is your interview pool.

In my mind, it’s not rocket science. It is, however, a systematic way to create criteria for a process of elimination.

Do you have a system for getting through a mountain of resumes?

Michael Shapiro, Dynamic Management Solutions, Inc.

What’s Up With the Economy?

Every day, we hear all these economic statistics thrown around. How do they affect our small businesses? We are particularly focused on small business this week as it is National Small Business Week. Today, for example, there was a new release by the Federal Reserve. It didn’t contain very good news. The Fed now believes that the recession will continue in 2009 and the economy will further contract. They also believe that the unemployment rate will approach 10%. This news caused the stock market to drop by 52 points by the end of the session today.

What does all this really mean for small business? Other economic indicators have been released in the last few months as well. The Gross Domestic Product is the best indicator we have of recession. During the last quarter of 2008 and the first quarter of 2009, the GDP fell by a total of 12.4%. That means our economy shrunk by that amount.

The Consumer Price Index, which is the value of a market basket of goods and services, fell during the first quarter. That sounds like it would be good news, but not necessarily. It could mean deflation which occurs when consumers hold off on purchases in hopes of lower prices. This is not good news for small businesses.

The Producer Price Index, which is the wholesale price index at the manufacturer level, also declined during the first quarter. This means the same thing as the decline in the CPI. The PPI is usually watched closely by investors.

Stock prices have been holding steady or climbing. The good news is that stock prices are a leading indicator of the economy. They usually predict what is going to happen in the future. Stock prices may take a hit in future weeks, however, because investors will react to a few things happening in the economy. The price of oil, and the price of gas at the pump, is going up. Financial stocks are taking a hit due to the President’s credit card legislation. We may see at least a temporary decline in stock prices.

The unemployment rate has recently risen from 8.5% to 8.9% and the Federal Reserve expects it to rise further. The good news is that the unemployment rate is a lagging indicator of the economy and often continues to rise for awhile even after a recession is over.

All of these economic indicators will affect our small businesses. In a press release, the Senate Committee on Small Business and Entrepreneurship notes that small business pumps almost a trillion dollars into the economy and account for half of the nation’s work force. The banks still aren’t lending, though the Small Business Administration has been charged with opening its doors to lending to small business with relaxed rules and lower fees. The Senate Committee pledges its support to U.S. small businesses.

Rosemary Peavler, Small Business Finance writer/guide, bizfinance.about.com, a New York Times Company

Be Insightful to Grow Your Small Business.

A few years ago I was conversing with someone older and wiser than I.  We were discussing some issues with the technology industry in general when, in response to one of my comments, this senior executive said to me “actually, that’s a great point – it’s very insightful”.

Immediately I knew what she meant because as I was speaking the words I had this warm fuzzy feeling – a moment of enlightenment perhaps.   In my quest to impress her, I’d ultimately had a deep and intuitive understanding of the issue.  I was inside the issue and had clarity of all its facets.

I thought more about this moment in the weeks following and realised that I, and no doubt many other business owners, was often guilty of only making observations about business issues and rarely seeking insight. 

You see, to be observant would be to identify that a particular product line isn’t selling.  But understanding that the product line isn’t selling in a particular vertical market because there’s a competitive product that has a payment plan option is insightful.  Having insight doesn’t mean you have the solution, it simply means you have a greater penetration in to the problem and are therefore much better poised to work on resolving it.

Whilst there is certainly a “gut feeling” or intuitive element to having insight, I believe there’s also a methodical approach you can take to explore your observations and develop insight.  I call it the “Why 5” method – that is, ask “why” five times?  A product isn’t selling – why?  Because customer’s aren’t buying it – why?  Because they aren’t even giving my sales reps the time of day – Why?  Why?  Why?  You get the point.

The end result is a greater depth of understanding about this issue, not just the fact that there is an issue.  I challenge you to use this thinking within your own business for issues that have effectively been barriers to your growth.  Ask “why” five times.  The insight you gain may well break through the barriers and lead to a greater clarity of how your business operates and lead you in to growth.

Did you find this insightful?

Clayton Moulynox – Evolve IT Australia
We fix business problems, not computer problems -  Develop, Solve, Evolve.
Follow me on Twitter: @claytonhm

Summit Takes Look at Future of PR, News Media

If you’re interested in knowing how the future of journalism and PR is changing, here is a great piece and synopsis of a pros conference.   It impacts small business as much as corporations, but also means that small business has the same opportunities as big business with big marketing budgets.  Creativity will go a long way in marketing your business in the future.

Media Relations Summit Finale: PR Pros and Journalists Envision a Brave New Relationship in Web 3.0 Future By David Copithorne, Principal, Aquarius Advisers

Dan Abrams, MSNBC’s principal legal analyst, set the tone for the final day of Bulldog Reporter’s Media Relations Summit 2009 Tuesday when he told keynote attendees that the rules of the media relations game have changed for good. “These days, every business is a media business,” said Abrams, who is also the founder of a new advisory service leveraging a database of 2,500 mainstream- and social-media experts to help businesses navigate the new media environment.

Reporters and editors struggling to feed the web 24-by-7 must collaborate with businesses creating their own media as digital technologies break down the old adversarial relationship between journalists and professional communicators. The result is a brave new world where best practices in PR, marketing and journalism are already being radically redefined, Abrams said.

Walls tumbling down — between old media and new media, journalists and PR people, companies and their customers, and within organizations of all sizes—was a recurring theme voiced by speakers from the ranks of both the media and PR throughout the day.

Read more…..

Follow me on Twitter: @SmallBizPRXpert

Jennifer Fortney, Cascade Communications and SmallBizPRMadeEasy.com

Amending Your Agreement

Because a business is a living thing, it is often necessary to amend your operating agreement or shareholder agreement.

Many people think that once it is in place, the members are bound by what they initially agreed to. That is not the case. Your agreement is entirely internal to the company so any changes need not be filed with the state or anyone else, unless of course, it says so in the agreement that it must be published or filed. There are clauses in the agreement to determine the procedures for amendments. Those clauses need to be followed if you want the amendment to be effective.

Be very careful though. If the initial agreement was drafted by an attorney, to the extent you can, have that attorney help you with the amendment. There may be things in the agreement that don’t seem to make sense but have a very important legal or tax consequence.

The amendment can be a series of emails that the parties decide to adopt, where both parties agree to sign a printout of the chain. That would certainly count as a “writing” as defined by most statutes.

Laws change, business changes, relationships change. Make sure you know your agreement to the letter and read over it periodically to make sure the provisions within the agreement still make sense.

Brian Fons, Corporate Creations. Brian.Fons@corpcreations.com or check out my Podcast in iTunes.

Can Your Company Pass a Human Capital Stress Test?

Recently the Federal Government required many of the country’s biggest banks to assess the viability of the capital the banks held. One of the reasons the Fed did this was to evaluate the processes and systems in place surrounding their assets. For a bank, cash is their lifeblood. So what does this have to do with Human Capital?

In most entrepreneurial companies, the employees – Human Capital – are one of the most important assets. According to an article by Will Helmlinger of The Resource Development Group, “the cost to replace one Customer Service Representative earning $18,000 annually is nearly $58,000″. A study evaluating the effects of the US Family Medical Leave Act found that “turnover costs for a manager average 150% of salary, including tangible costs of hiring new workers and relocation, and intangible costs such as the new worker’s inefficiency and lost productivity while the job is vacant.”

Consider also, that being in a state of rapid change – either increasing or decreasing – challenges a company’s ability to maintain an effective culture and workforce. While there hasn’t been a lot of growth these days, there has been more than enough downsizing. There’s no doubt that being laid off is bad. In a different way, being left at the company takes its toll too – the worry that you’ll be next, the uncertainty of how your job has changed, and the disconnect from real information coming from management.

Here is my recommendation for a Human Capital Stress Test:

1. Review your employee’s job descriptions – with your employee. Acknowledge how their job or role may have changed.
2. Review your company’s performance evaluation system. If you’re still doing annual reviews, call it your annual chat because there’s no way to address performance over the course of a year. At best, you may cover the past month or two. I recommend at the very least, doing quarterly reviews. More importantly is to create a culture of feedback – both good and bad – that occurs throughout the year.
3. Take a look at your organization. Are there holes left by departed workers. If new people are filling these roles, do they have, and know that they have authority to do the job.
4. Lastly, look at the way information is communicated to your employees. Does the word of bad news spread because you’ve been in a succession of closed door meetings. Your employees would rather know the reality of the situation than be “protected” from it until the very last minute.

If you take these steps and acknowledge the value you have invested in Human Capital, then when the economy does rebound, and it will, you won’t be starting from scratch to hire and train a competent workforce.

Michael Shapiro – Dynamic Management Solutions, Inc.

Don’t Rely on your IT Guy

My heading might appear to be a strange statement to make considering I run an IT company.  But I stand by it.  Let me explain:  Many small businesses I come across are initially hesitant to meet with me or my staff.  “But we already have an IT guy”, they declare.  And indeed they do;  It’s the owner’s son-in-law, or the guy from the computer shop across the road, or an employee’s brother who is studying IT at university, or the guy they called once from the yellow-pages.

In any case, they’re making the assumption that my company wants to become their “IT guy” when in fact that’s not our intention at all.  We aren’t the “IT guy”.  The IT guy is the guy they call when a computer breaks, or when email isn’t working, or when they want to know how to stop those damn pop-ups.   But I’m here to tell you that the IT Guy is a dying breed.

As technology becomes more and more ubiquitous and it penetrates deeper within core and critical systems and processes throughout small businesses, you don’t want to be relying on your IT guy.  He’s usually a whiz on computers, but he’s not necessarily full bottle when it comes to business consulting.

You see, the line between technology consulting and management consulting is becoming increasingly blurred.  Technology underpins and provides the tools for so many critical business functions that companies like mine employ business experts to provide true ongoing business solutions and services that fundamentally improve our customer’s businesses.   And small businesses really must engage in a long term partnership with a technology company that understands their business , first and foremost, if they truly want to maintain a competitive edge and be innovative.

If you don’t have a partnership with a technology company that understands business you’re likely to be left behind in the wake of your competitors.   IT companies are changing their business models to a more consultative partnering approach, and most are dropping the old fashioned adhoc break/fix type support altogether.  So if you rely on your IT guy there will inevitably be one day soon he’s not available to assist you when you need urgent support, and you might just find yourself up a familiar creek with-out a paddle because you don’t have a strong partnership with an IT company.  I believe the number of IT companies willing to answer your call to provide adhoc support will reduce as their business models shift to managed services with long term clients who look to them for business improvement, not just IT support.

So if you only have an IT Guy, do yourself a favour and make a committment to have a meeting with an IT company (Microsoft Certified Partners are generally a safe bet) and be sure to talk to them with an open mind about how they can help you be a better business.

You want your PC fixed ‘cause it’s broken? – call the It guy.  You want to make an ongoing and long term improvement to the way you do business?  – call your technology partner.

Clayton Moulynox - Evolve IT Australia
We fix business problems, not computer problems -  Develop, Solve, Evolve.

Small Businesses Who Use Credit Cards Protected By New Legislation

Small businesses have been forced to use business credit cards during the recession to pay their bills and add to their capital needs since funding from banks has been virtually non-existent. There is good news and bad news about business credit cards and small business finance.

First, the good news. The U.S. House of Representatives recently passed a bill to protect small businesses by limiting the ability of credit card companies to increase interest rates on existing balances except in limited circumstances. The bill also restricts a credit card company’s ability to impose late fees, double cycle billing, and retroactive rate hikes.  The bill is scheduled to go to the Senate where there is hope that it will pass.

The Small Business and Entrepreneurship Council does not like the conditions of the bill. They say that it imposes price controls on the credit card industry, leading to tighter credit. My opinion? This is fear-mongering. Credit card companies have abused both consumers and small businesses for years. Don’t believe that they will simply quit extending credit when they have made record profits for years. How will their companies continue to operate? They may scream – and loudly. The banks will lobby against this bill. In the end, they will still extend credit, in some way, as that is their business.

There is one small business credit card company, Advanta, which is essentially shutting down. Advanta says it is facing uncollectible losses from small business accounts, up to 20%. After June 10, customers will still be able to make the same minimum payments, but no new credit will be extended.

Another point is that there is confusion over whether or not this bill covers small business credit cards or just consumer cards. The bill does cover small business cards, which is a good thing.

As a financial consultant, I don’t like the use of business credit cards to finance your small business. However, I’m a realist. Right now, you don’t have any choices. So, I want to give you my best advice. Here are some points to consider.

Try to keep your credit limit from being cut. Here’s how:

• Pay off your balance every month if at all possible. If it isn’t possible, pay as much above the minimum as you can.
• Check your credit reports from all three credit reporting agencies often. If there are any negative marks on your credit, move quickly to correct them.
• Make all your payments on time, even a little early to be sure they are posted on time.
• Apply for an additional business credit card. You  need good relationships with more than one financial institution.
• Don’t hold any inactive accounts. If you have a business credit card that you never use, start using it occasionally. Credit card companies are closing accounts that are never used and you want to keep your card open.
• If you receive a notice that your credit limit is being decreased, find out why and try to get your credit limit reinstated. All they can do is say no.

The Senate is expected to vote on this bill on Thursday, May 14. Whatever happens, stay creditworthy!

Rosemary C. Peavler, Financial Consultant and Writer/Guide for http://bizfinance.about.com, a New York Times Company

Bowl of Spaghetti Theory Wastes Time and Focus for Small Biz

There are so many ways to market your business today, mostly thanks to the Internet.  Chris Nastav has made some great points on Small Business Daily about many of these online networking opportunities and, I agree, that many have become quite a fad.  One that has some business owners spending hours a day simply managing their social networks and not their business.

I truly believe in face-to-face networking and have been doing it since I started my business nearly eight and half years ago.   I was so intensely focused that I would be off to some kind of networking event every day, even spending some days at a breakfast, lunch and happy hour.   Then came the social networking sites and everyone and their dog was all over each and every one of them.   I was exhausted and took a step away from it all and what I realized was that I was taking the “bowl of spaghetti theory” to networking – this is the complete and total antithesis of what I preach about marketing.

Instead of being targeted with my time and energy by attending events and utilizing social networks that would, well, work for me, I was flinging everything I had in about 10 different directions – much like taking a bowl of spaghetti, throwing it up on the wall and seeing what sticks.

What I was doing was wasting a lot of time.  Since then, I’ve knocked myself down to only attending key events with key organizations and knocked my social networking focus down to four top sites.  (Seriously, who are these people who have ALL DAY to do this?)

I use the networking approach here because it’s something everyone can understand.  You’re in such a hurry to drive business that you aren’t being targeted or probably even all that effective.

Networking is one of the best ways to market your business, but unfortunately so many small businesses take this same approach in their overall marketing.  Small business owners think they should be advertising so they do…every where they can but fail to reach their audience and say what they need to say.  This carries over to direct mail, direct email, branding, public relations and even utilization of social networks.

Here are some things to ask yourself and discover how effectively you’re marketing and running your business.

• Take a step back – make a list of everything you’re doing to market your business.  Now cross off the ones that have not yielded any kind of return whatsoever.
• Define where your customers are – What networking groups/organizations are they part of?  What media do they read? Make a list of who your customer is; really define them in every way.  It will lead you closer to them.
• Define what it is about your business that customers should be interested in. Make a list and begin to develop brand statements that quickly and concisely communicate to your customers; create interest.  These should be used in every marketing element you utilize.  In public relations we call them key messages. In networking it’s your elevator pitch.
• How can you position yourself and your business utilizing 30 minutes to one hour a day and two additional hours a week on networking? Remember, you have a business to run and your time is precious.
• Finally, take hold of your marketing opportunities by outlining time each day to commit to creating interest and awareness in your business. Make sure it’s targeted, communicates your business effectively and reaches your target audience.

When you really tighten your target audience you will become much more effective in generating sales and business.  Example:  If I advertise or get publicity in a health-oriented publication for my (hypothetical) organic food business I’m more likely to increase sales and fast.  Makes sense, doesn’t it?

Don’t stretch yourself too thin and get caught up in what you think you should be doing, or what trends seem to saying you should do.  Zero in on what works for your business.  Put time and energy where your customers are and they will find you.  Your business will become successful because you put effort into being focused, targeted, efficient and effective.

Jennifer Fortney, Cascade Communications and SmallBizPRMadeEasy.com

Effective Delegation in Six (Almost) Easy Steps

Delegation is more than just a way of getting people to do things for you. It is also a powerful leadership and coaching tool.

When used properly, delegation enables you to increase productivity and profitability, improve morale and increase retention. Perhaps most important for overworked and overstressed entrepreneurs, it allows you to enjoy professional success and still have a personal life.

Achieving these results requires effective delegation, which involves six basic steps:

1. Be Prepared
Before delegating, take the time to think through the task and identify whom you will delegate to and the outcome you want..

2. Discuss the task
Engage the employee in a conversation about the task you want to delegate, then have them repeat back to you (in their own words) what they heard. Make sure both of you are in agreement regarding the task being delegated and the outcome you desire.

3. Identify the deadline for completion
This seems obvious, but managers often fail to clearly think through this step. Make sure your deadline is realistic and achievable, particularly when delegating a stretch goal or something the person hasn’t done before. If you think the employee might need some revision time, build it in up front so you don’t end up at the deadline with a different outcome than the one you wanted.

4. Outline the level of authority.
Clearly outline the level of the authority you want the person to have. Then stand back and let them act. Different levels of authority include:

• Recommend – Ask the person for a recommendation on a course of action, but you make the final decision.

• Inform and initiate – The person will inform you before they take action.

• Act - The person has full authority to act on their own.

If your primary goal is to get the job done, choose someone who already fits into the “act” level. To engage in coaching and development, select people in the first two levels.

5. Build in checkpoints or progress reports.
At the beginning of the task or project, schedule a series of checkpoint meetings. Build them in early and close together at first, then taper off as the person begins to master the task. During the checkpoint meetings:

• Review the work that has been accomplished to date and give feedback on how well it is meeting the criteria established in step two.
• Identify anything you would like the person to do differently. Ask them to repeat back your requested modifications to ensure they understand.
• Set the next checkpoint meeting (if you don’t already have a preset schedule).

6. Conduct a final debriefing
The final debriefing consists of a discussion about how the delegated task went.

It allows you to:

• Reinforce growth that has occurred
• Outline areas for additional growth
• Applaud success
• Document performance problems
• Provide real coaching

Ask the employee how they think they did on the task or project, provide feedback on how you think they did, and discuss any differences in your assessments. Next, have the person provide feedback on your performance as a delegator, give your own assessment, and discuss any differences. Offer the person suggestions for improvement and listen to any they might have for you.

As CEO, you should delegate about 95 percent of what comes across your desk, so that you focus on the strategic opportunities in front of the company. As an entrepreneur, you should delegate everything but your core competence. Using these steps will give you the tools and the confidence to delegate in a manner that achieves the results you want, while helping to grow your people and enabling you to become a more effective leader.

Michael Shapiro – Dynamic Management Solutions, Inc.

Watch Your Cash Flow – Especially in the Recession

The number one reason small businesses fail is because they don’t keep a sharp eye on their financial statements and fail to manage their cash flow. If you want to thrive in this recession as a small business owner, the best strategy you can employ is to manage  your cash flow.

In order to manage your cash flow, you have to take a look at your income statement or profit and loss statement. Your bottom line is your net income or profit. But, your profit is not the money you have to spend. That’s your cash flow. Let’s look at the difference.

The income statement is based on accrual accounting. In other words, sales revenues and expenses are stated when they happen. So, if you sell a product to a customer on credit, you state the revenue you receive from that sale immediately, even though you haven’t collected the money yet. That’s the key issue. You don’t have the money yet. If you look at profit, then, as the money you have in your pocket, it’s overstated.

Cash flow is different from profit. It isn’t calculated using accrual accounting. It’s calculated using cash accounting. If you sell that same product to a customer on credit, you state the revenue only when you receive the payment for the product, not when you sell the product. As a result, the money you have in your pocket as a small business owner is your cash flow, not your profit.

It’s important for a small business to always have a cash cushion to rely on. You may receive a shipment of products and have to pay for it C.O.D. There may be a bargain in the marketplace that you should take advantage of. Prices of one of your primary raw materials may rise. For example, we know how volatile gas prices are. If you use a lot of gasoline for cars and trucks in your business operations, you need a cash cushion in case gas prices spike up unexpectedly. If you have a cash cushion, you don’t feel like you are so much at the mercy of the market.

What you need to do as a small business owner is convert your profit to cash flow in order to see where you stand and you need to do this often. Cash budgeting is best done monthly. You first look at your cash receipts (revenue) and take your accounts receivable (credit accounts) into consideration. Then, you look at your cash payments or the money you have paid out to your suppliers and others during the month. You may have paid items such as rent, lease payments, taxes, and other such fixed items. You also must take when you paid your suppliers into account.

If you would like to see an example of how to develop a cash budget, you can check out an example. Keep an eye on your financial statements and your cash flow, even though it may not be your favorite thing to do! Prepare monthly cash budgets. It will pay you big dividends in the end and may actually save your small business in this highly volatile economic environment.

Rosemary C. Peavler, Guide and Writer, bizfinance.about.com, a New York Times Company

Shareholder Agreements

If you have a business partner, the most important document you have will be called a shareholder agreement or operating agreement (for LLC’s).

The Shareholder agreement is a contract that you have that governs the relationship you have with your business partner(s). This is an absolute “MUST HAVE” for anyone who decides to go into business with a partner. Approximately 0% of businesses go exactly the way the founders planned it. If you are a sole owner, you can make adjustments easily. Once you have a business partner, you’ll need to agree on changes to the business plan. Disagreements occur when you have too much money or not enough money. Suddenly, the friendship that created the partnership is less important than the money at stake.

The shareholder agreement should be drafted before the problems arise. The best time to negotiate the agreement is when the business partners are getting along. Once things begin to fall apart, it is much more difficult to negotiate.

Some example provisions in a shareholder agreement include a buy/sell agreement, division of duties, use and ownership of intellectual property, exit strategies, and many many more.

If you have a business partner and no written agreement with him or her, get that done as soon as possible. It will save you arguments, money, and potentially, your business. It is one item that is definitely worth the money you spend on it. While some law firms will draft the agreement for both of you, it is a good idea for each partner to have his own attorney during the negotiation of the agreement.

Brian Fons, Corporate Creations. Brian.Fons@corpcreations.com or check out my Podcast in iTunes.

How Well do You Listen?

Listening skills are an essential prerequisite to any business relationship. Are you a good listener?

What do good listeners do that makes them good listeners?                                

• They probe for clarification.
• They listen for a story, and for unvoiced emotions.
• They empathize.
• They summarize well.
• They get rid of distractions while listening.
• They keep the client talking by asking for more details that help them understand.
• They look (not stare) at the client as the client speaks.
• They encourage by nodding their head or giving a slight smile.
• They ask how they might be of help.
• They are aware of and control their body movement (they don’t move around, shake their legs, fidget with objects, etc.)

On the other hand, good listeners don’t:

• Interrupt.
• Respond too soon.
• Editorialize in midstream.
• Jump to conclusions.
• Judge the speaker.
• Try to solve the problem too quickly.
• Take calls or interruptions in the course of a meeting.

Can you improve your listening skills?

Michael Shapiro, Dynamic Management Solutions, Inc.