Archive for May, 2009
You’ve dreamed about, talked about it… and maybe even dabbled in it. Starting your own business is the dream of every entrepreneur, but before you take that giant leap into business ownership, there’s a lot to think through.
Is the money there? Are you the right person for the business? Is the business right for you? Is it the right concept? Is now the best time? These are all serious things you should consider before jumping headlong into a new business opportunity.
While dreams are great, starting a business takes a lot more than vision. You’ll need cash, capital or funding, because without sufficient money, you’re back to just dreaming. One of the major stumbling blocks of small businesses is that they tend to be undercapitalized from the start.
Without budgets and a simple cash flow statement, you risk condemning your business to failure before it even gets started. But if you enter your project prepared for the financial challenges, you’ll stand a much greater chance of success.
With this is mind, here are 3 great steps toward successful business financial planning:
1) Define Your Goals – Before you make any business decision that could affect you and your family, you need to make clear, realistic financial goals. Ask yourself why you want to start this business. Is it so you can buy another house, pay for your children’s education, or are you simply investing in your financial future? The more specific you can make your investment goals and objectives, the more powerful they will become, and the more likely you will be to achieve them.
2) Decide on a Timeframe – Once you’ve decided what you want from your time and money, the next key to successful business financial planning is to establish some very clear and realistic timeframes within which you expect to achieve your goals. Do you have a three year plan? A five year plan? Many businesses struggle to break even their first year. Make sure you plan accordingly!
3) Evaluate the Environment – Achievable business goals are based on the current conditions and realities of the business climate. Everyone wants to have a great first year, but if 3 new competitors open in your market or one of your vendors goes belly up, you’ll have encountered a significant hurdle. When it comes to business, always hope for the best – but plan for the worst!
Fear can be an extremely powerful force. How we react in the face of fear can change our lives and shape our futures. This is especially true in the business world – particularly for small business owners.
As entrepreneurs, one of the most daunting obstacles to achieving small business success is our own unique and very personal fears. We limit our potential or fail to try something new because of fear. We get locked into a mindset and hesitate to change even when we produce mediocre or poor results – all because of fear.
Unfortunately, fear of change is a vision buster. History has shown us time and time again that successful entrepreneurs are not afraid to take calculated risks, reach outside their comfort zone, or think outside the box.
Take, for example, the story of Instant Tax Service, which has grown from a one man operation to the 4th largest tax preparation company in the United States. In 1994, Fez Ogbazion was just a 19-year-old kid looking for a piece of the American dream. Fez wanted to dive into a potentially profitable business that still allowed him the flexibility to finish his degree at the University of Cincinnati.
Fez saw a need in his Ohio community for fast, local tax preparation services. He understood that people wanted exceptional service from professional tax preparers in their neighborhoods – not just in the suburbs. So on a leap of faith (and with the help of a few credit cards), Fez opened the doors to Instant Refund Tax Service. He prepared over 600 tax returns his first year.
Knowing complacency would never allow his business to grow, Fez developed his business significantly over the next 5 years into 26 retail locations. In 1999, a Fortune 500 company – sensing a major local competitor – offered to buy Instant Refund Tax Service.
Fez, ever the entrepreneur, accepted the deal and went on to re-invest the money from the sale into a bigger and better income tax business. That fresh start became Instant Tax Service, founded in 2000.
During its first year of operations, Instant Tax Service ran 60 locations. The company expanded into five new markets across the country in 2001, doubled its business in 2003, and started franchising in 2004.
Today, Instant Tax Service is one of the nation’s fastest growing franchises and currently operates over 1,200 locations nationwide. In fact, Instant Tax Service was recently named Entrepreneur magazine’s 2009 Top New Franchise, #1 Low Cost Franchise, and one of the Top 10 Fastest Growing Franchises in the country.
The key to Instant Tax Service’s success and Fez’s accomplishments are partly due to what Fez did in the face of fear – major competitors, a shaky financial start, and being a college student didn’t dissuade Fez from taking a risk. He learned to manage his fear and embrace his entrepreneurial spirit.
The dream of starting a business can be daunting, but the only way to make that dream a reality is by learning how to make that fear work for you.
At one point or another in your life, you’ve probably dreamed about owning your own business. The independence of being your own boss can bring you benefits like job security, personal income, and the ability to chart your own career path. But how do you avoid the pitfalls of a start-up business?
It’s easy to dream. What you may not know is that making your dream a reality may be easier than you think. For many entrepreneurs, franchising has helped pave the way to business ownership.
Today’s consumers are franchised focused. Burger joints, hair salons and video game stores dot the retail landscape from coast to coast. That’s great news for business owners, because these brands have already created instant customer recognition. Franchise owners benefit directly from the brand identification, successful business methods, and proven marketing and distribution system of a franchise system. In short, franchising is a strategic alliance between you – as the business owner – and the combination of support and operational guidance provided by an established corporate office that’s there to help you every step of the way.
Equally important is the economic impact a franchise business can have on your community. Did you know that franchised businesses have created nearly 21 million jobs, or 15.3% of all employment in the U.S. private-sector? Franchised businesses also create $2.31 trillion of annual output, or 11.4% of all private-sector output in the United States.
Some additional advantages to consider when evaluating whether or not a franchise business is right for you: higher possibility of success (compared to a startup), the speedy development of a customer database (customers have already heard of you!), calculated risk, and the opportunity to achieve a great return on your investment.
Today, about 3,000 different franchise brands operate in more than 200 different lines of business, and one of the fastest growing and most stable segments of franchising is the tax preparation business. Why? Well for starters, it’s a recession-resistance industry (everyone has to do taxes!) and it allows entrepreneurs to work just 17 weeks a year during the tax season from January to April.
According to the IRS, more than 155 million individual income tax returns were filed last year, resulting in over $256 billion in tax refunds. In addition, more than 60% of U.S. tax returns are prepared each year with the assistance of a paid tax preparation service or preparer.
So, if you’re interested in owning your own business, working just 17 weeks a year and want to join Entrepreneur magazine’s 2009 Top New Franchise, the #1 Low Cost Franchise and one of the Top 10 Fastest Growing Franchises, please click here to learn more.
When tax time rolls around, you can audibly hear the collective groan of the business world. Entrepreneurs everywhere begin to sift through financial records to determine exactly what Uncle Sam will collect from them.
For small business owners and entrepreneurs, tax time can be particularly worrisome in these lean times. While passion, ingenuity and hard work are all important entrepreneurial attributes, it’s what you make after the government gets its cut that really defines how successful your business is.
Here are some tips on how to make sure you get all of the deductions entitled to you by law. Being prepared, educated, and organized means keeping more of your hard earned money in your pocket.
1) Set up an accounting system – the best thing you can do for your business taxes is to have a roadmap in place. You don’t need an accounting degree to use simple and inexpensive software or online solutions to record your income and expenses. Make it a habit to log in your gross receipts and your payments on a regular basis. A good strategy and accounting plan in place will lessen headaches come next year’s tax season.
2) Use a tax preparer – have someone help you – preferably a reputable tax preparer or CPA who has experience handling your industry. While they should have intricate knowledge of the tax code, make sure they’re also well versed in the tax advantages and disadvantages of your particular business.
3) Keep receipts – to claim various tax deductions and tax credits, you need proof of expenditures. You also need a written record of travel and entertainment costs. Staying organized with receipts year round will make tax prep time much easier next year.
4) Take advantage of all deductions – did you know that as a small business, you can deduct ATM fees, credit-card fees, and other bank charges incurred on your business accounts? Cleaning or janitorial services to maintain your place of work are also tax deductible. You can even deduct what you pay a tax preparer for on the business portion of your taxes.
5) Plan ahead for estimated payments – as a business owner, you usually must pay taxes on your business income in quarterly estimated tax payments. To ensure that you have enough cash on hand to meet this obligation, it’s a good idea to budget accordingly so you never miss a deadline.
It’s like Benjamin Franklin once said – the only two things certain in life are death and taxes. Since taxes are inevitable, always make sure you’re informed and organized so you can take advantage of the maximum amount of deductions you’re entitled to. With a bit of careful planning, you may be able to keep more of your business income in your pocket this year.
As a small business owner, you’re pretty busy. We understand that because we’re small business owners too. Time in the office or in your store keeps business moving, money flowing, and customers happy. You certainly can’t afford to be everywhere at once, but at the same time you can’t neglect the growth of your business and the generation of new sales leads.
Networking is considered an essential tool for business development, and for entrepreneurs it’s a skill directly tied to long term success. The strong association between the entrepreneur as a person and his or her business, demands that entrepreneurs create and maintain business relationships.
While traditional networking events like Chamber meetings, Rotary Clubs and entrepreneurial groups will always have their place in business, today’s entrepreneurs are turning more and more to the online world to make those lasting connections and foster business growth.
Let’s face it, the Internet has forever changed the way we communicate, the way we buy and the way we interact with content and other people. It has made the whole world into a networked marketplace. What truly makes it different from any other form of communication is that users are now actively looking for information about you and your business – they’re the ones initiating the conversation!
As a small business owner, you can’t afford not to become engaged and involved in online social networking – your customers and business associates are already out there talking about you. Are you ready to join the conversation?
Social networking is allowing the business world to communicate and connect like never before, and they’re out there sharing both good and bad information about your business. Did you know that nearly 70% of all Internet users are finding their news about a company or product online? Tapping into this qualified audience just makes good marketing sense.
Over the past few years sites like del.icio.us, digg, YouTube, MySpace, LinkedIn and Facebook have allowed users to post content, tag and bookmark items they are interested in, and then share thoughts, ideas, videos and images about your business with others. Now add blogs, micro-blogs like Twitter, message boards and a host of other social media tools to the mix, and you have more than one reason – and one method – to be engaged.
There are a host of social networking sites out there for entrepreneurs to exchange ideas and best business practices. Below are a few that stand out:
Social networking is a cost effective way not only to promote your business, but to connect with other like-minded people. It will help you create new sales opportunities and drive interest about your brand. The trick is to not try and be everywhere at once, but instead explore the spaces where your customers are and develop your social networking presence from there.
We understand that being a small business owner can be tough. It took a lot of courage to set out on your own, become your own boss, and embrace your entrepreneurial spirit. Compound that with the state of the economy and you have a lot weight riding on your shoulders.
But the current crisis is no time to stand still and just hope for better days. Even if your business isn’t seeing the best of times, there are measures you can undertake to ensure that you’re positioned to take advantage of the marketplace once the economy turns around.
Take Advantage of Decreasing Costs
Most businesses are both suppliers and customers at the same time. To provide your product or service, you need to purchase the materials you use, but when demand slackens, your suppliers are affected as well. Use this downtime to strike a better deal with your suppliers and reduce your costs.
Price Cuts Aren’t the Only Way
A price cut is not the only way to stimulate demand. Try competing on service and quality instead of slashing prices, because if you produce the best work or product in town, your customers will appreciate you for it and continue to patronize your business.
Become the Expert
Know more about your product or service than anyone else and you become an indispensible resource that your community can’t live without.
Recognize the Competition
In a recession, competition accelerates because more businesses are chasing less demand. Analyze who your competitors are in the marketplace and what they’re doing to capture business. Competitive intelligence can go a long way in determining how to structure your business model to succeed in the long-term.
Marketing
Now is not the time to jettison your marketing activities because it’s an easily deleted line item. If business is slow and you’re reining in your plan to get your name out there, it means fewer leads, less business and, ultimately, less income. In fact, increasing the frequency of communications with customers can boost revenue and stimulate demand for your offerings, especially if competitors are busy slashing prices instead of promoting the quality of their services.
Have you ever felt the need to take control of your finances… instead of allowing your finances to control you?
If so, don’t worry, because you’re not alone! We’ve all been there. The weight of financial responsibility can be taxing, and the state of the economy doesn’t help. But there is still time in 2009 to learn how to balance your financial life. Let’s get back to basics:
Track Your Money
This premise is simple. Track every single penny that comes in and out of your life. This is the best way to be conscious of every dollar you spend… or save. It doesn’t matter how you track your spending. The key is to stick with it. Make it a daily habit to keep and tally your receipts, and don’t fudge the numbers. This is the only way you’ll know for sure where you stand, financially.
Build a Budget
Once you’ve been tracking your money for while, you should be able to build a budget. Budgeting will allow you to create a roadmap of where your dollars are going now – and where they should be going in the future. Earmark each of your dollars NOW. Don’t throw them away.
Get out of Debt
Debt is a killer. Use the rest of 2009 to figure out a way to unload some of this burden. Designate a certain amount of money each month to paying down those credit cards or student loans. Always pay more than the minimum payment, even if it’s just $10 more. Remember that credit card debt takes priority over student loan debt. Pay off your high interest debt first.
Spend Less Than You Earn
This is economics 101. And while it’s common sense, most of us don’t do it. The only way to build wealth is to spend less than you earn. Period. Building a budget and tracking your money will help you accomplish this, but even if you don’t do those things, spending less than you earn puts you ahead of the curve.
Get Automated
We’re nearly midway through 2009, so stop writing checks or waiting in line at the bank. By automating your finances through online bill pay and other systems, you eliminate yourself from the equation and make it much harder to mess things up. Better yet, you’ll have an online accounting record of exactly where all of your funds are going.
Taking control of your finances can be intimidating, but it’s achievable. You can get out of debt, save for retirement, and control your spending. Set aside a couple hours on the same day each week to sit down to figure out where you stand. Most importantly: get started now! This is one resolution you shouldn’t put off another day.
