Business Strategies of Less Importance than you may Think

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If you are an entrepreneur, you should look for ways to enhance and grow your business. It is essential to look for ways to have an edge on your competition. There are more ways than one to do so. You want to stand out in the crowd, but while some business strategies will help you to do so, there are others of less importance than you think. You can start by seeking information through the search engines to find out more about any particular area of your business that helps to foster growth. In reality, however, there are some strategies that you will find that may be helpful, but not essential in growing and developing your business. In fact, some of these strategies will only sidetrack you. Let’s explore.

The Influencer

While industry leaders and influencers are important, these do not necessarily carry any weight as was the case in the past. For one, influencers have a tendency of being a part of a large body of individuals and networks. In the past, if an influencer were to endorse your business, it would mean the world as if you struck gold due to the immediate business exposure. These days, you will find influencers getting busier as they try to catch up on social media advertising. In many cases, they experience a flood of email messages from social media followers and at the same time, having to run a business. For that reason, you may not have a chance to get a breakthrough to the influencers. However, you really don’t necessarily need an influencer to quickly grow your business. You don’t want to spend time chasing someone who is elusive instead of focusing on the priority of growing your own business by doing some of the same things the influencer is doing.

Industry Certifications

It is not an uncommon occurrence for you to come across business owners like yourself with tons of certification in their industry. As a matter of fact, many of these business owners will put up their certifications on the office wall for all to see. Most people don’t even have a clue as to what they mean anyway. So why would you waste valuable time in getting certified when you have a business to run? It is really not that important.

Social Media Followers

Yes, social media has become necessary and important to compete on the Internet. However, never pay a company to increase your social media following. Social media is about building relationships. It is your duty to form those relationships on your own. Never sell directly on social media or you will lose followers. Answer questions and share content – that is about as much as you want to do with social media to increase your following.

 

Maintaining a Busy Schedule

Yes, while a business allows for less time to do other things, you don’t want to be consumed by your business. Instead, you should find some balance by outsourcing work. This could offer thousands of dollars in savings and free up more of your time. As an entrepreneur, your focus should be on systems and the vision of the future. You don’t want to accommodate any distractions to your overall purpose and goal. Time is valuable and so is money. Stay away from those distractions and get the time to grow your empire.

 

The Lean StartUp Strategy Could Be Less Risky for your Business

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Whether you are launching a technology company, a small business or just a program within a large corporate entity, it is always going to be a risky proposition. The traditional method is to write your business plan, find investors using a pitch, and gather your team, afterwards product introduction and then hard selling. Within this sequence of events, you may experience setbacks, which is not abnormal. However, with good planning and strategic moves, you can overcome or avoid these setbacks. The odds are against you, though and that is why good strategy is essential.

The New Methodology

In recent years, there has been a significant emergence of a counteractive force that has made the business start up process not as risky. It is known as the ‘lean start up’ strategy. It is in favor of the experimenting of elaborate plans and strategies as well as getting feedback from customers instead of using intuition. It chooses to use interval design over the traditional large design that was once initiated upfront. This method is only recent, but the concept of having minimum products available and pivoting those, gradually introducing them to the world has taken up root in the business startup world. In fact, many schools that offer business courses are already teaching this in their curriculum.

The Movement

This movement and strategy is not yet in the mainstream marketplace and so its full effect has not been felt yet. In a nutshell, this strategy is similar to where the movement for big data was several years ago. However, it only consists of a few buzzwords, which have not yet been widely understood or grasped. As soon as it begins to spread, though, conventional wisdom says that most entrepreneurs will adapt to it. Why? Well, when an individual or group wants to start a new enterprise, the attempt is to lessen the risks and improve the chances for success. The principle of the lean start strategy adopts the concept of failing quickly so that you can continue to learn from your failures. This boils down to trial and error. Some of the most successful outcomes will be gained by large corporations that will not think twice about embracing the concept. Below is a brief idea of what the lean startup method entails and how it has evolved.

The Business Plan

There is no perfect business plan. This is a fallacy. There is no way that a business plan can answer all the questions that an investor may have. More importantly, it is not easy to figure out beforehand what the unknowns are – that come with starting a business. Many business owners find it difficult to tell an investor how much money is necessary to fund the venture because there are so many variables involved. With the lean startup strategy, instead of spending months in research and planning, it is best to sum up the framework in a business model canvas. What is this? It is a diagram similar to infographics that shows the hypothesis of how the company will create value and benefits for the customers and itself.

The Canvassing

The lean startup strategy canvasses the road to test the hypothesis, moving from behind a desk and going out to meet and greet potential customers and asking for feedback on various components of their business model. This includes pricing, product features, affordability and the varying distribution channels. Adjustments are made to the model once this information is gathered. In addition, instead of rolling out all aspects of the product during launch time, the lean startup strategy will roll out products in increments, taking it for a test drive first.

 

Starting Up a Business In a Difficult Economy

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It is not an easy feat to start a new business. In fact, in a difficult economy, it gets even more of a challenge. This is partly due to the financial institutions being reluctant to give credit and provide financing during an economic downturn. For that reason, entrepreneurs should incorporate a good business plan into the company’s strategy. Banks will recognize the time spent doing market and industry research to create a projected plan for the short term and long term future. The projection will allow banks to take you more seriously. It shows that you are interested in dong business the right way, following the protocol to obtain cash, but also to run a successful business. How do you get a slice of the financial pie? Below are some tips below to show you how to acquire financing in a very difficult economic downturn.

Securing the Finances

Prior to a loan application, you could ask for help from a trusted friend in reviewing your business plan. You want to make sure that nothing is overlooked. You don’t want to assume anything inaccurate. Ask a loan office or friend who already owns a business to give you feedback. You could also ask for input from your accountant.

Think Long and Hard

Even though, you may be trying to secure financing from a bank, you should always have a back-up plan, in case; it does not work out with the bank. It is important also to have your own cash reserve, apart from your business so that as your business starts to improve, you have sufficient funds to live off – at least or a year. You should have a budget, ensuring that you don’t miss critical payments such as rent, insurance premiums and mortgage. Before starting a new business venture and borrowing from a bank, think long and hard, look at your bank balance and ask for professional input.

Smart Marketing

It will take some ingenuity and creativity to embark upon a new business during a difficult economy. However, it also will take effective marketing. You have to adapt a game plan or your marketing efforts to stand out from the competition. Use your business plan as the initiating factor, fleshing out all the marketing elements that you have listed. What are you selling? Who are the target audience? What is the cost of your service or product? What are the specific promotion plans for your business? When you can answer these questions correctly, you are on your way to a potentially successful enterprise. You will be better off at succeeding by honing in on your particular niche instead of marketing to everyone and their mother. Be strategic with your marketing, narrowing the geographic location and taking a small piece of the pie.

 

The Bottom Line

If, after your market research, you see ways to alter your service or product to expand your business, its customer base and appeal, then by all means do so. While you are doing so, keep a close watch on your competitors, doing an analysis and assessment of them and tweaking your own service or product.

How to Manage and Maintain Your Client’s Expectations

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When you work with your clients, it can be a rewarding experience for a business owner. It is exciting to see the satisfied faces of clients who appreciate the services provided to them. In so doing, you will continue to build a positive and lasting relationship with your clients. This is a critical component for any business. Below are several tips on how to manage and maintain your client’s expectations.

Over Promising

Don’t promise a client something that you are unable to deliver successfully. If you are unsure that your promise will be guaranteed, then you will lose out on a good customer if it is not. Your client wants to know the truth. If you are unable to do something, it is best to let them know upfront. Customers don’t like surprises and believe it or not, most of them will understand if you are unable to do something.

Be Forthright

It goes without saying that you should be forthright and honest. If a customer approaches you for your professional expertise and you are unable to provide the level of service required in doing a good job, you should let them know and they will be pleased with your honesty.

Time to Listen

The customer’s needs are of the most importance in any business. It is your responsibility to ensure that those needs are met. The only way to effectively meet your client’s needs is to listen to them and assess the situation. You want to make sure that the client is getting exactly what is required of you.

Communication is Important

It is essential to communicate with your client on a regular basis if you want to make sure that they are being offered a high level of service to meet their needs. A customer wants to feel important and your regular communication offers that solace. It is better to exceed the customer’s expectation in going the extra mile by communicating and letting them know that their best interest is your objective. Regular communication will strengthen the business relationship with your client. You will gain their respect for caring and you will get to know them more. When you communicate regularly, you get to also meet dissatisfied customers. In so doing, you also get the opportunity to fix any problems that they may be having. Had you not communicated, you would probably have completely lost a valuable customer. When you reach out to the satisfied and dissatisfied customer, you set the precedence for good business practices. Most customers will see this as a good business trait.

Giving Advice

The customer views you as a valuable business partner when you offer good advice, input, direction and counsel toward their project. With this style of business, you will gain respect needed for improved project management. When you are not sure, ask questions. This will offer in-depth details about the project and allow you to achieve your best work for the client. Place yourself in the customer’s position in order to gain their perspective and get the results that the client needs. When you are aware of where the client is coming from, you will maximize the expectations.

 

How to Improve Your Business Cash Flow Management Skills

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As it relates to financial management, cash is important to a growing and developing company. There may be a long wait time between collecting money from your customers and having to pay your employees and suppliers. Therefore, you must know how to manage your cash flow. Cash flow management allows you to delay cash outlays as long as it is possible while you encourage your customers to pay on time or pay sooner rather than later.

Cash Flow Measurement

You should have a projection of your cash flow for up to one year. You should also be able to view and manage your cash flow for the next business quarter. When your cash flow forecast is accurate, it makes it easier to stay abreast of money that needs to be collected and keeps your business out of financial trouble.

Cash Flow Planning

You also need to understand the meaning of a cash flow plan. It is not necessary a look into the future, but an educated guess balancing several factors, which could include the payment history of your customers and future required expenditures for the business as well as how long each vendor will wait for payment. You should never assume that a customer will pay nor justify that receivables will be revolving at the same rate as in the past. You should make room for fluctuations, inflation, interest and loan payments as well as other expenses.

The Forecast

Begin projecting cash flow by looking at the cash that you have on hand and cash that you will receive from other sources. Gather all of this information from your collection and finance department, salespeople and service reps. Find out how much you will receive for each customer and when. You should also find out whether there are any particular collections pending for bad debts and any earnings on interest. This will give you a good idea of what to expect. Secondly, you must have an in-depth knowledge of the dates and the exact amounts of the future cash outlays. You also need to know when funds will be spent and what they will be spent on. This may include inventory, rent, salaries, utilities, debts, office supplies, advertising, equipment and taxes. Even though, it is an intensive process to prepare forecast or projects for cash flow management, this is one of the most significant exercises for any business owner. In comparison to a business plan, cash flow projections rank as high among the important things that a business owner should take care of.

Account Receivables

Not many business owner’s like to deal with accounts receivables that are outstanding. Yet, it is important to collect what is owed to the company. Therefore, you should have an entire department to handle this. This is one of the most effective ways to improve your cash flow. Once you can speed up payment from customers for outstanding money owed, you stand a better chance of efficiently managing your cash flow. You can also improve cash flow by:

  •       Offering customers discounts to pay their bills faster
  •       Asking for payment deposit on orders before delivery
  •       Credit checks for noncash and new clients
  •       Sell outdated and old inventory to free up cash
  •       Send out customer invoices on a timely basis
  •       Keep track of your accounts receivables

For payables, have a good working relationship with vendors so you can ask for discounts for paying early. Instead of paying creditors at an earlier date, take advantage of their payment due dates and pay on that date and not sooner. If there is a delay in paying your creditors or vendors, be sure to communicate with them to maintain their trust.

 

What to Expect from a Lender During the Business Loan Application Process

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Prior to getting a small business loan, lenders will want to ensure that you can repay the loan. Every business loan is risky to the bank.  In fact, every loan carries its own risks. Financial institutions do not want to take as much risk. So, you have to be able to show the bank that you can afford to make payments in a timely manner. Banks look for security. They look for a solid financial history and will check your business background. Below are some of the basic things that financial institutions look for a business loan approval.

Credit History

One of the main factors that lenders consider is the condition of your credit history, both personal and business. They will look at your credit score, acquired from all three credit bureaus. Your social security number will be used to access your personal credit score and your EIN number used for the business credit. It is recommended that you obtain your own credit report from the credit bureaus prior to shopping for a business loan. It gives you time to review it first and fix any mistakes.

Working Capital

Working capital is also important to the business loan process. The financial institution looks at your existing assets and liabilities, subtracting both to come up with a working capital. The bank views working capital as available cash to pay existing debts and to keep the business in operation. If you have no working capital, the bank sees this as a serious risk.

Ability to Pay

Your business must show reasonable cash flow and collateral in the form of assets. This shows the bank that you have the ability to pay the loan. You previous and forecasted financial statements will be assessed. Your personal tax return for the previous three years will be also observed. The bank wants to see how complicated your situation is. They want to see if your business is making a profit or just getting by. You can also show proof of any new client contracts or future business opportunities to give yourself a better chance for loan approval.

Collateral For Secured Loan

Many lenders will accept collateral as security for the business loan. Most small business loans require this. You can use both personal and business assets as collateral. If you had plans to buy equipment for the business, for example, using the approved loan amount, the lender will want you to use the equipment as collateral and guarantee the loan personally.

Business Experience and Reputation

Your business experience and reputation will be in question. You have to prove that you have experience in doing business in that particular industry. If you don’t have experience in the industry, you should be able to show experience as a manager or similar or hire employees that do have the experience.

Expediting the Loan Process

To expedite the business loan process, lenders will want to see a strategic business plan. The business plan should include profit and loss statements, balance sheets and cash flow forecasts of up to three years; past and future. You also have to show your accounts receivable and payable activities, breaking them up in thirty, sixty and ninety day segments. Market research data and competitor research is also helpful.

It is best to be organized and prepared before applying for a business loan. It will save you time and help you to get the approval. Get all documents in order prior to finding out what is required.