Posts Tagged ‘money’

As I start my business from scratch, I am finding I have to create everything. I like having a logo, so I paid attention to this from the very get go. I considered getting a VistaPrint logo for Broad River Creative, but I prefer having something unique. So I designed my own logo. Now, it needs to be said, I am not a graphic designer. However, I think I have a pretty good eye for things, and with a little training on Photoshop, I could probably crush a nice logo. But I don’t have Photoshop or the time for training. So I used what I have and designed a logo. I put it on my first batch of business cards. In the end, though, I didn’t like it.

This left me adrift without a logo. Not the end of the world, I know. When I redesigned BroadRiverCreative.com, I just left the logo out of it. I still wanted something nice for the site, for letterhead and other materials. I think a logo helps bring things together. But it would have to wait.

Then something pretty cool happened. I don’t consider myself lucky. I hardly ever win things. But, out of the blue, I got a tweet from 99Designs saying that I had won a $1,000 design package. I was pretty blown away. I could use the award for anything I wanted on the 99Designs web site.

Okay, in case you don’t know, here is a little information about 99Designs. This web site offers crowdsourced designs. Basically, any business or individual puts a job out for bid. Instead of bidding for the price, designers bid with their designs. As someone looking to have something designed, it works out pretty well. You get a lot of variety to choose from. I personally had 236 designs to choose from.

Now, I know that there are quality designers out there that hate sites like this. They feel it commoditizes the process. In some ways, they are right. If you have a little more money, you may be better off hiring a proven designer whose portfolio you like. That gives you more control over the end design. But for people that are just starting out, 99Designs and sites like it are a good match. Its a step above (way above) stock logo sites. You get a custom design, but the cost is lower and controlled.

My experience with 99Designs has been great. In the end, the hardest part was choosing a design. There were some pretty creative entries, and the designers responded to my suggestions and kept working to make just the right logo. In the end, my choice came down to a few really great designs. Some were fun and very unique. I thought that this was what I wanted, and almost went with a design that looked like a box of water with two fish swimming in it. But then I didn’t. I went with a more traditional logo instead.

Why did I make this choice? Well, while I want my company to be fun, I also want a design that is easy to use across multiple mediums. I was afraid the fish one wouldn’t make sense as a logo in some settings. Also, I am going after business customers, and I didn’t want to have a logo that confused them. Taken by itself, the fish logo could look like a fish tank. I don’t sell fish tanks, so I thought that may be a problem.

So I chose another logo that I really liked. This one did a good job of capturing the essence of Broad River Creative without being over the top. It was a design that I saw progress from the simple original that the designer submitted to the end product that you will see below. I liked the cleanness and vibrancy of the logo, and thought that it was simple enough that I could easily grow with it.

That was another important aspect of my decision. Would the logo last? Could I envision myself using the same logo, or perhaps a variation of it, for years to come? A logo should have staying power, otherwise, what’s the point?

So now I have a logo for Broad River Creative. I am so thankful to 99Designs for awarding me the money. Also, they were great to work with all throughout the process. And each and every designer put in a great effort, some making many adjustments. It was hard to say no to many of them.

Of course, the logo is only a small thing. As I create this business, there are so many more important things. Often, I get sidetracked by things like design and look, and don’t pay enough attention to sales and profit. Next time, I’ll tell you a little about my marketing plan and how I hope to bring in a bunch of new clients.

Here is my new logo:

When business is going great, you likely aren’t worrying about what will happen if you have to close it down. If things are bad, it is probably already too late to salvage much. You need to plan in the good times for things that might go wrong. Specifically, as part of your business, you should have a way out that w0n’t wreck you financially or emotionally. Call it your fire escape.

We all know that we should have an emergency plan in case of a fire. And even though a house fire is highly unlikely, we all have fire alarms in our house. With nearly as many businesses closing each year as there are businesses opening, it is important to have an escape plan.

While it is true that sometimes the worst happens and it seems your business goes up in flames, often businesses suffer a slower death, or owners just decide to walk away. The fact is, you should have an escape plan in place from day one of your business. Don’t make the mistake of thinking that things will eventually grow to a size where you can take out a retirement or whatever else you want from the business. Instead, craft the business from the get go so you can take what you need from it and you won’t be destroyed if it comes crashing down.

Take a Profit

The first thing you need to focus on is profit. You want to build a profitable business from the start. The only sure way to do this is to commit to taking a real profit out of the business. If you don’t do this, you will probably play things too close and operate on a razor thin margin. Commit to taking a profit, and you will quickly see if you are bringing in enough sales, if the profit margin is high enough, and if your overhead is in line.

Your profit is not your paycheck. A paycheck is what you get for doing the day to day work. It is what you would have to pay someone else if you can no longer work, or don’t want to. If the money you are taking out of the business goes away after you stop working, then it is not a profit. And if you aren’t bringing in any additional profit, you aren’t yet in business. You just employ yourself.

A profit is a percentage of income. For each check that comes in, you need to be able to take a percentage out. You pick the percentage. Start low if you must, but build it up to a healthy number, maybe around 20%. Remember, this is not greed. This is not robbing your business, either. If you can maintain a healthy profit, then your business is healthy too.

Some of your profit can go back into your business. The rest needs to go to you for non-business related things. Start an IRA, for goodness sake. Don’t borrow money from yourself after you get things going. And if you have to, don’t borrow it from your profit. You should be taking baby steps forward, not leaps backward. Protect your profit and you will protect your business. You’ll also have something to show for it if things go horribly wrong, or if you decide it is time to retire.

Protect Your Assets

The sooner you incorporate, the better. Incorporation can protect you from frivolous lawsuits, help you with tax burden, and put up a wall between you and your business. If things go south with the business, you will have a better ability to hang on to your own wealth and assets. This could mean the difference between keeping or losing your house, so it is important.

There a several different ways to incorporate, all with unique advantages. Contact an expert, or research it out yourself. I suggest the book, Incorporate and Grow Rich, as a good starting point.

Protect Your Data

Sometimes, real disasters happen. Are you safe if your building catches on fire for real? What about a computer hard drive failure? You need to make sure you have access to all of your vital business data, in case of an emergency. The best way to do this is to make sure you are backing up your data off site. I have used a service called Carbonite to do this, and it is very easy.

The other thing you can look into is using online software instead of onsite software. If you use an online CRM, such as Batchbook, to store your customer data, you will be able to access it even if you need to get a new computer, or if your business gets hit by a meteor. I suggest doing your own hard back ups of any data you store with online services, just in case. But a reputable software company usually does a far better job protecting and keeping your data than you do.

Insurance

Double check all of your insurance policies. Are you protected to the hilt in case of an emergency? You should be. Your business is your livelihood, after all. Talk to an expert about what kind of insurance you need. Pretty early on, if you own your business, you need to think about things like disability insurance and health insurance. Cover yourself as well as your business.

Structure

Finally, sometimes you want to leave your business even when it is doing fine. This is called retirement, and it doesn’t matter how old you are. Always be ready to retire. This means, build a business that you can hand over. You can’t hand over a business if you are paying yourself half the going rate for your job. If you can’t get any profit out of your business while you run it, you can’t expect to get a profit out of it after you bring on someone else to run it. Thinking of selling? The better your structure, the better your systems, and most importantly, the better your profit and cash flow, the more likely you are to get a good price.

So the stronger your business is, the easier it is to walk away from it. If it can go on without you and you can still bring in a profit from it, you are golden.

You don’t want to have to run screaming from your business. Plan now. Put things in place that will let you walk away with something, whether you leave a crumbled and bankrupt business or a healthy and strong one. Don’t bet everything on future success. Make way for profit right away. And always prepare for worst. That way, you will be secure.

photo credit: laurenatclemson

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Bradford Shimp helps small businesses build better web sites at BroadRiverCreative.com.

This is part of a series of posts on what you can do to be more successful in your business this year. To get a free report full of success tips for your business, click here.

As a small business owner, it is very easy to shortchange your own business in favor of helping your clients. What I want to ask you is, “what if you were your next client?”

Taking time out to focus on your business is necessary. If you don’t get a handle on the details of your small business, things could easily spiral out of control. So do yourself a favor. Schedule in some time to focus on your business.

Do Your List

There are many things that you can do to improve things. This might include finally putting some procedures on paper. You probably have a whole list of things that you have been putting off. Get them done.

The Things You Can’t Do

There is another element to this, however. Say you run an HVAC company. If so, I bet your furnace is in tip-top shape for the winter. But how about your books? Your marketing? Not surprisingly, we tend to focus on our area of skill. This is actually a good thing. Too often, though, we don’t bring in other skills to help make our businesses better.

If you are a caterer, you probably don’t spend much time giving clients advice on their web site. If they need help, what would you do? I bet you would refer them to someone you know who does web sites. When you look at your own business as a client, maybe you’ll realize that it is time to refer in some other businesses and professionals to help.

Bring in the Professionals

You wouldn’t try to do things yourself that are out of your area of expertise for your valued clients. But for some reason, you have a tendency to suffer through your weak areas for your own business. Stop. Get some help. Bring in the professionals.

If you want to be the best business possible, you need the best help possible. This includes great help in accounting, legal, marketing, even systems development. Unless one of those is your own area of expertise, you need to be hiring out for those. Is it going to cost money? Sure it is. But it will also help you create a more solid business that will be much better at generating profit and cash flow. In other words, it is money well-invested.

If you were your client, you would treat yourself better. You would give yourself the same advice I am giving you. You would bring in the experts when you didn’t know how to fulfill a need. And in the end, you would have a tighter, more efficient, and more profitable business.

photo credit: Rocker_44

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Bradford Shimp builds web sites for small businesses at BroadRiverCreative.com. Follow Bradford on Twitter @bradfordshimp.

This is part of a series of posts on what you can do to be more successful in your business this year. To get a free report full of success tips for your business, click here.

Having a customer is a great thing. This is a person or business who spends money on what you have to offer. Do you value your customer? Of course you do! How about this? Do you value your customer relationship?

Now you may be giving me a blank stare and wondering, what’s the difference? I’ll tell you. A customer is valued for that one purchase. Thank you ma’am for spending your money with us! A customer relationship is different. It is an ongoing conversation between you and the customer. It is what happens between sales.

The Customer Relationship

Most customer relationships happen something like this. Customer is wooed by you. Customer buys from you and falls in love with your business. You send customer a nice note, telling them how much you appreciate them (actually, more often, you don’t). You don’t call customer again for awhile. They happily use your product and maybe even think of you from time to time. If you are lucky, they tell a friend or two about you. Hopefully they remember your number, or at least your web address.

Time passes, you’ve each gone your different ways. But suddenly, one of you needs the other again. Maybe it is the customer. Maybe he or she needs more of what you are selling. So they look around for your number, or visit your store. Oh hey, I remember you! Thanks for coming back. And the cycle repeats. Or maybe its you. Maybe you need another sale, and of course you have the customer’s contact information. You’ve had it all along. You send a coupon or get on the phone. Remember me? Lets do business again!

Its actually a said story. You start with excitement, respect, even love. But that love is allowed to cool. The relationship is ignored until it becomes a necessity again. Its like some families on the holidays. You may have customers, but you don’t have customer relationships.

Staying in Contact

I got thinking about all of this because of a tip I received for my free report on business success in 2010. You can get that here. This tip came from John Schulte, the President of the National Mail Order Association. Here is what he said:

Every day, contact four customers or prospects. Pick up the phone. Drop them a note. Send a fax or an e-mail.

If you stick with this program, at the end of the year, you will have made 1,000 bonus contacts. And you’d better

believe it will produce business.

What do you say? If you contact a customer, how about a simple thank you for the business note? If the customer is

always prompt with payment, let them know you appreciate that. If you have a new item or service, let them know

about it. If you come across a clipping of interest, send it with a post-it note attached letting them know you

thought of them when you saw it.

Your bonus contacts needn’t be formal communications. They don’t have to be long. But every one lets the

recipient know that you were thinking about him or her, and took the time to let them know.

Every day, contact four customers or prospects. Pick up the phone. Drop them a note. Send a fax or an e-mail.If you stick with this program, at the end of the year, you will have made 1,000 bonus contacts. And you’d better believe it will produce business.

What do you say? If you contact a customer, how about a simple thank you for the business note? If the customer is always prompt with payment, let them know you appreciate that. If you have a new item or service, let them know about it. If you come across a clipping of interest, send it with a post-it note attached letting them know you thought of them when you saw it.

Your bonus contacts needn’t be formal communications. They don’t have to be long. But every one lets the recipient know that you were thinking about him or her, and took the time to let them know.

Good Business Sense

If you think of customer relationships in the same terms you think of your friendships, you will instantly understand the importance of staying in contact. The only difference is that this relationship leads to more money. A customer who you stay in contact with is far more likely to send referrals your way, for instance. And buying frequency will generally go up. There are good business reasons to take time to stay in contact with customers between sales.

What Do You Say?

Yet, you probably don’t do this, at least not as well as you could be doing it. That question that John asks is the tripping point for most of us, “what do you say?”

John provides a couple of ideas. I would just say this. Talk to your customers like they are human beings. Be personal, caring, and considerate. I would also suggest this. Start sending out weekly emails to all of your customers. The more you do it, the easier it will become. Think of these emails a quick note to a friend. You can add a few unique, personal emails into the mix every day, but for the most part, a general email to everyone will do the trick. Write as if you were writing to a friend. Don’t sell, at least not in every single one.

You can also connect with customers easily by becoming their friends on Facebook or Twitter, or joining their network on LinkedIn. Just reach out regularly. A personal hello goes a long way, and you never know what kind of conversation it will lead to.

Next time, before you make that sales call, will you already be comfortable with your customer? Making the sales is so much easier if you’ve committed to keeping the relationship alive in between sales.

photo credit: david.nikonvscanon

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Bradford Shimp can be friended on Twitter @bradfordshimp or on Facebook at Facebook.com/bradfordshimp. He helps small businesses establish their presence on the web via great web sites and online marketing plans at BroadRiverCreative.com. One of his favorite modern authors is Jasper Fforde.

No one likes to have debt hanging over them. In business, if you don’t handle it right, it can become a dangerous distraction. The fact that you owe money makes the risks of business that much more real. Running a debt-free business is a dream for many small business owners. Getting to that point, however, is often difficult. And not being willing to take on any debt, ever, may limit your growth potential.

Debt is Normal

I am not advocating taking on debt for your business. I am just pointing out that it is normal. The nature of business compels many owners to take on some sort of debt. The problem with debt is not usually debt itself. The real problems occur in why you incur debt and how you react to having debt.

Incurring Debt

A healthy business takes on debt to grow. Whether for a big capital purchase, a building upgrade, improved infrastructure, the debt is taken on to pay for a one-time cost. In this case, you are always better off if you already have enough monthly cash flow to cover the debt payments. Taking on debt in hopes that it will help you grow enough to pay the monthly cost is not your best move.

An unhealthy business takes on debt to meet payroll, to pay a vendor bill, to purchase small office items. If you can’t pay your day to day bills, you have a problem in your business that taking on debt will not fix.

There is a gray area here, at least in my estimation. Some businesses are very seasonal and take on debt to get them through the off season. I would say this is a short term plan. Eventually, to be successful, you need to be able to store up enough cash reserves to make it through the off season. An even better business move is to add new products or services that will help you keep the money coming in all year long. If you prefer to take several months off, that’s your choice. You may feel confident in taking on debt to make it through, because you always pay it off. Once or twice on this is fine. But its not a healthy habit to get into. What if you have a bad year? Now you can’t pay off your debt and have to take on more. Far better to walk into that situation debt free. So reverse your habits and start squirreling a way some money to make it through. It may take several years to store enough, but once you do, you should be able to break the debt cycle.

Before you incur more debt, consider what it is for. If it is for regular business costs, you need to reorganize or fix your business. Get your cash flow and profit right before you worry about anything else. Again, this will take time. Just be sure to start walking down the path right away.

Dealing with Debt

Once you have debt, it doesn’t really matter how you got it. You still need to pay it off. Hopefully, you have a budget and a plan. If not, get one in place.

I personally think it is a mistake to throw every extra cent you get toward paying down your debt. It is an especially bad idea if you do not have a budget and if your costs of doing business tend to fluctuate. The first thing you need to worry about in your business is cash flow. Don’t drain your cash flow by tying it all up in paying down your debt. Have a planned amount that you pay each month and stick to that.

If you are on a plan for your debt, you can the focus on building your business and increasing things like profit and cash flow. Never make your business about your debt. Never think, “I need to get more sales so I can pay off this debt.” You didn’t get into business to pay off debt. You got into business to make a profit. So focus on that. Continue to pay yourself and everyone else. Chip away at the debt that you do have. At the same time, plan for future expenses and future dips in business. You should be building a cash cushion.

It would be a mistake not to build a cushion of cash because you are focusing on debt. That cash can help you avoid further debt, which is going to do far more to help your business in the future than paying off your current debt early. Lets say you have $50,000 in business debt. At the same time, you have a goal to build a $20,000 cash cushion. Once you build that kind of cash up, it is going to be very tempting to take it and throw it on the debt. The problem is if you do that you will still have $30,000 in debt and no cash cushion. Now something bad happens, and you need money. You are left with no choice but to take on more debt. Instead, you should keep the cash on hand and continue to pay of the debt as you planned, one month at a time.

I am not saying it is never a good idea to pay your debt off early. If you are in a position to do so, then take advantage of that. But if it is a choice between investing that money for growth or paying off a chunk of debt, I would always invest for growth.

Take the long term approach to your business. You want to be healthy for a long time. Get your business in such a shape that it doesn’t need to take on debt for regular costs and so it can handle new debt payments for wise capital expenditures. In the meantime, take a monthly approach to your old debt. As you get more cash flow and profit, you can always increase those monthly amounts. But do so only after you have gotten your business into the best shape possible.

How about you? How do you deal with debt?

photo credit: Photos8.com

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Bradford Shimp helps small businesses create web sites and web presence to bring in more leads and sales at BroadRiverCreative.com.