It is essential for all the business owners to discern how profitable and money making they are at anytime. In today's world of business the conventional ways of annual accounting is certainly inappropriate and particularly when it comes to securing success for small businesses, small business accounting is of utmost importance. Nevertheless, the financial matters which are linked with small businesses are quite different from that of large or huge business houses and understating these matters as well as accounting is extremely crucial for the appropriate administration of the small businesses. This understanding further leads to right allocation of acknowledgment, correct business activities, suitable use of funds, enhanced decision making and apt evaluation of the competitors.
The Small Business Accounting essentially includes three major financial measures- Profit and Loss Statement, Balance Sheet and the Cash Flow Statement. The Profit and Loss Statement illustrates whether the business at small scale is money making or not. This statement is a testimonial that speaks the truth about the business i.e. how the business is going on and further covers certain time period, either quarterly or monthly.
While the Balance Sheet shows the worth of the business. It is the statement which lists all the liabilities as well as assets of the business at a specific point of time. The Cash Flow Statement gives an idea regarding the future cash balance of the business at small scale. It is the statement that covers the upcoming period of time and thereby predicts the future capital requirements of the small business enterprise prior to the necessity actually arises.
There are two prime methods of Small Business Accounting including the Cash Basis method and the Accrual Method.
In Cash Basis accounting method the bill payments are acknowledged as expenses and cash receipts are acknowledged as income. Vast majority of the small business proprietors' use this business accounting method since it is easy to understand as well as implement.
In this method the entry of revenue in accounts do not depends upon the actual compilation of cash. At any time when the product or service is sold, the transaction is recorded within the accounts as accounts receivable, even in the case if the client has not given the price. When the revenue actually is realized then the account receivable gets converts into cash in the recorded accounts. Likewise, if any overhead incurred by the small business enterprise then it is recorded in the form of expenses in accounts even in the case when the bills are cleared much later. Typically, the small business possessors that are engaged in the manufacturing business use the accrual method of business accounting.
The accrual method of business accounting includes some important issues about the Small Business Accounting, which includes tax liability issue (pay roll tax, income tax), maintaining the separate business transactions, internal control and the quarterly returns. In addition, the bank account reconciliation and the employee benefits policy are few other issues included in accrual method of business accounting. Consideration of all the things is very essential for a successful and a faultless business counting.
Thursday, July 30, 2009
Wednesday, July 22, 2009
Publicity and Press Releases - What Every Small Business Owner Needs to Know
I was recently lucky enough to be part of a brainstorming session conducted by a professional and very successful Public Relations Expert. I want to share some of the information that came out of that session - tips used by the experts themselves to get their clients' media releases read, and published.
Spread the News
Make your press release say something. No one wants to read boring articles, so make sure your media release is actually newsworthy. Simply stating that your business is open, won't cut it. (Unless of course the place that publishes it have no readership and nothing else to report on!) Have an event such as a grand opening. Many companies have a grand opening or a special day where they use a gimmick of some sort and invite the media to come along. Some places invite radio stations to broadcast from their place of business for a certain amount of time.
You can also sponsor a sporting event, partner with a charity or tie your media release into a particular event at the time. For example, as I write this, interest rates are about to be cut for the first time in 7 years. If you can use this to your advantage in your business, then send out a media release. Chances are, it will be picked up pretty quickly! If you have a fashion business for example, run a media release close to the Melbourne Cup talking about this year's fashion.
Send it on up
Most media releases are sent by email these days. Be sure however, not to send your media release as an attachment. Many a reporter has been stung by a virus this way and no will not open anything with an attachment. Ensure your press release goes to the appropriate journalist as a full email.
Contact me please!
Believe it or not, many people forget to put their contact details on a press release! Ensure you have full contact details either at the top of the release or at the bottom. This includes any addresses and full contact numbers - not just a mobile phone number.
Try to keep your press release to one page and ensure that no blatant advertising is included. Follow up with each journalist that received your media release until you receive an answer from them.
Using publicity as part of your marketing strategy and your marketing mix can bring in plenty of free business - so ensure you get the basics right the first time!
Spread the News
Make your press release say something. No one wants to read boring articles, so make sure your media release is actually newsworthy. Simply stating that your business is open, won't cut it. (Unless of course the place that publishes it have no readership and nothing else to report on!) Have an event such as a grand opening. Many companies have a grand opening or a special day where they use a gimmick of some sort and invite the media to come along. Some places invite radio stations to broadcast from their place of business for a certain amount of time.
You can also sponsor a sporting event, partner with a charity or tie your media release into a particular event at the time. For example, as I write this, interest rates are about to be cut for the first time in 7 years. If you can use this to your advantage in your business, then send out a media release. Chances are, it will be picked up pretty quickly! If you have a fashion business for example, run a media release close to the Melbourne Cup talking about this year's fashion.
Send it on up
Most media releases are sent by email these days. Be sure however, not to send your media release as an attachment. Many a reporter has been stung by a virus this way and no will not open anything with an attachment. Ensure your press release goes to the appropriate journalist as a full email.
Contact me please!
Believe it or not, many people forget to put their contact details on a press release! Ensure you have full contact details either at the top of the release or at the bottom. This includes any addresses and full contact numbers - not just a mobile phone number.
Try to keep your press release to one page and ensure that no blatant advertising is included. Follow up with each journalist that received your media release until you receive an answer from them.
Using publicity as part of your marketing strategy and your marketing mix can bring in plenty of free business - so ensure you get the basics right the first time!
Tuesday, July 14, 2009
Types of Small Business Loans SBA Loans
Explanation: The Small Business Administration is an independent agency of the federal government. Its mission is to help people start, build and grow businesses. The SBA does not actually supply the loan; lenders are responsible for that part. But the SBA guarantees between 50 to 85 percent of the loan, making the lender less wary of lending to riskier borrowers. The SBA does this by backing and securing loans that are given by banks.
Requirements/Documentation: Applicants of SBA loans will be required to provide a business profile, loan request, collateral, business financial statements and personal financial statements.
Pros: SBA can back loans of up to $2million dollars. Start up businesses can also take advantage of SBA loans if they meet the requirements, provide the proper documentation and present a sound business plan.
Cons: Borrowers are at the SBA's discretion when it comes to getting a loan. They have to be able to persuade them that the loan will be put to good use, and they must outline exactly how the loan will be used. Also, as bank lending practices tighten, SBA loans are also becoming harder to receive.
Business Line of Credit
Explanation: A business line of credit is like a credit card for one's business. A business line of credit offers revolving credit with lines that typically range from $10,000 to $100,000.
Requirements/Documentation: Many different banks offer business lines of credit. They may offer lines of up to $25,000, or lines of $25,000 and over. Requirements may vary depending on the lender that you are working with.
Pros: You have accessible cash on hand anytime you want. Also, many lenders do not require borrowers to have collateral to receive a business line of credit.
Cons: Like a personal credit card, you must pay interest on the outstanding monthly balance.
Business Cash Advance
Explanation: A business cash advance is a purchase of a business's future credit card receivables. Borrowers receive an upfront lump sum and in return, a small percentage from their business's future credit card sales is deducted and used to repay the advance.
Requirements/Documentation: Most business cash advance lenders require that the borrower has a business that has been in operation for at least four months, and that the business processes a minimum of $2,500 per month in credit card sales. Borrowers must provide lenders with at least the four most recent months of their business's credit card statements.
Pros: Borrowers do not need to have collateral to receive a business cash advance. There is no interest on the advance, and there are no fixed monthly payments. There are also no penalties for repaying the advance slower or faster than expected. Also, there are no restrictions on how your business cash advance can be used.
Cons: Business cash advances can not be used to fund start-ups, as the borrower must have owned his/her business for at least four months to be eligible to receive the advance. Also, only merchant businesses that process credit card transactions are eligible to receive business cash advances, as the payments are taken as a small percentage from a business's daily credit card sales.
Requirements/Documentation: Applicants of SBA loans will be required to provide a business profile, loan request, collateral, business financial statements and personal financial statements.
Pros: SBA can back loans of up to $2million dollars. Start up businesses can also take advantage of SBA loans if they meet the requirements, provide the proper documentation and present a sound business plan.
Cons: Borrowers are at the SBA's discretion when it comes to getting a loan. They have to be able to persuade them that the loan will be put to good use, and they must outline exactly how the loan will be used. Also, as bank lending practices tighten, SBA loans are also becoming harder to receive.
Business Line of Credit
Explanation: A business line of credit is like a credit card for one's business. A business line of credit offers revolving credit with lines that typically range from $10,000 to $100,000.
Requirements/Documentation: Many different banks offer business lines of credit. They may offer lines of up to $25,000, or lines of $25,000 and over. Requirements may vary depending on the lender that you are working with.
Pros: You have accessible cash on hand anytime you want. Also, many lenders do not require borrowers to have collateral to receive a business line of credit.
Cons: Like a personal credit card, you must pay interest on the outstanding monthly balance.
Business Cash Advance
Explanation: A business cash advance is a purchase of a business's future credit card receivables. Borrowers receive an upfront lump sum and in return, a small percentage from their business's future credit card sales is deducted and used to repay the advance.
Requirements/Documentation: Most business cash advance lenders require that the borrower has a business that has been in operation for at least four months, and that the business processes a minimum of $2,500 per month in credit card sales. Borrowers must provide lenders with at least the four most recent months of their business's credit card statements.
Pros: Borrowers do not need to have collateral to receive a business cash advance. There is no interest on the advance, and there are no fixed monthly payments. There are also no penalties for repaying the advance slower or faster than expected. Also, there are no restrictions on how your business cash advance can be used.
Cons: Business cash advances can not be used to fund start-ups, as the borrower must have owned his/her business for at least four months to be eligible to receive the advance. Also, only merchant businesses that process credit card transactions are eligible to receive business cash advances, as the payments are taken as a small percentage from a business's daily credit card sales.
Thursday, July 9, 2009
Small Business Websites - The Good, the Bad, the Ugly
A website can be a boon to your small business, helping you reach new markets and explode your profits. Not all websites are created equal - for each successful website, there are many more that do not meet the grade. This article explores the good, bad and ugly of small business websites.
Small Business Websites - The Good
A website boosts your small business' credibility.
When I taught my first website strategies class in 1998, websites were the exclusive domain of the most cutting edge businesses. Now, the first question a prospect will ask is "What is your website?"
They won't ask if you have a website, because everyone expects a bona-fide small business to have a website.
A website makes it easier for your raving fans to refer you business.
A web address is easier to remember than a telephone number. For that reason alone, having a web address your fans can remember smoothes the referral process. The benefits don't end there. By including testimonials, case studies, and samples on your web site, you make it easier for referrals to become clients.
The right website shortens the sales cycle.
The right website, created with persuasive content, will lower the number of calls you get from tire-kickers, looky-loos, and people looking to "nickel and dime" you. Instead, a website can weed these people out, so that you get calls and emails from prospects that are ready to buy.
A website expands your small business to new markets.
The market for a bricks and mortar store is typically a 5-mile radius. The Internet erases boundaries: the market for an internet-based business is worldwide. A search-engine friendly website makes it easy for people in other countries who want what you sell to find your small business.
A website levels the playing field between small and large businesses.
There are many small and micro-business owners making phenomenal profits through their websites. An affordable, top-producing website is within the reach of almost any small business. A prospect who visits your website does not need to know that your "corporate office" is in your basement.
Small Business Websites - The Bad
Not all websites are created equal, though. For each small business earning phenomenal profits from their website, there are several others that don't even make enough to cover their hosting fees.
Low earning, low traffic websites can be traced to a number of causes, including: * website components that actually block your website from the search engines, * content that does not connect with your audience, * no calls to action, and * no way to collect leads.
Small Business Websites - the Ugly
It is bad enough to have a website that is not bringing in results. What is truly ugly, however, is when there are prospects actively searching for your business that end up being directed to your competitor's website.
Small Business Websites - The Good
A website boosts your small business' credibility.
When I taught my first website strategies class in 1998, websites were the exclusive domain of the most cutting edge businesses. Now, the first question a prospect will ask is "What is your website?"
They won't ask if you have a website, because everyone expects a bona-fide small business to have a website.
A website makes it easier for your raving fans to refer you business.
A web address is easier to remember than a telephone number. For that reason alone, having a web address your fans can remember smoothes the referral process. The benefits don't end there. By including testimonials, case studies, and samples on your web site, you make it easier for referrals to become clients.
The right website shortens the sales cycle.
The right website, created with persuasive content, will lower the number of calls you get from tire-kickers, looky-loos, and people looking to "nickel and dime" you. Instead, a website can weed these people out, so that you get calls and emails from prospects that are ready to buy.
A website expands your small business to new markets.
The market for a bricks and mortar store is typically a 5-mile radius. The Internet erases boundaries: the market for an internet-based business is worldwide. A search-engine friendly website makes it easy for people in other countries who want what you sell to find your small business.
A website levels the playing field between small and large businesses.
There are many small and micro-business owners making phenomenal profits through their websites. An affordable, top-producing website is within the reach of almost any small business. A prospect who visits your website does not need to know that your "corporate office" is in your basement.
Small Business Websites - The Bad
Not all websites are created equal, though. For each small business earning phenomenal profits from their website, there are several others that don't even make enough to cover their hosting fees.
Low earning, low traffic websites can be traced to a number of causes, including: * website components that actually block your website from the search engines, * content that does not connect with your audience, * no calls to action, and * no way to collect leads.
Small Business Websites - the Ugly
It is bad enough to have a website that is not bringing in results. What is truly ugly, however, is when there are prospects actively searching for your business that end up being directed to your competitor's website.
Thursday, July 2, 2009
7 Deadly Sins of Teen Small Business Ownership
Many people are quick to tell you what you need to do in order to succeed in business. But not so many people are explaining what not to do. And as it happens, knowing what to avoid, the common mistakes made by so many people who've failed at fulfilling their vision and living their dreams, is at least as critical for success as knowing what to do. Because of that, I've put together this handy and invaluable list of the 7 big 21st Century no-no's (aka 'The Small Business Disruptors 2.02) in making your small business work for you. You've heard all the "Do's", these are the "Don'ts", and whatever you do, don't you forget them! Brouhaha!!
1. Being a Jack of All Trades: A jack of all trades is a master of none, and success in business requires being the master of whatever it is you do. Small businesses that specialize in a specific area of their industry, catering to a niche market, tend to perform much better than those who attempt to have their hands in every pot in an effort to appeal to the whole swath of consumers out there. In business, it's far better to be an expert in one subject than to know a little bit about a lot of things.
Target your branding and marketing efforts to the specific group you serve. You're not out to win over the entire marketplace, and more, you never will. Concentrate your efforts on your target market and establish yourself as the authority in your specific niche. By laser-honing your branding and marketing efforts so, you'll save valuable funds from wasted efforts, and give your small business the greatest chance of becoming the recognized leader in your field.
2. Being a Know-it-All and Do-it-All: Along those same lines, don't try to do it all yourself. Having a business isn't supposed to create more work for you to do, it's supposed to create less and, conversely, more money and free time for you to explore more pleasurable pursuits.
Henry Ford is reputed as being one of the smartest minds of his time, and not because his head was filled with extensive knowledge on every subject. It wasn't. What made Henry Ford so smart was that he knew exactly who to ask for the correct answer to any question posed to him.
Take after Mr. Ford. Surround yourself with smart people in the areas where you'll need that knowledge put to work for your small business. That way, you can free your mind to focus on whatever it is you do best while you delegate the rest of the tasks you need accomplished to those people who have the most expertise in them. This is what is meant by "leveraging your resources". Avail yourself of the abundance of talented people out there - employees, associates, and freelancers alike. Outsource the work you need done. Your job is to hold the big picture in mind, not to personally handle ever nitty-gritty detail that arises.
3. All Work & No Play: As mentioned above, you presumably created this small business so that you could have more control over your time and greater access to the money that reaches the top of the food chain before it trickles down to the bottom rungs. Therefore, don't wait until you've achieved what you view as "success" before you allow yourself that flexibility and freedom.
Running a business requires a lot of you, and there is no way you will be able to manage all those demands if you're overworked and overtired. Prevent burnout before it happens. Allow yourself time to rest, recuperate, and play. Owning a business is about improving your quality of life, and there's no reason you can't start doing that right now.
Schedule in your free time if you must. And hold yourself as accountable for your own well-being as you do for your business accomplishments. Your only shot at success in business rides on you being present, alert, healthy, and happy enough to be able to make it happen.
4. Having a B Plan, Not a Plan B: Very few people get it right the first time, and that applies no less when it comes to success in business. There is no shame in having a Plan A that doesn't work. Learning what doesn't work, in fact, is one of the greatest ways to find out what does work.
The danger comes in when you are unwilling to recognize that your Plan A isn't working, whether out of ignorance, fear, or just plain stubbornness. Going hand-in-hand with that is a perilous lack of an alternate plan to the one that's not working.
Devise a Plan B that further refines and simplifies Plan A because Plan A is what you really want to do right? That way it won't be such a big deal when you discover that your current course is off, because you'll quickly, easily, and deftly be able to course correct with your next best plan of action.
5. Following History...Not Creating It: History belongs to those who write it. This isn't to say that it's unwise to learn from the successes and failures of your predecessors. On the contrary, those who came before you have a great deal to teach you. And learning from the mistakes of others is one of the fastest ways to hop on the fast track to success.
The "sin" being addressed here is about blazing ahead without keeping detailed and accurate records of your journey. How will you ever know how well you are doing if you aren't tracking your actions? Document everything you do - your intellectual property, ideas, steps, and processes.
Building a business is just that - building. And to build a solid, lasting business you need a strong foundation. Your records of all that you've done to date is that foundation, supporting all that your business achieves from this point on. With no such foundation, any business can crumble to dust at the slightest shake-up. Don't let that happen to you.
6. Avoiding Problems: If you're avoiding problems then you're also avoiding solutions. Problems = Opportunities. If you're avoiding problems then you're letting fear rule your business. Fear of trying and failing. You need to risk failure in order to achieve success, and if you shy away (or all-out run) from problems then you are cheating yourself of the possibility of breaking through them.
This point cannot be stressed enough. You must seek out problems, not avoid them. Look for problems. Embrace them as your ripest opportunities for major breakthrough.
7. Focusing Too Much on the Details: By now you've probably noticed that these "deadly sins" of business management (and their antitheses - strategies for success) are all interrelated, and it's no different with this last common error. As mentioned above, your number one job is to hold the big picture for the business in mind. Learn to build a network in which you can leverage other people in your network to provide expert opinion and simple solutions for your seemingly complex problems.
Even if you're currently the only "employee" you've got, you still need to view every last aspect of your business (no matter how small) as it applies to the larger picture. But if you focus on the details, you only create more details. So focus on the overall vision and you will help flesh it out and bring it to life.
It's extremely easy to get mired down in the minutiae of your business, but that's the quickest and easiest way to mire down your entire business. Instead, step back and examine the big picture. When you do that, you'd be surprised at how naturally the minutiae suddenly seems to fall right into place. No matter how stressful something may feel at the moment, keep moving swiftly towards the bigger goal and you will discover that once you get to the 'problems' that you were initially stressed out about everything and everyone you need will be there when you get there. And yes, they will be ready and willing to help you easily and quickly get through it.
1. Being a Jack of All Trades: A jack of all trades is a master of none, and success in business requires being the master of whatever it is you do. Small businesses that specialize in a specific area of their industry, catering to a niche market, tend to perform much better than those who attempt to have their hands in every pot in an effort to appeal to the whole swath of consumers out there. In business, it's far better to be an expert in one subject than to know a little bit about a lot of things.
Target your branding and marketing efforts to the specific group you serve. You're not out to win over the entire marketplace, and more, you never will. Concentrate your efforts on your target market and establish yourself as the authority in your specific niche. By laser-honing your branding and marketing efforts so, you'll save valuable funds from wasted efforts, and give your small business the greatest chance of becoming the recognized leader in your field.
2. Being a Know-it-All and Do-it-All: Along those same lines, don't try to do it all yourself. Having a business isn't supposed to create more work for you to do, it's supposed to create less and, conversely, more money and free time for you to explore more pleasurable pursuits.
Henry Ford is reputed as being one of the smartest minds of his time, and not because his head was filled with extensive knowledge on every subject. It wasn't. What made Henry Ford so smart was that he knew exactly who to ask for the correct answer to any question posed to him.
Take after Mr. Ford. Surround yourself with smart people in the areas where you'll need that knowledge put to work for your small business. That way, you can free your mind to focus on whatever it is you do best while you delegate the rest of the tasks you need accomplished to those people who have the most expertise in them. This is what is meant by "leveraging your resources". Avail yourself of the abundance of talented people out there - employees, associates, and freelancers alike. Outsource the work you need done. Your job is to hold the big picture in mind, not to personally handle ever nitty-gritty detail that arises.
3. All Work & No Play: As mentioned above, you presumably created this small business so that you could have more control over your time and greater access to the money that reaches the top of the food chain before it trickles down to the bottom rungs. Therefore, don't wait until you've achieved what you view as "success" before you allow yourself that flexibility and freedom.
Running a business requires a lot of you, and there is no way you will be able to manage all those demands if you're overworked and overtired. Prevent burnout before it happens. Allow yourself time to rest, recuperate, and play. Owning a business is about improving your quality of life, and there's no reason you can't start doing that right now.
Schedule in your free time if you must. And hold yourself as accountable for your own well-being as you do for your business accomplishments. Your only shot at success in business rides on you being present, alert, healthy, and happy enough to be able to make it happen.
4. Having a B Plan, Not a Plan B: Very few people get it right the first time, and that applies no less when it comes to success in business. There is no shame in having a Plan A that doesn't work. Learning what doesn't work, in fact, is one of the greatest ways to find out what does work.
The danger comes in when you are unwilling to recognize that your Plan A isn't working, whether out of ignorance, fear, or just plain stubbornness. Going hand-in-hand with that is a perilous lack of an alternate plan to the one that's not working.
Devise a Plan B that further refines and simplifies Plan A because Plan A is what you really want to do right? That way it won't be such a big deal when you discover that your current course is off, because you'll quickly, easily, and deftly be able to course correct with your next best plan of action.
5. Following History...Not Creating It: History belongs to those who write it. This isn't to say that it's unwise to learn from the successes and failures of your predecessors. On the contrary, those who came before you have a great deal to teach you. And learning from the mistakes of others is one of the fastest ways to hop on the fast track to success.
The "sin" being addressed here is about blazing ahead without keeping detailed and accurate records of your journey. How will you ever know how well you are doing if you aren't tracking your actions? Document everything you do - your intellectual property, ideas, steps, and processes.
Building a business is just that - building. And to build a solid, lasting business you need a strong foundation. Your records of all that you've done to date is that foundation, supporting all that your business achieves from this point on. With no such foundation, any business can crumble to dust at the slightest shake-up. Don't let that happen to you.
6. Avoiding Problems: If you're avoiding problems then you're also avoiding solutions. Problems = Opportunities. If you're avoiding problems then you're letting fear rule your business. Fear of trying and failing. You need to risk failure in order to achieve success, and if you shy away (or all-out run) from problems then you are cheating yourself of the possibility of breaking through them.
This point cannot be stressed enough. You must seek out problems, not avoid them. Look for problems. Embrace them as your ripest opportunities for major breakthrough.
7. Focusing Too Much on the Details: By now you've probably noticed that these "deadly sins" of business management (and their antitheses - strategies for success) are all interrelated, and it's no different with this last common error. As mentioned above, your number one job is to hold the big picture for the business in mind. Learn to build a network in which you can leverage other people in your network to provide expert opinion and simple solutions for your seemingly complex problems.
Even if you're currently the only "employee" you've got, you still need to view every last aspect of your business (no matter how small) as it applies to the larger picture. But if you focus on the details, you only create more details. So focus on the overall vision and you will help flesh it out and bring it to life.
It's extremely easy to get mired down in the minutiae of your business, but that's the quickest and easiest way to mire down your entire business. Instead, step back and examine the big picture. When you do that, you'd be surprised at how naturally the minutiae suddenly seems to fall right into place. No matter how stressful something may feel at the moment, keep moving swiftly towards the bigger goal and you will discover that once you get to the 'problems' that you were initially stressed out about everything and everyone you need will be there when you get there. And yes, they will be ready and willing to help you easily and quickly get through it.
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