February 27, 2015 by
Tiffany C. Wright
You want to have the money (well in advance!) to meet payroll and pay your valuable employee.
A big issue for many small business owners and entrepreneurs is finding the funds for marketing. Many business owners treat marketing as a variable expense (which, technically, it is). However, marketing should be viewed as an investment, which is required to meet certain standards in terms of return on investment (ROI) and effectiveness. When you think of marketing as an investment, you can begin to creatively approach the financing of that investment. In the new free ebook, “5 Ways to Get Enough Money to Market Effectively and Meet Payroll: Have Cash, Not Just Paper, Profits“, I discuss 5 ways to creatively finance your marketing and access the cash you need to pay your employees – and to know where that cash is coming from well in advance of the pay date!
Below is an excerpt, method # 2, from the ebook:
2. Form marketing partnerships.
Sales and marketing are how you grow your business. Your marketing must be effective, otherwise highly ineffective marketing can become a money pit. You must clearly identify your target customers and determine what marketing works best for your company and your staff. One way to drastically reduce or even eliminate your out-of-pocket marketing expenses AND significantly increase the effectiveness of your marketing is to enter into marketing partnerships.
The optimal way to enter into the market or to drive an increase in sales in your market niche is to partner with a firm that already dominates your niche. Ask yourself: What companies reach your current or targeted customer base? Does your firm offer services or products targeting the same customer base that are complementary or supplementary to what these companies offer? (i.e., You want to avoid direct competitors.) Is the prospective customer sufficiently large to cover the additional marketing costs?
For example, you sell remote IT services to small businesses, nonprofits and local arms of larger companies. You could partner with a larger database maintenance firm or a software services provider. By adding your service to their general offering through a co-marketing arrangement, the database or software company appears to have a broader range of service offerings, which helps it further differentiate itself from its competitors. You get your marketing; your partner gets an additional competitive advantage. Win-win.
Do you want to know what the other four ways are? Download the free ebook, “5 Ways to Get Enough Money to Market Effectively and Meet Payroll: Have Cash, Not Just Paper, Profits“.
July 26, 2013 by
Tiffany C. Wright
Many small business owners consider retirement plans essential to maintaining the wealth and disposable income of retirees, however many owners stop short of providing retirement plans to their employees. A bit of a quandary there, eh? Perhaps the viewpoint is, pensions are important but let someone else handle them. Or is the thought, “We are not sure we’ll be in business long enough to have retirees?”
Small businesses have several inexpensive retirement plan options.
In addition to your employees’ retirement, whose funding yours? You may think that you’ll fund your retirement through the sale of your business. However, if like most small business owners you maximize your tax deductions and minimize your taxes and/or if you are the primary or sole manager in the business, then the likelihood of selling your business anywhere what you think it’s worth is very low. You’d be selling a job with nice benefits. That just doesn’t attract the amount of money you want for your business.
If you want to minimize your taxes and still fund your retirement, set up a retirement plan. There are a number of relatively inexpensive options including a SEP-IRA or Simplified IRA.
Check out this great article on American Express’ Open Forum that discusses this subject. It provides some valuable insights you may want to consider as a small business owner. Article: The Crucial Mistake You May Be Making With Your Retirement Plan .
November 02, 2011 by
Tiffany C. Wright
This is my favorite Napoleon Hill quote. I think it is so applicable to life today I decided to share it here.
“I bargained with Life for a penny
And Life would pay no more,
However I begged at evening
When I counted my scanty store.
For Life is a just employer,
He gives you what you ask,
But once you have set the wages,
Why, you must bear the task.
I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of Life,
Life would have willingly paid.”
What is your favorite Napoleon Hill (Think and Grow Rich author) quote?
October 17, 2011 by
Tiffany C. Wright
How do experienced business owners respond to
FINANCIAL B%T CAMP?
Highly recommend this 2-day course. Charles has a wealth of insight on finance to break down complex concepts into understandable chunks…and reassemble the pieces so it still works.
— Joel Quinn, serial enterpreneur
Are you ready to go the next level for your business?
2-Day Workshop $295 (incl. lunch)
October 21 & 22
9:00 – 3:00
Workshop will be presented by
Charles H. Green at
1375 Spring Street, Atlanta GA 30309.
Limited to 15 Participants
April 15, 2010 by
Tiffany C. Wright
I’m a big believer in credit unions. I know that times have been rough on many small business owners over the last two years due to the double whammy of a sharp reduction in spending by customers or a loss of those same customers and the restriction in credit. Credit unions picked up a little of the slack.
I’ve often wondered why credit unions didn’t pursue more small businesses as customers. For many, it’s an untapped source of new customers and deposits. True, credit unions have not encountered the issues large national and small community banks did in the past 2-3 years (and, for the latter, still are). Nor were they scathed by the savings and loan crisis back in the 90’s. Credit unions are decidedly more conservative and highly systematic in their approaches which is why they’ve avoided trouble.
That said, I didn’t realize that Congress set a cap in 1998 on how much credit unions can lend to small businesses. That cap is currently set at 12.25% of assets! With this low ratio, credit unions could not pick up the slack /address the needs of small business owners and management. However, even with that cap and their inherent conservative stance, credit unions still managed to increase the their business lending by 10%.
So if you are still looking for financing and having difficulties with your bank, check out the credit union that you privately bank with. If you don’t have a relationship with one, identify those that you are eligible to join and determine if they have a robust small business lending program.
October 14, 2009 by
Tiffany C. Wright
Here are some musings on small business financing and financial issues.
1) Myriad sources of financing exists for businesses of all types. Much of it is dependent on the amount of capital needed, the type of company it is, the stage the company is in, and the revenue and profitability history of the company. One often overlooked source is a strategic partner who could provide you with the money or with the actual resources you need – marketing, salespeople, IT support, etc.
2) The biggest problem I see among small businesses is a focus on the income statement and not on cash flow. Consequently, many companies encounter liquidity issues because they have allowed the days outstanding on their receivables to grow excessively, inventory to ramp up, or they bid for and win projects which make no money or result in losses. In addition to identifying and hiring virtual or part-time bookkeepers, I help business owners craft an easy-to-understand cash flow template to analyze the impact on cash flow of all current and prospective bids and contracts.
3) Small business owners often try to save money by doing much of the work themselves or hiring personnel who do not cost much. This strangles the growth of the business because an owner can only handle a few jobs and often must go behind mediocre personnel and police or correct their actions. There are many creative ways to tap into strong management talent or a skilled workforce at a lower initial cost, i.e., offer of an equity stake, a share of profits, and/or work flexibility.
September 09, 2009 by
Tiffany C. Wright
I get many small business owners who lament how hard it is to find and keep good workers. So I thought I’d write a post about the subject. In another post I’ll talk about proper operational support for workers but for now, I’ll assume a different stance.
Why do good workers quit and how do you stop it?
1) Sit down with valuable employees and ask them are they happy with their jobs and what could be done to increase their job satisfaction. Different people are motivated by different things. Rarely is it just money. By asking people their opinions then using that information to increase their satisfaction levels, you demonstrate that you value them.
2) Use the information garnered from the interviews to develop employee recognition and morale programs. Make it a point to highlight those who have done well to their immediate boss and to their peers. Solicit employee suggestions and recognize those who put forth excellent suggestions that the company implements.
3) One reason people leave in times of tight budgets is due to uncertainty, overwork (layoffs, cutbacks) and a perceived underpayment. By honestly communicating with employees about the financial issues the company is facing, the impact on budgets, and showing that EVERYONE is feeling the impact, companies build good will by helping employees feel like they are an integral, respected part of the company. This also lessons the fear that the employee’s wage could be cut, the employee could be laid off, or the employee is being taken advantage of. In an uncertain environment, people turn inward. By providing regular communication to employees and soliciting their assistance in cost savings, the company behaves in an outward manner, which strongly encouraging employees to do the same.
If you have some additional suggestions, I’d love to hear them.
September 02, 2009 by
Tiffany C. Wright
What inspired you to start or buy your first business? The reason differs for all of us but there are some similarities. It may be the need for freedom, noticing boredom at work, need for a greater challenge, desire for a higher net worth, etc.
Part of what precipitated my returning to school to get my MBA was the desire to buy my own business. After I graduated with an MBA in Finance and Entrepreneurial Management, I had a vision of working for several years to acquire experience in the various roles played as a business buyer and owner and amassing a sizable cushion to pay my living costs, search expenses, and equity infusion. However, when my high-flying stock options went to $0, the “cushion” portion of the vision evaporated.
I started a real estate investment business but realized consumer real-estate (what I call houses and small apartment buildings) held no deep interest for me. So I went to work for a firm as a business advisor to help me better understand the needs of small businesses since most of my work experience had been in large corporations. After a year, I was bored, antsy, and feeling underutilized so I knew I had learned what I came to learn and I was ready to leave but I was too fearful.
I searched for companies to join where the company would put up the funding and I would find the companies but none of the opportunities were legitimate. Finally, I started reading books and listening to tapes to re-shore up my confidence. I later sat down and wrote out a many optioned plan, then began searching for companies. I wrote out a letter of resignation with a future date and kept it on my desk. I had a decent sized brokerage account and some contacts for short-term consulting engagements. I turned in my resignation letter on the designated date. I closed on the purchase of my first company six months after I left steady employment.
Whatever your inspiration, go for it! If the first business doesn’t work, go for the next.
April 13, 2009 by
Tiffany C. Wright
Most small businesses have fewer than 5 employees. So what does a small business owner do when your small company with relatively few employees has a key employee who wants to take vacation? You cannot deny their vacation or they may not be around for much longer! But when your top performers are out for a week or longer, how do you keep things running smoothly? Or, even worse (in the business person’s mind), what do you do when a key employee wants to take maternity or family leave?
Yes, as a small-business owner you can still maintain a well-functioning business when employees go on a two-week vacation or take a multi-week maternity leave. (By the way, the laws around family leave apply to businesses with more than 50 employees. So it is not mandatory if you have fewer employees to provide those full benefits. However, providing a portion of such benefits by incorporating some of the options below will help you retain excellent employees and build loyalty.) Below are some tips and explanations on how to keep your business running smoothly when certain employees go on leave or vacation. These tips follow:
1. Have the employee who will be on vacation write a list of items that need to be taken care of while he or she is gone and briefly explain how to take care of those items. For example, a top salesperson needs to make a number of calls, is expecting a number of return calls or anticipates a couple of requests for a meeting. Have the salesperson write up separate short scripts for outgoing and incoming calls and face-to-face sales meeting and provide his tracking mechanism – i.e., Excel spreadsheet, notebook, or something similar.
2. Have the employee create a mini process manual in advance. That way another employee can cover the basics of the job while the primary person is out of the office.
3. Identify a temp who has significant experience in your business – a retiree, someone seeking extra work – through customers or association membership. Construction is a notoriously up and down business so, at any given time, there are generally a small number of qualified individuals familiar with a trade who can step in temporarily to assist. In the current climate, the same applies to banking, consulting, and a number of other industries.
Check back on Wednesday for the 3 steps to take to handle family and other leave.
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