SCORE counselor Bala Subramanian reminds us that based on current events businesses large and small should have a Disaster Recovery plan in place.
“Small business owners need to plan for many contingencies including unexpected disasters. The gulf oil spill illustrates this fact vividly. While the media and society considers this as BP’s (a large business by any measure) failure and accuses their unpreparedness for that eventuality, all small businesses such as: fisherman, oysterman, tourist industry dependents, i.e., restaurants, hotels, etc., affected by that event are equally unprepared. If those small businesses had considered the impact of such unexpected catastrophic events, they could have been better prepared to state their claims and not only seek compensation but also have alternate solutions for their survival, insuring their continued existence.
Business plans rarely include disaster recovery. Disaster recovery caused by an internal or an external failure is essential for large as well as small businesses.
In the case of a small business, owners should plan for such eventuality and have a contingency action plan that would enable them to relocate re-source-suppliers and continue their services to their customers. Even in cases when there are only walk-ins and the customers are transients, a disaster recovery plan can provide valuable information to those end-users, clients and the dependants of those businesses services; an alternative way to have those services available to them in an uninterrupted manner.
The DR (disaster recovery) or BC (business continuity) plan begins with risk analysis and ends with a plan that needs constant updating. There are several steps in between which answers questions such as: What are the threats? What are the probabilities associated with each of those threats occurring? Prioritizing and ranking the threats using an estimate, perhaps based on the cost associated with the loss of value to your business if that threat occurred.
Each business is unique in its needs and with thoughtful consideration you can create a Disaster Recovery Tool Kit for your business that may include:
A contingency check list or a questionnaire.
An audit questionnaire.
A dependency analysis document (with questions, guidelines and a time frame).
A business impact analysis.
Based on these findings each small business needs to have an action list to recover from any disaster contingency.
Here is a link to more resources: http://www.businesscontinuityworld.com/tool.htm, an organization that specializes in providing technical services.
If you as a small business owner feel this to be of importance and want to learn more, contact SCORE at the number below to arrange a free counseling session.”
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
Wednesday, July 28, 2010
Tuesday, July 20, 2010
Am I ready to be my own boss?
SCORE® counselor and noted advertising executive, Alan Yarnoff asks the question, “Do you want to be your own boss?”
How many times have you gotten up in the morning and headed to work wondering if I would be better off being my own boss and answer to no one but myself? Being your own boss is not an easy task, as evidenced by the fact that 85% of all small business fail after five years. Even so, being the boss can be appealing and many have had great success. Before you give up a steady job here are some points you need to consider:
- Are you a good decision maker who can make decisions quickly under pressure and in an independent manor?
- Do you have the stamina to put in seventy to eighty hour work weeks over a long and protracted period?
- Do you have good business skills from marketing to accounting and beyond? Remember small business is just that and you need to be prepared to do it all.
- Are you a self starter? It will be up to you to take the lead to develop the business, manage the process, and follow through on all the projects.
- Do you work well independently, since once you are on your own you really are alone? No accounting department to call on for forecasts, no marketing group to turn to for sales and promotion ideas, and no dedicated sales organization to bring in the business.
- Are you ready to handle the uncertain financial risks? Remember you won’t be getting a pay check weekly, and there will be times when your cash flow dips well below your operational costs leaving you short of covering your fixed personal expenses.
Lastly, remember this new venture will completely change your life. You will need to balance family demands with your new responsibilities. You may have financial difficulties before the company becomes profitable creating a need to reduce your living standards and forego family activities that had been common place prior to your new business adventure.
Well, if you answered the above with a definite "yes", you may be a candidate to be the boss. Remember, before you leap into the market place do your homework and make sure you get it right.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
How many times have you gotten up in the morning and headed to work wondering if I would be better off being my own boss and answer to no one but myself? Being your own boss is not an easy task, as evidenced by the fact that 85% of all small business fail after five years. Even so, being the boss can be appealing and many have had great success. Before you give up a steady job here are some points you need to consider:
- Are you a good decision maker who can make decisions quickly under pressure and in an independent manor?
- Do you have the stamina to put in seventy to eighty hour work weeks over a long and protracted period?
- Do you have good business skills from marketing to accounting and beyond? Remember small business is just that and you need to be prepared to do it all.
- Are you a self starter? It will be up to you to take the lead to develop the business, manage the process, and follow through on all the projects.
- Do you work well independently, since once you are on your own you really are alone? No accounting department to call on for forecasts, no marketing group to turn to for sales and promotion ideas, and no dedicated sales organization to bring in the business.
- Are you ready to handle the uncertain financial risks? Remember you won’t be getting a pay check weekly, and there will be times when your cash flow dips well below your operational costs leaving you short of covering your fixed personal expenses.
Lastly, remember this new venture will completely change your life. You will need to balance family demands with your new responsibilities. You may have financial difficulties before the company becomes profitable creating a need to reduce your living standards and forego family activities that had been common place prior to your new business adventure.
Well, if you answered the above with a definite "yes", you may be a candidate to be the boss. Remember, before you leap into the market place do your homework and make sure you get it right.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
Tuesday, July 13, 2010
What should I consider in outsourcing functions of my business?
Outsourcing is a common practice in today’s business world, but it’s not the domain of large companies. Small business owners use outsourcing for a variety of reasons—to handle work overflows, receive specific expertise in a new or unfamiliar area such as marketing or IT, or take on more routine administrative tasks that are taking up too much of their time and attention.
The decision to outsource certain functions requires a professional approach, particularly since the small business owner may be understandably leery about relinquishing control over a task that he or she has handled from the outset. Developing a successful long-term relationship with an outsourcing partner requires effort on both sides. It’s important to treat it like a partnership, because that’s what it really is. A vendor who supplies a vital service for your business is like part of your staff, so you should go through a similar interviewing and reference checking process before you “hire” them.
Using outside service providers who have experience working with your particular type of business is important. You’ll also want someone with the technology and expertise to deliver cutting edge services.
Be sure to ask detailed questions about the service you will receive and your access to someone who can answer questions and solve problems as they arise. For most small business owners, this kind of accessibility and service are top priorities. If the firm you are considering won’t be available when something goes wrong, look elsewhere.
Also ask your candidate firms for current and past clients who received services of a scope similar to what you’re looking for. If possible, ask for clients similar to yours to properly gauge how well the company understands your needs. And, always meet with the service provider’s leadership as well as the people who will be working directly with you. You don’t want to have any doubts about their ability to handle what may be critical tasks for your business.
The “go-to” resource for help is the Outsourcing Institute, the world's largest professional community dedicated solely to outsourcing. The Institute’s Web site (www.outsourcing.com), provides a wealth of information about outsourcing trends, articles on securing IT and business processing services, and tips for ensuring your outsourcing partner delivers the level of performance you want.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
The decision to outsource certain functions requires a professional approach, particularly since the small business owner may be understandably leery about relinquishing control over a task that he or she has handled from the outset. Developing a successful long-term relationship with an outsourcing partner requires effort on both sides. It’s important to treat it like a partnership, because that’s what it really is. A vendor who supplies a vital service for your business is like part of your staff, so you should go through a similar interviewing and reference checking process before you “hire” them.
Using outside service providers who have experience working with your particular type of business is important. You’ll also want someone with the technology and expertise to deliver cutting edge services.
Be sure to ask detailed questions about the service you will receive and your access to someone who can answer questions and solve problems as they arise. For most small business owners, this kind of accessibility and service are top priorities. If the firm you are considering won’t be available when something goes wrong, look elsewhere.
Also ask your candidate firms for current and past clients who received services of a scope similar to what you’re looking for. If possible, ask for clients similar to yours to properly gauge how well the company understands your needs. And, always meet with the service provider’s leadership as well as the people who will be working directly with you. You don’t want to have any doubts about their ability to handle what may be critical tasks for your business.
The “go-to” resource for help is the Outsourcing Institute, the world's largest professional community dedicated solely to outsourcing. The Institute’s Web site (www.outsourcing.com), provides a wealth of information about outsourcing trends, articles on securing IT and business processing services, and tips for ensuring your outsourcing partner delivers the level of performance you want.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
Tuesday, June 22, 2010
How do I retain my best employees?
Make Employee Retention a Top Priority
The expression, “good help is hard to find,” has never been more accurate. Competition for talented workers is intense in most locations and specialties, and the “best of the best” know it. If they’re unsatisfied with their current job, they have no qualms about looking for something else.
Retailing motivated, productive employees is a critical concern for small business owners, as they often play a key role in the growth and success of the enterprise. A survey by Robert Half International, conducted by an independent research firm, examined the reasons that “top” employees, those considered good performers by their bosses, left the business. Here’s what they found:
• Limited advancement opportunity: 39 percent
• Unhappy with management: 23 percent
• Lack of recognition: 17 percent
• Inadequate salary/benefits: 11 percent
• Bored: 6 percent
• Lifestyle change, such as moving: 2 percent
• Other/don’t know: 2 percent
The message for business owners is clear, says Max Messmer, CEO of Robert Half. “Helping top performers reach their goals is essential to keeping them. The best employees are ambitious and may not stay in a job long if it lacks growth potential.”
Retaining good employees can be a challenge to small business, particularly when compensation or advancement is involved, but it’s not an insurmountable one. If promotions aren’t an option at your business, you can still find ways to reward extra effort. It doesn’t have to be money. If budgets are tight, consider a more flexible schedule or larger workspace. Praise should be frequent and personalized, but it does not have to be costly or time consuming. A simple thank you note can be an effective motivator.
Take the pulse of employee perceptions in your business. Are they happy doing what they do? Ask their opinions on the work environment and changes that might enhance their loyalty.
Also remember that like any other important business asset, employees require their own form of care and maintenance. Bringing in temporary help during crunch times is one way to ease the workload and prevent burnout. Engage your employees in finding ways to add some fun to the workplace, especially for jobs that involve a lot of repetition. The resulting increase in morale and camaraderie will boost not only loyalty to your company, but also its productivity.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
The expression, “good help is hard to find,” has never been more accurate. Competition for talented workers is intense in most locations and specialties, and the “best of the best” know it. If they’re unsatisfied with their current job, they have no qualms about looking for something else.
Retailing motivated, productive employees is a critical concern for small business owners, as they often play a key role in the growth and success of the enterprise. A survey by Robert Half International, conducted by an independent research firm, examined the reasons that “top” employees, those considered good performers by their bosses, left the business. Here’s what they found:
• Limited advancement opportunity: 39 percent
• Unhappy with management: 23 percent
• Lack of recognition: 17 percent
• Inadequate salary/benefits: 11 percent
• Bored: 6 percent
• Lifestyle change, such as moving: 2 percent
• Other/don’t know: 2 percent
The message for business owners is clear, says Max Messmer, CEO of Robert Half. “Helping top performers reach their goals is essential to keeping them. The best employees are ambitious and may not stay in a job long if it lacks growth potential.”
Retaining good employees can be a challenge to small business, particularly when compensation or advancement is involved, but it’s not an insurmountable one. If promotions aren’t an option at your business, you can still find ways to reward extra effort. It doesn’t have to be money. If budgets are tight, consider a more flexible schedule or larger workspace. Praise should be frequent and personalized, but it does not have to be costly or time consuming. A simple thank you note can be an effective motivator.
Take the pulse of employee perceptions in your business. Are they happy doing what they do? Ask their opinions on the work environment and changes that might enhance their loyalty.
Also remember that like any other important business asset, employees require their own form of care and maintenance. Bringing in temporary help during crunch times is one way to ease the workload and prevent burnout. Engage your employees in finding ways to add some fun to the workplace, especially for jobs that involve a lot of repetition. The resulting increase in morale and camaraderie will boost not only loyalty to your company, but also its productivity.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
Tuesday, June 15, 2010
What funding sources are available for small businesses?
Financial expert and SCORE counselor David Plucinsky shares his expertise in this first of a series of articles on how to fund your business.
“One of the most frequent questions asked of SCORE counselors concerns ways to fund a business. The topic is very broad; today’s article addresses general concepts.
Money: You want it, someone has it and you are looking, oftentimes to a stranger to part with it; invest in your idea, lend to your business or provide a grant. No one gives money away, no matter how good your idea or your current business is, unless there is “demonstrable evidence” to support funding. Funding sources want to know that they are not throwing money into a “Black Hole”. Demonstrable evidence is your high quality business plan which addresses:
---- For equity investors (e.g. Angels or venture capital firms), a return on investment
---- For debt lenders, proof there is sufficient collateral and cash flow
---- For grantors, proof the concept is viable plus documenting that a social good will occur
Where to look for funding depends on who you are. Are you an entrepreneur with a great idea? Perhaps an entrepreneur with a proven idea; you have a proto-type or beta site to back it up? You may already be in business and struggling, possibly in business and succeeding, looking to expand.
While there are no hard and fast rules as to where to source funding, certain realities do apply. Banks will not fund a start-up. Organizations like the Small Business Administration (SBA) or the NJ Economic Development Authority do not fund businesses; they provide guarantees to banks once the bank determines that the borrower is credit worthy. Banks require collateral to support the amount of money needed, be it assets in the business (heavy duty machinery, receivables from customers or property), equity in your home or other assets that can reasonably be converted to cash.
Professional investors such as venture capital firms do not fund start-up businesses. Occasionally what is known as “Angel” investors may, however recent statistics prove this to be less likely. Looking for money from those close to you and indeed, yourself, generally known as “friends and family” is your best option if you are starting a new business. Grants are available; these however generally apply to” special circumstances”, the disadvantaged, minorities and those providing a social good, such as creating new jobs. Many SCORE clients believe grant money is “easy” money, this is most certainly not the case, obtaining a grant is very hard work.
As noted at the outset, funding is a very broad topic. Future articles will look in depth at the various forms of funding.”
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
“One of the most frequent questions asked of SCORE counselors concerns ways to fund a business. The topic is very broad; today’s article addresses general concepts.
Money: You want it, someone has it and you are looking, oftentimes to a stranger to part with it; invest in your idea, lend to your business or provide a grant. No one gives money away, no matter how good your idea or your current business is, unless there is “demonstrable evidence” to support funding. Funding sources want to know that they are not throwing money into a “Black Hole”. Demonstrable evidence is your high quality business plan which addresses:
---- For equity investors (e.g. Angels or venture capital firms), a return on investment
---- For debt lenders, proof there is sufficient collateral and cash flow
---- For grantors, proof the concept is viable plus documenting that a social good will occur
Where to look for funding depends on who you are. Are you an entrepreneur with a great idea? Perhaps an entrepreneur with a proven idea; you have a proto-type or beta site to back it up? You may already be in business and struggling, possibly in business and succeeding, looking to expand.
While there are no hard and fast rules as to where to source funding, certain realities do apply. Banks will not fund a start-up. Organizations like the Small Business Administration (SBA) or the NJ Economic Development Authority do not fund businesses; they provide guarantees to banks once the bank determines that the borrower is credit worthy. Banks require collateral to support the amount of money needed, be it assets in the business (heavy duty machinery, receivables from customers or property), equity in your home or other assets that can reasonably be converted to cash.
Professional investors such as venture capital firms do not fund start-up businesses. Occasionally what is known as “Angel” investors may, however recent statistics prove this to be less likely. Looking for money from those close to you and indeed, yourself, generally known as “friends and family” is your best option if you are starting a new business. Grants are available; these however generally apply to” special circumstances”, the disadvantaged, minorities and those providing a social good, such as creating new jobs. Many SCORE clients believe grant money is “easy” money, this is most certainly not the case, obtaining a grant is very hard work.
As noted at the outset, funding is a very broad topic. Future articles will look in depth at the various forms of funding.”
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
Thursday, June 10, 2010
Does it make sense to plow profits back into my business?
As your business matures, the time will come when you will see excess cash and steady profits. Then the question arises of how to further increase the profits of your company. The stock market in recent years has been particularly unkind to the large companies that invested heavily in it. So plowing your profits back into your company may be the shrewdest move you can make in good times.
Lowering your overhead is a logical place to start, particularly if your rental payments keep going up. That may suggest to you that it’s time to buy your current building or look for one to purchase, so that you acquire a manageable mortgage that costs you less per month than renting. And once the space is yours, you can design the layout that will best maximize productivity. Longer term, you benefit from having the value of the building on your balance sheet and may be able to protect some of your profits from taxes due to the depreciation allowance.
Another approach to building value for your company is taking advantage of down markets to buy additional inventory—taking advantage of volume discounts and discounts at the end of a supplier’s selling season—or acquire better equipment. The latter approach might include computerized and electronic systems that can improve internal processes—again enhancing productivity.
However, another use for excess cash is to invest in financial instruments. You may decide, for example, that excess funds are best kept in treasury bills or certificates of deposit (if you can keep them there at least 90 days). Most likely, with available funds in excess of $100,000, you can make transfers between your checking account and your interest bearing investment account, despite the limit on the number of checks you can draw on the interest bearing account.
Lastly, you may want to consider acquiring a smaller company as a way of growing your business and expanding market share. If you go this route, prepare to learn more about business valuation at the same time you’re scrutinizing such assets as property, equipment and inventory, to be sure you really need them.
Richard Strug
Greater Princeton Area SCORE
Serving Mercer and Middlesex Counties
Lowering your overhead is a logical place to start, particularly if your rental payments keep going up. That may suggest to you that it’s time to buy your current building or look for one to purchase, so that you acquire a manageable mortgage that costs you less per month than renting. And once the space is yours, you can design the layout that will best maximize productivity. Longer term, you benefit from having the value of the building on your balance sheet and may be able to protect some of your profits from taxes due to the depreciation allowance.
Another approach to building value for your company is taking advantage of down markets to buy additional inventory—taking advantage of volume discounts and discounts at the end of a supplier’s selling season—or acquire better equipment. The latter approach might include computerized and electronic systems that can improve internal processes—again enhancing productivity.
However, another use for excess cash is to invest in financial instruments. You may decide, for example, that excess funds are best kept in treasury bills or certificates of deposit (if you can keep them there at least 90 days). Most likely, with available funds in excess of $100,000, you can make transfers between your checking account and your interest bearing investment account, despite the limit on the number of checks you can draw on the interest bearing account.
Lastly, you may want to consider acquiring a smaller company as a way of growing your business and expanding market share. If you go this route, prepare to learn more about business valuation at the same time you’re scrutinizing such assets as property, equipment and inventory, to be sure you really need them.
Richard Strug
Greater Princeton Area SCORE
Serving Mercer and Middlesex Counties
Tuesday, May 25, 2010
Is Newspaper Advertising Still Relevant for My Business?
As a small business owner, you must give great consideration to the best ways to promote your business and newspaper advertising needs to be a key element in your media mix.
Newspapers are one of the oldest forms of mass media and they continue to be one of the largest sources of communication between the advertiser and the consumer. Over 50% of adults read a daily paper with readership in the Sunday paper nearly 65%. Importantly, they spend valuable time reading and processing the content, illustrating the importance the reader gives to the material.
Yes, newspapers play an important role in our daily lives but how does this translate to building your business and making your advertising budget work harder?
Newspapers allow you to easily reach a large number of your target audience within a specified geographic area thereby reducing media waste and increasing your advertising plans efficiency.
Newspapers offer immediacy. You can judge results quickly, and since you are working with short deadlines, you can adjust the advertising quickly depending on market conditions.
Consumers can take their time examining your advertising unlike other media where they are limited by the length of the commercial.
Newspaper advertising is relatively inexpensive to produce compared to other media. They are also easy to switch if you need to promote a new service, special offer, or a seasonal event.
Newspapers give you the opportunity to better pinpoint your ad depending on your target audience or business profile. If you’re promoting an accounting firm, you would use the business section or, if your target is only men, you might place your ad in the sports section.
The bottom line is that you have many advertising options to choose from and limited funds to work with. To reach and persuade your target market, newspaper advertising remains one of oldest, affordable, and reliable ways to advertise your product.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
Newspapers are one of the oldest forms of mass media and they continue to be one of the largest sources of communication between the advertiser and the consumer. Over 50% of adults read a daily paper with readership in the Sunday paper nearly 65%. Importantly, they spend valuable time reading and processing the content, illustrating the importance the reader gives to the material.
Yes, newspapers play an important role in our daily lives but how does this translate to building your business and making your advertising budget work harder?
Newspapers allow you to easily reach a large number of your target audience within a specified geographic area thereby reducing media waste and increasing your advertising plans efficiency.
Newspapers offer immediacy. You can judge results quickly, and since you are working with short deadlines, you can adjust the advertising quickly depending on market conditions.
Consumers can take their time examining your advertising unlike other media where they are limited by the length of the commercial.
Newspaper advertising is relatively inexpensive to produce compared to other media. They are also easy to switch if you need to promote a new service, special offer, or a seasonal event.
Newspapers give you the opportunity to better pinpoint your ad depending on your target audience or business profile. If you’re promoting an accounting firm, you would use the business section or, if your target is only men, you might place your ad in the sports section.
The bottom line is that you have many advertising options to choose from and limited funds to work with. To reach and persuade your target market, newspaper advertising remains one of oldest, affordable, and reliable ways to advertise your product.
Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties
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