Small business budgets come in many formats, types and degrees of complexity. In most cases though they serve three purposes. The first purpose of a budget is to establish performance targets over a specified period of time. Usually a budget plans for revenues and expenditures on a monthly, quarterly, annual and multi-year basis. Company managers and employees can then devise action plans to achieve the targets provided by the budget. The second purpose of a budget is to measure … [Read more...]
How a 1031 exchange works
1031 exchanges offer business owners and real estate investors a solution to a “good” problem. When you buy an asset like a warehouse, office building, rental apartment or piece of land, it will likely increase in value over time. When you sell it for a profit, there is usually a hefty tax bill that must also be paid. Those taxes eat into the money you earned on the transaction which in turn leaves you with less cash available to reinvest in a new property. To solve this problem, Congress passed … [Read more...]
The most profitable way to sell online
Alibaba, the Chinese e-commerce giant expects to facilitate the sale of $420 billion worth of goods this year, up from $170 billion in 2012. The company founded by Jack Ma in his apartment 15 years ago has become the largest online seller on earth, dwarfing companies like Amazon and eBay. Their main business – the Alibaba marketplace – connects small and medium sized businesses with buyers inside and outside of China. While Alibaba’s success is unique, the form part of a largely trend – namely … [Read more...]
Where will the economy be this fall?
As the summer starts winding down, it’s a perfect time to evaluate the health of the economy. Chances are that your business will perform better if the economy improves. Knowing what will happen over the remainder of 2014 and 2015 will help you make better decisions related to pricing, sales, hiring and borrowing. You don’t need to be an economist or get bogged down in reams of data. Just focus on these 5 key signals: Interest rates Since the financial crisis of 2008 the Federal Reserve has … [Read more...]
How to make an extra $5,000 per month
Most consultants that I meet aren’t expecting to make $10 million per year offering their services. As professionals they want to make a healthy six-figure income. But the constraints on their time – both selling and executing their consulting – make it difficult to scale their businesses. They reach a sales-plateau with little hope of generating more revenues beyond that maximum level. This can lead to frustration and disenchantment; especially if that plateau isn’t enough to support the … [Read more...]
Should a small business barter?
Cash is king but what do you do if your business needs something desperately and can’t afford it? Take a cue from the past and barter your way to what you need. Bartering has existed since the beginning of history, where people exchange goods or services. It predates the existence of money and is still used extensively today with billions of dollars worth of time and products changing hands every week. Should a small business barter to pay for what it wants? Should a small business barter … [Read more...]
Use big data for small business to crack the pricing code
Pricing is the most difficult element of a company’s marketing mix to get right. Few small businesses take a scientific approach to pricing, instead relying on trial and error as well as the owner’s gut. Slugging around with unscientific pricing experiments can easily cost a company thousands of dollars a month in lost profits. Even worse it can lead to lost customers that otherwise would have stayed if the proper pricing were used. Up until recently, only very large companies could afford the … [Read more...]
Use price anchoring to boost sales
Nailing your pricing should be the focus of every small business owner. While big companies have entire departments dedicated to price optimization, we usually have to rely on our judgment and trial and error. Does this mean we are condemned to always price too high or too low? Absolutely not! There are many proven pricing strategies developed over decades of research that we can put to work immediately. Many are based on human psychology and have stood the test of time. One such strategy is … [Read more...]
Smooth out small business cash flow lumps
Only a perfect business receives cash from customers just in time to pay all of its bills. For most businesses, cash flow arrives in lumps with long dry spells in between. The weeks before one of these lumps can be very stressful as owners scramble to find desperately needed cash. While you may be willing to wait to get paid, many suppliers and employees won’t be so flexible. To avoid this stress, you need to use different tools and techniques to smooth out your cash lumps to be able to pay … [Read more...]
Are you cooking the books without knowing it?
Sometimes your business just doesn’t perform as well as you need it to. Spending 15-hour days at trade shows, pulling all-nighters to revamp your market strategy and tweaking your website all weekend don’t always guarantee a profit or cash flow boost. If you happen to be applying for a loan or line of credit or are in the process of selling your business, a few bad months could mean the difference between loan approval and rejection. When faced with this kind of pressure, some small-business … [Read more...]
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