Monthly Archives: June 2016

Some Things Must Consider Before Take Business Loan

Is this your first time venturing into the small business loan frontier? Obtaining a small business loan is just one of the first steps to launching your business. Proper financial planning, however, is critical to your success.

There are two key things to keep in mind as a small business loan first-timer. If you’re seeking a small business loan, the way you present your business idea, business plan and financial forecasts can be the difference between gaining or not gaining investors’ or a bank’s approval. But once you do get a business loan, how you manage your operations and where those funds go can make or break your entire business.

From creating a budget to managing costs, there are several steps you can take to make the most out of obtaining and managing small business loans. Holly Nicholas Signorelli, a certified financial planner and CPA, advises aspiring entrepreneurs and small business owners to maintain realistic expectations. Based on more than 20 years’ experience, Signorelli shared the following do’s and don’ts of first-time small business loans.

Editor’s Note: Looking for a small business loan for your business? If you’re looking for information to help you choose the one that’s right for you, use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

1. Do create a real budget.

About 90 percent of the time, clients come in with a huge budget made up of millions of dollars in profits, Signorelli said. But when you start to go through the line items, there isn’t any real backup to substantiate the numbers. Instead, there is always some hype about the product, the market in general and, most of all, “the potential.” Banks and investors don’t want to buy your idea; they want to make a profit, Signorelli stressed. For them to believe in your idea, they have to believe there is a profit. With very few exceptions, they are not going to invest in your idea if it doesn’t make sense, or if it feels too good to be true, Signorelli said.

2. Do have budget references.

Make sure that every single line item has a reference behind it, Signorelli said. “Real figures, real research — get down and dirty on it,” she said. “For example, if you are providing a service and your budget states that you can sustain XX amount of customers per month at XX amount of dollars, then the price of the service will be easy to show, given the average price of that service in your geographic area,” Signorelli said. However, you need to back up why the customers would come to you versus the competition. “That’s ‘down and dirty,’ and you can’t get too detailed; keep it short and to the point with backup,” Signorelli said. “Think about it: When you are reading a budget, you don’t want someone rambling about their pipe dream. You want to know that the person understands what it’s going to take to make a profit and has a clear plan to bring in business.” In other words, you want details, but you want them to be short and concise.

3. Don’t overestimate your income.

“In 20 years, I have never seen a budget where the income was as high as predicted in the first year,” Signorelli said. This is critical, because the lack of income in the first year is what causes 80 percent of small businesses to go out of business, she said. “Once your budget is done, go back to it and reduce your income 25 to 50 percent less than what your due diligence led you to put on the report,” Signorelli advised.

4. Don’t underestimate your expenses.

“There are things that you underestimated, no matter how meticulous you were, and there are things that you forgot altogether,” Signorelli said. “Just like income, you need to go back to your budget and take your expenses and increase them by 25 to 50 percent.”

5. Do have extra funds.

As a small business owner, it’s critical that you have enough savings, to make sure you can pay your bills during the first year, Signorelli said. “It was hard enough to get your loan, but I promise you that six months into when you are not profitable, no one will want to loan you more money to get you though the next six months,” she said.

6. Don’t stress about finances.

To make it through the first year and build a profit, you want to focus on marketing and bringing business in, so you don’t need to stress about finances, Signorelli said. Manifesting and building a business requires you, the owner, to believe in yourself and your new small business. With the right budget, you will get the right amount of money from the right investor, giving you the freedom and confidence to focus on your dream and make it happen, Signorelli said.

7. Do learn from your mistakes.

Yes, it’s OK that you made mistakes, as long as you learned lessons from them.

“I worked for a great CPA right out of college for five years to learn all I needed to know to run a business,” Signorelli said. “I still made mistakes in the first few years, but the foundation had been set and above all else, it was not an option for it not to succeed. It was my life, and whatever you are taking on must be your dream that you will move heaven and earth to make happen.”

Let’s Learn About SWOT Analysis Tools for Small Businesses

Conducting a SWOT analysis means listing your company’s strengths, weaknesses, opportunities and threats. It is used to evaluate your current market environment and how it may change for better or worse, and then develop a response strategy.

Strengths and weaknesses are for internal factors such as location, patents held and reputation. Opportunities and threats look outside the company for things like competitors, market changes and supplier impacts. When you evaluate those four things against one another, you can see where potential problems lie as well as market gaps that you can position your company to fill.

If you have never done a SWOT analysis, you might not know where to begin. Here are eight tools, software and apps to help you get started.

MindTools
Looking for a free SWOT analysis? MindTools offers a free SWOT analysis PDF worksheet that you can download, fill out and save on your computer. Each section contains sample questions to help you with the process, such as “What do you do well?” for strengths, “What could you improve?” for weaknesses, “What trends could you take advantage of?” for opportunities and “What is your competition doing?” for threats. MindTools also offers a complete how-to guide that covers what a SWOT analysis is all about and how to create the best one for your business. Similar resources include the TOWS Matrix — an alternative to a SWOT analysis — and tools that help with strategizing, problem solving and decision making.

Creately
The term “SWOT analysis” may sound boring, but yours doesn’t have to be. Creately, a Web-based SWOT analysis software, lets you create colorful SWOT analysis diagrams that you can fill with content, logos and other personalized elements. The software is also jam-packed with features like premade, professional SWOT analysis templates; Google Images integration; the ability to import your own images; and collaboration capabilities for feedback and contributions from members of your team. Creately also provides sample SWOT analyses from other companies, along with a database of tutorials and diagrams, to give you an idea of how to begin. To start using Creately, just click on the Start Drawing Now button to launch the no-install software right on your browser.

Gliffy
Gliffy operates on an HTML 5 editor that is more than two times faster than Flash, making large diagrams quick and easy to create. You can set themes and colors, protect and track changes, and share or publish easily with a read-only URL that you can embed in social media. Gliffy also offers Google Drive Integration so that you can access them on any device, making collaboration and review processes a snap. It also allow Visio imports, allowing you to upgrade your sharing methods while retaining and repurposing all of your old diagrams.

Cost: Starts at $5 per month per user for basic functionality. Access to full features starts at $10 a month per user with Gliffy’s Business pricing plan.

Grapholite
Don’t have an iOS device? Check out Grapholite, which lets you create, edit and save SWOT analysis diagrams on an Android or Windows 10 device (Windows 8 users need to contact the company directly for a link). Although Grapholite is essentially a flow-charting tool — you can create everything from Venn diagrams to organization charts and mind maps — its SWOT capabilities are more than enough for any small business. This full-featured app offers drawing tools, drag-and-drop shapes and elements, online and offline modes, and the ability to export SWOT diagrams into common image and document formats.

SmartDraw
SmartDraw is all about speed. This software claims to let you create a SWOT analysis in minutes. First, choose a template. Then, add action buttons, shapes and other content, all within the Microsoft Office suite. The software will automatically align elements, providing a foolproof way to create professional-looking SWOT analyses. Although SmartDraw aims to help you create a SWOT analysis as quickly as possible, it also offers all types of SWOT examples to review before you get started and use as guidance for your business. In addition to basic SWOT diagrams, other examples include different types of SWOT diagrams, such as angled, pie chart and tabbed; different kinds of SWOT analysis, like Key SWOT Questions, Market Analysis SWOT and Product Marketing SWOT; and SWOT for different types of businesses, ranging from coffee shops to car manufacturers and everything in between.

SWOT Analysis Generator
Don’t know where to start? Creating a SWOT analysis doesn’t get any easier than WikiWealth’s free SWOT Analysis Generator. Each section in the generator is prefilled with a list of possible strengths, weaknesses, opportunities and threats to help you get started, and you can also enter your own ideas that aren’t on the list. Just enter your product or company name, and start checking off statements that apply to your business. When you’re finished, simply click on the Create SWOT Analysis button, and the generator will automatically build your SWOT framework and take you to your SWOT analysis. Besides helping you build a SWOT analysis, what makes WikiWealth’s Free SWOT Analysis Generator especially valuable is that it helps you gain a deeper understanding of each section and your business. Once your SWOT analysis is created, you can view explanations and definitions of each SWOT statement, as well as add comments to better evaluate each section. You and members of your team can also up-vote or down-vote items to better prioritize them and make wiser business decisions.

SWOT Map
Create a SWOT analysis right on your iPhone or iPad. SWOT Map is an iOS SWOT analysis app that can help you tell a story, inspire and send a message with your SWOT analysis. First, the app offers more than 100 customizable SWOT analysis templates to help you find the perfect fit for your business or product. It also features a robust SWOT Editor to help you create and modify SWOT ideas, content and templates. And if you don’t feel like using the editor, SWOT Map lets you use your iPhone or iPad camera to take a snapshot of a handwritten SWOT analysis and then use the rest of the app’s functions. SWOT Map stands out because of its collaboration and social-sharing capabilities. You can not only email SWOT analysis diagrams to your team and colleagues but also post them on Facebook and Twitter, as well as save them as images to your Camera Roll.

How To Know If Your Business Has Been Worth

What’s Your Business Worth? How to Find Out
Credit: Melpomene/Shutterstock
For some small business owners, the long-term plan is to build their company up and sell it when the value is at its highest. But according to market research from IBIS World, only two percent of businesses in the U.S. value themselves annually. Banking on a final payday when you’re ready to sell is no safe strategy unless you know for sure what your company is worth.

“Nearly 40 percent of active businesses [in the U.S.] will sell in the next 10 years,” said Mike Carter, CEO of BizEquity. “The haunting statistic is that 78 percent of the business owners who sell think they’re going to fund 80 to 100 percent of their retirement needs from the sale of the business. But if only two percent really know what they’re worth that’s a huge problem, not just for the owners but also for the economy.”

The reason so many business owners don’t know their company’s worth is they don’t add their expenses back into the total value, Carter said. He recommended utilizing the “Seller’s Discretionary Earnings” methodology in order to obtain a truly accurate picture of a privately held company’s value.

Seller’s Discretionary Earnings (SDE) is a measure of a business’s net profits with certain expenses added back. These expenses are generally ones that benefit the business owner, such as the owner’s salary, insurance premiums, and larger one-time expenditures. Knowing your SDE and total revenue is crucial to gaining an accurate valuation of your company.

In addition to being aware of your SDE and revenue, Carter recommended following these steps to determine your business’s value:

Research your industry. Utilize free search tools to find the North American Industry Classification System (NAICS) and Standard Industrial Classification (SIC) codes for your specific business. This will help you compare your value to other businesses in your sector.

Think about your growth rate. Long-term growth rate can factor into your business’s value, and could account for why your company is actually worth more than what the market says.

Don’t only use the buyer’s valuation. When you’re ready to sell, a buyer may make an offer based on his or her valuation of your business. Before completing the sale, be sure to get another third-party value assessment to ensure you’re not underselling your company.
If you’re planning on funding your retirement with the sale of your business, it’s important to begin evaluating your company’s worth now. Putting it off until shortly before you’re ready to call it quits is a recipe for disaster, Carter said.

“If you wait until right before you retire [to value your business] it’s like planning for retirement the month before you actually retire,” Carter said. “You wouldn’t do that, I wouldn’t do that, and yet millions of business owners are doing that every day.”

The Benefits Of Open Communication For Female Leaders

unduhan-69For women who feel outnumbered by the men on their teams, transparent communication can help break down gendered perceptions and open the door to leadership opportunities within the group, finds new research.

A study recently published in The Leadership Quarterly journal discovered that in work groups that are composed primarily of men, women tend to take on more leadership roles as the group becomes more social.

For the study, researchers assigned nearly 1,000 participants of varying ages to small groups and had them rate which group members emerged as leaders after performing a series of tasks. They replicated the experiment with both short- and long-term groups to verify the results.

The study’s authors found that the more extroverted the teams were in terms of talking to each other and asking for help with their projects, the more likely it was for women to be seen as leaders.

The study’s authors believe the open collaboration allows group members to get to know each other better and see each other’s strengths and weaknesses. This in turn helps eliminate the preconceived gender stereotypes that are typically found in the workplace, said Jim Lemoine, the study’s lead author and an assistant professor at the University of Buffalo.

“When we first meet people, we tend to categorize them subconsciously based on snap judgments and observations,” Lemoine said in a statement. “But the more we get to know people, the less those preconceived ideas matter.”

Lemoine also noted that when work teams value communication and increase their interactions with one another, women may have a leadership advantage, since groups choose leaders based on who best exemplifies their shared values.

The study’s results have important implications for businesses looking to develop more women leaders. Lemoine said instead of having teams that are isolated and driven by goals, businesses wanting more women to take charge need to develop a culture where they are more opportunities for employees to get to know each other and collaborate on projects.

“When teams foster a culture of open communication and teamwork, it allows new leaders to step forward and diverse perspectives to be heard,” he said.

The study was co-authored by Ishani Aggarwal, assistant professor in the Brazilian School of Public and Business Administration in Rio de Janeiro, and Laurens Bujold Steed, a doctoral candidate at the Georgia Institute of Technology.