Support and Mentoring for Small-business Success: A Missouri Example

Success sogm

Photo (CC) Bruce Berrien, on Flickr

There is one truth about the small business segment. They rarely have all of the resources they need.

For them the practice of bootstrapping is an every day occurrence. And one way that many small-business owners use is finding mentors and technical assistance through networking.

In Missouri, one such resource is the University of Missouri Extension and their business development program. In addition to one-on-one assistance they have a monthly newsletter filled with news and alerts for the businesses they support. It also provides a calendar of upcoming events and funding opportunities.

Learning from other business owners is part of their effort as well. They support this by having two success stories in each addition. As you look through the stories, you will come away with tips and ideas used by other business owners; information that you might find helpful in your own business.

These same stories have a dual purpose in that they form a regular posting on the success of their work.

Keeping up with people who have come through their system takes time but the stories help other business owners as well as provide a story for the University of Missouri Extension.

So business owners, tune in and see what people like yourself are doing. And for Extension colleagues, get ideas on what you might try to help grow your small-business community.

Throw a Twitter Party, Have Fun and Grow Your Business!

Yes, it is possible to grow your business while having fun.  One way to do it? Throw a Twitter Party!

A Twitter Party creates an experience to engage your clients and prospective customers. Twitter Parties can build your online presence, market your enterprise and expand your brand.

Use Twitter Parties to connect with your audience, discuss timely topics and present information about your products and services

Join Alyssa Dye, Nebraska Extension Intern and entrepreneur, as she discusses setting up a Twitter Party while providing strategies designed to make your Twitter Party a success!

To learn more about Alyssa, go to https://www.youtube.com/watch?v=pW9bxBUnQpE

Register for the Twitter Party event at: http://go.unl.edu/friday15registration

Missed previous events?
Check out the Power of Business YouTube channel https://www.youtube.com/user/PowerofBusiness
or the “Friday 15 tab at Power of Business. http://powerofbusiness.net/

While you are on the site, sign up to receive reminders for monthly chats and a newsletter designed to grow your business!

“See you” on later today at 11:15 AM CT!

 

Saying “No” as a Small Business Owner

No

Photo (CC) smip.co.uk, on Flickr

Over the holiday break, I enjoyed spending time with my 18-month old grandson. He is at that stage where the word “no” is a significant part of his vocabulary. He says it often and sometimes loudly.

As we grow older we tend to say “no” less often. I don’t know if it is because of our upbringing or if we are just trying to keep everyone pleased, but saying no feels like something we just shouldn’t do. It seems to be a word to be saved for only the most dire emergencies.

As a business owner, you need to break that mold. Saying no should be one of the management tools you carry and use on a regular basis. This was recently pointed out in an article shared by Becky McCray on her blog, Small Biz Survival. This blog post was building on an earlier work by Stephanie Ward of Firefly Coaching.

Stephanie several reasons why we just can’t say no: we want to be liked; we feel guilty; or we don’t know how to say it in a way that makes it an acceptable response. So instead we say yes and quickly become angry or feel overwhelmed.

There are other times we need to say no as a business owner. One such time may be when you are being asked over and over for donations. Suzette Barta of Oklahoma has put together an excellent piece on “How to Survive When You’re Being Hundred-Dollared to Death” (look for CR-961).

Here are more helpful articles:

No – It is one of the shortest words we have. Yet it carries so much weight. We fear that using it will shut doors forever.

The reality is it can be used effectively and without any harm to your business. As we move into a new year, make it part of your business management strategy.

Financial Literacy Basics for Prospective Small Business Owners

I came across this article in Prairie Business Magazine the other day. The author, Matt Varilek, does a great job of identifying some major pieces of information that nascent entrepreneurs should consider before they fully commit to starting a business.  Great insight. Take the time to think about these issues before you commit your time and money. I want to thank Matt, our guest blogger, and David for approving the reprint.

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startup business Scrabble tiles

Photo (CC) by Dennis Skley, on Flickr

What to Know Before You Take the Plunge

by Matt Varilek, SBA Region VIII Administrator

What should entrepreneurs be aware of before they decide to devote a considerable amount of time, effort and resources to a small business start-up?  Here are ten financial literacy ‘hot buttons’ for new entrepreneurs and prospective small business owners to consider:

Know Your Own (and Your Family’s) Tolerance for Financial Risk.  There are no assurances there will be either short or long-term financial stability, so everyone involved in the start-up should have the emotional and financial capacity for a high level of uncertainty.  Also, using personal savings, a 401(k) or other retirement plan monies is a serious decision that one must carefully consider if there’s a potential for loss of funds.

Learn How a Legal Business Structure Can Impact Your Future Tax Liability.  There are different tax advantages associated with formal corporate structures that accrue to both the company and the owners, and tax law changes nearly every year.  Discussing the available business structure options with a qualified accounting or legal professional can help determine the best course of action when forming the business.

Understand How Much Money it REALLY Takes to Start Your Business.  Unfortunately, most all start-up projections for revenue growth are too optimistic, expenses are underestimated, and anticipated breakeven timeframes are too short.  A good plan is to double the projected cost to get to breakeven, and triple the timeframes.  Being prepared for a possible worst case scenario is good financial insurance against running out of time and money on the cusp of success.

Understand What Start-up Expenses are Crucial versus Questionable.  Focusing on expenses that directly relate to revenue generation is one of the keys to financially managing a start-up.   Every start-up expense should answer the question: “How does this contribute to the bottom line and get me closer to breakeven?”

Learn When it Makes Sense to Use Business Credit.  Business credit should be considered only when the money received can be used for either of two purposes: increase revenues, or reduce the costs of doing business.  Business credit should not be used to maintain a desired lifestyle, provide for the owner’s salary, or for anything that cannot be directly tied to bottom-line results.  In some cases, scaling back a start-up is a wiser choice than incurring business debt.

Understand the Relationship Between Your Credit History and Business Lending.  Lenders are literally ‘banking’ on the owner’s prospects for success, and how an owner has managed their own personal finances to that point is an important indicator.  Even a compelling business plan may not overcome an owner’s poor or marginal credit history.  After a year or two, availability of a business loan is more likely to be based on the company’s credit and operational histories.

Learn How to Record and Track Business Income and Expenses.  First, accountants can only work with what they see.  If it’s not recorded, it didn’t happen.  Second, accurate records enable a business owner to gauge the financial health of the business through the use of ratios and other financial measurements.  Having at least a basic computer-based financial system (i.e. like QuickBooks or equivalent) and keeping up with regular data input is a must.

Learn How to Read, Interpret and Use Business Financial Statements.  The Income Statement, Balance Sheet and Cash Flow Statement each tell a different part of the story about the company’s financial condition. Together, they can be used to find company weaknesses and strengths.  Ratios derived from various sections of the financial statements provide clues to where a business owner needs to implement corrective actions before a situation becomes serious.

Understand How Cash Flow Keeps a Business Alive.  A business can be profitable on paper, yet fail from a lack of cash flow.  Important aspects of cash flow include the timing of accounts payable and receivable, inventory turnover, fixed expense loads and other areas.  Without a solid foundational knowledge of such areas, a business owner is handicapped in terms of actually managing the company’s cash.

Understand the Financial Implications of a New Hire.  Two major questions should be answered before anyone is hired: “How will they enable the business to increase revenues, or How will they enable the business to be more efficient?” (i.e. more productive).  Quantifying these areas will help determine if a potential new hire is really worth what you will pay them in wages, benefits and training time.  Avoiding the temptation to hire too soon is one of a business owner’s major challenges.

 

As the economy continues to recover from the recent Recession, a business owner’s financial literacy is as crucial to the prospects of a business as it would be to any one of us in managing our personal financial affairs.

(Business financial literacy is part of the curriculum provided by one or more of SBA’s major Resource Partners…SCORE, Small Business Development Centers and Women’s Business Centers.  All can be found through the sba.gov website.)

Reprint approved by:

David D. Leavitt Jr.,

Regional Communications Director, Region VIII

U.S. Small Business Administration

Business Ideas – Keep Your Eyes, Ears and Mind Open

Opportunity Sign

Photo (CC) by One Stock Way, on Flickr

This post may bring a few smiles and maybe some chuckles.  I know when I read it a smile came to my face.

I also suspect that several of you will say, “I could have thought of that.” How many times haven’t you seen a new product only to proclaim, “I had that idea,” or that you had already saw this was a need.

So what was this idea? The Tooshlights © story can be found in the Sept issue of Entrepreneur, p.82. We have all been there, entering a public bathroom only to wonder what stall is open. Did we ever dream of developing traffic lights? And what really caught my interest was their plan to add an app (what would we do with out our mobile devices) to get a sense of how busy the bathrooms are at any one time.

Business ideas. For many potential entrepreneurs coming up with an idea is the hardest thing to do. This article represents just one way to do it, we experience it.

A way I recommend for rural business owners is to take a ride. Go to several towns that sort of match where you live. Drive around and see where the lines are long. Each one of those might be something you could duplicate in your town.

The challenge is being creative and looking at the world in a different way. Ask yourself what might be.  It means opening your eyes and ears and all your other senses. Perhaps more crucial, it means opening your mind to what might be.

What brings out creativity? That varies by person. In terms of opportunities, it can be anytime and anywhere. You just need to be ready to see the possibilities.

Most ideas, in fact probably very few, are not huge leaps forward or even little jumps. Many represent just a small step at taking something and improving it. Think about how brooms have and continue to change. It seems simple enough but they continue to evolve.

So looking for an opportunity? Open your senses and let your mind wander around the possibilities we come across.

Wow, So Much to Know!

Question Mark

Photo (CC) Colin K, on Flickr

Whether you are thinking about a business idea, just starting your business, or you have had a business for some time, it seems like there are always new questions or issues coming up. How can you keep up?

Two common ways that business managers stay up to date are, first, by talking to other business owners. That is one of the reasons for Power of Business. We want to encourage business owners to connect and engage with other business owners. Each of you have some of the answers learned through experience and your own searching for answers.

The second commonly used tool is to find resources that you consider reliable and trustworthy. You have traditional sources such as your local Extension Service office and its online presence found in each state and at eXtension.org.  You also have agencies such as the Small Business Administration, Small Business Development Centers and SCORE. Every state has other sources in addition to these found in one or more of the state agencies.

All of these resources and many others can also be found online. One of the online resources that has seen a dramatic rise in numbers are various bloggers. Again, business owners tend to find their favorite ones, people they feel provide timely, valid and reliable information. They also look for information from people who have “been there and done that” and often recommended by other owners.

When searching for bloggers or other online information providers, you can often find those who are directly in your same industry. For some time, I have followed Small Food Biz. Recent articles such as the look at why small businesses need insurance, http://www.smallfoodbiz.com/2014/07/30/the-importance-of-insurance/, quickly lay out a basic outline of the issue and some real-world reason why it is important. (This author has no relationship to this blog).

Another blogger I follow focuses on small rural business and the communities where they are located, Small Biz Survival. (This author is a guest blogger at this site). Today, you can probably find someone offering information for practically any type of business in any type of location (Just check out our list of interviews with business owners under “Friday 15.”).

The bottom line is that there are resources available to help you get the answers to your questions. And we haven’t even discussed other professionals who also can be of great service.

So when faced with a new situation or question, ask around and go online. Chances are you can find guidance from a number of sources.  However just a note of caution, not all of the information you find is correct or right for you so, again, use your resources to check and verify.

Remember, when you are running a small business, you need not feel alone.

 

Call It Passion, Grit or Something Else

I have always referenced that unseen motivator that seems to help some people conquer seemingly insurmountable hurdles as passion.  Others reference it as determination or perseverance. In this TED video by Angela Lee Duckworth, it is labeled “grit.”

Whatever the name this element shows strong evidence of being important in achieving success, whether in academic settings or in business.

“Stick to it,” “never gives up,” and, yes, even “stubborn” are words that can be of great help to those looking to achieve a goal.

So when you are thinking of starting a business, reflect on how strongly the fire is burning inside you. If it’s small, you may want to think about this idea some more.  If it is a roaring blaze, maybe it is time to take the plunge.

Remember though that passion cannot overcome all obstacles. You still need a product or service that solves the customers needs. And you must be able to produce it at a price the customer is willing to pay. In other words, you need to do your homework as well as have the passion.

When you find this combination, then have the conversation with family, friends, and mentors and make plans.  Get ready to overcome or go around obstacles. Finally, hang on for the ride.

Hiring Your Own Children

You need some summer help and you have a teen who is looking for work! Perfect. You’ll hire your daughter or son and both problems are solved. While in many cases that can be a very workable solution there are other instances where hiring your own children can create more headaches than you ever imagined. As with most things in your business the key to success is careful planning. Here are a few tips for success:

Have a job description. This is important for any employee but will be especially important when hiring family members. Describe the tasks that are expected, the work hours and conditions.

Have an employee policy manual. This doesn’t have to be fancy but it should include the tasks that need to be completed along with clear instructions on procedures and work quality. Include general policies related to taking time off, and who to notify in the event of illness. The policy manual should also be clear about any training that is required, what equipment can (and can not) be used and when, and the safety plan in case of an emergency.

Have an letter of employment signed by both parties. This document should spell out the wage that is being paid, when and where checks can be collected, how hours are calculated, the policy on rest breaks and meal breaks, the starting date and the terms of employment.

It may seem a little silly to go through all of this with someone that you know as well as you know your own child but experience makes it clear that all of this process really helps to create a professional employee/employer relationship. By emphasizing the professional nature of this relationship you can help minimize the temptation to drag family baggage into the work environment. It will also help your teen set some important expectations about future jobs where the boss will not be “Mom” or “Dad”.


 

Tips on How to Motivate Employees

  • Organize jobs so that an individual can see the job through start to finish
  • Let employees interact with other employees, customers, and supervisors
  • Organize jobs into clusters that require a variety of skills
  • Allow some freedom for employees to make decisions in how to get a job done
  • Provide frequent feedback with clear standards about how success is measured
  • Provide opportunities for growth

Know Your Competitor

Food truck competition

Competition (CC) Bob B. Brown (bit.ly1o2905w), on Flickr

Successful business owners understand the market they are in and who they are competing against.

Have you taken the time to figure this out for your business? Understanding this and then developing your business to respond are crucial for long-term viability.

Yet research suggests that often the business owner takes too narrow of a view of who are his or her competitors. This restricted view may be in geographical, industry or customer terms.

Customer terms represent a broad look at the psychological and behavioral elements the customer is looking for when entering into a business transaction. A common example of this element is what happens when you want a cup of coffee.

You can make the coffee at home, which makes it a commodity purchase. If you stop at the local diner and get a cup of coffee there, your cup of coffee is a “good” as opposed to a commodity. However, if you take coffee buying to the next step, or the Starbucks approach, the cup of coffee has become an experience.

This set of possibilities reflects customer needs.

You also need to consider your competitors in geographical terms. A common phenomenon in consumer behavior is the tendency to always look at the next bigger town as having better goods and services than what you can buy locally. People living just outside the area who come to the smaller town to shop view the local stores highly. But the locals living in the smaller town think the stores in the bigger community offer better-quality goods.

Another part of the geographic view is to take into account customers’ ability to buy goods and services online. This makes anyone in the world your competitor.

The idea of coffee also brings up the overlooked notion of who my competitor might be when viewed in terms of industry. Coffee is just one part of the overall beverage industry. It is just one way I can quench my thirst.

One final way to consider who your competitor is comes from a basic economic principle. As a consumer, I have only a certain amount of disposable dollars, or money I can spend in a variety of ways. If I spend the money on a cup of coffee, it no longer is available to buy a shirt or maybe put gas in the tank to drive out to the lake to go fishing. It is an economic choice principle.

For business owners, the bottom line is that all of these ways of understanding who your competitor is are valid. You need to understand and then make your offering unique. Understand, however, that being unique is much easier if you are selling the experience as opposed to the commodity.

Finally, remember that the competitive marketplace is dynamic and not static. New competition pops up daily and old ones disappear. Thus, you need to be watching the changing marketplace as well as the trends occurring in the consumer market overall.

Stay on top of who your competition is. Think broadly when defining that set. And understand how your customers are viewing the marketplace.

Is Your Business Ready for Growth?

Guest Blogger: Richard Proffer, University of Missouri Cape Girardeau County Extension Office SBTDC, profferrd@missouri.edu

Growth curve

Growth (CC) www.stockmonkeys.com bit.ly1gKOjcq, on Flickr

Most business people what to grow their business but a question often comes up is am I ready to grow or can I afford to grow? Those are big questions for small business owners because of the time, commitment and financial resources it takes to successfully grow a business.

The first step towards growth is to take inventory on your business. Richard Proffer, business development specialist for University of Missouri Extension, says, “I am not talking about physical inventory where you count your product but a more mental and financial inventory to see if you have lined up the right resources to grow.”

For this inventory, the business owner will need to invest time in analyzing the current situation and work on redefining the business’s goals. This analysis will allow the owner to make smarter decisions, be more accurate in the financial projections and move faster into growth when it happens.

Many business owners face the Red Queen paradox where they feel the constant strain of working and working and not getting anywhere but where they started. This feeling is typical of entrepreneurs who have not done a good job of planning their business’s future. “Simply doing more of the same thing is usually not the answer for growing the business,” per Proffer. “You need to take action.”

Growth, at some level, is necessary for business survival. The alternative is stagnation and being overtaken by the competition.

In summary, the four steps in growing your firm include:

1. Taking an inventory, some may call it a SWOT analysis, and defining where the owner wants to be in the future with the business.

2. Develop plans out what needs to happen with the business either in sales, employees, financials or marketing to reach the desired goal. This must include measurable goals.

3. Start putting into action processes to reach the goal in the stated time.

4. Measure progress towards the goals to know progress is being made and the right path has been chosen for success or where to make corrections to the plan.

Strong businesses are always thinking of tomorrow. Take time to plan how your business will grow.

If business growth is part of your plans, contact your local Extension office for help and guidance for other resources. Also check out our website, Power of Business, as well as the national eXtension effort, Entrepreneurs and Their Communities.