Reports you should use to assess business performance

July 15, 2010


In the previous post we mentioned that as a small business owner you should know the key numbers of your business by heart. These key numbers provide valuable insight in your business and act as early warning indicators. Without them you may not realize if the business is heading for trouble and by the time you do it may be too late.
We also advise you to spare some time from daily operations and spend 15 minutes daily and several hours weekly and monthly to go over the reports that show how your business is performing. In this post we will provide more details about these reports and what you should look for in them.
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Importance of Due Diligence in Buying a Business

June 29, 2010


Whether you are buying a business for the first time or you have purchased and sold number of businesses you cannot underestimate the importance of due diligence before signing on that dotted line. The mistake made at this stage can not only be costly in terms of financial losses; but it will get you stuck with bad business for a long time.
So what is due diligence? Due diligence is the process of looking at the business you are planning to purchase from multiple angles to verify that the financials match with what the seller promised earlier. Presumably, you have already done your homework in terms of market analysis, competition, and future potential before putting an offer with the seller. The due diligence comes into picture after the seller has agreed to your offer. It is usually one of the last steps in the buying process before you start preparing the closing documents.
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How to Overcome Challenges of Starting a Business in Bad Times

June 1, 2010


In our previous blog post Is this a Good Time to Buy a Business we argued that the difficult economic times present an excellent opportunity to start a business. There are a number of advantages and opportunities that bad economy; like current one; provides. The advantages include less competition, good talent available at reasonable salary and others.
While it is true that this is a good time to start a new business you cannot ignore the challenges that you will be facing in starting business in bad economic time. By understanding the challenges and preparing yourself to meet them head-on you will improve your success rate. Here are three most difficult challenges in our mind along with suggestions on how to overcome them.
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How to Make Partnership Work

May 19, 2010


Statistics show that more than half of partnerships usually end up in failure. This is a reason enough to discourage many would be partners from getting into business with partners. However, it doesn’t have to be this way. Given sufficient precautions the partnerships can not only avoid failure; but can thrive.

There are a number of successful partnerships at a larger scale that have worked well. For example, the triumvirate at the helm of Google – Sergey Brin, Larry Page and Eric Schmidt has grown the company’s sales to more than $23 billion in 2009. So what makes a partnership successful and how can you use it in your situation? Below we have identified several traits of successful partnership from our own experience and that of others.
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5 Reasons to Establish Partnership

May 17, 2010


The failure rate of businesses with partnership is much higher than those managed without partnership. So why would anyone want to get in the partnership? Despite what statistics shows there are some valid reasons why you should consider establishing partnership. As I mentioned in my previous blog there are pros and cons of partnerships. As long as you take steps to make it work you can get what you want out of partnership.
Here are 5 reasons why you should consider getting into partnership. In some cases there may be multiple scenarios depending on the situation and number of partners involved.
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Is this a good time to buy a business?

May 11, 2010

This question keeps coming up in many conversations with existing business owners and prospective ones. In almost all situations I encounter two diverging opinions. In one camp you have those who say the economy is so bad; consumers are spending very little money, banks are not lending and many other issues facing small businesses today. In the opposing camp there are those who say this is the best time to start a business because you have many businesses for sale at good price, your business will be ready to take advantage when things start looking up and so on.

These conversations remind me of a story of two shoes salesmen who are sent to an African village to explore business opportunities for shoes. One salesman goes to the village and finds that nobody is wearing any shoes. She sends a message to the headquarters – stop this project. No one here wears any shoes. The other salesman goes to the village and finds the same situation. However, she sends an urgent message to the headquarters saying – crank up the production in full force. No one here wears any shoes. As you can see the opportunity is in eye of a beholder!!!

Many of the well-known businesses of today were started in bad times.
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