Small Business Information Insights and Ideas

Tax Season Opens Security Risks for Small Businesses

April 24, 2013

According to a nationwide survey conducted by the National Cybersecurity Alliance, 73 percent of small businesses rely on trusted Internet connections and 77 percent report that information security is of the utmost importance. Despite this, over 87 percent of small businesses are unprepared for data breaches that may occur online or through other, traditional methods.

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Filed Under: Technology Tagged With: Best-Practices, security

Small Business Owners – Do you have Long-term Saving Plan?

April 21, 2013

If you are like most small business owners you don’t pay enough attention to saving for the long-term. After all, when you can invest money in your own business and get higher return than saving at a bank why wouldn’t you reinvest in your business instead of saving it. Many business owners do not even keep their personal and business finances separate. Their accounts and expenses are intertwined moving money from personal to business and vice versa all the time.

This could be a big mistake. As much as you would like to invest your money back in the business this can create number of issues potentially not only impacting you, but your family too. First of all, if something goes wrong with the business you could lose it all with no rainy day fund to tap into. The tax authorities will also come down hard in audits if you cannot show how your personal and business finances are kept separate.
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Filed Under: Finance Tagged With: Best-Practices, Cash-Flow

Too Much, Too Fast – Lessons from JC Penney Failure for Small Business

April 13, 2013

By now, most in the business community have heard about the ouster of Ron Johnson as CEO of JC Penney after only 17 months on the job. This was a stunning reversal of fortune for Ron Johnson who was regarded as retail Guru based on his accomplishments in transforming Target to “Cheap Chick” retailer and hugely successful launch of Apple Stores. When he was hired at JC Penney he was viewed as a savior who would rescue JC Penney from the downfall it was experiencing for several years.

However, things have not turned out to be that way. In 17 months JC Penney has been in complete turmoil. Sales in 2012 declined 25% compared to prior year representing a staggering $4.3 Billion in lost sales. In 2012 it recorded loss of $1 Billion. No other company has seen such a precipitous loss of value in this short time. So, what went wrong and what lessons can small business owner learn from this?
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Filed Under: Management, Strategy Tagged With: Business-Model, Coupon

Beware of These 5 Traps when Hiring in Small Business

April 6, 2013

There are few decisions as important as hiring employees when running a small business. Hiring the right person can take your business to new heights. On the contrary, it doesn’t take long for the business to go in the ditch if a wrong person comes onboard. After all, all businesses, large and small, are largely dependent on their employees to keep them going. The owner or the manager alone cannot take care of everything.

Attrition remains a big problem for all small businesses. It is not surprising to find replacement of the entire workforce within a year. Many small business owners feel as if they are in the constant hiring mode – advertising, interviewing and onboarding employees. How can you expect to do rigorous job when you are always in the hiring mode? However, taking right steps early on and spending extra effort in finding and retaining good employees can pay off in reduced attrition rate, taking care of the nipping the problem from the bud. In an earlier post, I discussed 5 things small business owners must do when hiring. Here we will look at the corollary. What are the traps small business owners should avoid to ensure they don’t end up with bad apples in their employee crew?
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Filed Under: Employees Tagged With: Best-Practices, Hiring

Do not Undersell – How to Set Prices for Maximum Profit

March 30, 2013

The goal of pricing a product or service for any small business owner is to charge the maximum amount that customer is willing to pay and maximize profit. If you charge lower than what customer is willing to pay you leave money on the table. If you charge higher customer will walk out the door and you will lose profit.

To some it may seem like Black Magic, but pricing is combination of art and science. Big corporations, such as Wal-Mart, do lot of research and number crunching to figure out to the pennies exactly how much they should charge so that they get the maximum profit. This is the science side of pricing. No matter how much number crunching and data analysis you do human behavior and psychology plays a big role in customers determining whether a given price is a good deal or not. This is where art comes into play. There are number of ways in which business owners can convey the message about good deal (aka pricing) and take advantage of how customers react to that message.
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Filed Under: Customers Tagged With: Best-Practices, Pricing, Profit

5 Must Do’s for Hiring Great Employees in Small Business

March 23, 2013

The success of any business is largely dependent on its employees. Good employees can help improve the business, and by the same token, bad employees can sink it into bankruptcy. That is why hiring good employees should be of paramount importance to all businesses, and particularly so for small businesses.

In my observation, most small business owners consider employee hiring a necessary evil they have to deal with when current employees leaves. They approach the hiring process in an ad-hoc fashion and try to get someone quickly so that the business can get back on track. The problem is hiring this way does not get you the right employees you need to make the business successful. Eventually, either you will need to fire the employee because he isn’t the right fit or the employee himself will leave. In the end, the cycle has to repeat and soon you find yourself in the endless hiring loop.
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Filed Under: Employees Tagged With: Best-Practices, Hiring

Tips to Organize Business Finance Weekly to Enjoy Long Term Benefits

March 18, 2013

Most entrepreneurs think that adequate finance is the key to success in business. But that’s not true! It is actually the business owner who is the key because it is she or he who decides how to ensure adequate finance for proper functioning of the operations. In order to ensure this sufficiency, it is vital to keep the financial records up-to-date as well as organized so that it becomes easy to track. So, here are some tips for you to follow on a weekly basis so that you can better understand the financial status of your business and maintain it smartly.

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Filed Under: Management Tagged With: Best-Practices, Performance

Warning! You might be Wasting Money on Electricity Bills!

March 9, 2013

Here is a quick question – When was the last time you checked your electric bill? Do you remember how much it was? If you are like most small business owners you do not pay attention to how much you are paying towards electric bill. You take it for granted that the electricity expense is fixed and there is not much you can do to bring that expense down. This could be a mistake because even a small monthly savings of $50 in electric bill can add up to substantial amount at the end of the year.
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Filed Under: Finance Tagged With: Cost-Management, Negotiation

Blockbuster Failure!! How Can You Avoid Similar Fate

March 3, 2013

Blockbuster, the ubiquitous video rental chain of the bygone era, announced recently that they will close 300 stores in U.S. and lay off 3,000 employees. This is after they have already closed hundreds of stores over the years. The latest round of closing will leave them with only 500 stores, down from 9,100 at the peak of their business. This is one of the blockbuster failures in the American business history! To be fair, they are not alone. Recent times have seen number of successful retail businesses wipe out from the landscape – Borders, Circuit City, the list goes on.

Blockbuster was one of the great success stories in how to build an empire by putting number of small rivals out of business throughout the country. Starting with a humble beginning they went on to consolidate the video rental industry to be the eight hundred pound gorilla. And yet, they were not immune to the law of natural business cycle when new competitors came along. There are important lessons to be learned from Blockbuster to ensure your small business does not meet the same fate.
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Filed Under: Management, Strategy Tagged With: Business-Model, Customer-Complaint

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