Find Trouble Spots in your Business from Warning Signs

August 28, 2011

In the previous post we looked at 5 warning signs that tell you if your business is headed for trouble. These signs serve as early warning system that can help you identify and remediate problems before they become too serious.
Looking for a warning sign is just the first step in fixing things and making them better. Once you have received the red sign you need to interpret it, find the underlying causes and correct them – all before your business reaches the point of no return and forces you to close it or sell at a loss. It helps to have a business degree online to get a better understanding of these warning signs.
In general, you will find two types of problems that would cause the businesses to sputter. The first has to do with general market and economic conditions, which you may not have much control over. The second type of problems has to do with your specific business. These issues are the result of how you run your business and are totally under your control. As a business owner your goal should be to uncover issues specific to your business as quickly as possible and take appropriate actions to correct them now rather than waiting till the last minute.
In this post we will show you what could be the underlying causes for the 5 warning signs mentioned in the previous post. The next post will focus on actions you can take to correct them.
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5 Warning Signs that Tell you if your Business is Headed for Trouble

August 24, 2011


“I didn’t know we were in such a bad shape! How could this happen?” How many times have you heard this from a small business owner whose business is shutting down? For small business owners it is imperative to stay on top of the business like a hawk. Otherwise it is not surprising to wake up one day and find that you are not able to pay your employees or make interest payment to the bank.
We mentioned in earlier post that you have to be able to tell how your business is doing even when someone asks you in the middle of the night. We suggested that you identify key parameters for your business and look at daily, weekly and monthly reports.
We have been asked by number of small business owners if there are simple warning signs that can tell them if the business is headed for trouble – something akin to early warning system. In response, we have come up with 5 metrics that can tell you exactly that. By keeping a keen eye on these metrics you can detect potential problems well in advance and take appropriate actions to correct the path.
Here are those 5 metrics along with explanation of how to calculate them:
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15 Simple Cost Reduction Techniques for Small Business Owners

August 21, 2011


In the previous post we showed a systematic approach you can use to reduce cost in small business while still keeping your foundation intact allowing you to take advantage of the upturn in economy when it happens. We suggested that you should take surgical knife approach to cost reduction as opposed to using machete.
By applying this approach your business may come up with tactics that will be different from some other type of business. You have to tailor the systematic approach to your business and situation. However, there are common tactics that can be employed by almost all types of businesses. Below we describe those techniques categorized by stages in the cost reduction approach.
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A Systematic Approach to Cost Reduction for Small Business Owners

August 17, 2011


A penny saved is a penny earned. This age-old saying is relevant to small business owners now more than ever. The great recession of 2008 has squeezed consumers and businesses alike and continues to do so. They are reluctant to spend their hard-earned money on anything but basic necessity. This has made direct impact on the revenue, particularly for small businesses.
Given that there is less money coming in, the obvious step small business owners need to take is to watch the money outlay. Only those who can reduce their expenses to a sustainable level will be able to survive the ongoing economic challenges.
Now, it may be tempting to take a machete and start cutting your expenses; however instead of going about this willy-nilly you should try to use surgical knife and make systematic cuts that will keep your foundation intact and help you take advantage of the upturn when it happens. We have come up with a systematic approach to looking at your expenses that will help you find “low hanging fruits” for expense reduction without impacting your operations and customer service. You should study and deploy these steps in the order described to minimize the damage, while still achieving your expense reduction targets.
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How to Handle Rejections while Running Small Business

August 8, 2011


If you are running small business, chances are you have heard “No” more often than “Yes”. I will be surprised if you have not heard “No” at least one a day. It could come from anyone you are interacting with. Your bank might say “No” to your loan applications. Ninety percent of your prospective customers will say “No” to your sales pitch. Your landlord will say “No” to your request to reduce the rent. The list goes on and on.
It’s not how many times you hear “Yes” that determines your success in small business. It’s how you handle those “No” answers and what you do afterward that makes a successful small business owner. Most of the successful people – small business owners or otherwise – have heard “No” multiple times before they have finally achieved their dreams. Here is a list of 13 well-known business leaders who failed before they succeeded.
So how should you handle “No” to ensure that future questions and requests will result in “Yes”? Here are some suggestions:
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Filed Under: Management, Operations, Sales

10 Signs You will Fail as Small Business Owner

August 3, 2011


Not everyone has what it takes to be small business owner. Many people jump into small business without giving much thought to what is required to succeed. There are number of myths out there about small business that influence their decision about getting into small business.
Before you commit your time, money and effort to you own small business it helps to look for signs that show whether or not you will succeed as small business owner In addition, you should also look for signs that show that you may fail as small business owner. Below we have listed 10 of them. Examine yourself and see if you show any of these signs.
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10 Signs You will Succeed as Small Business Owner

July 31, 2011


Many people jump into small business without giving much thought to what is required to succeed. There are number of myths out there about small business that influence their decision about getting into small business.
However, not everyone has what it takes to be small business owner. We think there are special personality traits that you need to have to succeed as small business owner. While some people consider joining MBA to gain business knowledge from this resource about online colleges it also helps to have these personality traits for success as small business owner. We are on the lookout for signs that point to success as small business owner. Watch for these signs in to see if you will be successful.
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How to Grow your Business without Spending a Fortune

July 27, 2011


The great recession of the last 2-3 years has made many small business owners skittish about spending money even if it can help them improve sales in the future. Many of the small business owners are hunkering down to survive till the sky is cleared. They are happy with maintaining current sales and making reasonable profit. While we agree that these are difficult times for all small business owners, you should not have to sacrifice long-term benefits at the expense of short-term survival.
We believe, there are ways to satisfy both the needs of conserving cash and growing your business at the same time. The key is to utilize low-cost marketing techniques to improve sales combined with flexible operations to control cost. We have covered several of these techniques in previous posts. Below we summarize them for your convenience.
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Small Business Lessons from $100,000 Salt and Pepper Shaker

July 24, 2011


I am reading this fascinating book “The Last Lecture” by Randy Pausch, who used to be a professor in Computer Science at Carnegie Mellon University. The book is a compilation of his thoughts and experiences he delivered as a last lecture to the students after he found out that he had a terminal pancreatic cancer with only few months to live. It describes many of his experiences in life – from childhood to the end. I highly recommend this book for summer reading.
One of the interesting incidents he describes occurred during their family visit to Disney World when he was a 12 year old. In that he and his sister buy a salt and pepper shaker for $10 for their father with all of their pocket money. However, before they can give it to him he drops it on the ground and breaks it. Very disappointed, they go back to the store with little or no hope of getting a replacement. To their amazement and disbelief, however, the store employee happily gives them the replacement without any charge even though he explains that it was all his fault and Disney had nothing to do with it.
When his father hears the story he becomes a devoted fan of Disney. He continues to take not only his kids, but people from his volunteer group to Disneyland for many years, spending approximately $100,000 according to his estimate.
There are two important lessons to be learned for small business owners from this incident. First has to do with customer service and the other with employees.
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Are you too old to start small business?

July 13, 2011


When hearing the term entrepreneur most people think of a 20-something, smart looking kid who has just completed high-school or college and is eager to change the world. The images of Mark Zuckerberg or Google founders come to mind. While it is true that many of the famous companies were started by folks when they were in their prime, there is certainly an argument to be made for starting small business by people who are in their 40’s and 50’s.
Popular belief is that many of the people in that age group like to settle down and enjoy their steady lives. But there are number of “old” people who want to try their hands at entrepreneurship and small business ownership. We like to call them “experienced” as opposed to “old”.
So why do we think it is perfectly alright to start small business in 40’s and 50’s? There are number of reasons and they all have to do with what you have collected along the way.
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