small business budgeting

Small Business Budgeting Tips

When you start your own business, creating a budget is the first thing you need to do. For a lot of small business owners, the last time they had to make a small business budget was their freshman year accounting class. If you don’t have much financial experience, it can sometimes be hard to make your first budget, especially if you can’t yet project your costs and sales. While making a budget is difficult, it’s also very necessary. Without one, it will be almost impossible for you to keep track of how successful your business really is. You won’t know if you need to cut back or if you can afford to give yourself a pay raise.

If you need help making a budget, there are numerous websites and books that can be extremely helpful. The Small Business Association (SBA) website is one resource that is very informative and super helpful. If you have money to spare, you could also invest in a budgeting program, or even hire someone to do it for you. No matter what, it’s very important for you to review your budget and make sure that you’re staying on track. Read on for a few small-business budgeting tips to ensure financial stability.

Be realistic about your cash flow projection

When you start a new business, it’s impossible to know exactly how successful you will be. Even though you would love to make thousands of dollars in the first month, depending on your business plan, this may or may not be realistic. Aim low when making your first budget. If you make more money than you planned for, it will be a happy surprise, rather than the heartache and financial stress it would be if you come in way under what you had anticipated. If you don’t know how to make this projection, reach out to those who can help you, whether it’s an industry colleague, an old professor, or even some of your target customers. They’ll likely be more than happy to help.

Understand how to do a cost-benefit analysis

If you don’t know how to do one, you can easily Google it and find step-by-step instructions. Basically, a cost-benefit analysis helps you determine whether or not big business decisions are worth it. For example, let’s say that your business sells blankets. For each blanket you sell, you make $10. You’re considering investing in something new for your business, such as an iPad ($500). A cost-benefit analysis will tell you that you would have to sell 50 blankets to pay off that iPad. Is it worth it? Maybe yes, maybe no, but this easy calculation will help you determine whether or not you’re willing to make the purchase.

Never spend all the money you make

This one is probably pretty self-explanatory, but don’t spend everything! It’s just like your parents taught you when you were a child. It’s important to save money and have it in reserve so that it is there when you need it. A savings is great to have if your business doesn’t do well one quarter, but it also might be useful for other reasons. Maybe you’ll have a great new investment opportunity or the chance to expand. Don’t just save it for a rainy day, but for the future of your business.

Don’t budget every dollar

Leave a little leeway- if you budget every last penny, you won’t be ready for the things that you can’t anticipate, like a leaky roof or a broken computer. Make sure that you give yourself a little bit of wiggle-room so that you have extra money when you need it. Remember that old saying: “Plan for the worst but hope for the best”? It’s important to keep this in mind when planning a budget. We, as small business owners, would all love to spend the absolute least amount of money that we can, and sometimes this might be possible, but not always. It’s important for us to be prepared for whatever might come our way.

With these tips in mind, you’re well on your way to making (or tweaking) your budget. It’s also important to keep in mind, however, that your budget shouldn’t stay the same forever. As you gain or get rid of expenses, and as you make more money when your business expands, it’s important to make new budgets that better reflect your financial status. Budgets aren’t one size fits all, so you need to keep yours in check. Its benefits only appear if it’s accurate and useful. If you haven’t looked at yours in a while, today’s the day to get started.

Hat Tips:

 

green beans blog interviewing

Tips on Interviewing Employees

If you look online, you’ll find hundreds of pages that give you interview tips – what to wear, how to act, when to arrive, and what kind of questions you need to be prepared to answer. It’s much harder, however, to find tips when you’re doing the interviewing or hiring. If you’re a small business owner with little HR experience, conducting your first interview can be a little bit daunting. You have to skim resumes, conduct interviews, and choose the perfect candidate. Whether you’re hiring your first employee or an additional one, we’ll tell you all you need to know when interviewing employees.

Set the Scene

The first thing to do is decide on the interview format. One-on-one, in-person interviews are the norm, but they aren’t your only option. If you’re hiring a sales rep who lives across the country, or you’re out of town on business, phone or Skype interviews are also a great option. Phone interviews can also be a great screening method. You can conduct phone interviews with 5-10 candidates first, then bring in the top 3 for a face-to-face interview. Depending on the nature of your industry, group interviews might also be an option to consider. These are helpful for project-based positions where working with a team is essential. Decide if you want anyone else sitting in on the interview with you. If you’re part of a small team where personality is important, you might want to consider having your whole team present.

Know What You Want in an Employee

As the interviewer, the most important thing that you can do is to be prepared: know exactly what you’re searching for. Think about education, experience, and skills. Make sure that you have a detailed job description and a list of the expected roles and responsibilities. Think about personality – do you need someone outgoing? A team player? A leader? You can also prepare by being familiar with the candidate you’re interviewing. Go over his or her resume and be ready to ask questions if you have any. Check references, look at the candidate’s LinkedIn profile, as well as their social media.

It’s important to have a list of questions before the candidate even comes through the door. The two most important kinds of questions that you want to include are fact-based questions and behavioral questions. Fact-based questions are often easy for you to come up with and easy for the candidate to answer, but they’re important nonetheless. Examples include: Tell me about your most recent internship. Can you explain this responsibility further? Behavioral questions are much more open-ended and usually begin with the phrase “Tell me about a time when….” You can tailor these questions to fit the qualifications you’re looking for in your employee: Tell me about a time when you made a mistake and how you overcame it. Tell me about a time when you took the lead on a project. Tell me about a time when you had to multi-task and how you handled it. Make sure that you have plenty of questions planned and rank them in order of importance in case you can’t get through all of them in the time allotted for the interview.

Hold a Conversation

Even though you probably have a lot of questions that you want to get in during the interview, make sure that you’re having an actual conversation, NOT an interrogation. You’re not the one being interviewed, so don’t spend the whole time talking about yourself or your company. Instead, listen hard! Take notes and ask for clarification when you don’t understand. Experts suggest that the interviewer only speak 10-20% of the time, or else you’ll interview yourself. Make sure that you also leave time so that the interviewee can ask you questions. These questions are a great way to gauge his or her interest in the company and how much he or she prepared for the interview. Conclude your interview by thanking the candidate for his or her time. Tell them your hiring timeline, and when they can expect an answer from you.

Analyze Your Options

The final thing to consider when conducting your first interview is how you’ll decide whom to choose. Many experts suggest that you use a rating system. Write down notes and rate each candidate on qualities that matter to you after their interview. Although personality is important, you’re not hiring someone to be your best friend. You’re hiring someone who can fulfill a necessary role in your company. Rating forces you to consider whether or not someone hits the important marks rather than getting distracted by someone who is friendly, but might not be the best choice for the job.

When you decide which candidate to hire, welcome them enthusiastically. Let the other candidates know of your decision, but tell them how much you appreciated their time and let them know that you hope they’ll keep your company in mind for potential future opportunities. Congratulations! You’ve successfully completed the interview process and have (hopefully) hired a wonderful new addition for your team.

Hat Tips:

green beans blog target market

Defining Your Target Market

Have you ever heard the saying that you can’t be all things to all people? In the business world, this couldn’t be closer to the truth. If you set out to create a product or service that will work for everyone, you won’t succeed in the end. It’s impossible to market one specific product or service to everyone, because people want and need different things based on their demographics, behaviors, and various other factors.

In order for small businesses to effectively compete with larger businesses, it’s important for them to find their target market and work to build strong relationships it’s members.

If you’re like a lot of small business owners, you might have read the first paragraph of this blog and are now wondering “What is my target market?” We’re here to help you figure that out. If you’re still trying to find your niche, read on and learn how to market to that group of people.

Analyze your Current Customers

See what kind of people are already buying your products or paying for your service. First, consider demographics: Male/Female? Do they live in the city or in the suburbs? Age? Married/single/divorced? Do they have kids at home, grown kids, or none at all? What is their occupation or their income level? What’s their education status? Then, consider what the experts call “behavioral and psychographic attributes”, or things they do often/ways they act. Do you own a nice restaurant and consider your customers to be foodies who eat out often? Do you own an organizational service and see that most of your customers work long hours or consider themselves to be messy and disorganized?

Find the commonalities between those who are already buying from you. Chances are, those people should be your target market. Others like them would probably be interested in your products or services as well, and by marketing to them, you can be sure that you’re spending your marketing budget with a higher chance of profit.

Understand What Problems your Business Solves

People buy your product or use your service because you’re fixing a problem that they have. Think back to the attributes we talked about earlier. An organization company solves a problem for people who are too busy to organize themselves. Another example might be a retail store that specializes in business clothing for young college grads and those starting jobs for the first time. If you didn’t solve a problem, people wouldn’t be buying from you. Consider what your business has to offer and who stands to gain from it. Those people are the ones you want to target with your marketing efforts.

Consider your Competition

It’s always important to look at your competition and see how what you offer is different and unique from what they do. Why is your offering better? It might be a simple answer— maybe your office is closer for people who live in a certain neighborhood. Maybe your product is slightly less expensive, or maybe people are willing to pay more for your customer service experience. Whatever that advantage is, promote it! Reach out to those who would benefit from your business and make sure they know why your product or service is the most beneficial option for them.

Evaluate

Target markets should be very specific, but they shouldn’t be so specific that there aren’t enough people in that group to justify spending money on marketing to them. Recent college grads who are starting their first business job within the Charlotte metro area is an awesome target market. Recent college grads from a NC college who are starting a business consulting job and will make more than X amount in the South Park neighborhood ….that’s a little bit too specific.

Once you think you have a great target market, ask yourself some of these questions: Are there enough people that fit my customer description? Are these people going to be interested in my product and can they afford it? What information can I learn about this group that would help me market my product more effectively to them? What marketing channels are most accessible to this group?

Although defining your target market might take some time and effort, it’s well worth it in the end. Defining your target market is the difficult part; after it is decided, you will have a much easier time developing a marketing strategy and determining how you’re going to reach out to those people. In the marketing world, one size doesn’t fit all – make sure that your marketing message is effective in reaching those who will be most interested in your product. The rest will be a piece of cake.

Hat Tips:

 

millennials at work

8 Things You Should Know about Millennials at Work

Millennials, those currently in their 20s and early 30s, are nearly the largest part of America’s workforce today. In fact, the US Bureau of Labor Statistics estimates that millennials will make up 75% of the US workforce within the next 15 years. Millennials are more likely to be entrepreneurs than their parents or grandparents, and they’re also more likely to have multiple jobs and even careers. Read on for eight things you should know about millennials and their role in today’s workforce.

Millennials Understand Technology

Millennials grew up with technology, and are used to adjusting and advancing along with it. They are far more likely than their parents to see its value and importance in the business world. Studies show that 9 out of 10 millennials believe that they can access information at any time, whenever and wherever they need it. They’ve grown up in the era of google searches and instant gratification, and they’re likely to carry these qualities and skills into the workplace. Millennials are a generation of “digital natives”, and they can be instrumental in helping organizations update their technology.

Millennials Will Work for Many Employers

Millennials are more likely to change jobs and careers at an unprecedented rate. They’re not likely to work for one company for an excess amount of time, as they are more open to changing jobs and careers than previous generations. This is notably different from the Baby Boomers, who often believe that they should stay with an employer for a substantial amount of time before searching for a new job.

Millennials Have an Entrepreneurial Spirit

Millennials are more likely to start their own businesses than elder generations. They’re also more likely to study majors that are related to entrepreneurialism, and to want to be their own boss. At the same time, the costs associated with starting a business have gone down drastically, allowing this surge in the number of millennial entrepreneurs.

Millennials Face High Rates of Underemployment

Millennials are not only unemployed, but they are also underemployed. Underemployment means that millennials are underpaid for their education; they’re taking jobs where their education isn’t needed, or they’re only able to find a part time job. In fact, they’re 8-9% more likely to be underemployed than their parents, regardless of their education level.

Millennials Want to Give Back

Millennials love to make a difference! They enjoy working for businesses and organizations that care about their community and give back to it. They appreciate community service days and philanthropy events, as well as corporate values. They want their work in a company to serve a greater purpose and meaning than just bringing in profit.

Millennials are the Most Educated Generation

Over 79% of Millennials hold at least a bachelor’s degree, compared to 69% of Generation X members and 62% of Baby Boomers. These millennials are brimming with talent and education, and are often excited to get started and take on the world. It’s worth noting, however, that these millennials also have more student debt than any generation before them. Overall, millennials are educated and ambitious to work, regardless of the need to pay off debt.

Millennials Value Flexibility

Millennials love jobs with flexibility, such as telecommuting options and the opportunity to get their work done at unconventional hours. They consider job flexibility when applying and interviewing for positions, and they sometimes decide to start their own business instead in order to get the flexibility that they’re looking for. They have to be technological savvy to accomplish this, but are likely to do whatever they can to hold a flexible job and schedule.

Millennials Seek Happiness

Above all, Millennials want to be happy and fulfilled. Approximately 2/3 of millennials say that they would rather make $40,000/year at a job they love than $100,000/year at a job they don’t. As a result, it’s important for millennials to find jobs that are rewarding to them. Millennials want to be satisfied and feel accomplished with their work, so it’s important for them to be challenged and excited by it.

If you’re a millennial, you probably identify with most, if not all, of these qualities. If not, you might see these qualities in your kids or your younger co-workers. As a small business owner or entrepreneur, it’s important to keep these millennial characteristics in mind. Challenge your millennial employees and nurture their entrepreneurial spirit. By doing so, you’ll be able to help millennials find happiness and feel fulfilled in the workplace.

Hat Tips: