How to Create a Franchise of Your Business: 4 Basic Steps to Follow for Franchising Your Name

businessmen walking

Are you at a point in your entrepreneurial career where you are giving thought about how to create a franchise from your business?

Just like creating your company from the ground up, franchising your brand is no small matter. That doesn’t mean it can’t be done, however.

In this post, we’ll take a look at some of the steps you need to take to ensure you take the important steps and pay attention to the important details that go with planning to create a franchise. So keep reading to learn more, because the information you find on this page will put you on the path to reaching a wider audience through franchising your company.

Read more

Getting Rid of Distractions at Work: 7 Steps to Keep You on Track

distractions

So what can you do to make sure you maintain focus as you put your business plan into action and move toward making your entrepreneurial goals become a reality?

Keep reading to find out, because eliminating distractions at work is exactly what we’ll be talking about in this post.

Read more

The Role of a CFO in Your Growing Business: Why the Right Kind of Expertise Matters

chief financial officer

As a business leader, you’re eventually going to reach a point where you will need someone to handle your company’s financial resources, so it helps to know all about the role of a CFO and how one fits in your plans for growing your business.

Your company’s finances are among its most important assets, and that importance only becomes more prominent as the company expands with time.

With that in mind, it makes complete sense that you might want to bring in an expert who can take hold of those finances and make sure they are working to your absolute best advantage.

In this post, we’ll explore the role of a CFO, how that expertise helps you, and what it all means as you move your company forward, so keep reading to learn more.

Read more

How to Give Bad News in Business: 4 Things You Need to Know and Why It Matters

bad news

Have you given any consideration to how to give bad news?

Not all times are going to be good times, so this is something that you, as a business leader, need to know how to do and how to do well.  There are a number of ways to break bad news and unfortunately, there are a variety of people that you will encounter in your business dealings to whom you will have to break bad news.

But it’s better to learn about doing it beforehand than having to improvise when the need suddenly arises right?  That’s why, through this post, we’ll explore the idea of how to give bad news in a business setting and what you can do keep things going even when bad times occur.

Read more

Tips for Selling Your Small Business: What You Should Do to Get Everything Ready

Do you need tips for selling your small business?

Whether you’re retiring or moving on to another venture, getting your affairs in order so that you can sell your business is a process that’s just as involved as starting the business was.

Like the beginning of the company’s life cycle, the ending involves a number of steps and precautions that you need to take to ensure that the sale goes smoothly.

But what are those steps?

That’s a question you’ve probably asked yourself if you’ve been considering to sell your business.

So let’s take a look at some tips for selling your small business and you’ll see just what you can do to get everything in order before you move forward.

Read more

Cash Flow Management Strategies: How to Make Your Money Work for You

Cash Flow Management Strategies

Ask any successful business leader and he or she will tell you that no company, big or small, can survive without the right cash flow management strategies.  It’s important to remember that, as a business, you don’t just have an obligation to your customers; you have obligations to your employees and creditors as well.  That’s why it’s important to keep track of the money that moves through your business.

Cash is king when it comes to managing the immediate needs of your business and when it comes to planning for the long term; so it needs to be adequately managed down to the last cent.  Let’s take a look at some cash flow management strategies that you can apply to your business. You’ll see just why this simple concept has such big implications.

Read more

Small Business Budgeting Strategies: Making Your Money Work for You

Small Business Budgeting for your service business
4 small business budgeting strategies

With everything that you pour into your business, the last thing you want to see happen is for it to face some kind of trouble or, even worse, failure due to financial mismanagement.When it comes to your business, you already know everything that there is to know about the product and service that you offer, right?

No matter what kind of question a business partner, customer, supplier, or lender has about what your company does and how it can improve lives, you’ll be able to answer their questions without a second thought.

Some of those same people who ask you questions about what it is that your company does may have questions about your company’s finances and expenditures too.

With the right budget and careful financial oversight applied to your business practices, you’ll not only be able to answer those questions, but you’ll be painting a clear roadmap for where you want to be and how you’ll eventually get there.

Let’s take a look at 4 Small Business Budgeting Strategies and you’ll see how crucial a component it is to your company’s overall success.

1. Look at Your Fixed Expenses

The first expenses you should take a look at as part of your small business budgeting strategies are those that occur every month without fail and stay roughly the same each billing cycle.

Think about common operating expenses like the rent for your office space, your payroll, and the taxes that you pay.

These should be among the first things that you include in your budget, because you know you’ll always have to pay costs associated with them. After including them, you can work other expenses into your budget as part of your small business budgeting strategies. They can be shaped around your fixed expenses so that there are fewer potential surprises.

Assuming that these costs remain fairly constant, you can plan for them several months at a time so that you’ll know what you pay immediately as well as what you’ll be paying for them in the long term.

2. Pick Out Costs That Can Dramatically Change From Month to Month

As part of your small business budgeting strategies, you also need to be aware of the costs that can change depending on factors like how much business you do.

Look at:

  • Your inventory
  • How many deliveries you’ll have to take on every month
  • The cost of the materials you need to provide your products or services
  • Similar things of that nature

You don’t have as much control over these as you do your fixed costs and you should plan your company’s budget around that fact accordingly. But here are some ways to reduce operating expenses in your business.

If a product or service that you offer corresponds with a particular time of the year more so than it does with others, then you’ll see an uptick in customers during that time. With that being the case, you need to consider inevitabilities like increasing employee payroll to make sure you have enough coverage, taking on extra deliveries to make sure supply meets demand, and the possibility of extending the hours of your service.

Conversely, your business could be in an industry that experiences regular “slow” periods, such as construction in the winter months. When that happens, costs associated with running your business may be dramatically lower every month.

These are just some of the considerations that you have to keep in mind, and they certainly don’t apply to every business owner, but showing some flexibility in your small business budgeting strategies will guarantee that you’ll be prepared for sudden shifts in activity that could affect your company one way or the other.

3. Examine Time Tested Patterns and Trends

Research is an essential part of business planning and things are no different when it comes to figuring out a budget.

One thing you may want to do is take a look at information like what other businesses in your area have experienced as far as traffic from customers and money coming in are concerned.

You can use past precedents to guide your actions in setting up your own small business budgeting strategies and further refine your expectations by considering where your company is located.  You can also consider the times that you operate compared to your competitors.

Using these methods, you’ll be able to estimate what you’ll see in revenue and plan subsequent actions related to your business accordingly.

4. It Pays to Stay On Top of Your Budget

Once you’ve come up with a viable strategy that can put the minds of investors and business partners at ease, you want to make sure that your company’s operations follow that roadmap closely enough that you’ll see the kind of success that was laid out in the pages of your business plan.

When you come up with good small business budgeting strategies, keep a close eye on the developments that follow the plan being put into place.

Over time, you may experience instances where the costs that you worked into your business plan may not be ideal for the situation at hand. When that proves to be the case, you can make several adjustments to better suit the circumstances:

  • Review your practices – With a small business, you can hardly afford to waste anything. If you find that money is being spent needlessly, then a review of your budget will allow you to make the adjustments necessary to guarantee that every dollar is put to work.

Conversely, you may find out that you have a surplus that could be put to use in some area of the business that needs additional attention.

Make it a habit to review your budget every few months. With the pace at which the world of business moves, you may need to make periodic changes to ensure that you’ll always come out ahead.

  • Keep business relationships strong – When running your company, the relationship that you share with other businesses can have a much larger influence on your small business budgeting strategies than you might think.

Whether we’re talking about suppliers who provide you with raw materials, or banks that extend loans to your company, you want to make sure that the terms you share with these entities are the best that they can be.

Doing so will ensure that you always have someone that you can rely on to deliver an important part of what keeps your company going.

  • Look at ways to lower costs – This can be done in a number of ways. If you want some additional breathing room then you can look at things like your office space and the equipment that you use. Read 3 tips for growing your business on a budget for more helpful info.

Can you find a space that’s just as good for a small amount of money? Is there any cheaper equipment out there that can do the job just as well as what you currently have?

Besides answering these simple questions, you shouldn’t be afraid to shop around for the suppliers who provide you with the raw materials that you need. Doing so could save enough revenue over the long term that you can redirect the money to more productive purposes.

When it comes down to it, your company needs budgeting in order to forecast its revenue streams and plan the appropriate steps to positive growth and longevity in your sector.

Regardless of what your company does, it helps to know where you’re going and how you’re going to get there. With these small business budgeting strategies, you can shape the kind of business plan that has helped countless companies like yours see success and become leaders in their fields.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, check out our website at www.portalcfo.com.

How to Reduce Operational Risk

how to reduce operational risk in your business

The question of how to reduce operational risk is one that should be on the mind of every last business owner. It doesn’t matter if you run a hot dog cart or a multinational conglomerate. It doesn’t matter if you’re the only employee or you employ a workforce that could populate a small city.

Whoever you are, whatever you do, you need to know about the many different ways your company is constantly exposed to operational risk. You also need to know what you can do to reduce risks so that they aren’t as much of a hazard to your company’s success.

Doing so is necessary to maintaining a competitive advantage. It also ensures that your company is able to keep a strong presence in its sector. Because no businesses are alike, the risks that they face will differ, so this post will take a broad look at how to reduce operational risk. By the end, you’ll be able to take the principles of what’s discussed here and apply them to your own business practices. This should allow you to reduce the impact of the losses that your business could incur as a direct result of risk.

4 Steps – How To Reduce Operational Risk:

Step 1:  Managing Equipment Failures

For all of the good that technology has done for the world of business, the equipment that you use to conduct your operations can still break down. Depending on the severity of the failure, you could face crippling losses in revenue.

It’s because of the fact that technology has become so intertwined with businesses that extra steps have to be taken to:

  • safeguard information
  • make sure all equipment works properly
  • ensure alternate plans are in place in the event of a failure

If your company relies heavily on information technology (IT) infrastructure like a computer network, then make sure that programs and hardware are up to date and protected by the best security that you can afford.

If you operate in manufacturing, transportation, or any other industry that relies heavily on machines with a lot of moving parts, then the question of how to reduce operational risk can be answered by adhering to regular maintenance and making sure that small issues are addressed quickly enough that they don’t become large issues.

Step 2:  Keep Strong Business to Business Relationships

Your business wouldn’t be able to survive without the work of other businesses. Whether you rely on another company for supplies, shipping, or anything else that you need to count on in order to run your own enterprise, it pays to keep strong relationships with other companies.

In thinking of how to reduce operational risk in this respect, you have to look at common risks like miscommunications, accounting errors, delivery failures, incomplete or missing legal documents and vendor disputes as ways that business to business relationships can expose your company to risk.

With this type of operational risk, you want to make sure that you and your vendors and suppliers are always on the same page when it comes to your transactions. It never hurts to double check figures and make sure that invoices, quantities, and other aspects of the business to business supply chain are correct.

Doing these things can keep your relationships strong and reduce the likelihood that errors common in these sorts of interactions will have negative effects on either side of the transaction.

Step 3:  Having Adequate Insurance

You want to make sure that, in the event that something does happen, your business has the proper insurance it needs to cover the event.

It could be anything from property damage to a personal injury, but having an insurance policy that covers something that could negatively impact your business could mean the difference between a minor and major disruption in your business operations.

When thinking about how to reduce operational risk as far as your insurance coverage is concerned, go over your existing insurance policies and make sure that all possibilities are covered. It pays to consult with a representative of your company’s insurance broker to guarantee that you have all of the coverage you need.

From property insurance to liability, there are a number of different types of insurance that you can get to cover your business. Make sure you have them all and risk won’t catch you off guard.

Step 4: Know the Regulations

If you stay up to date on state and federal regulations as they relate to your business, then you take a huge step towards knowing how to reduce operational risk.

Whatever it is that you do, you want to make sure that all of your business practices are well within the confines of the law of the land in which you operate.

Things like health and safety standards, employee wages, licensing and certification, taxes, and permits all have an influence on how you’ll run your business. Don’t let ignorance of the law lead to trouble later down the road.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.

Rationalize your business now before it is too late

Compensation PackageOne topic that is all over the news these days is state employee benefits.  I understand that compensation is a very challenging issue; with key constituents making powerful points on both sides of the argument.  The point, as I understand it, seems to be:  “what was agreed to” and “what can afford to be paid.”  I tried to think about the issue in basic terms and came up with a similar example that I see time and time again in my CFO consulting practice.  So, let’s look at the issue from a business owner’s perspective.

I asked one of my business owner clients how he arrived at the dollar amount of his monthly compensation package.  He replied to me that $X is the amount of money that he needs to live on.  Gently, I explained to him that based on his company’s current revenue and net income, his business could only afford to pay him $X MINUS $5,000 per month.  You can imagine how my response was received by this hard-charging entrepreneur.  I explained to him that he (and his business) was sitting on a ticking time bomb that was called “his pay.”

He had already weakened his company over the last year by taking more compensation out of his business than his business could afford to pay him.  The problem showed up in the form of a lower-than-usual cash balance, a higher line of credit balance, and a constant scramble to collect accounts receivable in order to make payroll.  In other words, the business was doing just fine (financially healthy and growing slowly), but it was beginning to struggle to pay its owner’s ever-increasing compensation demands.  I figured that I better press the argument before the company reached the point of no return; aka “ceasing to exist in the business world.”

I explained to the business owner that the growth in his compensation package had outpaced the growth in his business and therefore he was slowly killing his business and therefore his livelihood.  Any business, I explained, can only afford to pay its owner “so much”.  You have to decide if you can live on whatever that “so much” is or consider other alternatives.  You are a risk-taking entrepreneur.  You have to decide if you can grow the business to the point that it can afford to pay you the compensation that you desire and refrain from taking your ideal compensation out of the business before that time arrives.  If you believe that your business will never be able to provide the compensation that you desire, either deal with it or sell that business and go start another business that will provide you what you seek.  No one can answer that question but the business owner.

My client wasn’t having any of it.  He told me that he was accustomed to living a certain “lifestyle” and come hell or high water, he was going to live that lifestyle.  I explained to him that he needed to reduce his pay or else he would go out of business. There was no other way around it.  He is choosing not to do it.  He believes that he will grow his business quickly and eliminate the current stress.  Ah, the charmed life of an entrepreneur!

The same example applies to the current state benefits debate.  The states built the benefits packages, attracted the employees with it, and now revenue has fallen short and the states can’t afford to pay the benefits packages they previously negotiated.  The current path is simply unsustainable.  State employees refuse to have their benefits reduced and I fully understand their argument and actually agree with them. However, if a reduction is not made to the benefits in order to bring them in line with revenue, the state will be forced to restructure in some way; maybe even lay-offs.  What would you do if you were faced with this crisis?  It’s not an easy question to answer.

Remember, running a business successfully does not need to be complicated.  Keep it simple!

https://portalcfo.com/2017/06/23/business-growth-planning-preparing-future/

https://portalcfo.com/2017/12/01/business-analysis-things-analyze-business/