Category Archives for "Small Business"

Small Business Technology Spending

By Randall Orser | Small Business

Technology in the hand of businessmen TNSmall business owners can find many ways to spend their capital on the latest business software applications. These solutions are designed to automate a small business so it can become more efficient and achieve other business priorities. To grow your business, you must invest in software solutions. Consider these four reasons for improving your small business capacity through business technology acquisitions:

  1. You can stop assuming you know what technology solutions work best for your company. As a small business owner, you need good advice from IT experts. Sometimes you have to follow an IT expert’s recommendation to invest in technology upgrades, especially if your servers and software solutions are obsolete.
  1. You can prioritize technology spending along with other types of non-recurring expenses in the company budget. If you don’t prioritize tech spending, you can hold your company back from increasing its capacity in important areas like marketing. You might neglect certain segments of the market, such as customers who do business on their mobile devices. Other businesses come along with better tech solutions and provide the capacity consumers want. You lose your market share.
  1. You don’t want to miss opportunities to acquire IT technologies with a quick return on investment. Your competitors might risk more capital after studying the potential ROI of each business solution. They develop business plans around a timeline for recovering their investment. When you don’t invest in tech, other companies surpass you in business intelligence. Their ROI includes employees with access to better technologies. These employees make better decisions, which leads to higher overall performance.
  1. You should be realistic about how your revenue streams change over time. If you aren’t bringing in the revenue you projected a few years ago or even last quarter, that’s okay. Technology spending is part of your business plan, and you scale it down in proportion to your drop in revenue. Study available technology solutions. Pick a solution that will help you increase your revenue streams in time to change the downward trend.

There may be an upswing in the economy that enables you to increase tech spending; waiting for the upswing for big purchases will hurt your market position. Remember that business technology automates important functions in a small company, enabling employees to make good decisions and to focus more on innovation.

If you aren’t sure how to build your business intelligence through technology purchases, hire the services of an IT consulting firm specializing in small business clients. Get the best tools for your business!

Determining Your Hourly Fees

By Randall Orser | Small Business

Time Money Signpost Showing Hours Are More Important Than Wealth TNAs an entrepreneur, are you concerned about whether your hourly fees are enough to cover your own salary, your expenses and are enough to secure a reasonable profit? If so, don’t despair. A number of entrepreneurs and small businesses have difficulty determining their hourly charges. Most have these issues when their new business venture first gets off the ground. Only later do they find out that their hourly charges aren’t enough. As such, it’s imperative to clearly define your enterprise’s hourly fees. This involves taking steps to ensure your hourly fees not only cover your salary, but that they cover your direct expenses, indirect expenses and provide a profit. So, where to begin?

A simple calculation to determine hourly fees

The calculation to determine hourly charges is quite simple. Hourly charges must account or the entrepreneur’s salary, their direct expenses, their overhead and their profit. When looking to determine your hourly salary, think of the salary you would be paid if you were an employee of a company. Next, your direct expenses and overhead must be accounted for within your hourly charges. Finally, you’re in business to make a profit. Don’t forget about the importance of securing the profit you’ll need to finance your enterprise’s future growth. It’s never enough to just cover your salary and expenses. You must account for profit in order to secure your company’s future. That profit comes from adding your hourly salary, direct expenses & overhead and dividing this total by your desired profit. We’ll provide the calculation below and then analyze each portion of the calculation in detain.

Calculation: (salary + direct expenses + {overhead or “indirect expenses”}) / profit

Coming up with your hourly salary

Don’t shy away from your hourly salary. If you’ve decided to move forward with your own business, then you’re well within your right to have the same salary, if not more, than you would if you were working for another company. This may require you to research your given profession. Concentrate on defining your hourly salary relative to your experience, where you live and where your customers will be located. Again, it might require some analysis, but you should have plenty of information at your disposal.

Understanding the difference between direct & indirect expenses

Determining your hourly fee means you must understand the difference between direct and indirect expenses and how both play a role in your enterprise’s cost structure. First, direct expenses are those expenditures that go directly to a specific job, product or service. In essence, these expenses include the raw material, parts and labour that cover the production of a given product or the work involved in providing a given service. Indirect expenses are those expenses that are seen as above and beyond a company’s direct expenses. These would include those costs pertaining to gas, equipment and car maintenance, taxes, insurance and other miscellaneous support costs. Indirect expenses are expenses that can’t be attributed to any one product or customer, but who are still an essential part of running a business.

  • Direct expenses: Expenditures that go directly to a specific job, product or service.
  • Indirect expenses: Support expenses that can’t be attributed to a specific job or product, but who are essential in running a business.

The Role of Overhead

Overhead essentially summarizes the company’s indirect expenses. These overhead expenses pertain to those support expenses that are an essential part of the company’s operations. As an entrepreneur, you’re likely just concerned with covering your own time. However, as your company grows, you may need to hire employees. Their salary will become a part of your company’s overhead, as they fall under those indirect expenses that are an essential part of managing your business. The easiest way to calculate a company’s overhead is to take indirect expenses and divide them by direct expenses. Most companies will track their expenditures over a given period. Some may track expenses by week, while others will focus on monthly or quarterly periods. In this case, it really depends upon the size of the enterprise and the fluctuations in those expenses. Small companies have more flexibility in tracking their overhead because they can immediately determine the impact of any minor changes. Larger enterprises typically review their overhead over a given quarter or year. The calculation for overhead rate is shown below.

Overhead rate = indirect expenses / direct expenses

The key is to determine your overhead rate and then use that rate to determine your indirect expenses for each hour charged to customers. This simply involves taking the overhead rate and multiplying it by your direct expenses. Why use overhead when you can simply track indirect expenses? Well, the fact is, as your enterprise grows, you’ll have to track your overhead more closely. Gradually, your overhead will likely level out and become more consistent over time.

The importance of profit

Never forget the importance of securing a profit within your hourly fee. Profit finances expansion and secures your enterprise’s long-term future. Most entrepreneurs simply cover salary and expenses. Therefore, define your enterprise’s profit and be sure to include that profit within the fees you charge your customers.

An example of working out the hourly fee

Let’s assume you work 50 hours a week and that you’ve defined your hourly salary to be $50.00. In addition, you’ve tracked your direct and indirect expenses over a period of one week. Your direct expenses total $3,000.00, while your indirect expenses total $1,000.00. Your direct expenses would be the $3,000.00 divided by 50 hours, or $60.00 an hour. Your overhead rate would be your indirect expenses of $1,000.00 divided by your direct expenses of $3,000.00. This would give you an overhead rate of .33 or 33%. Now, you could just use your indirect expenses of $1,000.00 and divide it by your 50 hours per week. This would give you $20.00 an hour in indirect expenses. Or, you could use your overhead rate of .33 and multiply it by your direct expenses, which would give you $990.00 of indirect expenses, or $19.80 for every hour charged. For this example, we’ll stick with the $20.00 an hour as summarized by our indirect expenses.

  • Salary: $50.00 an hour
  • Direct expenses: $60.00 an hour
  • Overhead or indirect expenses: $20.00 an hour
  • Profit: 20%

Calculation: (salary + direct expenses + {overhead or “indirect expenses”}) / profit

($50.00 + $60.00 + $20.00) = $130.00 / .80 = $162.50

In this case, you should charge your customers $162.50 an hour.

Now, all of this may seem confusing, but the basic approach is to determine your salary, add your direct and indirect expenses and then determine your profit. Be comfortable with tracking your enterprise’s overhead as you will likely be hiring some help in the future. By tracking overhead, you’ll become more comfortable with how it impacts your hourly fees. If it’s simpler to track your indirect expenses at the beginning, then do so. However, be cognizant of the fact that as your enterprise grows, you’ll have to enact strategies to mitigate your expenditures, and that means to reduce your company’s overhead.

Three Characteristics Of Critical Thinking In Business

By Randall Orser | Small Business

bulb TNOne of the biggest challenges in business today is deciding what information is needed to make the best business decisions. With the extraordinary amount of information available, it is important to have excellent critical thinking skills to apply to the challenge. There are several characteristics of critical thinking that play an important role in making business decision.

First it is important to understand what the term “critical thinking” actually means. What is the definition? What are the many components, the hallmarks, the characteristics of critical thinking? How do you know it when you see it; how do you know when you have it, or don’t?

Critical thinking is disciplined thinking that is clear, rational, open-minded, and informed by evidence. Critical thinkers have the ability to critically view themselves. A rather lofty but informative definition used by The Critical Thinking Community, is “the awakening of the intellect to the study of itself.”

Here are characteristics of critical thinking that apply to business.

  1. The ability to use reason rather than emotion – this requires evidence, data, facts, a full accounting of the information that surrounds your thinking. When you challenge your own thinking you will find where you are relying on emotions and not facts.

This is absolutely critical in business today. Businesses must use reason, not emotion, to succeed. There are many cases, particularly with entrepreneurs and start-up businesses, where emotions dominate the thinking. People become so excited and take such ownership in their new idea that they lose sight of the facts and data that support the best decisions. Taking a product to market only to find out there is no market, shows flawed thinking. “If you build it they will come” works in movies but not in business.

Successful businesses require critical thinking up and down the organizational structure. The challenge today is that we have too much information. Critical thinking helps to decide what information is relevant and why.

  1. Always keep an open mind – this means you listen, take in other views and seek alternatives and new ideas. Good judgment comes when you recognize the merit of other views and ideas, and factor them into your own thinking. With open mindedness you need the good judgment to know when you have the information you need. Do not get “analysis paralysis”.

Successful executives have to keep an open mind. To be effective, they have to listen well. Every day people bring executives their views, recommendations, facts, data and opinions. The higher an executive goes in an organization the more information they have to consider to inform their decisions. Having a reputation for open mindedness can impact every stage of a career. People equate open mindedness with fairness. Effective leaders, whether they manage a department, lead a work group, direct a division or run a company, build employee and colleague trust when people know they are being heard and that their views are being considered.

  1. Take a disciplined approach – with discipline you become detail oriented and are comfortable with a lot of information. In fact, you meticulously seek the most relevant and appropriate details and do not make decisions without them. With discipline comes the ability to see the connections between ideas. Solving problems is approached systematically. Identifying, constructing and evaluating arguments become second nature.

Discipline in business and in careers is highly regarded. Discipline leads to focus. When you hear “she really knows her facts”, “he really thought through this issue”; “people admire her for good decisions”, comments are reflections of critical thinking. When we discipline our minds we get rid of clutter. We leave space for better critical thinking. Yes, you get better at it over time.

There are other, more reflective characteristics of critical thinking that should be applied in business today. Critical thinkers are more self-aware. They know their own biases and recognize built in prejudices and assumptions. They approach what they do with honesty and confidence. These qualities are also reflected in their personal lives.

Today, more than ever, critical thinking is an essential part of successful businesses and successful careers. Using reason rather than emotion does not mean you cannot be passionate about your work. It does mean than when it comes time to make important decisions you put the emotion aside. Open mindedness allows you to see opportunities no matter how these opportunities are presented or by whom. With a disciplined approach comes the acumen to identify the right information for the situation and knowing how to use that information. When these critical thinking characteristics are put together they are a powerful business skill to be admired.

Are you Winning? Using the Figures to Boost Your Home Business

By Randall Orser | Small Business

Win Target Shows Successes And VictoryThe main indicators of success for your business are ‘work’ and ‘finance’.

Work is a straightforward measure of how much work you have on at any time. How many orders have you completed? How many are there in the book that haven’t been started yet and how many are in progress? A regular view of the value of orders in the book and the value of work finished each month will provide a trend.

Finance is measured in many ways. For the small business, it can be simply ‘what’s in the bank?’ and ‘how high is the overdraft?’   As with the work, however, a regular review for trends is extremely valuable. For both, a trend upwards is a good sign that business is good and getting better. Downwards is almost always not good.


The most obvious measure that everyone watches is simply ‘how much money is in the bank?’ A credit balance is good; an overdraft can be a challenge.   The balance will be the difference between money paid out and money taken in.   If you have more money going out than is coming in, you will not be in business for long. The trick is to identify it early and find out what’s going wrong.

If you have a lot of orders coming through and being completed but are still not making money, first confirm that the invoicing and receipt processes are running smoothly. No one will pay if you don’t ask them for it!

Next, review what you are charging for your product against what you have to spend to make it.   Be sure to include your overheads in the cost calculations. If it costs you £20 per month for the telephone services and during that month you can produce 100 of your product, then the cost calculation for each item must include 20 pence to cover the telephone overhead. Similarly electricity, premises rent and rates, insurances, any employees (and your time), and any other charge that you pay, will all have to be covered by what you charge people for your product. The basic calculation is simply to divide the annual cost by the number of items you can produce in a year. The price at which the item is sold must include the complete cost for producing it. A small extra amount added into the price on top of the cost is your ‘profit’. Too much and people won’t buy. Not enough and you won’t be making enough to stay in business.

If it is costing you more to make than you are charging for it, then you have two avenues: put up the price you charge and/or cut down the costs for making the product.

I’m Charging Right but Still Not Making Money

If the charge for your product already covers the item production and you are selling and invoicing successfully but still not making money, then you may be building up a stock of materials or parts. This is easily done if your practice is to order slightly more than you think you will need, but never go back and use the extra that is sitting in the stock cupboard. If you have built up a high stock, you need to consider how to reduce it and maintain it at a more appropriate level.   There may be quite a lot of money sitting in that cupboard that could be working better for you. You also require a system for using up what’s in the stock cupboard. Perhaps you order less. Better still, you may include a current stock check into your routine when pricing a job and ordering materials.

Making the Most of Trends – a Case Study

The other process for useful information is comparison. Comparison of this month with the same month last year will show whether things are getting better or worse but will also provide clues to what might be causing the trend.

In the following case study, Martin started his hairdressing business in January 2010 and in mid-2011 is analysing his receipts for the first 14 months he has been in business. He can see some important trends:

Month    Receipts
Jan 2010 £400
Feb £900
Mar £950
Apr £1200
May £880
Jun £650
Jul £590
Aug £675
Sep £1700
Oct £2030
Nov £2300
Dec £2950
Jan 2011 £900
Feb £1200


At the beginning of 2010, receipts were very low. This was the beginning of business and people did not know him or his work. He didn’t have much advertising working for him and his main custom came from family and friends and a few people who transferred with him from his previous salon. It is common for new businesses to struggle for a couple of years while they get known and build up a clientele.

There is a steady growth from the beginning as the figures show an upward trend, although June, July and August seemed low and January 2011 showed a big drop from the months on each side. In comparison, November and December 2010 jumped upwards very satisfactorily.

When Martin compares the two Januaries they both show low takings so it may be that the starting low figure was affected by more than just being a new business. It may be that January will generally always be slow. He will need to take that into account when planning for future years.   It’s not a good idea to just charge a little more to cover the drop in work as it will alienate customers who have become used to the charges and expect them to stay the same. Changing charges requires advance notice and extra publicity.  It is better to identify why the sales are down and encourage more people to come in. If he offers a ‘post-Christmas discount’ he may be able to attract more customers in during that month.

In contrast, his sales immediately pre-Christmas have jumped upwards. He reviews who came in during those months by checking his appointments book, remembering he was run off his feet, and finds that his older female customers flocked in to ‘have their hair done for Christmas’, while the young children and teens were less in evidence. The customer mix, and the type of hairdressing that was required by them, would account for the increase in sales. He can continue to expect a pre- Christmas boom if he maintains satisfaction for these customers and can keep them coming back.

During summer his sales fell slightly. His appointment book reveals more white space than usual, showing that he had times when no one was in the salon. He remembered hearing a lot of holiday stories in the following months and realised that many of his regulars had been away and missed having their hair done with him.

In reviewing his expenses, Martin found high expenditure in December compared with the other months. His invoice file showed that he had ordered in extra quantities of shampoos, conditioners, waxes and hairsprays. He remembered that with all the extra business, he had run out of some products and had been forced to shop around for emergency supplies. This had been more expensive than his usual suppliers, on top of being extra orders. He made a note to stock up more in October so to be ready for the rush this year.

Overall, Martin was able to conclude that the business was generally good, although there was still plenty of room for more growth. He would introduce a post-Christmas discount to see if he could entice more people through the door in January.   During the summer period he probably would still have a drop in business, but he might be able to run a promotion for new customers. He could also try attracting his regulars – and perhaps others – with a ‘look good for the holidays’ promotion just before they go away. He would order in extra stocks of his consumable items ready for the pre-Christmas rush. If he doesn’t sell as much as he expects, he could use the leftover extras for his post-Christmas promotion and sell them at a discount.

In this case study, Martin is identifying, and dealing with, seasonal trends that will affect his profitability. By looking at the year as a whole, and comparing the months between years, he can see where his ups-and-downs relate to the time of year and plan accordingly. Seasonal trend is only one factor among many that make a difference to your sales. Depending on what you are selling, you may need to deal with fashions, new technologies, an event in the celebrity world, the impact of a new television program or film, a new law or regulation, an unusual weather pattern, a faulty product that lets you down, major job losses in your area limiting people’s spending, or something new that has never happened before.

The most successful businesses keep an eye on what’s happening, analyze why sales are dropping or increasing, drill down into the documents that are part of the daily process (such as appointment books and invoices), and find answers that they can then use to continue reducing expenses and increasing sales. It’s not difficult to do, but if you need help – or just another point of view – your accountant is a useful resource in analysing the figures. It will need your valuable knowledge of the daily business, however, to understand the underlying reasons and what might be done to address a potential problem.

It is up to you, as the business owner and manager, to keep an eye on the numbers, to measure progress regularly, and to address trends that are affecting your sales.

New Year’s Eve

By Randall Orser | Small Business

fireworks-display-series_04 TNIn the Gregorian calendar, New Year’s Eve (also Old Year’s Day or Saint Sylvester’s Day in many countries), the last day of the year, is on December 31. In many countries, New Year’s Eve is celebrated at evening social gatherings, where many people dance, eat, drink alcoholic beverages, and watch or light fireworks to mark the new year. Some people attend a watchnight service. The celebrations generally go on past midnight into January 1 (New Year’s Day).

The island nations of Kiribati and Samoa are the first to welcome the New Year while Honolulu, Hawaii is among the last.

New Year traditions and celebrations in Canada vary regionally. New Year’s Eve [2](also called New Year’s Eve Day or Veille du Jour de l’An in French) is generally a social holiday. In many cities, such as Toronto and Niagara Falls in Ontario, there are large celebrations which may feature concerts, late-night partying, sporting events, and fireworks, with free public transit service during peak party times in most major cities. In some areas, such as in rural Quebec, people ice fish and drink alcoholic beverages with their friends until the early hours of January 1.

From 1956 to 1976, Guy Lombardo and his Royal Canadians serenaded Canada on the CBC, via a feed from CBS, from the ballroom of the Waldorf-Astoria Hotel on Park Avenue in New York City. After Lombardo’s death in 1977, the Royal Canadians continued on CBC and CBS until 1978.

In 1992, the sketch comedy troupe Royal Canadian Air Farce began airing its annual Year of the Farce special on CBC Television, which features sketches lampooning the major events and news stories of the year. While the original 1992 edition was a one-off special, Year of the Farce episodes continued as a regular feature of the Air Farce television series which ran from 1993 to 2008—airing its series finale on December 31, 2008. Following the finale of the television series, the original cast continued to participate in New Year’s Eve specials in the years following.

Similarly, the CBC’s French language network Ici Radio-Canada Télé airs its own yearly New Year’s Eve comedy special, Bye Bye. Unlike Year of the Farce, Bye Bye has been presented by various comedians; originally running from 1968 to 1998, it was revived in 2006 by the Québécois troupe Rock et Belles Oreilles. Its 2008 edition, hosted and co-produced by Québécois television personality Véronique Cloutier, became infamous for several sketches that many viewers perceived as offensive, including sketches making fun of English Canadians and then American president-elect Barack Obama.

On New Year’s Eve, social gatherings of all sizes are organized to mark the end of one year and the start of the next. These range from small parties with family members and a few good friends in private homes to huge street parties with live entertainment, music, dancing and even public fireworks. Many events start in the middle of the evening on December 31 and continue into the early hours of January 1.

Some people mark the stroke of midnight by opening bottles of champagne or sparkling wine and drinking a toast to the New Year and the health of everyone present. Others take a short vacation to enjoy Canada’s natural beauty at its wintry best or to take part in winter sports, such as skiing and snowboarding. In rural areas in northern Canada, particularly in Quebec, some people spend all night on a frozen lake with a group of good friends and fish through holes in the ice.

Who Is Santa Claus?

By Randall Orser | Small Business

santa claus--Tidbits 2014-12-24 TNSanta Claus, also known as Saint Nicholas, Father Christmas, Kris Kringle and simply “Santa“, is a figure with legendary, historical and folkloric origins who, in many Western cultures, is said to bring gifts to the homes of the good children on 24 December, the night before Christmas Day. However, in some European countries children receive their presents on St. Nicholas’ Day, 6 December.

The modern figure of Santa Claus is derived from the Dutch figure of Sinterklaas, whose name is a dialectal pronunciation of Saint Nicholas, the historical Greek bishop and gift-giver of Myra. During the Christianization of Germanic Europe, this figure may have absorbed elements of the god Odin, who was associated with the Germanic pagan midwinter event of Yule and led the Wild Hunt, a ghostly procession through the sky. Over time, traits of this character and the British folklore character Father Christmas merged to form the modern Santa Claus known today.

Santa Claus is generally depicted as a portly, joyous, white-bearded man—sometimes with spectacles—wearing a red coat with white collar and cuffs, white-cuffed red trousers, and black leather belt and boots and who carries a bag full of gifts for children. Images of him rarely have a beard with no moustache. This image became popular in the United States and Canada in the 19th century due to the significant influence of the 1823 poem “A Visit From St. Nicholas” and of caricaturist and political cartoonist Thomas Nast. This image has been maintained and reinforced through song, radio, television, children’s books and films.

Since the 20th century, in an idea popularized by the 1934 song “Santa Claus Is Coming to Town”, Santa Claus has been believed to make a list of children throughout the world, categorizing them according to their behavior (“naughty” or “nice”) and to deliver presents, including toys, and candy to all of the well-behaved children in the world, and sometimes coal to the naughty children, on the single night of Christmas Eve. He accomplishes this feat with the aid of the elves that make the toys in the workshop and the flying reindeer that pull his sleigh. He is commonly portrayed as living at the North Pole and saying “ho ho ho” often.

Do You Have A Document System?

By Randall Orser | Small Business

Automated data processing TNAn efficient process to establish a document system would be as a documented process or flow chart demonstrating how documented records are to be started, reviewed, and retained.

Security precautions and continuing observance of standard procedures relative to document control is essential. Document management must develop a contingency plan for safety and preservation of retained documents, electronic files and software. The contingency plan would include the prevention of unauthorized cyber attacks, limiting access to update servers, and a failsafe systematic method of backing up of essential business related information at scheduled intervals.

Document management is controlling changes to documents in a systematic fashion and ensuring that only valid versions of documents are available at points of use.

The document management system must have:

  • a current, readily available master list
  • a process for controlling changes
  • a process for distributing new revisions and retrieving obsolete revisions
  • a process for controlling cross references and external documents

Document management is a quality system function. That quality requirement is defined by international standards, such as ISO, and is also inherent in traditional non-ISO systems. The document management system is in place as empirical evidence of the maintenance of both internal and external company or customer documents.

The document management system is to ensure that all documents are current, readily identifiable, and accessible to those on a need to know basis. Controlled documents are usually accessible through a company intranet and in a .pdf format to prevent unauthorized changes.

Document management administration is responsible for the distribution, maintenance and the security of documents from unauthorized changes. The document administrator is also responsible for replacing any obsolete documents when a new revision has been received or a change has been issued. The definition of a “document” can also include customer-supplied specifications, electronic files and software.

Since documents, such as designs, work instructions, and contracts can be in characterized as “living” documents, a significant part of the management of the system is in its ability to react quickly to document revisions or obsolescence. This is usually done either through a revision to an existing document, after approval of those who would be affected by this change, or through the complete removal of the document as from “active” into an “obsolete” file. And if the document must be retained in some manner, is there an internal, customer, or regulatory requirement for document retention for a defined period of time?

4 Good Reasons to Build a Home Office for Your Home-Based Business

By Randall Orser | Small Business

Modern Luxury Loft / Apartment Architecture Interior TNFollowing the current economic crisis, many people who lost their jobs have decided to become entrepreneurs. Their encouragement to do so comes from stories and news about individuals who succeeded in their home-based businesses. Indeed, running a business from home offers a lot of benefits and can be profitable too. If you have begun doing business at home, you may want to formalize a little. Specifically, you may want to build a home office from where you can manage and operate your home business. This is one aspect that is often neglected by many small home business owners especially those who put value on how much they save by working from home. Building a home office, however, will open greater opportunities for your business.

  1. A Home Office Boosts Your Professional Image

If your business goals include growth and expansion, then you will need a home office. It will validate the professional image you want to impress on your clients. By having a home office, you have your own place to meet and entertain your clients and prospects in a businesslike manner. Do remember that image is very important when doing business and you need to hold up that image.

  1. A Home Office Offers Convenience

Another reason why you ought to create a home office for your home business is the convenience it will give you. You get to save on time and energy while exerting lesser efforts in operating your home business. You have a designated space in your home that is dedicated to your business affairs. You can have everything you need in there, from furniture and equipment to materials and supplies, to make your work easier. And when you feel that pressure is building up at work, you can always cross over to your home and enjoy its comforts even for a short while.

  1. A Home Office Keeps Your Business Life Separate from Your Personal Life

Those working from home may find themselves constantly interrupted by demands from other family members and other household responsibilities. As a result, you may not be able to complete your tasks and could miss out on deadlines. Having a home office can isolate you from domestic concerns at least for the duration of your working hours. You should then be able to have peace and focus on your tasks yet be accessible enough in case of emergency.

With a home office, you are not abandoning your responsibilities to the home. You’re merely establishing a boundary for your professional life. The other members of your household need to understand that your work is real work and that you will need to be serious about it. It will help if you let them know about your working hours so they won’t bother you during that time. It is for this reason that the ideal location of your home office is in a separate room with a door you can keep closed while working.

  1. A Home Office Gives You Opportunities for Growth and Expansion

If you have a home office, you can explore more opportunities that will help you grow and expand your business. As you may be aware, traditional business establishments have separate personnel attending to the different aspects of the business, like a human resources department has its own staff and so do the other departments such as tech support, finance, and sales, to name a few. It is different with a home business setting, especially those that are in the start-up stage when the business owner does everything. In time, when you can afford to pay salaries, you may consider hiring employees although you will need to take care of a few things like withholding taxes and insurance coverage. Then again, the increase in your expenses and in your administrative duties may well be justified considering the many benefits of having employees to help you generate bigger revenues while reducing your own workload.

Why Outsourcing is a Good Option for Home Business Owners

By Randall Orser | Small Business

Outsourcing Definition TNThere are those who frown upon the current trend of offshore outsourcing. In fact, in 2004, during a Strategic Research Institute conference, there were at least 7 workers’ organizations that rallied against offshore outsourcing in New York where the conference was being held (source: Those who are against offshore outsourcing contend the practice deprives many American workers of job opportunities. They may like it or not, but it looks like outsourcing is here to stay because many businesses, especially home-based businesses, highly favor it. Outsourcing has proven itself to be a cost-effective strategy to get things done. There are three reasons why you would want to outsource your home business. For one, it is cheaper than hiring full time employees. Second, you do not have to go through the process of direct hiring and firing. And finally, you can take advantage of the expertise that is available overseas.

Cheaper Labour

Many home businesses are small-scale in operations. They cannot afford to pay staff working for them full-time. Yet, the home business owners usually find themselves swamped with work and realize that they do need help. Some manage to get part-time workers but salaries eat a big chunk off their profits. Now, it is a fact that wages are much lower in other countries compared to the pay range in North America. You too can get those foreign workers to work for you and still pay them based on their local rates. The BPO (business process outsourcing) industry is growing in many countries like India, Bangladesh, Pakistan, and the Philippines. They have several companies servicing American businesses.

Advantages of Outsourcing

Other than the lower labour expense, you can save money when you outsource your home business. You do not need to make additional investments on new furniture, computers and bigger office space just so you can accommodate workers. Instead, you get to use the facilities of the BPO vendor. Also, you pay them on a fee-for-service basis, which means that what you incur are variable costs instead of fixed expenses. You get to enjoy staffing flexibility with outsourcing. If your business has seasonal or cyclical ups and downs, you can easily get workers for the duration of the high demand and release them when you expect the demand to be low.

If you’ve been spending more time on your work than what you originally intended to, outsourcing some aspects of your home business will enable you to cut down your working hours. You can then have more free time to pursue other business opportunities. You can also reclaim the time that you should devote to your family and personal life. BPO vendors have developed the skills and competencies of their workers in various business processes. They are also continuously updating their knowledge and technology to keep abreast with competition. When you engage their services, you avail of their talents and expertise that in turn puts you ahead of your own competitors.

What You Can Outsource

You can outsource the business functions that you would delegate to employees if you were to hire. Review your list of regular tasks and note those that you can’t seem to find the time to work on even if they’re fairly easy. You may also want to outsource those repetitive tasks that you don’t enjoy doing. The most often outsourced jobs include customer care and sales support, which include responding to phone-in queries and complaints, telemarketing, order taking, and invoicing. Many home businesses also outsource their accounting functions, production, fulfillment of orders, website administration, and data entry, among others.

You really do not need to work harder than you have to and you should not miss out on orders because you’ve already reached the limit of what you can do on your own. Outsourcing some areas of your home business can be advantageous for you; it can increase your capacity without the hassles of actually hiring more people.

Is Now a Good Time to Be Thinking about Starting a Business?

By Randall Orser | Small Business

Businessman falling TNIs now a good time to be thinking about starting a business? The answer depends on several different factors. The most important factor that one needs to consider when answering this question is whether or not you have the venture capital to do so. When the economy is in the throes of a downturn, finding the money to start up a new business can be difficult. Therefore, if you have a source of venture capital already in place, you are one leg up and ready to start a business of your own.

What Type of Startup Business Has a Chance?

While the economy might not be that great at the moment, there are several different types of businesses that are continuing to grow and find success. The truth of the matter is that people cannot be expected to give up everything. There are items that people need to survive, items that businesses need to grow, and items that people simply want.

Therefore, certain businesses are going to thrive while others are going to struggle. Plus, certain members of society can still afford to continue living at the same level that they have been living at. Consequently, these individuals can still afford to purchase whatever they want to have.

In general, businesses that can provide goods and services for reasonable prices and fees are going to fare better than their counterparts that are charging excessive rates and prices. In general, fast food restaurants and discount stores are hanging onto a fair share of the market. Additionally, businesses that provide a necessary service or essential commodities at reasonable rates are also surviving. Plus, businesses that cater to current trends in technology, learning, and social networking are also in a good place to continue thriving.

Tips on Becoming a Successful Recession Startup Business

In order to make a go at a startup business and succeed, the stage has to be set just so. In essence, all of your ducks need to be in a row and it’s best to get them there before you begin. Follow these simple tips to get started on your new business venture with a positive step in the right direction.

Venture Capital Tip

Make sure that you have the access to a source of venture capital. If you are one of the lucky ones who can still get a loan at an affordable rate, then that should be sufficient. If you aren’t going to be able to take out a loan, then make sure that you have the cash that you will need to function as a business for at least one full year and ideally two full years. Don’t rely on potential sales or business income. If you don’t have it, you can’t count it.

Research Tip

Do the research before you select the type of business venture or the location. If the area is already inundated with similar enterprises, you’re cutting off your foot before it even takes that first step. Check out how many others are already selling the products or service that you want to sell in a particular locale. Check out their advertising scenario. Assess their level of success by watching their clientele traffic for a week or so. If need be, switch the location that you are considering or tweak your business idea to an area for which a true need exists.

Beginning Business in a Small Way

Don’t over invest your money during the beginning stages. Start out small and work your way up. There’s plenty of time to amp it up once you get started. However, if you need to shift gears and you’ve already dumped all of your cash into the project, what are you going to use to adjust your plan? Exercise a bit of frugality and shop for your supplies and needs wisely. In fact, make a budget and stick to it so that you don’t run out of business capital too quickly.