bizthreads.net: Business Information for Entrepreneurs by an Entrepreneur

Educate Yourself – Loan Programs for Small Businesses

If you’re considering starting a small business, your first stops need to be MoreBusiness.com, a one stop small business resource center (type “loans” in search node) and the U.S. Small Business Administration’s website. They offer many services and tools you’re likely to find helpful.

Today, we will discuss SBA loan programs.

There seems to be some confusion surrounding the role of the SBA in providing startup financing via loans for small businesses.

First, the SBA - an independent agency of the Executive Branch of the Federal Government - does not actually make loans to businesses.

But, what they can do is guaranty loans made to small businesses by their partners.

Their partners might include community development organizations, lenders and microlending institutions.

Two SBA Loan Programs Especially Designed For New Businesses

SBA has a five different loan programs. However, the two listed below are specifically designed for new businesses…

• Basic 7A Program - This program is the most frequently used loan program by the SBA.
  
  In the most general terms, a business owner applies for a loan through a commercial lender who, depending upon their confidence in the borrower, may ask the SBA to guaranty a portion of the loan.
  
  Visit Small Business Administration - Basic 7(a) Loan Program for more info.

• Micro-Loans - This program offers small ($35,000 or less), fixed rate, short-term loans to both new and growing businesses.
  
  Intermediary lenders are likely to require some type of collateral and the personal guarantee of the business owner. They may also require the business owner to fulfill training or planning requirements prior to even being considered for a loan.
  
  For more details, visit Small Business Administration – Micro-Loans.

If you need startup or expansion funds, Morebusiness.com and the SBA are both great resources.

How to Keep Your Small Business’ Reputation Intact

In order for your small business to grow, you need to ensure that your reputation is not simply maintained, but enhanced in the eyes of your regular and prospective clients.

It only takes a single incident to mar your reputation forever.

Be Honest and Transparent in All Your Dealings

You should ensure that you are honest and transparent in each and every business transaction, be it with your clients, suppliers or employees.

This will build up your reputation as someone who can be trusted. Do not try to cheat – it will just be a matter of time before you get caught and your reputation is torn to shreds.

Maintain Strict Control Over Your Employees

Since you probably won’t be able to attend to every customer on a personal basis, your employees will become the face of your business.

You should keep a strict vigil on the actions of your employees and ensure that they handle every job to your customers’ satisfaction.

Weed out inefficient or dishonest employees before they permanently mar your reputation.

Work on Improving Your Reputation

Instead of resting on your laurels after establishing your small business, work on improving your reputation. Get accurate feedback from your customers on a regular basis and improve on your weaknesses.

It is very difficult to build up and maintain a business reputation - and very easy to lose it all in a single moment. This is why you need to work tirelessly towards nurturing and enhancing your business reputation.

Your efforts will definitely bear fruit in the long run.

How a Training Program Can Improve Employee Efficiency

Implementing an employee training program on a regular basis is necessary in order to remain up-to-date with the current trends of your industry – and also to improve your employees’ efficiency.

• A Training Program Can Help New Employees. A training program can help your new employees to settle in quickly, meet your other employees and understand certain business processes and procedures.
  
  Your new employees will get into a groove more quickly, and contribute to your business sooner.

• Raise Your Employees’ Knowledge. Your employees’ technical knowledge can be upgraded with a good training program, and they will be better equipped to deal with clients.
  
  By having a training program, you will help them solve problems on their own faster, and thus improve their efficiency.
  
  Your employee’s skill range will also improve and they will be able to tackle a wider variety of complex problems at a faster rate.

• Raise Employee Morale. Because they will be well-trained to do their jobs, they will experience a higher level of on-the-job success.
  
  This will raise their morale and inspire them to work even harder. Your employees will also learn their role in your business – and this will make them more responsible.

• A Training Program Encourages Bonding. A training program will enable your employees to find their strong and weak points, and help them bond together and work as a team.
  
  This will convert individual employees into a formidable force that will make them more efficient and result in improved business.

Implementing a training program is a must, especially if you have a small business. It will definitely improve your employees’ efficiency, reflecting positively on your business in the form of increased sales and quicker problem resolution.

Different Types of Online Businesses to Start

So - you know you want to have your own business, but you are having a tough time deciding just what kind of business to start.

Let’s take a look at the options out there, so you can narrow down your choices.

• Developing a Business from Scratch – This type of business is where you do it all. From developing a product to creating it and then selling it, this is a business that is all you.
  
  While this is a high-risk, high-responsibility venture, you also have the best chance of being rewarded for your work with higher profit margins.

• Affiliate Program Business – Even if you don’t have your own product to sell, you can still have a business that you believe in and that is successful.
  
  Affiliate programs are those where you refer customers to products you want to sell. Every time a sale is made from your referral, you get a small commission.
  
  Companies like Amazon.com offer affiliate business opportunities.

• Direct Sales Business – From Mary Kay to candle companies, you have likely seen or heard of direct sales businesses in the past.
  
  These are companies where you sell products from another company. You show the items for sale to potential customers on your website and take their orders. The company ships the items, with you getting a cut of the purchase price.

• Resell Business – In this type of business, you are in charge of the product line and purchase items to sell at wholesale pricing.
  
  This means you get the markup percentage as a profit, not just a commission. But you will also be responsible for keeping inventory warehoused and shipping items to customers when they are purchased.

Select the type of business you want to run, and you will take your first step towards you new life as an online business owner.

How to Handle Multiple Businesses

In these competitive times, you might find that one single small business is not enough to take care of rising expenses.

If you are thinking of running another business along with your current one, then here are some pointers to help you to handle them concurrently.

Practice Good Time Management Techniques

You will need to devote sufficient time to your businesses so that one doesn’t progress at the cost of another.

Manage your time so that you are present when crucial decisions need to be made, or during peak hours of that particular business.

Try to avoid handling multiple businesses that are labor-intensive; you might not have the time or energy left to handle them.

Learn Money Management

You will need to maintain separate accounts in order to keep each business as its own entity.

By robbing Peter to pay Paul or vice versa, you will only end up with a bankrupt Peter and Paul. If one of your businesses is struggling, then it may be better to abandon it.

Manage Your Employees Effectively

Since you might not be physically present in your multiple businesses, hire the right employees for the job - and maintain close tabs on them.

Get regular updates so that potential problems can be quickly nipped in the bud.

Learn To Be Accessible

You should be accessible for your clients as well as your employees, so that they feel that you are actively involved in that business.

Even if you are at another office, you should be accessible by phone or email. Use technology to the fullest.

By keeping all these aspects under your control, you can successfully manage your multiple businesses – and bring in multiple profits.

What to do if Your Small Business is Sued

Even if you are running a small business, you could get sued for a ridiculously large amount of money due to a single mistake.

In addition to some basic precautions, you will also need to take other steps to counter the attack and increase the probability of winning the lawsuit.

Let’s look at some steps you should take if your small business is sued.

• Hire An Attorney Immediately. You should immediately hire an attorney in order to file a response to the lawsuit.
  
  If your insurance policy specifies that the insurance company will defend you, then that is even better. Ultimately, it might be the insurance company that will have to cough up the money if you lose the case.
  
  This brings up another important point - and that is to take out an adequate insurance policy in the first place.

• Do Not Waste Time. Do not treat a lawsuit as a low priority. If you do, you and your attorney will not have enough time to prepare for your defense.
  
  It might also send the wrong message to the court if you are unable to file your response during the required time frame.

• Get The Relevant Papers Ready. If an employee has sued you, then you need to get all the papers related to him/her or their attorney.
  
  If a client has sued you for lack of service or due to a faulty product, then you will have to gather factual data on your service or product.

• Launch A Counterattack. In addition to filing your defense, you will also need to find out the chinks in the armor of the employee or client that is suing you.
  
  If you are not at fault, then you will also need to plan your counterattack along with your attorney.

If you find yourself in this unfortunate situation, there is no need to panic. Instead be prepared – that is the best defense.

Employee Retention Tips for Your Small Business 

For your small business to run smoothly, it is essential that you retain your employees so that everyone, including your clients, feels that they are part of one big family.

Here are some employee retention tips that will benefit your small business.

Take Personal Interest

You should not forget about your employees once you have hired them. Instead, take a personal interest in each of them.

Monitor their progress and find out whether they are happy working for you. Disgruntled employees can lower the morale of other employees and spoil your business’ reputation.

Provide a Good Working Atmosphere

You should ensure that your employees are well-protected during work. Take out adequate insurance policies and ensure that they are satisfied in their work.

Motivate them and increase their skills and responsibilities so that they do not get bored.  

Be Accommodating

If you have employees with families, then make sure that you are in tune with their individual problems.

Show some flexibility regarding work hours so that they can balance out their work and home lives.

Also ensure that your employees are aware of your efforts, so that they do not take you for granted. 

Help Them Advance Their Careers

Help your outstanding employees by promoting them on a regular basis.  That way, they get ahead in their careers. This will increase their loyalty towards you and your small business.

Try some of these strategies and you will find that very few of your employees will desert you for greener pastures.

How to Ensure That Your Small Business Runs Smoothly In Your Absence

If you have a small business, then you need to put a plan into place in case you are unable to run it for a period of time.

This could be due to a number of reasons - an accident, a death in the family or a prolonged illness.

Here are some tips to ensure that your business functions well in your absence.

Train Your Staff Well

You should train your staff well so that in case of your absence, they concentrate on the work at hand instead of taking undue advantage.

Your employees should have a sense of discipline; and your clients should get the same level of attention, even when you are not physically present in the office.

Implement a Universal System

You should have an efficient and easy-to-understand system in place, from attending to client’s inquiries to order processing and collection of payments.

This way, when you are unable to be in the office, at least your employees will be comfortable in continuing their daily tasks without supervision.

Establish a Chain Of Command

You should not only train your employees well but also keep an eye out for employees who have gained the respect of other workers.

That employee should be given small chances to lead the team, so that if you are not around there is still a leader to take them forward.

The employee you choose should be honest and knowledgeable, and should also have clear, strong leadership qualities.

Be Accessible

Even if you are ill or are not physically present, you should be accessible by phone, fax or email.  Your employees need to be able to inform you of the latest happenings in the office; they will also be able to take important instructions from you.

So, even though you might not be physically present in your office or store for some time, follow these tips to still ensure that your small business performs like a well-oiled machine.

It Ain’t Easy Being Green Your Small Business and the Environment

Whether your business is small or large, you can still do your bit to save the environment by following these simple tips.

You’ll also be able to save a good amount of money!

Install Sensors to Shut Power for Unused Areas of Your Workplace

You can install motion sensors throughout your workplace. These devices switch the power off when there is no motion detected after a particular period of time.

This will save a lot of energy and money - and you can easily recover the cost of this investment over time.

Set Your Gadgets on Power Save Mode

Set your computer monitors or televisions on power save mode, so that they automatically shut off if there is no activity for a certain period.

This will save a lot of power, since these products consume a lot of electricity.

Recycle Everything

You should shred all your important documents. Then mix them all up and use them as packing buffer when you pack your products for shipping. By doing this, you can avoid buying bubble wrap for your packing needs.

Buy recycled paper for your business needs and also remember to print on both sides of the paper if you are printing trial reports.

Try to limit the use of disposable plastics in your office by switching to porcelain mugs or glasses, which can be washed after every use instead of just being thrown away.

Save Paper and Ink When Printing

If possible, redesign your sales invoices to fit in half a page, so that you can save on paper. You should also use ‘fast’ or ‘economy’ mode when printing non-critical reports to save on cartridge ink or toners.

Use the above tips to do your part to help save Mother Earth - as well as save a little money for yourself at the end of every year.

When to Say No to New Business

When you are new to your business, you could have a tough time getting new and continued business. In your desperation, you might also cater to clients that you would not normally do business with.

Here are some cases where you should say no to new business.

When Clients Don’t Respect You

There are clients that will be very rude to you - who may think that by giving you business, they own you or that you are obligated to them.

You should avoid this type of client at all costs. You have every right to expect that your clients give you the same respect that you give to them.

Clients Who Value Only Money

There are always customers who will be desperate to make sure that they get the lowest price possible at your expense. They will regularly deduct some amount from your payments for frivolous reasons, and threaten to go to your competition.

Drop customers like these like a hot brick. They will end up costing your more money in the long run.

The Time Bandits

There may be some clients who remain confused, even after you have spent hours trying to explain a particular product or service to them.

Such clients will only end up wasting your time, and in the end might go to your competitor to purchase the product. Spend only a limited time with people like these - you may have to ignore them if they are still confused.

Clients Who Expect Freebies

There are some clients who will expect to pay only once - and then expect all future services to be free.

They will not pay you for any extra effort that you make. Customers like this should tactfully be avoided, since it will only result in a waste of your time and effort.

Turning down new business may be hard; but in some cases it is necessary to ensure that your business is profitable.