By David Cotriss: 8 Tips and Resources for Managing Your Business Finances

September 10, 2009

By David Cotriss

One area many business owners struggle with is keeping track of their finances, but it is one of the most important areas given that cash flow is the lifeblood of the business. Small mistakes and a lack of knowledge and resources can be costly and problematic.

We’ve selected some of the most important things to consider and provide these tips and resources.

• Find the best local credit union. Given their frequent willingness to provide loans, finding a credit union that understands the needs of your business can go a long way. There are many online tools to find credit unions based on specified criteria. Many local credit unions require membership in an affiliated organization, often listed on their web site, but costs to join are usually minimal and well worth it. Here are a few tools to start with: Find A Credit Union, Credit Unions Online, Credit Union National Association.
• Find a trusted mentor. Access to free help is just a click away, with sites that help connect entrepreneurs with mentors fitting their needs. Having a mentor assist with setting up finances can be invaluable if the person is trustworthy. One resource is the Association of Small Business Development Centers, which provides access to full-time business counselors around the country, often former entrepreneurs or M.B.A. graduates. Other sites for finding mentors include SCORE(affiliated with the Small Business Administration), iMantri and MicroMentor.
• Choose the correct accounting software. While software is a mainstay of small business finance, sorting through dozens of choices isn’t easy, since there may be better options for your specific needs than the popular QuickBooks program and related packages. Find Accounting Software is a free tool that helps find exactly the right solution through a detailed questionnaire. TaxSites provides extensive resources including a list of software for small businesses.
• Consider hiring a bookkeeper. A good, trusted bookkeeper can handle all of the mundane tasks that go along with keeping finances on track. Be sure to understand the various types of bookkeepers and how to avoid fraud. A free bookkeeper hiring test (to be taken by prospective hires) can be requested.
• Accelerate cash flow with mobile payment systems. Mobile payment systems can allow faster and easier acceptance of payments for products and services. A system called GoPayment from Intuit allows acceptance of payments through mobile phones and can directly download the data into QuickBooks. To monitor transactions, users can access Intuit’s online Merchant Service Center to search, view and create reports.
• Look into factoring receivables. Accounts receivable financing allows immediate payment for invoices rather than waiting 30 days or longer and tying up working capital as a result. Factoring services advance the amount of the invoice minus a “discount”, or fee (advances of 80 to 90 percent are common), and provide a “rebate” when invoices are paid – the amount depends on how long it takes the customer to pay. FactorFind provides a directory of factors specializing in small businesses. Businesses can be matched with the most appropriate factors at theInternational Factoring Association, BuyerZone, and Resource Nation.
• Understand and measure capital versus operational costs. The goal often is to drive down the totals on the capital costs side of the spreadsheet and move more over to the operational side of the equation. Operating costs don’t require complex depreciation calculations and are more easily adjusted from year to year. Outsourcing is one way to do this because it sits on the operating cost side and helps to free up cash by not tying it up in capital investments (such as IT infrastructure, servers, etc.) or tasks like head hunting and payroll management.
• Measure bottom line impact by looking at the service budget year over year. Are the costs for delivering a service going up, staying the same or dropping? Figure out how much it costs to deliver specific services to the business such as recruitment, payroll or benefits management. Understanding cost-to-serve offers the business great insight into projects and tasks, how long it actually takes to do them, and as a result how much they cost. If you want to pare back on the budget, there are hard numbers to work with that show exactly what the impact on quantity and quality of service will be if resources are reduced.

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About the Author: David Cotriss is a business/tech and new media writer, having published 500+ news and feature articles to date worldwide in magazines ranging from PC Magazine to The Industry Standard.

By John Mariotti : 20 Tips to Save Time and Money in Your Small Business and At Home

September 4, 2009

By John Mariotti

These are difficult times and every small business (and large one) needs to find ways to save money and time without delivering less value to their customers. Service to customers must be maintained, and product or service value is the key to continued business. So what can you do?

Here are 20 tips that are proven time or money savers. Time is money so the two savings are combined here. Since many small businesses are operated out of home offices, these will also save money and/or time at home. Choose the ones that work for you and start saving now.

1. STOP BUYING “STUFF”: If you don’t need something, don’t buy it — no matter how great the deal is. There’s no right price for something you don’t really need. Learn the typical promotional cycles-clearance sales in January (before the retailers’ fiscal year end), for example. Buy office products when the ones you need are on sale-plan ahead. Buy non-perishable holiday supplies after the holiday, and save money next year.

2. DIY (Do It Yourself) INSTEAD OF HIRING SOMEONE: Do the simple jobs yourself instead of hiring it done. Janitorial services charge more if you have them empty wastebaskets and replace liners every day. Few people fill wastebaskets daily, some don’t in a week. Tell everyone where the dumpster is and have them plan to dump their trash while on another trip. Ditto for window washing. It’s nice to have clean windows, but staying in business is nicer.

3. SHOP FOR BEST BANKING DEALS: Switch bank accounts to the places where they offer free, unlimited check writing, no fees on accounts, etc. Shop around and see whose deal is best. If you plan to keep a healthy balance in any account, ask where it can be parked to earn interest and swept to the checking account when needed.

4. USE EMAIL TO AVOID PHONE TAG: Use email to set up phone calls and avoid frustrating phone tag. Tell the person what you want to talk about, and whether you need a decision from them, information, or just a discussion.

5. PHOTO DOCUMENT MISHAPS: Use the camera on your cell phone to document mishaps. Photos of the damage, an accident, the site where it happened, etc. can be invaluable if a dispute arises or an insurance claim needs to be filed.

6. USE EMAIL WISELY: Don’t argue on email. It is damaging, counterproductive and usually escalates an argument instead of resolving it. Meet face to face (first choice) or talk person to person on the phone. Assume that you can and will resolve the argument and say so-that alone goes a long way to resolving it. Don’t print emails unless you need a hard copy for some good reason – it just wastes paper, ink, time and money.

7. PRIVATE LABEL GOODS ARE GOOD BUYS: Buy private label goods where the store guarantees them or will replace them with brand names if you are dissatisfied. Kroger and OfficeMax both do this. Wal-Mart will match any competitor’s advertised deal-but bring the ad along. Compare prices and learn who has the best deals, on what.

8. SHOP (& NEGOTIATE) GAS PRICES: Pay attention to which service stations seem to always have the best gas prices and plan fill ups. If there is a loyalty program with a grocery store, wait to fill up until you can use a discount for more gallons of gas. Negotiate with your favorite gas station if you are a heavy user, or have a fleet of vehicles. Ask for a discount-they are often available. Use the right grade of gas for best mileage and don’t be a “lead foot,” it’s not a race.

9. COMBINE SAVINGS WITH GIFT CARDS: Take advantage of gift cards sold in stores with such programs (Giant Eagle is one such chain). You can buy a $1,000 worth of stuff at Home Depot with two $500 gift cards purchased at Giant Eagle and save a lot on future gas purchases at Giant Eagle.

10. PLAN AHEAD - AVOID WASTED TRAVEL TIME & FUEL: Plan trips, in fact, plan all activities, to avoid doubling back or traveling further than necessary. Think of making a loop, hitting all the stops and ending up where you want to be. Arrange the pickups/dropoffs in an order that takes you out & back in the loop, not in & out, back and forth. You’ll save time, fuel, wear & tear on vehicles-and money.

11. GROUP SIMILAR TASKS: Accumulate similar tasks and do them in a group. Often the “make ready time” is a sizable part of the job, so whether its paying bills, returning calls, mailings, filing or whatever-group the work then “knock it out.” Assembly lines in plants are efficient because they combine work in the best way.

12. MINIMIZE SMALL TALK – e.g., HOW’S THE WEATHER: Small talk is nice, but it wastes time. Discussing the weather is the most common time waster. If you need to bond with someone ask about family, fun or favorite sports team. Otherwise, get on with business. That includes Texts and Twitter Tweets, unless there is a valid reason for them.

13. USE MEETING AGENDAS & TIMES: Don’t hold a meeting without an agenda, a time frame, and a statement of what is to be accomplished (information exchange, decision, next steps by whom and when, etc.) Take notes and record who will do what by when — then follow up. It’s a powerful time saving habit.

14. USE FEWER WORDS – GET TO THE POINT: Don’t write long letters or emails if short ones will do. Ditto voicemails. What’s the subject, what do you need (info, help, meet, etc.), when can you be reached with a call-back?

15. DON’T REPLY TO ALL: Don’t use the “reply to all” function. It just makes more emails for everyone else to read, wasting time. Occasionally an embarrassing email goes to someone who shouldn’t get it — and that can cause big trouble.

16. CONSOLIDATE INTO A SMART PHONE: Electronically consolidate all of your calendar, contact information, etc. on a “smart phone” which is backed up to your computer (in case of loss or damage). Preferably choose a smart phone will also do email, text messaging and have web access; most can also serve as a calculator, camera and alarm clock … and more. Print out your calendar and address book once in a while, and put it in a safe place — just in case.

17. SAVE ELECTRICITY: Turn off lights when no one’s around. (It doesn’t cost more to turn lights on and off. It costs more to leave them on). Turn off copiers; unplug chargers, shut down computers over night. All use electricity even when idle. Use compact fluorescent bulbs or the new LED bulbs instead of incandescent bulbs — they use less electricity and pay off in savings over a few years. Use timers (or motion sensor) to turn lights off — or on — when appropriate.

18. SAVE ON ALL UTILITIES: Turn down the thermostat (or up) — one degree makes a difference; 2-3 saves more. In winter, wear heavier clothing; in summer, dress cooler. Use a programmable thermostat-reduce heat and A/C use when gone or sleeping. Reduce water heater temperature settings; run only full loads in washers, dryers & dishwashers. Maintain your HVAC, and it can save you money. A humidifier in winter keeps the air feeling warmer, and reduces health problems due to winter dryness. Maintain furnace filters — change (or clean) them regularly.

19. BUNDLE YOUR TELECOMMUNICATIONS BUYS: Negotiate a bundle of your phone & electronic communications. You get a better deal buying Internet, Phone and Data (and cable or satellite TV too, if you need it) from one source. Shop around. Cell phones added to a plan and bundled minutes are very economical. Call and ask for a better deal. If you need to keep a “wired phone line” negotiate that deal too. If they can’t find one, talk to the department that keeps people from switching via price concessions (AT&T’s is called “Retention”).

20. CLIP COUPONS & USE THEM: Use coupons and deals aggressively for office products. Some superstores will begin sending them every month. Other stores will honor them even if expired. Plan your purchases to maximize the savings-but only buy stuff you need. Use affinity plans that give you discounts too. Shop at super-discount places like Aldi Foods that sell house brands or generics. Many are made by major manufacturers and are as good as brand name goods. There are many coupon websites, and most major manufacturers, and some retailers have coupons too.

Finally, smile a lot and keep an upbeat attitude. Make “saving time and money” into “fun.” Give recognition to employees who find new ways of saving money. A “certificate” and praise — in front of peers — are very valuable motivators.

If the people you work with see you with a positive, can do attitude, that’s contagious. Try it — it works.

Editor’s note: this article was originally published at the American Express OPEN Forum.

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About the Author: John L. Mariotti is President and CEO of The Enterprise Group. He was President of Huffy Bicycles, Group President of Rubbermaid Office Products Group, and now serves as a Director on several corporate boards. He has written eight business books and a novel and has been a conference keynote speaker, a radio talk-show host, and a multi-national columnist for IndustryWeek, Management Centre Europe, the American Management Association, Fortune Small Business, Tiempo de Mercadeo, and a contributor toBusiness – The Ultimate Resource and the Encyclopedia of Health Care Management. His electronic newsletter THE ENTERPRISE is published weekly. His Web site is The Enterprise Group.