The Honest Truth About Your Business

29 Questions to Help You Determine if What You’re Doing is a Business or a Hobby

Are you a true business owner and entrepreneur? Or are you pursuing your business dreams more like a hobby but may not even be aware this is what’s happening?

In meshing business and personal life in the past…

I took a lot of time off when I felt like it… ,

I worked around the kid’s school schedule and family meals… ,

if I didn’t feel like making calls for a few weeks, I didn’t make them… ,

when the sun came out, the kids and I headed to the park and work was the last thing on my mind… ,

I would fit in a few hours here and there to work on my business… when time allowed around my other commitments…

What about you? Do you let family, friends and other factors take you away from working on your business? Or are you 100% committed and invested in your business success?

Here are some questions you can ask yourself to help – you might be surprised with some of the answers if you’re being honest with yourself!

Are you clear on your business’s focus – have you defined the product or service you provide and have stuck to it or are you continually trying out other things?
Have you registered your business name with your local government?
Do you have a business licence with your local community?
Do you have a dedicated business phone line? A toll free number?
Do you have business insurance?
Do you have legal contracts in place dealing with the various aspects of your business?
Do you have a clearly defined mission statement?
Do you have a business plan? One that gives you a solid blueprint on how to achieve your business goals and how much it’s going to cost?
Do you know who your competitors are and what they are doing?
Is your business scalable in a way that it doesn’t depend on you being hands-on 100% of the time?
Do you have a marketing plan that provides you with specific steps on how you are going to attract your perfect client and how much it’s going to cost?
Do you have a set budget for advertising and marketing to build your client base?
Do you really know who your target market is?
Do you have a professionally designed logo to establish your brand identity and appeal to your ideal target market?
Do you have professionally designed business cards, letterhead, promotional materials and other items to market your business?
Do you have a professionally designed and developed website that represents your business brand effectively, 24 hours a day – 7 days a week?
Do you continually update and employ SEO tactics to your website to ensure optimal results?
Are you outsourcing certain tasks to help you with the things that are not your core competency such as bookkeepers, web developers, marketers, virtual assistants and graphic designers?
Do you have a separate office space where you can shut the door at the end of the day and leave it closed until business hours start again?
Do you have set business hours where no emails and no phone calls occur after hours?
Is your office space organized and systemized so that anyone could come in and take over where you left off?
Do you keep proper books and track all of your business receipts? Or is everything stuffed in a shoe box or file folder until tax time?
Are you aware of all the tax write-offs that you’re entitled to and use them to the fullest?
Do you have a dedicated business bank account?
Does ALL of your business income go into this business account and you pay yourself on a regular basis?
Do you work all year round with vacation breaks or do you take whole summers off and tell yourself you’ll get busy working again in the Fall?
Do you diligently work at your to-do list of items that will help achieve your goals or are you telling yourself you’ll kick things into gear after… (fill in the blank)?
Are you truly happy and passionate about doing what you do?
Is your business fulfilling your life’s purpose or are you just going through the motions of trying to make some money?

The Immediate Goals of Starting a New Business

Are you tired of your boss? Or are you getting ready for greener pastures? Setting up your own business can be very exciting. However, before you even take the first step, save yourself time and money by being aware of what’s involved in running a business. Investing time and money into proper planning is paramount when it comes to turning your dreams into reality. The idea of operating a small business is not just about working for yourself or from home, it’s also about having necessary management skills, technical skills, industry expertise, finance and, of course, a long-term vision to grow and succeed.

Whether you will choose to be an entrepreneur, buy a franchise, or start an existing business, the business planning resources are the same. The only things that will be different are the business strategies, business opportunities, upfront cost and step by step instructions to start various businesses.

The following are some of the immediate goals of starting a business:

Have Self Confidence

The foundation of success is self-confidence. Ask yourself, do I have the confidence to stand alone and be my own boss? If yes, then you are on the right track. People with self-confidence achieve success much faster than those without. Venturing into a new business means you are willing to risk. Confidence also helps you to understand your colleagues, employees and even customers. Without confidence, you cannot challenge solid issues that affect the business or even the tide the business comes with.

Choose the Right Business

If you want to start a business, you should have the right business idea in mind. What business do you wish to venture into? Do you have an interest in that business? Choosing the right business that you feel you can easily handle and manage is one of the ways to tackle this section. Will the business reap enough? Does it have competitors? If so, is the market competition tight? A market survey can help you in determining the right business.

Identify Your Market Niche

This is a factor to consider when starting a new business or changing your old location to somewhere better. You might have the right product, but you are selling it at the wrong location. For a new business to survive and beat the competition of the similar products it has to have a better location. This means available amenities, parking space, potential customers of the product and few competitors.

What are Your Goals?

What is driving you to do that type of business that you have chosen? Goals will help you achieve several milestones that you have put in place. With proper objectives, you will be able to invest the available starting capital wisely and plan your work schedule. Of cause you are not just going to germinate in one day, you need to set attainable goals and learn to be patient.

Managing Your Small Business Budget

Not surprisingly, small businesses often operate on relatively limited budgets. Regardless of the financial situation the business may be in, it is always important to conserve money whenever and wherever feasibly possible. While this may seem simple, it is often very difficult to track and manage business expenses without having a well-thought-out business budget. This is definitely true for those expenses that may be unexpected, which happens within a small business more often than not.

For those small business owners who want to keep their business operating in the black, they will need to account for both expected and unexpected costs. With this in mind, it is important to create – and stick with – a well-planned business budget. If you are a business owner who is struggling with managing your small business’s finances, here are some tip to help you better manager your business’s money.

Know and Understand Your Risks

Regardless of what type of business you run, there is always some amount of risk. The risks associated with your line of work always have the potential to have a major financial impact on the business. In order to have a secure budget plan, it is important to take both short-term and long-term risks into consideration. Think about how these factors may affect your business: changes in minimum wage, changes in healthcare requirements, the likelihood of a natural disaster, or the need for seasonal help.

Take Note of Sales Cycles

Almost every business goes through an ebb and flow of sales throughout the year – ice cream shops are generally busier in the summer where snowboard and ski shops do more business in the winter. Small business owners should take a close look at the seasons of their sales and incorporate that information into their budget. During the business’s slow season, you may need to incorporate more wiggle room for overhead or increase the budget for marketing when you have a need to bring in business.

Plan for Large Expenses

Some of the largest purchases a small business makes often happen without warning – equipment breaking down and needing to be replaced right away or a company vehicle needing important repairs in order to make deliveries. Even though you cannot plan for these types of expenses, you can plan for large projects that you know about ahead of time, such as store renovations, technology upgrades, or hiring more employees. Carefully planning and timing these purchases can be very helpful.

The Importance Of Adequate Insurance Cover To Small Businesses

One of the largest risks facing small business owners is a failure to ensure an adequate level of insurance cover for their company – this is particularly true of small businesses who may not quite have the resources to cope with the large financial losses which may be suffered as a result of ‘underinsurance’.

A UK study recently estimated that around 80% of businesses may actually be underinsured, and this figure is only likely to rise given the unprecedented volume of new businesses which are forming by the day in the UK.

As commercial insurance can be a somewhat dry and complicated topic, it is often overlooked by business owners eager to focus their efforts on lead generation, sales, customer service and production.

This is an understandable, yet extremely dangerous view to take, particularly in the modern era.

Unfortunately, claiming that you were ‘unaware’ that you lacked the correct insurance cover will rarely stand up in a court of law, and you must therefore take the time to ensure you are knowledgeable of exactly what is included in your business insurance policy, and what has been omitted.

This needs to be undertaken on a regular basis.

Never take the risk of waiting for a major financial loss before inspecting your insurance cover – instead, analyze your business insurance carefully, and determine whether you currently hold the correct level of coverage, in relation to the risks that are present in your individual business or industry.

Underinsurance is quite a basic concept – it simply means that your insurance schedule is valued lower than the sum of your company’s total assets, and you risk receiving less money in compensation than you require to restore your business to any pre-loss standing it may have held.

The primary reason for inadequate coverage among business owners is complacency – the feeling that ‘it will never happen to me’. However, this is demonstrably untrue, and this school of thought has led to many closed businesses, and a vast amount of unemployed entrepreneurs.

As well as ensuring an adequate level of coverage, it is also important that you update your business insurance accurately, on a yearly basis at the minimum.

The assets of a business can increase or decrease in value on a regular basis, particularly during uncertain economic times, and it is vital that your insurance schedule reflects the health of your business as it currently stands, and not as it stood twelve months ago or longer.

Take the time to undertake a full evaluation of your assets on a yearly basis before renewing your business easily avoided.

Businesses can be inadequately covered for many reasons, but it is important that you immediately examine your current level of coverage, understand the risks involved by remaining underinsured, and make the necessary changes to your business insurance, to ensure you minimize the risks involved with potential underinsurance.

It is often common for businesses to be inadequately covered on any commercial insurance policy, but UK insurers claim that the following policies are the most frequently underinsured – Property Insurance, Business Interruption Insurance, and Cyber Liability Insurance.

So You Want to Run a Massage Business From Your Home

I received my license and certification as soon as I finished school for massage therapy. I knew right away that I was going to start building my own practice out of my house as soon as I finished school (which is why a prerequisite of the home I was purchasing had to have an extra room for my business space). I built up my clientele and was quickly recognized as one of the top massage businesses in the area. Here’s how I did it…

First thing’s first. Find out what all the regulations and restrictions are for operating a massage practice out of your home for your community. This is extremely important, as some towns may not allow you to operate this kind of business out of your home without proper permits and business licensing, if at all. Make sure you obtain all of the necessary credentials, as well as massage therapy insurance, CPR/first aid certification and also home owners or liability insurance. If you are renting your home, make sure you also have written permission from your landlord for operating a business from their property. Some municipalities require specific building features, such as handicapped accessibility and the relativity of the location of your office to the entrance(s) of your home, as well as to the bathrooms. Most of this information can be obtained from your local Town Hall.

Next, write up a business plan. Even if you’re not planning on applying for business funds, it’s crucial to put your goals and ideas into a written format, using as much detail as you are capable of. When you put things into writing, the law of attraction will go to work to make sure that your intentions come to fruition. Whether you believe in it or not, there’s something almost magical about it. And if you don’t have any clue where to begin with writing up your business plan, don’t fret. There are samples, example, outlines and tutorials all over the internet at no cost to you.

Next, come up with a name for your business. This can be a bit tricky, as there are thousands of massage business names already in use. Do your research to be sure that you’re not using the same name as, or one that is similar to, another business near yours. Also, I recommend not using your personal name. Keep in mind that although “Massage By Jody” may add to the personal appeal, it hinders the professionalism of the business.

Once you’ve done all of that, it is highly recommended that you create an LLC for your business. This will take any liability off of you personally and keep it completely restricted to your business. Probably the easiest and most convenient way of doing this would be through an online legal firm. Just follow the links on their website for creating an LLC, fill in the blanks and submit your application with your payment. They’ll take care of the rest. It really is that simple. Then file your business with the IRS to receive your Employment Identification Number. After which you’ll be able to open a business checking account to keep your finances separate from your personal bank accounts. This makes it a whole lot easier when tax season comes around. This also gives you the option of accepting check and/or credit card forms of payment from your clients (this is a convenience that they will greatly appreciate).

If your goal is to operate a successful, long-term massage practice out of your home, you MUST have a space that is specifically designated for your business and your business alone. Don’t set your table up in your living room or your bedroom and then assume that it will be good enough for your clients. I’ll let you in on a little secret: It’s not. That might be okay for your close friends and family if you’re limited on space, but for anybody else you’ll need to provide a safe, comfortable and private space where they are allowed to relax and feel at ease

Starting a Minority Owned Business

Starting a business involves planning, making financial decisions and completing legal activities; minority business owners also face challenges accessing capital, marketing and resources.

However, in recent years thanks to the Minority Business Development Agency, it’s now possible for minorities to become successful entrepreneurs.

The agency helps minorities secure financing, create effective marketing plans and provide other valuable resources. So, here’s a basic list of what is needed before seeking help.

1. Write a Business Plan

I know what you’re thinking “not the dreadful business plan”.

However, the business plan is a valuable resource to you and your business, providing a guide on how the business will operate. While writing your business plan, you will start visualizing your business and will learn and develop the characteristics of your customer; who is your customer? What does your customer look like? What’s your customer’s income? You will also understand the role of your competitors and vendors. When writing your business plan, think outside the box show your investors that you’re serious and have the necessary data to support your vision. A well written business plan will open many doors for you.

2. Business Structure

It’s important for you to know what type of business structure you will form. This will determine the taxes you will pay, the personal liabilities you will face and how you will raise money. Types of ownership –

• Sole Proprietorship

Sole proprietors are the most common form of business structure. This type of business is easy to form and operate. However, the business owner is personally liable for all debts incurred by the business.

• Partnership

A partnership is when two or more people agree to give money or a skill set to a business. Both partners share the profits and losses of the business, and each partner is personally liable for the debts incurred in the business.

• Corporation

A corporation is an independent legal entity owned by shareholders. This means that the corporation is separate from its owners, and the corporation is liable for the actions and debts the business incurs.

3. Financing

Many financing options exist on the market today, and choosing the right one for your business can mean the difference between failing and succeeding. Though, you may look at certain organizations to help you with financing. Most government agencies do not provide loans directly. They guarantee the loans once you have met certain criteria.

Home-Based Business Entrepreneur Working At Home

Being an entrepreneur is very appealing but not everyone can become one. One of the quickest and easiest ways to become a successful entrepreneur is by working at home through a home-based entrepreneur business.

Firstly, you need to evaluate your strengths and weaknesses. After the evaluation, you can now determine if you can manage your own online business.

Aside from the evaluation process, you must know how to plan, put to work your organizational skills, appoint staff, and exercise control. These are your responsibilities as an entrepreneur. You should be able to work alone because now you’re the boss and all business decisions will be made by you.

Some say that online businesses can be run without many problems. Well, they are very wrong because even with an online business, you have to deal with certain business problems and risks. You can’t eliminate such risks because that goes hand in hand with any business undertaking, both for online and offline businesses.

However, you can reduce the risks that you’re bound to deal with in the future by choosing the best home-based entrepreneur business that will work for you.

Entrepreneurs are known to be self-starters. Organizing your time is a difficult task but if you want to run a home-based online business, you should be able to do it. Remember, you don’t have a boss that you can rely on. This is your business and you have to be responsible for it at all times.

Running your own business would also mean that you have to deal with different kinds of persons. You will surely encounter demanding customers, moody vendors, and potentially unreliable staff. To become a successful home-based business entrepreneur, you should know how to deal with them individually.

You should know the quirks of every person that you encounter so that you can address them and the situation correctly.

Running an online business is all about your attitude and character. According to some experts who conducted research about the characteristics of entrepreneurs, there are certain traits that an entrepreneur should possess. As mentioned earlier, entrepreneurs are risk-takers, self-starters, and they know how to deal with different kinds of people.

Those traits and characteristics are not enough. You have to have more than that. Another trait that you should possess is being an excellent decision maker. Since you’re the boss, you should be able to make quick yet effective decisions. Some situations are filled with pressures but despite the pressures, you still need to make an informed and wise decision. As owner of your online business, you have no one else to rely on when it comes to business related decisions.

To be an effective online business entrepreneur, you must have lots of energy and an excellent work ethic. Owning an online business, depending on the projects to be completed, may mean working late hours and on the weekends.

Anchor and Nooses: Two Big Drains on Your Business

Business is a tough game. Continually we need to operate in three areas to ensure we produce consistent outcomes. The businesses we work with are challenged to:

Tend to the business. We operate our business daily, tend to the issues and the pressing needs as they arise.

Prune the business. At times we all need to prune. Whether it is a process, a product or a person, this is a needed part of ensuring that you obtain the best result and investment is made in what is best in your business.

Grow the business. We continually need to look for ways to grow our business. This can be growing your core business or sowing new seeds.
To work these areas, our owners progress through a process to reflect and review. We take them “out of their business” to work on their business. We acknowledge that we all need to be in the business, but we need to have time ongoing to work on the business.

All businesses are unique, however, we find a few things in common. We find most businesses have anchors and nooses. Let me explain.

Anchors

Anchors hold businesses (and people) back. They are wide and varied but the common ones are listed here.

A business relationship that takes too much resources relative to the level of business.

A product line that the business has emotional investment in, but is now not providing the return for it’s current level of investment.

A team that is failing to see the link between sustainable business and their positions.
These are the main three, although we do see more. On every occasion we create a strategy to release the anchor and start the business moving again.

The biggest part is to be able to identify the anchor and work through a process to cut the chain.

Nooses

Nooses are, similarly, an impediment to business growth, but this time the business is impacted by a tightening pressure. Often this is due to the following:

Unreasonable supplier or customer terms creating unnecessary pressure on cash flow.

Inadequate planning, be it business, financial or marketing which pressure ongoing investment in these areas.

Constant complaints from customers on service or product quality.

Pro-bono or special consideration business taking resources away from your best customers.
The key, again, is to identify it, and then work to achieve a strategy to reduce the pressure and then eliminate.

Strategy

We work with clients to build strategy to help them gain control and bring growth back to their business. Once awareness is gained from the business owner, the strategy starts to form. Having a fresh set of eyes helping you through this maze.

What Comes First: Business Strategy or Tax Strategy?

Any business advisor will tell you the answer, but what’s happening in the real world?

Here are a few examples:

VAT

When Jeanne started her exercise class business, she decided after taking advice that she wouldn’t register for VAT. It makes sense. If you want to compete with everyone else then you can’t charge 20% higher prices to include VAT. But now she’s stuck. She can’t grow the business beyond the VAT threshold because she would have to increase her prices or take a significant reduction in margin. Now she’s contemplating setting up separate businesses to boost her earnings. It’s quickly going to get complicated – she can do without all the distraction of doubling the admin work.

Five years in to running his hair salon, Scott takes a day off a week and shuts early some days just to limit his takings to keep them below the VAT threshold. But he’s living hand-to-mouth.

Which came first in these two cases: tax strategy or business strategy? The payoff of course is that both businesses reduce their tax bill, but at what cost?

I’m sure this isn’t what was intended when a VAT registration threshold was included in the VAT legislation created in 1973.

Income Tax

John runs a sole-tradership and draws money from the business as he needs it and, more importantly, when it’s available during the year. His accountant then finds the most tax efficient way at the year-end to distribute his drawings between salary, expenses and dividends. Cashflow is not managed proactively, so while John knows what’s in the bank he doesn’t keep track of every due payment or receipt so he sometimes draws too much and leaves the business short of cash. This regularly causes him to have sleepless nights.

Norman runs a limited company and runs it the same way. He takes no salary as such and reinvests most of the profits into the business to fund growth. He restricts his drawings to pay as little tax as possible. He’s looking to exit the business in 3-5 years. Unfortunately, because he’s not taking any kind of salary, let alone a market rate salary, he has no idea how profitable the business truly is and is complicating things for himself when he eventually come to sell.

Ken is looking to buy a new vehicle for his business, that he will use personally too, in order to reduce his tax bill. However, his tax savings are less than savings he’ll make obtaining a vehicle this way compared to some of the alternatives.

5 Common Mistakes Holding Back New Business Owners

It is really trending and the economic status of the world now favors a lot of people owning their own businesses. That on its own throws up very many challenges principal among which is how to start and manage such businesses. To start a business, your first major challenge is having a good plan and the discipline to act on it. That is exactly where many new business owners make the mistakes which hold back their businesses. Here are 5 of the commonest mistakes you should avoid when starting a new business:

01. Not having a workable plan. It is highly imperative to have a workable business plan before you start any business no matter the enterprise or scope. A good number of new business owners always ignore plans for their businesses, a result of which they run into crisis as soon as they begin operations. To avoid early crisis, new business owners really need to set realistic and attainable goals in their plans if they want to succeed. Such goals must not only be reasonable, there must also be clear and specific steps which they need to take to reach them. Not doing so is always a very costly mistake.

02. Underestimating your competitors. I have seen new business owners who are so idealistic as to really believe that their businesses are so unique that they will not have real competitors. Even when they acknowledge that they may have competitors, some do assume that such competitors are no threats to their businesses. Both of these cases are assumptions based on false premises which turn out as real mistakes at the end of the day. In reality, it is extremely rare in the business world to have no direct competitors. Even if you managed to invent a completely new and unique product, chances are, there will be someone out there who already has market share in your niche. Ignoring that fact may turn out as a huge mistake in your new business.

03. Not thinking about marketing. It is surprising that in this age and time, many new business owners never really give a good thought to how and where they will sell their products. Many believe that as soon as they are able to bring a good product to the market, buyers will surely come. This is a common belief among many new business owners who think that because their products are so unique, they can just rely on free PR and word of mouth to sell their products. That is an avoidable common mistake which can stunt any new business. In reality, every new business needs to invest quality time and money in marketing for the simple reason that it is new and must get noticed. That is what takes you to where your competitors are spending their marketing dollars. While there, you get the real opportunity to compete favorably and to differentiate yourself.