Whether you are about to start your own business or have been running one for a little while, it's very important that you know your numbers. If you don't know how much your labor costs are or how much it costs to produce the goods you sell, you won't be able to know whether or not your business is profitable. The good news is that it doesn't take long to wrap your head around the basics of small business finance. Here's a quick cheat sheet... How Do You Determine Your Operating Costs? Your operating costs are broken down between fixed costs and variable costs. Fixed costs are those that stay the same each month such as building rent or workers compensation insurance payments. Variable costs may include labor costs, electric bills, and others that you have some control over each month. To determine your operating costs, gather any bill or statement that you have from a vendor or creditor. From there, all you need to do is add each payment until you reach your final total. Once … [Read more...]
How to Write a Rock Solid Business Plan
(Photo by rawpixel via Unsplash) A business plan is a road map for your business’s success. Once you make the commitment to start your own business, you need to have a plan for how you will run and maintain it. Without a carefully crafted business plan for your company, you'll lack the organization and vision necessary to succeed. Also, in order to apply for certain business loans, it's required that you provide a business plan for the lender's review and consideration. Here are six critical elements that every effective business plan should include... Executive Summary This summary is the place to clearly state the goals of your business and your overall plan on how to get there. It should communicate to the reader exactly what you wish to accomplish. This is the place to include your mission statement, general details about the company (where it was formed, who its founders are, location, size, etc.), and the products and/or services the business has to offer. Business … [Read more...]
The Pros and Cons of Owning a Cash-Only Business
As technological advances make it easier and more affordable for small businesses to accept credit card and mobile payments, cash-only businesses are becoming rare to the point of extinction. So why are some businesses remaining cash-only, even in the modern era? Believe it or not, there are some good reasons for your business to only accept cash—but they have to be weighed against a few major inconveniences. Here are some pros and cons of going cash-only with your small business. Pros of a Cash-Only Business Affordability: Accepting payments via credit cards impacts your bottom line in a way that cash doesn't. Transaction costs associated with credit cards take a percentage of the purchase price that would have stayed in your pocket had the purchase been made in cash. Additionally, the extra equipment you’ll need to process credit card and mobile payments will cost you more than a simple cash drawer. Security: With all the new technology involved in payment processing, there … [Read more...]
How to Turn the Tide in Your Restaurant
I often hear from restaurant owners who say they have tried everything to fix their costs, sales, and operations, and nothing has worked. Their ideas as a whole are great or well planned, but the execution is lacking. If you are looking to grow sales in your restaurant, you need to ensure that you have your costs under control, your operations are pristine, and that you have the ability to invest money in the proper people and overall structure to grow sales. For this piece we will discuss a quick service food franchise that also delivers, and how we were able to turn them around. Menu What are you known for, and what brings your customers in? You need to start with the basics of what you are known for and ensure you are giving that to your customers from the moment you open until the moment you close. If you are known for having fresh produce, are you serving the same product seven days a week? We started teaching the staff what the expectations were. Through cost cutting, … [Read more...]
The Shopper’s Brain: What Neuroscience Can Teach Us About Customer Behavior
The following Q&A excerpt with David Kepron — Vice President of Global Design Strategies for Marriott International and author of Retail (r)Evolution — was originally published in Credibly Business Journal: Understanding the Needs of the New Consumer, the first in a three-part series on retail trends and innovation. For more of our conversation with David, download the journal right here. CREDIBLY: What are our brains doing when we’re shopping? DAVID KEPRON: Our brains are ultimately geared towards the recognition of patterns and the interruptions in those patterns. Some of these patterns have shaped our brains in ways that are consistent across all cultures and all races, and we all share some of them. For example, when we see a snake, or the grass moving as we walk along the path, we’re likely to jump out of the way. That’s cross-cultural. Those instinctual reactions to experience are born into us because of our evolutionary development over millions of years. Then, there … [Read more...]
Investing in a Franchise? Do These 4 Things First.
If you’re thinking of not only investing in a franchise, but becoming the owner and operator of the franchise as well, you want to be involved with something you really enjoy. For example, if you love automobiles, you should be looking at a quick auto service franchise like Jiffy Lube. If you like serving and helping people, particularly the elderly, a senior care franchise like BrightStar Care would be something to consider. And if you love food, then any of the various food franchises out there would be a good option. Your prior experience and interests are wonderful indicators of what type of franchise you’ll want to pursue. But just because a franchise appeals to you personally, doesn’t mean it’s the right fit for you and your money. That’s why you’ll need to properly vet the franchise beforehand. Here are four important things to analyze and evaluate before becoming a franchisee. Download Joe’s sample side-by-side franchise analysis right here! First Things First: Crack … [Read more...]
Ten Tips For Spring Cleaning Your Small Business Finances
Spring has officially sprung, and while you might be busy cleaning out the cobwebs and dust bunnies at your home, it may be time to focus on cleaning up your business too. In particular, reevaluating your business finances around this time of year can help your business stay on the right track. If you need some help on where to start, here are 10 tips to get your business finances in shape. 1. Analyze Your Finances Take a good look at your finances, with a goal to be bigger and better for the rest of the year. Run reports from your software program and take a look at where your company stands. Are you doing better or worse than you thought? Try to get a handle on the debts that your company may have; pay off any outstanding debts you can, or negotiate payment plans. Compare your business debts with your receivables list. Make notes on the good, bad, and downright ugly things that you need to work on before year's end. 2. Work on That Receivables List There is no business that has … [Read more...]
7 Key Metrics for Managing Cash Flow in Construction Businesses
Do you know how much you have to bill this month to cover your expenses? Do you know how many construction projects you need to bid to cover your expenses four months from now? These are important questions that every contractor should know about their business. These numbers and other key metrics give us the information we need to properly manage our cash flow, a must for any business to be successful. To avoid times where we struggle to pay bills or make payroll, we must properly plan and track our key metrics. Take control of your cash flow by making a commitment to know and live by your numbers. The following seven key metrics are the numbers that every small business contractor should know by heart. Related: Boost Your Cash Flow With These 9 Money-Saving Tips Projected Monthly Billings How much do you expect to bill on each project for the month? This should be calculated on all projects and summarized for making decisions about expenses. In order to plan ahead we need … [Read more...]
How Much Restaurant Space Do You Really Need?
Entrepreneurs who are new to the restaurant industry often look to build large, beautiful buildings. The truth is, those large restaurant spaces will only be filled during peak events or times, leaving them as wasted space the majority of the time. The challenge is assessing the overall size to effectiveness ratio. When working with our clients, we use the below information to help determine the best plan of action. For this piece and most evaluations, we use an industry standard of 12 square feet per customer for seating. How big of a seating capacity do you need vs. want? Even if you are located next to a venue that will help drive sales (a sports arena, concert venue, etc.) there are only a finite number of days/times that will drive those sales. Looking at the factors involved in driving your sales during peak times will help you decide your seating requirements. For instance, how many home games are there during the year, and how often does the venue fill the space with other … [Read more...]
Eyes on the Prize: 3 Ways to Stay Focused on Profits
When you run a small business, it’s easy to get caught up in the day-to-day activities that consume your life. Whether you are scheduling, fulfilling orders, rendering services, or balancing the budget, the hours are jam packed and can be overwhelming. That can make it easy to confuse being busy with being productive, and can make it even easier to confuse revenues with profits. It's crucial to remember that your number one goal as a business owner is to make money, so don’t be ashamed to make profits a top priority. Below are three strategies I share with my coaching clients to help them stay focused on profits: #1 Keep it in perspective. You can be in business to make a difference and to have an impact, but ultimately if you aren’t making money you aren’t going to get very far. For many business owners it is difficult to be upfront about wanting to make money. They feel bad saying that they want to make money and even worse if they make a lot of it. But isn’t that the point? You … [Read more...]
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