Month: October 2013

Categories
Finance & Capital

How to Secure Finance for a New Business Venture

fiann

Article Contributed by Doug Barden

It is pretty difficult to get a new business off the ground without some kind of start-up capital. You may need to buy fixed assets, pay new employees, or even draw a wage to cover your personal living expenses. There are ways to keep the costs down—setting up a small business from the spare room can work for entrepreneurial IT types—but if your dream is to open a restaurant franchise or a boutique, the only way to do so will be to look into your potential sources of available finance.

Bank Business Loans

Banks have always been a traditional source of funding for small businesses. Going cap in hand to your local bank manager with a head full of dreams and an embryonic business plan might just be enough to secure you a business loan. Or at least it would have been ten years ago. Nowadays, the economic climate has changed and banks are far more risk averse. Your credit history and business plan will need to be rock solid before most banks will even give you the time of day. But there is funding available, so don’t lose heart if the first bank you approach says “no”.

Private Equity

The first place to look for private equity is close to home. If you are lucky enough to have any friends and family with deep pockets and a desire to help, you may be able to secure enough money to get your new business off the ground. Another possible route is to approach a private investor and try to persuade them that your business is worthy of their investment.

Venture Capitalists

Venture capital funding comes from private investors interested in long term growth potential. High risk businesses with the potential for generating massive returns for their investors are attractive to venture capitalists, so if you can’t raise cash through traditional avenues, but you are certain your business plan will make you rich, venture capital may be your best option. The main disadvantage of this type of funding is that your investors will expect to have a say in how you run your business, plus they will expect a slice of the equity pie.

Grants and Government Start-up Initiatives

There are many non-profit organisations and government backed initiatives offering finance solutions for new businesses. Many are aimed at young entrepreneurs aged between 18 and 30, so if you fit the bill, this could be the ideal path to take. Aside from a cash loan, you will also receive lots of support from a mentor to help you make a success of your business venture.

Invoice Factoring

Instead of chasing payment from customers, use invoice factoring to release capital from the sales ledger to help build your business. Invoice factoring companies will charge a fee and a percentage of the invoice, but it is useful way of raising working capital in the early days.

There are many ways to raise finance for a new business start-up, but almost all of them will require that you have an excellent business plan. Nobody will lend you money unless they feel that your ideas are workable, but if you are convinced your business has the potential to be more than a pipe dream, it is time to turn your dreams into a reality and join the thousands of other people who start their own business every year.

About the author:

Doug Barden is a managing partner in Beech Business, one of North Manchester and Lancashire’s leading chartered accountancy firms.  For more information on the services they offer, including book-keeping, payroll and accounting, visit http://www.beech-business.co.uk.

Categories
Online Business

How to Stand Out in the Crowd – SEO Tips for Small Businesses

seo-smallbiz

Article Contributed by Anca Bradley

For small businesses, visibility is key. Customers can’t find you if they don’t know you’re there. While major multi-national companies can throw resources at advertising agencies and gain a higher profile, small organizations don’t have that luxury. SEO, or search engine optimization, is a great equalizer. A noticeable online presence makes you easier to find than competitors. As search engines have become more sophisticated, so has SEO.

Pandas and Penguins

In the early days of Google and other search engines, the software’s sorting and ranking algorithms were naive. Pages stuffed with keywords and light on content ranked well, clogging the first few pages of search engine results. Designers quickly found ways to sort valid sites from those with a low signal-to-noise ratio, and legitimate businesses had to evolve to meet changing optimization needs. Two of the largest and most influential changes were Google’s Panda and Penguin algorithm updates.

The first Panda update came out in April 2011, according to the Moz.com (http://moz.com/google-algorithm-change) tracker, and it revolutionized search engine optimization. Small businesses that had previously relied on high keyword percentages and thin content found themselves penalized while those that used natural writing surged ahead in page rankings. Google, and eventually all other major search engines, had begun to think like its users and weed out the low-value sites.

If Panda was Google’s answer to thin content, then its later Penguin algorithm was a defense against over-optimization and bad back-linking strategies. Sites that had previously relied on intricate linking schemes or paid links suddenly found themselves devalued on search engine results pages. That drop in rank had significant implications for traffic; the top three spots on the first page account for almost 60 percent of clicks, say statistics from Optify as published on Search Engine Watch (http://searchenginewatch.com/article/2049695/Top-Google-Result-Gets-36.4-of-Clicks-Study).

SEO Help for Small Businesses

Understanding where SEO was in the past helps small businesses predict where it’s going in the future. Google regularly releases updates to Panda and Penguin as well as other smaller tweaks. Trends today have been toward rich content with natural contextual cues that lead organically to higher page ranks. Search engines want to serve useful content, and they do it by prioritizing pages customers might want to read over keyword-stuffed or heavily linked text.

To stay on top of search engine algorithm changes, many small businesses are turning to professional content creation teams who make it their business to keep current with state-of-the-art SEO. Giving your existing site an SEO makeover may boost your traffic and give you the higher visibility that’s so important to a smaller company’s bottom line. Professional bloggers can also contribute to better SEO while giving your readers a reason to make your site a destination. Social media signals factor into rankings too, and by supplying content worth sharing, businesses can garner more interest from word of mouth.

Penalty checkers are another valuable tool in creating a winning SEO strategy. These products analyze websites and blogs for elements that could draw penalties from Google such as low-value back-linking and keyword stuffing. Fruition’s Google penalty checker tool (http://fruition.net/google-penalty-checker-tool/), for example, looks through more than 30 Google updates and measures content against them for more reliable search engine optimization. Small businesses can’t afford to make mistakes that drive their page ranks lower; these tools can help prevent down-ranking oblivion.

For experts in SEO and small businesses that use them, staying in front of ongoing algorithm changes translates directly into greater visibility.

About the Author

Anca Bradley is a geek at heart and enjoys all-things SEO and Social Media. Her experience includes several years of making major contributions to a wide variety of projects, such as Pay-Per-Click ad management, Search Engine Optimization, Social Media Management and Campaigns as well as other web strategies that are crucial in today’s online business sphere.

Anca Bradley’s interests are family, music, biking, technology, and of course the internet.

Categories
Operations

3 Tips for Running Your Business Using Low-Budget Strategies

3 Tips for Running Your Business Using Low-Budget Strategies

Running a business can be exceptionally difficult in today’s economy. It’s hard enough to get a loan, but even more of a pain to keep excessive costs down. Bearing this in mind, you shouldn’t allow your budget to get in the way of your ability to reach your goals, especially if you have the knowledge and drive it takes to push a business in a forward direction no matter what the scenario.

There are several low-budget business strategies that can help your company turn a profit each year or at least stay out of the red. Learning how to integrate them into your business plan is an essential part of seeing growth in the coming months and years, and it doesn’t have to be difficult to do so.

Carve Out a Niche

Companies that offer products and services similar to others being offered in the same area often have a hard time breaking through in the marketplace. Usually, doing so requires one to spend a great deal of money on marketing in order to simply get noticed, which is certainly not an option for companies operating off of a shoestring budget.

One of the best ways to avoid this conundrum is to carve out a unique niche in your industry. Take Allegiant Airlines, for example, a company that seeks out routes ignored by other airlines, thus creating their own unique selling point. “Its almost akin to having a monopoly,” says luxury air merchandise Entrepreneur Benny Klepach, and he makes a very good point.

Always Focus on ROI

ROI (or “Return On Investment”) is everything for start-up businesses, as turning a profit is the only way to push forward. Delegating the spending of your company’s money can certainly be tricky, but one thing you should always focus on is ensuring that the money you put into your business is at least somewhat likely to offer you a higher return.

Commonly thought of as spending a nickel to make a dime, ROI is essential to pay attention to not only during the early stages of a business’s life cycle, but consistently throughout the years. Don’t forget that this concept applies to staffing as well. If you’re not getting what you feel you should be out of an employee, you may need to find someone else to take on the job.

Operate as Lean as Possible

The costs associated with simply keeping a business afloat can be staggering at times. After all, you’ve got utilities to pay for, as well as upfront costs for whatever materials you may need and a wide range of other expenses that can amount to an overwhelming sum of money on a monthly basis.

Keeping your operations as lean as possible is the only way to run a business on a shoestring budget. If you don’t, you run the risk of going into debt at an alarmingly-fast pace. Look for low-rent office space, staff a bare minimum of employees and don’t waste money on superfluous items like fancy furniture and expensive signage. The leaner you can run, the more likely it is you’ll turn a profit.

There are certainly a fair amount of constraints that come along with running a business on a tight budget, but if you’re careful with your spending it shouldn’t cause nearly as many headaches as it might otherwise.

Article contributed by Jenna Smith

Categories
Entrepreneurship

3 Tips for Aspiring Restaurateurs

3 Tips for Aspiring Restaurateurs

Entrepreneurs who are interested in jumping into the restaurant business have a lot to look forward to. Running a restaurant can indeed be stressful, but the fast-paced lifestyle associated with the industry is just one of the reasons why so many people enjoy being a part of it.

In order to properly get a restaurant off the ground, however, there are a great deal of things that need to be taken into consideration. There’s a reason why 30% of restaurants fail within the first year they’re opened; a lack of proper planning can truly have detrimental effects.

Worrying over whether or not your restaurant is going to succeed won’t do you any favors. Instead, focus on what you can do to succeed. Here are just a few tips to help aspiring restaurateurs achieve their goals.

Choose Location Over Everything Else

There’s really no getting around how important it is to choose the right location when planning to open a restaurant. If you’re familiar with the term “haunted location,” you’re likely aware of the fact that some areas are simply not fit for certain types of restaurants. As a result, you’ll want to do as much research as possible into the area that you’re searching for a space. Get to know which parts of your city have restaurants with successful turnovers and which do not. Also, keep style of cuisine in mind and search for a location that will allow you to carve a unique niche in the surrounding neighborhood.

Don’t Skimp on Initial Supplies

One of the most difficult aspects of opening a restaurant is being able to afford to outfit it with supplies. Between kitchen equipment, dining room furniture and everything in between, there’s no denying the fact that opening a restaurant can be an expensive endeavor. Skimping on initial supplies, however, will do you very little good and could even potentially derail your restaurant during the beginning stages. It’s worth mentioning that many people forget about the little things when planning a restaurant opening; proper cooking utensils, guest checks, table linens etc. Make a list of everything you think you need and allow others with experience to go over it with a fine-toothed comb for you.

Start With a Test Menu 

A common mistake made by first-time restaurateurs is throwing all of their money towards food inventory right off the bat. It would make sense to the think that a large menu would serve to bring in more costumers, but there’s a huge chance that you’ll be letting a great deal of food go to waste in this scenario, as spoilage occurs quicker than most people would like to admit. Work with your chef to draft a small, limited test menu to help get the ball rolling. This will not only drum up interest for your restaurant, but will allow you to keep food costs to an absolute minimum to begin with.

Embarking upon a career as a restaurateur can be frightening, but if you make the right moves, you’ll find that it can be an excellent business venture.

Article contributed by Jenna Smith

Categories
How-To Guides

How to Build a Lean Start Up

leanstartup

Article Contributed by Doug Barden

A lot of start-up businesses are created from nothing more than a brilliant idea and a willingness to work hard. Others are awash with working capital and bloated with assets from day one. But lean is a good philosophy to buy into for it will keep you focussed on the core principles as you build a sustainable business.

Take the Fast Road to Profit

No business is truly a business until it is capable of generating a sustainable profit. Until that point, it is a work in progress. In order to reach that point, you need to be 100% focussed on building the business and acquiring new customers. Getting bogged down in unnecessary details will only distract from this task. So instead of wasting time checking out fancy new office space in a desirable part of town, concentrate on the important stuff.

Six Ways to Keep Your Business Lean

  1. Do not borrow too much capital – Only borrow what you need. The more money you borrow the more the loan will cost you in terms of interest.
  2. Rent instead of buy – Never buy an asset when you can rent it. Buying assets ties up too much working capital and negatively impacts on cash flow.
  3. Keep management systems streamlined, simple and cost effective at all times.
  4. Keep a close eye on the financials – Tracking income and expenditure will help keep costs down and prevent cash flow problems.
  5. Don’t over staff your organisation – Employees cost money, so make sure each employee you hire can be justified, and if they can cover multiple roles, even better.
  6. Keep your overheads down – Never pay any more than you absolutely have to and always renegotiate supplier contracts regularly to ensure they remain competitive in the current market conditions.

Develop a Customer Centric Business Model

Your customers are the heart of your business, or at least they should be. To this end, the ethos of your business should be about improving your products and services and ensuring the customer experience is positive at all times. Make ‘repeat business’ your buzz word. The more repeat business you can generate the shorter the amount of time it will take for your business to start making a profit. On the other side of the coin, if your products and services are of a sub-standard quality and your costs are spiralling out of control, it won’t be long before the business is in trouble.

Why Lean is a Long Term Strategy for Success

Excessive business debt and bloated cost heads are the enemy of a successful business. If you can work hard at keeping your running costs down to the bare minimum whilst increasing a healthy sales ledger, you are well on the way to building a long term successful organisation that will be sustainable even in an economic downturn.

It isn’t always easy to run a ruthlessly streamlined organisation, but if you want to be successful, it is a smart approach. Adopt a lean approach from the inception of your business and it won’t be long before you are running a successful, profitable business that will survive whatever the prevailing economic conditions.

About the author:

Doug Barden is a managing partner at Barlow Andrews, a leading chartered accountancy company in the UK.  For more information, visit http://www.barlow-andrews.co.uk today.