This interesting question was emailed to me last week, and at first I thought to post a one-liner or just email back and say something like, “higher is always better“. I got thinking about this and decided the answer is not as clean cut as it may seem.

After all we are talking small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants here. So I reconsidered and decided to write about it here.

As I said, generally speaking, a higher cash-flow is desirable because you have more “scope” to develop cash-flow reserves for your small business, by using standard cash-flow planning tools, like renegotiating payment terms with your suppliers and deal with credit control better.

Here is the thing, if you are a micro business, or even a one man/woman home business, more or less cash-flow may not be as important to you as concentrating on credit-control. Let me explain, if you are a service business, you may just want to make enough money for your monthly income, there are limits to the amount of work you can do, before you start running into other problem areas, like employment issues, office rent, etc. You may not want that, you may be very happy the way things are - and contra to popular belief that is perfectly OK. However that means you do not necessarily want a higher cash-flow.

The same applies to small manufacturing businesses, higher cash-flow can also mean much higher risk for your small business, your client could go bankrupt and not pay you, what then? This is something that happened to me in the late eighties - it was a very unpleasant experience.

ANSWER: A qualified “HIGHER”, with a big “BUT” for micro-businesses. ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below - I’d be most grateful.

There is a great article by Paul Graham on “The Future of Web Startups“, it is so close to what I believe in, example:

“… So my first prediction about the future of web startups is pretty straightforward: there will be a lot of them. When starting a startup was expensive, you had to get the permission of investors to do it. Now the only threshold is courage.”

or

” … It might seem that if startups get cheap to start, it will mean the end of startup hubs like Silicon Valley. If all you need to start a startup is rent money, you should be able to do it anywhere.”

The truth is you don’t even need the rent money, just do it in your garage or kitchen. Using online technology, means you can do it anywhere at anytime, build your small business network, do business on the beach, while on holiday - it’s all possible.

The important thing here to realize is, that many people are thinking about starting up a small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants.

It’s getting cheaper, it’s getting easier and it’s getting more and more important for each global economy. ST.

I have been answering small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants questions on my blog, and I’m delighted to receive more and more questions from you, my readers.

However there are a few points I would like you to consider before sending me a question:

• General Questions Only - please only send me general questions, as I will only be able to answer those, due to the fact that I do not know your business and can not comment on too specific questions;
• This is no business advice - for the same reason as above I can not give you any detailed advise, you would be better served by an accountant or business advisor, best a person who does both, if you have specific issues, please understand my answers more as a point made in a business book;
• Volume of Questions - I will try to get all questions answered ASAP, but I can only do so much per day. I have started to combine questions to deal with more issues in a timely fashion, so have a look. I will send you an email with an link to the post in which I have answered your question.
• Email - as some of you know I have answered some of your questions by email direct, since they are not relevant to my general blog readership, in some cases the email addresses have been invalid, please check those before you submit the form, otherwise you may be disappointed or even think I’m ignoring you - if you do not get an email, then there is a problem with your e-mail address or spam filter.
• Categories - please browse my categories to find answers, because I can not answer the same question over and over, it would get boring for my other readers.

I love receiving your questions so keep them coming, I will try to add answers ASAP to make my blog a great small business resource for all small businesses owners. ST.

This question is being asked again and again, so I want to give you some pointers to some past articles about this subject:

• Planning Your Small Business And Start-Up
• My category “How to plan cash-flow”.

This should get you started. ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below - I’d be most grateful.

On October 15th I posted three posts for Blog Action Day For Our Environment and I was in very good company, the statistics are impressive:

• 20,603 blogs participated
• 23,327 posts where published
• 14,631,038 RSS readers alone

The reach of the postings is likely a multiple of the 14 Million readers via RSS, since most will have been read on the blog sites. My contributions for that day where:

• Blog Action Day For Our Environment: WinWeb Pledge
• The World Without US
• Slow Progress With Eco-Friendliness in Our Daily Lives

Next year there will be another Blog Action Day, so why not get involved? ST.

Ask Shama, she got a great post out to answer this question, here she sets out what you need:

“….What do you need? Characteristics wise, most clients ask for virtual assistants who are sharp, can take initiative, and who will help further the client’s business. If this sounds like you, you may find your business booming before you know it. You also need a good working computer, an internet, fax, and phone connection, and lots of folders to keep you organized. Remember to back up your files often. Careless errors in your first years in business can cost you.”

There is more, so have a look. I would add, to use online technology, with all it’s benefits for you, it also makes it much easier to become an integral part of the clients team.

She also talks about marketing, there are many places you can find contacts and network, like LinkedIn, LiveNet, and others. ST.

This is my last rant of the week - I promise, but what angers me most, is the inability of politicians to understand one simple truth, if we want to deal with the future challenges like global warming, rising fuel prices, crime and traffic gridlock, we need more small businesses, and many, many more home businesses. It is not important if these businesses want to grow or not.

Looking at the problems of fuel prices and traffic gridlock - it is estimated that the peak of oil-production could be upon us by 2012, this will mean that oil prices will rise dramatically. This in turn will do enormous damage to our economy, triggering probably more than one recession - in fact some believe we could see the biggest recession ever - dare I say more.

If government had the insight to really help small and home business, this would have the following effects:

• less congested roads, because people would work from home or in their local communities,
• partly protect our economy from the effects of the oil-price rise to be expected,
• with less travel, we would need less roads, public spending would be affected positively,
• the environment would benefit enormously.

This kind of small business support may very well help in areas, not immediately obvious like crime, health and in local communities:

• crime, because our kids would find someone at home when they get home, I have written about this before;
• health, the hours of work, especially travel, to and from work would diminish, this would give more free time to people and this in turn my very well help with some stress related health problems, or less drug abuse because of better child supervision, due to home and local working;
• local communities, would become more vibrant again, with all it’s social benefits.

So why is government so hell bent on making small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants, a target?

Answer: Lack of vision. ST.

UPDATE: As if just to prove my point - Oil Prices touch above $90 level - say no more!

Mr. Browns Labour Party must be thinking, “Attack is the best defense!” After all the “goodwill” they generated with their tax-hike for small business in the Pre-Budget-Report, they now send out the former home secretary Charles Clarke - who had to resign, because he couldn’t even follow very simple rules, regarding foreign inmates, repeatedly - to lecture small business about doing better and “promised” more red-tape.

This at least is what AccountingWeb, is reporting in this piece.

While small business is being blamed and punished, big business seems to get away with receiving generous tax breaks and “public” funding - one guess who’s tax-money is being used for this. It is startling, how incompetent politicians are in dealing with small business, could it be that most of them have never had any experience in the real world, since most of them are career politicians?

To me this all sounds like the bad old days, the government is failing on more and more fronts, NHS, schools, crime, public services, not sure if I should mention the war, and many other areas - yet will insist on lecturing us about our “failures”. What ever happened to “leading by example“?

It is time for change. ST.

Just to have another dig at the UK government, I refer to an article on accounting web. They repot that the Dragons ( I guess out of their den) join the CGT - capital gains tax backlash - they must have told Mr. Darling that they are out.

WOW, now that really changes things, I’m sure Mr. Darling is really shaking in his boots now. Any moment now, Mr. Darling is going to change his mind, not because the whole business community is busting his chops, no the Dragons will have done it.

This kind of obvious opportunism is incredible, why accounting web feels we need to know is, is beyond me. It always amuses me to see these guys sitting with their money in their chairs, behaving in the most ill-mannered way possible, while displaying an arrogance that is breathtaking. The only thing you can learn on that program is why you do not want a partner in your business.

Does anyone know what happened to all the “lucky” ones, who got funded by these small business geniuses, I would really like to know?

You will not be surprised to learn that this post will be filed under “Balderdash“! ST.

How long is a string? Let me give you some pointers here, but please remember you can always do more on the cost-cutting front in any small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants.

1. Keep your staffing level low. As much as it may hurt, work longer hours yourself, until extra staff is economically viable.
2. Outsource all non-core business activities. This will reduce your fix-cost structure, make your small business more flexible and you can react faster to an economic down-turn.
3. Buy second hand. Do you really need the brand new van? Or computer, or……
4. Work from home, this will not only cut your cost, but may improve your work-life balance at the same time.
5. Let your staff work from home. No office cost, hire a room if you need to on an hourly basis.
6. Use online technology, so you don’t waste time and get distracted.
7. Focus on your core business and sales. Every distraction costs time and money, sales generates money.
8. Bootstrapping. Think before you spend a penny, could I borrow, hire or do it online, get creative.
9. Analyze your fixed cost every month. You will find things you don’t need - trust me you will.
10. Compare and get new quotes. Even if you need the service or product from your supplier, check others all the time, insurance, telephone, utilities, etc.
11. Get better payment terms. Ask to pay in 60 or 90 days, or get an early payment discount.
12. Check your bank charges - you’ll be surprised. Or have it done on a results basis, doesn’t cost you time and gets you money back.
13. Do credit control - get your money in lower your bank overdraft cost and charges.

This is only a short list of what you can do, but it’s a start. Remember even $100/£50 per month is $1200/£600 a year more in your pocket. ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below - I’d be most grateful.