If you are undecided about the benefits of selling your product via a catalogue then this list may help.  

1. Raising Awareness - Although it is not as spectacular or has as far a reach as traditional advertising methods, catalogues are a good way of letting the public know that your product exists
2. Low Risk – You have very little to lose from being in a catalogue and many firms do not even charge you to list your product
3. Less Packaging – There is no need to have attractive expensive packaging to compete on shop shelves. Simple plastic bags and plain boxes are sufficient
4. Credibility – If your product appears in a catalogue alongside other successful products it raises credibility. Strong catalogue sales can also open doors to being featured on television home shopping networks
5. Manageable Growth – A catalogue will only take a small quantity of your product to begin with and will order increasingly larger amounts once it has been shown to be successful
6. Product Line Not Required – You are not at a disadvantage for only having one product to sell, whereas large stores prefer to stock a line of products from the same manufacturer
7. Easier to Compete – The catalogue market is a level playing field where both small startups and large corporations sell their products
8. Market Testing – You can experiment with placing your product in niche catalogues in order to fine tune your marketing strategy
9. National Exposure – You are not limited by geographical barriers and your product could potentially be viewed by millions
10. Lucrative Returns – The catalogue market is still extremely successful and if your product is a hit you could generate a lot of revenue for your start-up. Use this money to expand your business and to eventually get your product sold commercially in stores

I had an interesting conversation about my view that management control over employees is a myth. I have believed for some time now that an office is often a total waste of money and completely unnecessary. Most of the time I’m told it’s OK when you work by yourself, but not if you have employees, as they need to be supervised and somehow “controlled”.

I have now been working for almost ten years from home, and most of my staff works from home too. Apart from being an eco-friendly way to work, it saves people time and frustration to travel in and around London to come to an office, where we all sit in cubicles or offices. In the days of broadband internet, Skype and OnlineOffice, there is no need for an office, even to have meetings.

Offices, like cars are are often nothing else but status symbols – what other reason can there be for a small business to have an office? If that is true then how is the office helping with your business, it’s a big expense. Seriously, if you do not have clients coming thru your office doors several times every day, why have the office. Even if you have, do really all your people need to be in the office every day? I guess not!

We are in an economic downturn, what is more important – your ego or your business – ask yourself that every time you walk into your office. I’m sure there a good reasons for some micro businesses to have offices, even so I currently can’t think of any, but I’m convinced in most cases a healthy bootstrapping and outsourcing mentality would be more beneficial for your business.

Unless the first business goal is to feed your egomania, you need to have a good hard look at your cost structure to survive in these times. — ST.

I talk a lot about outsourcing as a way to grow small business turnover and small business capability, but we should also talk about value co-production!

Outsourcing means several businesses working together, to service more customers than they could service by themselves. If you think only small business does this, think again. Almost all big car manufacturers, furniture manufacturers, and other big business do it always.

Value Co-production means that you, and your outsourcing partners, offer discounts to customers so they build their own product. You effectively sell a kit of whatever it is you manufacture. This is often done in the furniture industry, look at IKEA, Homebase, etc. When they talk about “flat-packs” they are talking value co-production, with benefits to the customer:

        1. Lower Price – in return for their own work input;
        2. Transport – the items often fit into in your own car;
        3. NOW factor – customers can take the good now, no waiting for delivery.

Some of the benefits for your small business are:

        1. Lower Cost – due to shortened manufacture cycle;
        2. Higher Manufacturing Output - due to shortened manufacture cycle;
        3. Higher Turnover – products become more competitive in price;
        4. Lower Transport Cost – due to smaller items being shipped.

This all will help to drive down overheads and help cutting costs. Is value co-production for you?

If you are a manufacturing business, it is certainly worth thinking about! ST.

I had many emails regarding my post “Is your competitor for sale?”, the responses show me that some of you certainly have a healthy megalomaniac instinct – good for you!

Here comes the BUT! You need to be careful, for bigger business does not always mean better business. While there is no limit to the size of a bootstrapping business – see Shawn Hessinger on “How big can a bootstrapper be?” – it never the less can be a risky strategy to grow through acquisitions. I put some basic pointer for your consideration below:

1. Businesses come with people and all the associated problems – so make sure the culture fits;
2. Target group should be identical to yours, i.e. serve the same customer base, so you get more turnover for both businesses;
3. Synergies – find them and make them work for you – by sharing resources you can lower the cost-structure in both businesses;
4. Distance – make sure you can easily be in both businesses, so keep it close;
5. Level of debt in the new business – make sure you can handle it easily, don’t risk your current business.

There are other points to consider, so good and trusted advice is absolutely essential. I guess here you will have to decide if you are a gambler (bad) or just a risk-taker (good). Since you made to this point I shall hope you are an entrepreneurial risk-taker.

So, if you are anything like me, you’ll be thinking “Screw it – let’s do it!” ST.

One way to grow your small business is to buy another business and merge the two together. When the going gets though, i.e. a recession – many of the non-bootstrapping businesses will be for sale or in trouble. This is the time for you to sharpen your bootstrapping pencil and think about opportunities that present themselves.

If you do not know what to look for here are some pointers:

        1. Customers complain about your competitor;
        2. Employees from your competitor apply for a job with your business;
        3. Competitors loosing the plot, i.e. unrealistically low prices;
        4. Court judgements against your competitor or disgruntled suppliers;
        5. Partners and directors resigning or leaving the business.

Be aware of potential pitfalls, especially if you have never done this sort of thing before. Get your accountant to help you evaluate the competitor and then make a move.

Don’t loose your business focus, however tempting the opportunity. It is easy to damage your business with an uncontrollable acquisition. ST.

This question is hard to answer, because there are no simple answers here and the outcome of this situation could easily be fatal to the business and if you are personally guaranteeing this money – and you probably are – this could potentially be very serious for your personal life too.

The things that you need to do, in my opinion are:

• Find out why? If the reason given are not satisfactory, you will need to get legal advice.
• Try and extent the deadline? If that is possible reduce the overdraft as soon as you can, or negotiate a stepped reduction of the O/D limit, ie. by month or week.
• Try and change bank, ASAP.

People often believe it is somehow always their fault, if the bank changes their attitude towards them, that is not always the case. Banks will always try and make you believe it is, but in reality they my have new internal guidelines for handing out money – banks can get into “cash-flow” problems too. So – don’t automatically assume it is always your fault.

Banks may have the right to recall a loan or overdraft, but I’m not sure if they have the right to damage your business by doing so – especially if the reason for the recall is not your doing. So if it comes to the crunch, get legal advice. This is one of the reasons why I hate these, IMO, often legal but still unreasonable arrangements between banks and clients.

Many years ago someone made the the loan, O/D – umbrella analogy and it goes like this:

When the sun is shining your bank gives you an umbrella;
when it is raining, they need the umbrella themselves.

It is best if you do everything possible to not need banks in the first place, by bootstrapping, outsourcing, planning your business and keeping your fixed costs as low as possible.

Remember sometimes, attack is the best defense even with banks, they may need their money, but they do not need bad publicity either. ST.

Earlier in the week I wrote a piece on the 10 minute power meeting and on the 10 second marketing speech. The issue here is clearly getting things done in as little time possible.

Time management is the current buzz-word for small and micro business. No matter what kind of 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 you run, time is a finite resource for all of us, and we need to learn to use our time as best we can.

You would be forgiven to believe, that time management is only the obsession of managers, but is that really the case? I believe time management to be an integral part of your work-life balance strategy. If you get your work done more efficiently it will help the overall business efficiency, but at the same time get you out of your office sooner, allowing you to enjoy the better things of life.

Efficiency is also a bootstrapper trait, getting things done reduces overheads and other costs, you will see the results in your monthly planning exercise, your income will increase while your costs don’t change.

Here are some basic rules on time management – or cutting to the chase – as I would call it:

• Tell people how you want them to work with you, or how to use your time;
• Return the favor, treat their time as you want your time treated;
• No meetings without agenda;
• No long documents without a short summery;
• Make sure you know what is expected of you;
• Ask – don’t wait for offers, go and get what you need to do your task.

I’ll be writing more one this later, but I guess you get what I’m getting at. Like so often it is just the case of “taking some time” to come up with more specific ways to save time during your work day.

“Taking time” to increase your time management efficiency is not “wasted time”! ST.

Choosing an accountant/CPA is probably one of the most important decisions to get right, because you are unlikely to have an accountant’s grasp of

• taxation
• company law
• dealing with the tax authorities
• wide range of knowledge about small business.

You need to make sure you find an accountant/CPA who concentrates on 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 before you make any appointments.

Another aspect is size, make sure you are not “one among millions” sort of speak, smaller accountants practices are often more in tune with your small business needs, because they are a small business too.

Here are some questions I would be asking when starting out with a new business venture:

• Should I start my business as a sole-trader, partnership or limited liability company?
• Can you help me to find and raise finance? (Read about bootstrapping first!)
• Will you help me with setting up my cash-flow forecast?
• When do I need to register for VAT (UK), GST (Australia) or when do I need to charge sales tax (US)?
• Am I ready to start trading, or should I wait?
• Do I need to choose my financial year and trading year end date?
• Are you going to do my bookkeeping and accounting work?
• Will you work online with me, so we both can be up-to-date with my business progress?
• Will you deal with my employment issues, pensions, annuities and insurances for me?
• Will you help me to understand more and more of these issues myself, and will you be available for advice if and when I need it?

There are many more issues to consider and they depend on your business, that is where your accountant will help you too. If you find the accountant is dealing with other businesses like yours you are in good hands, they can give you better and more realistic planning guidelines about your business venture.

The most important question is the one you need to ask yourself, “do I trust this person and can I work with him/her long term?” If you feel intimidated, or misunderstood, get up and walk. An accountant should be your advisor, he/she should never be your boss, what I mean is you need to make the final decisions, not your accountant. No matter what advice you get anywhere, you are always responsible.

Most of all your accountant should be a trusted advisor, trust me you will need his/her advice on a regular basis! 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.

Well, two things come to mind:

Often the term “staff turnover” is used in connection with fluctuation in staff levels, which means staff leaves the company – for whichever reason. How large or small staff turnover in a company typically is I do not know, but large staff fluctuations are not good for any business. It usually indicates problems during the hiring process or management problems within the company.

The other use of the term “staff turnover” could be in relation to the monetary turnover for a business a staff member will generate, versus the turnover generated by the business owner. This is assuming this staff member is employed in a sales capacity. Here it would be desirable to have a large turnover, of cause.

In both cases it is true to say, it does not matter what kind of 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, you run. It may be more related to things like:

• Market segment;
• Management environment;
• Staff experience, to name but a few.

You can always speak with some other small business owners or get some market segment data from information agencies, maybe they can give you a better idea of where you should be with numbers, comparing yourself to your peers is always a good idea.

I like the question, it makes for some interesting planning exercises for bootstrappers. 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.

Again I had several questions regarding “crisis planning“, “disaster planning“, “data-security” and “data-backup“, so I will cover all of them in this post.

When I started thinking about WinWeb’s Small Business Infrastructure, we always knew we had to do something about data-security and data-backup. The truth of the matter is that most 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, do not have a coherent data-security and back-up strategy. To be perfectly blunt about the subject, it is not made easier by confusing technology and more to the point terminology, that even we have difficulty understanding some time. So I believe:

We should not expect business start-ups and small business in general to be accountants, bookkeepers, IT specialist, lawyers, marketing & PR gurus and so on. We should provide small business with an infrastructure in which it can concentrate on core business tasks, while at the same time enabling the business owner to stay informed of all relevant business facts like cash flow, sales, HR issues, tax position and more. This will enable him / her to make informed decisions, maybe with the help of an external advisor.

I formulated at the beginning that one of the benefits of using WinWeb’s OnlineOffice would be:

No security problems. No business interruption problem.
Your data is continuously backed up onto multiple RAID-5 data servers in multiple physically and network secure data centres – if that is not enough you can make a copy of your data anytime onto your PC or a CD. Should your computer crash or get stolen – no problem, just log on to another computer and keep working – can your competition do that?

So that takes care of the data security and back-up problem. To give you a little example, one of our clients is a web-designer for a niche market, he lives in an area which was flooded earlier in the year. His computer equipment gone, but all his data, addresses, email and work was safely stored in our OnlineOffice. He moved to his parents for a time and was back working within a few hours – not everybody was that lucky.

A burglary or fire would do the same – and can be dealt with quiet easily. This is not so easy when you have a business that manufactures goods, even when you do it from the kitchen table, you will incur “business interruption“. You will need a plan for that too – insurance may be the first step.

But loosing customers and with that revenue is not something an insurance is going to cover you for. So you need to plan ahead, ask yourself the following questions:

• Is there somewhere else I could work from temporarily? Parents, friends, short term office hire, etc.
• How long until I can get my raw-materials again? Maybe you should require your supplier to get a certain amount in stock for you, make a contract.
• Could you hire machinery until you can replace your own? Find suppliers now.
• Could my staff work from home if necessary? Online technology will help with that.
• Could I outsource some work temporarily? Have a look at virtual assistants in your area.

There are other questions you could ask yourself, just take 30 minutes, get a piece of paper and imagine your business, office, house, kitchen just burned down – trust me – the questions will come, and so will the answers. Oh, just to mention it, a disaster plan in a burned out house is of no value to anyone, keep it online or safe elsewhere.

Answer: YES, a small business needs a disaster plan, just like any other business. 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.