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.

The answer to this question is not always easy, since for a manufacturing business it may be necessary for you to borrow, if that is the case you need to see an accountant you can trust, to help you to get the best deal and talk about the implications, like personal guarantees, liabilities and so on.

If however, you are in the service sector you should try and stay away from borrowing money as long as you can and bootstrap. Here are some things you can do:

• Work from Home, do not get an office.
• Work part-time in your business, keep your job until the business starts earning money on a regular basis to support you.
• Start with sales, it gets you money and you can find out if someone wants to buy your product. If someone put up the money to buy your product or at least sign an order, that is a good sign. Don’t trust praise, most people don’t want to hurt your feelings.
• Do some business planning, and see when your business would break even, get the tools free, so no excuses.
• Outsource all non-core business processes from day one, don’t hire someone just to answer your phone, find Virtual Assistants to do that and other admin stuff, they know how to do it and that makes you look good.

Have a look at some of my categories, like bootstrap, How to grow your business, and others to get some more ideas. ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and this is not business advice, since I only know very little about your 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 thank you for your effort.

I always look for way to turn a problem into an advantage, so here is my take on the so often mentioned “isolation problem” for small home businesses, free-lancers, contractor, sole-traders and micro-business.

So, you don’t meet enough people to interact with on a personal level? Let me ask you another question, what kind of people does your business need most of all? Customers, right? As a good bootstrapper you know that everything starts with sales, because that is how you get your money. You may very well do all your marketing online and get business that way, but why leave it at that? Think global - do local!

So, now to my solution for your “isolation problem”, I guess you already know what is coming:

• Go and meet people, customer people.
• Go to networking events in your local area.
• Go and join business clubs or start one.
• Run an event from your home.
• Take a business class at your local college.

All these and other events will get you out of the house, open your local paper, call your local camber of commerce, they all can help you to find events and contacts, and start your “isolation-opportunity” marketing and sales drive.

Turning “customer people” into “customer friends” could be the smartest thing you will do this year. Business is so much easier if you know someone personally. You know your “isolation-problem” has turned into an “isolation-business-advantage”, when your customers come around your house to discuss the next business deal and/or for a cup of coffee.

Always think, where is the opportunity in this problem? Once you start thinking like that you will see many new opportunities and the world will become a much more friendly and profitable place. ST.

I have discussed before that it is important for 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, to do a minimum of business planning, but does it stop there?

Not really, you need to keep up to date with your bookkeeping, to complete the business planning process. You may ask why, if you have done the planning, why not get your bookkeeping done once a year for your tax return?

The answer to this question is the business planning process never ends. Remember I have been talking about going back to your plan at least once a month. In order to fine-tune your small business planning you need to actual information how your business performed in the last month. The only way to do that is to do your bookkeeping or accounting.

By doing that you will be able to compare your predicted numbers in your cash-flow with the actual number your business has generated. This in turn will help you to update or modify your cash-flow plan for the future. More important than that, you will learn new things about your business:

• You may have higher (good) or lower (bad) sales, than you expected?
• Your cost in your business may be higher (bad) or lower (better) than you expected?
• Your cash-flow may be better or worse do to the above two points?
• You may need to outsource some business processes to lower your fixed cost structure, to make your business more recession proof or just more profitable?
• You may need to ramp up your sales and marketing activities for your small business products or services?
• You may also have to adjust your SWOT analysis and your business goals?

You will be surprised how creative you can be, once you know about and understand a problem in your business plan. It may not even be a problem at that time, you may just need to adjust the way you do things, and you may have avoided a small or big problem in the future.

In my opinion strict cost control and bootstrapping are not like nice to have features, they are essential for your small business survival. Often the difference between failure and success is just a little planning and checking the “plan” - doing a reality check. There is no excuse not to do it, all the tools are available for free, for anyone.

If you feel the initial process of business planning is too much for you, than get your accountant or bookkeeper to help you to set your cash-flow fore-casting, SWOT analysis with you, doing it online will give you strategic advantages, like you can work with your accountant or bookkeeper in real time in different places, this lowers your cost, no time wasted and is good for the environment.

I would like to make one more point here, the aim of all this planning is not to get it spot on - no, the aim is to understand what is happening in your business, that is why you should be doing it.

Among other things, it will give you a measure of certainty, security and confidence, if you understand what is happening in your business. So, how confident are you about the future of your business? Why not take the weekend and have a planning session, it is like playing monopoly, only this game will secure your future. ST.

SmallFuel Marketing is a great site which introduces a marketing system for small business and I must say I like their approach:

“Welcome to the SmallFuel Marketing store. You’ll find that every product here will serve one purpose: to grow your small business. With that as our goal, we created a coherent marketing system that combines everything you need to grow your business into a simple and extremely effective package. In short, we created what we believe is the best possible way to grow a small business: the SmallFuel Marketing System.”

Marketing is still a kind of “black art” for 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, but these guys give you a marketing plan layout for free in three steps:

• Step 1: Position and Plan
• Step 2: Create an Identity
• Step 3: Spread the Word

This system will not break the bank, but will fast-track your small business marketing, even if you are not going to spend the money read their pages, most informative.

Hat-tip to Small Business Trends. ST.

If you want your small business to be successful you need to have the ability to get things done - are you one of those people who get stuff done?

But is that really all that counts? No, of cause not, getting the right stuff done is what counts. So every time you are working on something you need to ask yourself

“Is this effort I’m putting into this project getting me anywhere or not?”

If the answer is “NOT” then you need to stop it right away. This can be one of the hardest things to do, especially if you have invested a lot into it the project already. But it is essential for your business success to make this hard decision.

You may decide to try again and again, but as Benjamin Franklin used to say:

“The definition of insanity is doing the same thing over and over again and expecting different results.”

ST.

For me small business planning centers around some very basic questions and I always aim to answer those first:

• How much is my business going to cost to set-up?
• What are the monthly running costs of my start-up?
• Is anyone willing to buy what I have to sell?
• What other problems or challenges does my business face?
• What are my best selling points or strength?

You may thing that these are all very basic questions and you would be right - but can you really answer them for your small business? I think I would find it difficult at times too. So I have devised this very basic business planning system I would like to share with you:

• Cash-flow Planning
• SWOT - Strength, Weakness, Opportunities and Threats Analysis
• Mission & Goals Statement

Let us have a look at each one of these components individually - first up cash-flow planning - without money it is difficult to run a business. You may see that as a problem, I view that as an opportunity in as much that it forces you to sell your service or product, before you do anything else.

You could of cause do a market study and analysis, spend “lots” of money in the process and have very little extra useful information at the end of the process. While if someone buys your service or product you know it sells - without spending a penny. Enter your sales into a cash-flow and you can easily work out how much cost your small business can take. I’m passionate about “bootstrapping your small business” from day one.

This in turn will help you to focus on saving money wherever you can, since you will only make very little money in the beginning. You will understand that payment terms you offer to your clients or payment terms you receive from your suppliers can greatly help with your cash-flow, I have written about cash-flow planning before.

Secondly I like to do a SWOT analysis so I can focus myself and others in my business to stay “on message” and understand the vision for the business better. Even if you have no staff to begin with, it will help you to make the right decisions and stay focused.

Strength and Weaknesses are “internal” factors where you need to be honest with yourself and write down what you do well and what you do badly - writing it down is almost therapeutic - enabling you base future decisions on these facts, building on your strength, while avoiding your weak spots.

Opportunities and Threats are all about “external” factors and deal with issues like your unique differentiators for your products and services in the market place, as well as your competitors, red-tape, funding issues, etc. Again just writing them down will move you forward.

Last but not least I find it helpful to have a “Mission Statement” for my business, what do I want to achieve, so my customers, partners and others understand what my business is all about.

The “Goals Statement” is more personal, I write down why I run my small business or why I want to start a business.

As with all plans it is of the utmost importance to revisit your business plan as often as once a month or at times when you do not know which decision to take - go to your goals list, it will help you to focus on the way forward.

Doing basic business planning like that will help you to run and grow your business, and it can be fun too. Remember it is cheaper to test your plans on paper then for real with your own money.

I wish you and your small business or 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 “Happy Planning and Success”! ST.

Related Items:

• How to Plan Cash-Flow Category.
• How to Bootstrap Category.

I often refer to “bootstrapping“, when I talk about small business, you may very well be asking “What the hell is bootstrapping?” To put is simply, bootstrapping is the art of running a small business with no or very little money and/or funding.

So if you are thinking about starting, growing or running your small business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, but are worried about if you can be successful, worried about failing, worried about giving up your job, etc. than bootstrapping is for you.

Especially if your aim is to build a personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants, working from home, creating an income and keeping it small and manageable, then bootstrapping is definitely for you. There are more than 18 million small and home businesses in the US alone, self-employed working is gathering pace in all areas of business. If you look around you you will most probably know many people working from home, or doing contract work, freelancers and so on.

One very unpleasant outcome of a small business venture is the failure thereof. Bootstrapping will mitigate any fallout from a business failure. Remember that business success often comes with experience and experience comes form making mistakes - bootstrapping will allow you to make mistakes and recover from them.

Here are a few bootstrapping facts to consider if you wonder if bootstrapping is for your:

• Bootstrapping is a fast and the best way to build a solid small business, because you are starting with sales as your priority task - that creates cash-flow and keeps your small business alive.
• Bootstrappers don’t waste their money - they make money. They understand that cash is king and should not be wasted on old style advertising and marketing - there are better and almost cost-free ways to promote your small business.
• Bootstrappers don’t waste time with long business plans they start their small business immediately. Cash-flow, SWOT, list of goals and they are in business.
• Bootstrapping is the lowest risk strategy to start a business, you can start your business with a Small Business Infrastructure for about $20 / £10 per month, get ready in peace find customers in your spare time and build your business on the side.
• Bootstarppers don’t follow the herd, they use unconventional thinking to move forward and succeed.
• Bootstrappers focus on their business goals, outsource and build networks to grow their small business.

It is never too late to start with bootstrapping even if you have been running your small business for years. So have a look at it and build a stronger, more secure small business for yourself.

When are you going to start bootstrapping? ST.

Related Items:

• How to bootstrap category.

A few days ago I was once again reminded by Joshua Levy and his piece “One Blogger Asks: Is the Grass Really Greener on the Web Worker’s Lawn?” on his blog Web Worker Daily that I wanted to write a piece about what I believe to be the social impact of home working.

Joshua is asking some interesting questions about working from home:

So is all of this freedom actually liberating us? Does web work actually represent an evolution in the working conditions of the masses? Or are we fooling ourselves, blind to the reality that we can’t have it two ways — you can’t have the freedom AND have someone else, er, pay the bills.

If I ask myself these and other questions I’m invariably drawn to find answers in my personal work life and how it has changed in the last decade.

In 1999 I was still office based, traveled from one of our offices around the world to the next and was rarely home. In fact most of the time those years I came home Friday very late or Saturday and then often left Sunday night again. So I saw little of my family and especially my son who is now grown-up and ready to go to university.

Then in 1999 I sold my ISP-business and went back to run WinWeb. This time around I worked from home, right from the start I did not want to be in an office and lead the same life as before. So for the past eight years I have been there when my son came home from school, I even picked him up often enough. I was here when he came home with the latest music CD, I had to listen to - not always easy, I admit - or the latest sport-shoes form addidas had finally arrived at the shops.

Similarly I spend much more time with my wife, going for lunch, doing some “essential” gardening - I hated gardening, but love it now. I could give you many more examples, but you get the picture.

While there are many challenges for home workers, I believe we are seeing the beginning of an “reversal” trend. I would like to list here some challenges I believe our society is facing currently:

• Child care - in our work dominated society we often outsource most of our child-care, in kindergarten, boarding schools, and other institutions, here our children will not receive the same level of care and love they deserve and need;
• Care for the Elderly - our lifestyles often separate us from our loved ones and in times of need we are often not able to care for our relatives or friends, because we live in different cities or even countries for example;
• Environment - many of us spend hours every day alone in cars or on trains - not alone, but still isolated - and contribute to the carbon emissions that change our climate.

There are many more examples. This whole process began with the “Industrial Revolution” some 150 years ago. Some of us may even remember a time when three or even four generations of a family lived in one house. People worked in their villages, child-care or care for family “just” happened - was that a bad or good thing? Looking at single parent families and the impact on our children, I would argue it was a good thing, and so would the many parents working from home exactly for that reason - to provide a healthy family environment for their loved ones.

I believe that the whole trend of home working may in the future allow us to have a much more natural work/life balance and will reverse some of the damaging effects of the post industrial revolution changes in our society. People will live closer to family, local communities will be revived - I believe that is happening as we speak, and our children will benefit from “more family”, and all this will have a profound impact on all our lives and the environment.

I would encourage Joshua and everyone else working from home to relearn the social skills of building local friendships, or live near family and give you the social life you need.

After all, this technology we at WinWeb and others supply makes it possible to work from anywhere, gives you a tremendous amount of freedom to live the life you want, where you want.

Let’s hope in hundred years from now people will see this era not only as the “Information Age”, but also the age when we learned to live a better work/life balance, in tune with our emotional and social needs as individuals, families and society as a whole. What do you think?

Have a great weekend with your family and friends.

Funding issues are really only a problem if you do not use “bootstrapping techniques” - so I’m not that comfortable talking about this issue, since I believe everyone should start their small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal business on a shoestring.

Anyway here are the small business health check questions you need to ask yourself:

• What do I need the money for? Can’t you find a customer how will buy the product or service, before you even have it? It can be done you know!
• Do I have enough securities for a bank loan or overdraft? I always like the analogy of a bank will give you an umbrella (money) and when it rains (problems) they need the umbrella themselves - what than is the umbrella good for!
• Should I be looking for an external investor? You could find external investors who will tell you how to run your business, but know even less about your small business than you do?
• Do I have the detailed business plan needed to find investors? You will need a detailed business plan - which frankly may not be worth the paper it’s written on - which will be used against you when things don’t work out.
• Do I have the time to wait until a decision is made? You could be looking a 12 - 18 month before you have funding, do you have that time? Why not deal with customers today and get started on a shoestring.
• What if they say NO? This is my favorite one - are you happy to give up on your business idea if everyone things is bad or worse (?)…. if you are don’t start a business, because you are not ready and whatever you do do not borrow any money from anyone.

If you read this and think this is all b*** s*** - and you may be right, of course - let me know why you think you need to borrow money? Maybe we could come up with an idea that would allow you to start your small business, without having to borrow money and loosing some of the control in your small business.

You can see other reasons for small business and personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants failures in my Health Check Category, if you can add to this list please do so, I would welcome your comments.