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.

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 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.

Here in the UK we had the “Pre Budget Report” yesterday. The government set out it’s plans to get small business owners to pay more tax, they increased capital gains tax by 90%. At the same time they announced the economy outlook to be weaker as expected.

The result was immediate, looking thru my log files today, I stopped at the search term listings and saw many references to “recession” in it. Next up one client asked me about “How to run his small business in a recession?” I asked him a few questions to get him to think about what to do in times of a recession:

• What are the problems in a recession? You may get fewer orders, customers pay later, some customers go out of business – was his answer.
• What can you do to combat those problems? Keep your fixed cost down, make sure you have reserves, keep up with your credit control, here I had to help him with most answers.

I’ve been talking about “bootstrapping” or “cost-cutting” for a long while now, with business planning as an additional tool, to combat any surprises. Going the easy route is not always the best way to run a business. For example, having to fire people because the economy is in recession is no fun for anyone and quite easy to prevent in most cases.

So even when the times are good, make sure you do bootstrap so you will survive the bad times. I think my client got the message – good on him. 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.

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.

Starting and running a small business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal business today, is all about staying focused on the small business and not on running your office. WinWeb’s Software as a Service applications allow you to do exactly that. Below you will find some of the benefits detailed to help you make up your mind if this kind of technology is for you.

1. No More Software Installation.

Since our software comes to you via your internet browser, there is no need to install anything. Your printer will also work with our software without installation or any modifications. Our software works with any web browser, Internet Explorer, Safari, Firefox etc.

2. Our software is always up to date.

This really is one of the main benefits of SaaS. We make all the software updates on our servers, so you don’t have to do anything. No update hassle and worry anymore. There are no “Update available – Please download” messages and no CDs / DVDs updates arriving in the mail.

3. Never pay for software “updates” again!

No matter if we update or bug-fix, you will never have to pay for them again, it is all part and parcel of our service. Artificially accelerated software cycles are a thing of your past.

4. Fully Compatible with any Operating System.

Our software runs on any Operating System (OS) with Linux, Mac, Windows and some others – you login and use it.

5. Work and collaborate with anyone, anytime and anywhere.

Our software allows you to work with your accountant, colleagues, virtual assistants and others in real-time at anytime – whatever your business needs.

6. No commuting. No time wasting.

With online technology you can work from anywhere, so no need to travel to an office. Run your small business from home and benefit in terms of time, money and investment.

7. 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 centers – 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?

8. 24/7 Live Support 365 days a year.

We believe that you will be busy during the day with your clients and with working on new projects and so you should – after the phone stops ringing you get down to your admin work. So we thought we better be around in case you need some support for any of our products. It would be no good if we weren’t around now, would it?

9. No contract needed.

No minimum term, cancel anytime, no contract needed and you can test drive any software for a minimum of 30 days free of charge. This puts you in control. Unlike the boxed software you buy, once you paid for it, it’s yours including the problems. Not so with our software.

10. ClimateByte™ Technology

Our environment is in trouble – by using our on-demand Small Business Infrastructure™, you can help to reduce your carbon footprint and help our environment – we are dedicated to develop our future products and services with this in mind.

Our Software as a Service products provide your small business with a on-demand Small Business Infrastructure™ helping you to concentrate on your business, while we run your office and IT. This makes your business more mobile and competitive while saving you time, money and helping the environment.

When you run a small business and personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants you probably benefit even more from using SaaS technology – program your business for success.

I get regular questions about what we really mean by WinWeb’s Small Business Infrastructure?

On-demand Small Business Infrastructure™ centers around the idea that business start-ups and growing small businesses need help with numerous administrative tasks that are not core to the business success – such as bookkeeping, it services, internet services, call handling and other such services.

These services – if performed by the business owner – cause a great deal of time wasting – while the fixed cost of a business is still accumulating. This is in our minds a fatally floored business model and can easily be remedied with our infrastructure approach.

We should not expect business start-ups and small business in general to be accountants, bookkeepers, 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.

Based on these facts, we have devised a six point on-demand Small Business Infrastructure™ concept, which consist of:

1. WinWeb On-Demand Software Solutions – Anywhere At Anytime.

AccountsOffice and OnlineOffice are our two software offerings, which are based on the SaaS – Software as a Services model, to allow for the following key business benefits:

• tight inclusion of business advisors from the start,
• cultivating outsourcing techniques at the outset, i.e. virtual assistants,
• no IT knowledge needed and hassle free operation,
• real-time multi-user access from anywhere, increasing mobility.

2. WinWeb 24/7 Live Support – We Are Here For You Always.

Providing customer care and support only during business hours is not acceptable to our clients. Experience has shown us that most admin work gets done by small business before nine in the morning or after five in the evening. This practice is essential if the business is to survive it’s early years.

This is why we have provided our much acclaimed customer support for 24 hours a day, seven days a week from the outset. Saving our clients wasted time and money – while setting new standards in customer support. No manuals need to be read – all problems can be solved in real-time online.

3. WinWeb Live – Networking Community for Small Business Only.

To foster collaboration and outsourcing we have expanded our WinWeb Live™ offering to allow for small business community networking – thus enabling the business owner to make decisions about his / her current needs, with the following benefits:

• timeshare virtual assistants for professional results,
• offer contracts of work to contractors on a case-by-case basis,
• promote the business to a large audience or even locally,
• find new work and contracts online

4. Business Advice

Our On-Demand Small Business Infrastructure™ enables business advisors, accountants, bookkeepers and other advisors to have a “Up Close and Personal” relationship with the small business owner, providing key elements for the success of a small business:

• timely and up-to-date advice from anywhere at anytime,
• more efficient advisor function due to SaaS technology, less travel,
• easily expandable advisor network.

5. Solution Partners

Third parties provide external services to complement our services, such as parcel service, office supply services, printing services. These and other services are provided on a bulk buy arrangements by leading businesses in their respective sectors – to provide the most reliable and up-to date service possible – with the effect of enhancing the professional appearance of our clients.

6. ClimateByte™ Technology – For A Cleaner Future.

Our clients are among the biggest demographics concerned with climate change and carbon footprint neutrality. It is a fact that employing remote working and collaboration techniques drastically reduces the damaging business side affects on our environment. We enable our clients to be more eco-friendly and aware, by providing them with our green technology – an ongoing development commitment of WinWeb.

WinWeb welcomes any suggestion that will further enhance our On-Demand Small Business Infrastructure™ concept – especially the development of even more eco-friendly business processes – to serve our small business and business start-up client-base.

The typical scenario is you work hard all week, have no live and at the end of it all little money to show for it. This is often a sure sign of loss of management control in a small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses.

The small business health-check questions for this episode are:

• Do I know what is going on in my business in all areas or have I abdicated some responsibility to staff? You can pick and choose what you do work-wise everyday, you can not pick and choose what you should know about and make decisions about – this is your business, not your staffs business – act like it.
• Am I running my business or is it running “itself”? No business is running itself, other than into the ground!
• Do you know how your cash-flow is doing? Done this one before, yet it always comes back to this, check it out.
• Do you have an overview of your small business fixed costs and sales, are you happy with the situation? I guess you could always do better, but if you do not know the details you can not improve your situation.
• Is your vision in line with your small business targets? You need a vision for your business, that will allow you to develop your small business strategy and plan, so you know where you are going – don’t just drift along.
• Have you asked your staff lately? Have a power-meeting with your staff once a week, to see how they are feeling about your small business, last week or the next few weeks. It will motivate them and give you a new insight in how others see your small business.

The central message here is to be involved in ALL areas of your business ALL of the time – in a management capacity. When I hire people I always hire people who do something better than I, but you have to stay involved.

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.