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Stefan Töpfer
CEO & Chairman of WinWeb Email Me |
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I'm passionate about very small business, it's positive impact on personal lives and for local communities. Reducing small business failure is my aim and that of WinWeb's services. |
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Archive for the 'Finance' CategoryHow much money do you really need to start your micro business?By Stefan Töpfer on Feb 02, 2008Starting from home and using bootstrapping techniques will save you money and help your small business to stay afloat. But you will need some money - the question is, how much capital will you really need. To work this out you should do a cash-flow forecast, planning your income and expenditure for the next six to twelve month. Doing this on a per month basis is certainly a good start. Here are a few pointers to think about, when doing your cash-flow:
You need to remember that cash-flow forecasting is not a exact science, it is a planning tool. There will always be a certain degree of error in your plan, and that is the interesting part. Now you can learn what went wrong and understand your business better, it will force you to rethink and face facts. Running a business is not gambling, it is taking manageable risks, and the aim has to be to minimise the risks to your home business as much as possible - cash-flow forecasting does exactly that. You will be amazed what you can learn about the financial dynamic in your small business within one hour, that is often all it takes to get started. Once you know where your money is going and what benefit you derive from this expenditure, you can start thinking about different - more cost effective - ways to achieve the same result, and have a healthier small business in the process. If you need help to start your cash-flow forecasting, use the WinWeb free cash-flow forecasting tool and ask our 24/7 support staff for help. So, how much money do you really need? ST.
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Q & A: How Do I Find A Suitable Bank For My Small Business?By Stefan Töpfer on Nov 11, 2007This is not a precise art so you need to make some judgment calls along the way, every 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 needs a bank . I would take this stepped approach to finding a small business bank in your area, and many of the steps are similar to finding other suppliers:
You will notice that banks don’t like to be called suppliers, or service providers, but that is exactly what they are, nothing more and nothing less. So use those terms and see how they react, if they get all upset and defensive about this, then walk away - they only see you as a number. This is probably the last time for a while that you hold all the cards, so it’s better to find out what your bank is like before you really need them. For me business is between people, I move bank with my bank manager when he leaves, I’m on bank number three with him right now and that always served me well in the past, it is also a compliment to my bank manager, and he knows it. Better the devil you know……! ST.
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Q & A: What should I do when my bank cancels my overdraft without warning?By Stefan Töpfer on Nov 11, 2007This 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:
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:
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.
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Q & A: What are successful cost-cutting solutions in small business?By Stefan Töpfer on Oct 18, 2007How 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.
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.
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Small Business Failure - Reason: FundingBy Stefan Töpfer on Aug 30, 2007Funding 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:
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.
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Small Business Infrastructure For Business Start-Up.By Stefan Töpfer on Aug 28, 2007I 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.
2. WinWeb 24/7 Live Support - We Are Here For You Always.
3. WinWeb Live - Networking Community for Small Business Only.
4. Business Advice
5. Solution Partners
6. ClimateByte™ Technology - For A Cleaner Future.
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.
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Cost Cutting for Small Business - Payment TermsBy Stefan Töpfer on Aug 24, 2007There are two ways to get better payment terms from your suppliers - make sure you know what the pricing is and negotiate the payment terms last, without warning. Most businesses do not expect small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses to negotiate payment terms, so you have the element of surprise on your side - and it makes you look more professional. Firstly there is the extended payment term, of 60, 90 and 180 days - see if your supplier will allow any of those terms. Even if they only give you 60 days, you can always go back after 3-4 month using this payment terms in which you have shown to be trustworthy. If it is declined and only 30 days are offered - because you have no history - then this is the perfect scenario of our second method. Early payment discounts of 2% if you pay within 7 days. This is like a 24% p.a. discount on the invoice value, not a bad way to compensate for the overdraft interest charges from your bank. Surly you supplier is interested in your business, and is not going to decline both offers - you win either way - if they decline, then look for a new supplier. Because you are not only helping yourself with your cash-flow, but theirs too.
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Small Business Checklist: Business CostingBy Stefan Töpfer on Aug 15, 2007Do you know what your overheads and variable costs are in your business - have every worried about that? If you have then you must keep up-dating your costing every few month, as they will change as the business grow and changes. Here are a few things to look out for:
The more you know about where your money goes, the easier it is to figure out how to optimise your capital usage for maximum business benefit. Many small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, fold because they don’t look after the money. For more of my checklists see the Small Business Checklists category and as always please add to my list with your comments, tell us what works for you.
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Private Equity and Small BusinessBy Stefan Töpfer on Aug 08, 2007Private equity plays a crucial role in the manner in which new entrepreneurs can shape their business and work at making it a success. And thus it is understandable that there is a growing concern in the manner in which the Government seeks to change its policy regarding Private Equity. The British Chambers of Commerce (BCC) has expressed concern on the manner in which small business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer businesses, will be affected if the government decides to clamp down on capital gains tax relief. BCC director general David Frost says,
Currently the capital gains policy supports budding entrepreneurs who utilize private equity for their businesses and create jobs. On its part the government maintains that it needs to take steps to make the private equity industry more open and transparent. TUC general secretary Brendan Barber says, it wants the Treasury to review the tax paid by private equity investors, and calls into question the ease with which the super-rich can claim non-domiciled tax status. The government policy with regard to Private Equity will have a deep impact on the manner in which business start-ups work and SMBs need to pay keen attention to it.
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Want to waste some more time before you start your business?By Stefan Töpfer on Aug 02, 2007While it does take a great idea to make a good business the fact is that is just not enough to make it successful. Now that you know what your great idea is, it is time to get down to reality and facts. To begin with it is essential to have a cash-flow forcast that is viable and realistic, do a SWOT analysis and spend on hour or two - not more - reading through a business plan questionnaire, just to make sure you have not overlooked something - otherwise business plans are highly overrated for business start-ups. There are some basic things that need to be looked into and checked before you are set to start your business. To begin with there is the financing of your small business, like home-, micro-, lifestyle-, mobile-, SME-, SMB-, SOHO-businesses, that is of utmost importance.
It is important to understand the cash flow in the business and hence you must have an accounting system with integrated cash-flow forecasting in place, that does away with the need to pen down expenses and credits and allows you to go through your financial details in a comprehensive manner. Is writing a business plan bad? No, but wasting to much time on it is. Ask yourself all the questions critically, but don’t spend hours, days or even weeks on it. I would do a SWOT analysis, SWOTs are:
I also add a little list of what I want to achieve with my business, no more then five points each. This and your cash-flow forecast should be your constant companion, you need to read and work on these every week to stay focused and see problems coming a long way off. Next you would need to ensure that your business complies with government regulations. Take into consideration all the practical aspects of running a business and you would have a list of the infrastructure you need to have in place for your business. Having an online office is an excellent way to keep in touch with your office wherever you go. Proper marketing and image management can ensure that your business has a foothold in the market. Finally you need to pace the development of the company and try to stick by your business goals as far as possible. Now add some bootstrapping techniques to your small business infrastructure and you could be onto a winner.
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