I received this question form a lady working from home, she emailed and explained her business had started of well, she got some clients and kept her costs down. But her turnover is not high enough and she wants to grow her home business. Interestingly she does not want to grow the business more than 20 to 30%, she wants to stay at home with her business. This is not unusual for many small businesses and start-ups, a home business is an ideal way to run your own business.

Getting back to her question, there are really four answers:

• Increase the number of customers - this in turn will increase the your turnover, yielding the extra business you want, while at the same time make your business more recession proof;
• Increase the order frequency from your existing customers - this could be more difficult, you need to find out if you can replace someone else as supplier, or diversify your offering;
• Increase the average order value - same as before, offer higher quality or premium service.
• Increase your own efficiency - outsource more if you can, cut costs this will not grow your turnover, but increase your bottom line, so you can take more money out of the business for yourself.

Once you start thinking about these options you will find out what you can do, often it is a combination of things to do. But you need numbers, so plan your business, get an overview and find out where you stand.

Remember what you can measure you can manage. 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.

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.

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.

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.

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.

The first post in this mini series is related to this issue of cash-flow and so will be many that follow. Cash-flow is the central and most critical management objective for every small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal business.

T o perform this small business health-check, ask your self the following questions:

• Do I have a written plan and cash-flow forecast for my business? As I said before, without it it is like driving with your eyes shut.
• Am I efficient in achieving those aims? We often allow non-core issues and irrelevant stuff to “steal” our time, or we are so overwhelmed by work that we do not have the time to stand back and look at our small business - take the time and make those decisions.
• Do you have a feel how my small business works financially? If not, you must be feeling uncomfortable most of the time, again take the time and feel better about your small business.
• When did I plan and monitor my cash-flow last? You need to do this at least once a week or if something happens that is not in the plan. Check your cash-flow each time before you make a bigger purchase or hire staff which is not in the plan, you will quiet easily see if you can afford to do it or not.
• How much reserves does my business have? The best peace of mind is when your small business has substantial reserves, do you have any or are you at least planning to get a 2-3 month reserve buffer?
• Have I re-negociated my terms with my suppliers? What if your suppliers gave you 60 or even 90 days payment terms - put that in your cash-flow and smile, it’s instant reserve. You need to pay your suppliers on time, only then will they trust you enough to give you the extra long payment terms.
• Am I chasing my clients for payment adequately? Do you know the average number of days you clients need to pay you? Give incentives - 2 % off if you pay within 7 days - try and keep your average well below 30 days. If you have not enough time to do credit control outsource it.
• Do I need my overdraft? If you get better payment terms fro your suppliers and do a better job at credit control, you may not need your overdraft anymore, which will save you a lot of money. Don’t cancel your overdraft, but make sure you only pay for it when and if you use it - shop around. On those terms you should get an overdraft, even if you do not need it, so if something unexpected happens you got the cash-flow reserve.

The importance of your cash-flow situation can not be overestimated, as long as you can pay your bills you are in business - as the saying goes: Cash Is King!

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.

I have decided to write a little mini series on why small business and personal businesses, like contractors, freelancer, self-employed, sole-trader and virtual assistants, fail and how to find out if your small business is in danger, too.

In this first part, I would like to talk about fixed costs in small business. To perform a basic small business fixed cost health check, ask yourself the following questions:

• Do I know where all the money is going every month? You should know where all your money is going at all times - if you don not know, it is important that you find out.
• How comfortable am I with the current level of costs? Are you able to generate reserves in your small business, or is your business just making ends meet.
• Are large parts of the costs for non-core business tasks and do I get value for my money? No matter how well your business is doing, you should never waste money - so if you can outsource do it, it will make you small business more focused and far more resilient and efficient.
• Do I have a cash-flow forecast for my business? Having no cash-flow plan is like driving with your eyes closed - cash-flow planning is easy, and you will have a better feeling about your small business.
• Are there any spending issues with business partners or colleagues? Are other people spending your money (?) and you can not control them - deal with it, sort it or get rid of them even if they are partners in the business, find a way or get help.
• Am I in control of my spending or have I abdicated this function to someone else? Even if you have staff - outsourced of employed - doing your bookkeeping and organize the payments for you, you need to make the decisions of when your suppliers get paid, so you can control your cash-flow.

There are many more questions you could ask yourself, here I just wanted to get you going. If you have any more issues or are uncomfortable with any of your costs and answers to the above questions, then you should get some professional advice.

Running out of money is the reason most small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses, fail - not controlling your fixed costs is one of the main reasons for this.

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.