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

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

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

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

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

In our OnlineOffice we have a Quick Switch, which allows you to “switch” from one company to the next. There is no limit to the companies you can set up, or be part off. What’s so great about that you may ask?

Virtual Assistants can set up all their clients with OnlineOffice, and work with all their clients at the same time, each client is only a “click” away. Whatever your virtual service is, typing, bookkeeping, web-dasign, translations, telephone answering, diary management, PR, it does not matter with OnlineOffice and the Quick Switch facility you will easily stay in control.

Accountants can use this in the same fashion, so when a client calls, “switch” to the up-to-date data and give advice. This service is also available for the free accounting software module, so no excuses there.

One other use is if you have more than one company of cause, then you can switch between your businesses easily. Combine this with the benefits of online technology and it eco-friendly impact, and you will be excused for feeling good about your business.

To use this technology, all you need is your find your LiveNet ID - in My LiveNet > My Profile - give it to your client and he/she can set you up as a user on their OnlineOffice system and restrict what you have access to.

This means you can work for anyone in the world who uses OnlineOffice, or you can add contractors, virtual assistants, freelancers or free agents to your system at will.

Great bootstrapping and outsourcing opportunities for your small business, don’t employ people for temp or non-core functions, Quick Switch them. ST.

Last week I received an invitation from ZANA Network to be their guest at the first ever small and medium business Global Export Summit in Washington, D.C.

For me the main topic is:

“….. US small and medium business under representation in the global marketplace; risk-mitigating resources for small and medium businesses and the economic impact and even reduction of the U.S. trade deficit derived from global participation by small and medium businesses. “

So, should you be in D.C. on the November 14th, the summit will take place from 4:00 to 6:00 p.m. in the Reagan Building, you can register for free. Members of the U.S. government and different departments are there and you can make your voice heard. Which would be a good thing, since most politicians need help with understanding some of the basics about small business. There is also a great line-up of companies wanting to help those, who are interested in exporting.

We used to have separate products called ExportOffice and GlobalOffice, which were especially designed for the very small exporting business, but we learned in time, that our OnlineOffice provided all the needed components as well, so we simply-fied our product offering in this regard.

I will not be there since WinWeb sponsors an award at the UK Accountancy Age Awards, Best use of Internet in Practice, I’m committed to present the award in person. But, I’m sending an colleague of mine, Mr. Göran Thorell - should you be around, go and find him and talk to him about your exporting ideas, I’ll be blogging about the Global Export Summit again, after the event.

I would have loved to go, since I firmly believe the 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 virtusal assistants is highly under represented in the global market place.

Opportunities are everywhere, you just need to see them. ST.

Disclosure: All travel arrangements for this event for my colleague are being paid for by ZANA Network LLC.

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

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

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

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

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

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

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

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

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

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

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

You need to make sure you find an accountant/CPA who concentrates on small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants before you make any appointments.

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

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

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

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

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

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

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below - I’d be most grateful.

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

When I started thinking about WinWeb’s Small Business Infrastructure, we always knew we had to do something about data-security and data-backup. The truth of the matter is that most small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants, do not have a coherent data-security and back-up strategy. To be perfectly blunt about the subject, it is not made easier by confusing technology and more to the point terminology, that even we have difficulty understanding some time. So I believe:

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

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

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

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

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

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

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

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

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

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below - I’d be most grateful.

I’m answering three questions here, emailed to me during last week, so excuse the long headline. I will give examples and will let you fill in the rest for yourself.

What are “Fixed Costs”?

Fixed costs are operating cost that are incurred when providing necessities for doing business and have no relation to the volume of production and sales. Examples are rent, some employee costs, property taxes, telephone, heating and interest/bank expense.

As opposed to “Variable Costs“, they only occur in proportion to activity within the business and hopefully that will lead to sales and revenue.

Why should I keep my “Fixed Costs” as low as possible?

When I talk about outsourcing, I’m talking about changing fixed cost into variable cost. Let me give you an obvious example to make my point.

Let us assume you have hired someone to answer the telephone, this person cost you $1,000 per month, and on average you get about 5 calls per day. Most of these calls are not even from clients, or you could take the calls while you are in the office. This $1,000 is a fixed cost, no matter how many calls you get, or if you are in the office or not.

So you outsource it to a virtual assistant, now you pay $100 per month and that includes 50 calls received, each extra call is $1 per call. The $100 are still fixed cost, but you have lowered your monthly fixed outgoings by $900. And depending how often you are in or out of your office, the 50 inclusive calls are probably enough to cover your needs. Combine this with online technology and you can stay in touch anywhere and anytime.

Should that not be the case, then you have “variable costs” of $1 per call, which means you are out of the office, working or enjoying life while it is quiet, for example during holiday season. You phone is professionally looked after in any case.

Outsourcing, bootstrapping (cutting costs), it all means the same for 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, more money for you, less distractions, and a more recession proof small business, that is why business planning is so important.

Answer: Keep your “Fixed Costs” down. Stay mean and lean, while enjoying your work and life. 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.

A virtual credit controller is someone you have outsourced your credit control work to for execution. Needless to say that credit control is one of the most important functions 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, it affects your cash-flow and keeps your small business a float.

This could be a professional company which specializes in credit control all the way to court action, this service is usually used for bad debt or difficult customers. The service can be quite pricey and you may have problems getting them to deal with only a few invoices per month.

Another option is to use a virtual assistant (VA) in your area and give him/her the list of open invoices or just copies of them and have the virtual assistant follow up on your clients. You can also use online technology to keep your files up-to-date and make the work-flow more efficient for you and your VA, saving time and money.

Important, no matter how you choose to do your credit control, is to set guidelines, it’s no good getting paid and loosing the client at the same time. Keep your virtual credit controller up-to-date with payments received, clients get upset if chased for money they already paid, and it makes you look unprofessional.

Remember, the easiest way to get new business, is to offer more and new products and services to existing clients. 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.

Ask Shama, she got a great post out to answer this question, here she sets out what you need:

“….What do you need? Characteristics wise, most clients ask for virtual assistants who are sharp, can take initiative, and who will help further the client’s business. If this sounds like you, you may find your business booming before you know it. You also need a good working computer, an internet, fax, and phone connection, and lots of folders to keep you organized. Remember to back up your files often. Careless errors in your first years in business can cost you.”

There is more, so have a look. I would add, to use online technology, with all it’s benefits for you, it also makes it much easier to become an integral part of the clients team.

She also talks about marketing, there are many places you can find contacts and network, like LinkedIn, LiveNet, and others. ST.

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.