Small Business Survival

In today’s economic climate, the first priority for the small business entrepreneur is survival. A glance at newspapers, business journals, or cable news channels reveals a succession of corporations striving to stay on top of their game, and often failing, to slow the growth of outsourcing or to show real growth within their market space. In such times, knowing how to achieve long-term success is more critical than ever.

The most important thing today’s small businesses can do is expose their organizations to critical self-analysis. Small businesses survive not by competing head-on with global corporations, but by pursuing the market niches larger operators ignore. Such a strategy requires constant attention to detail, necessitating self-analysis well beyond the operational level; it is crucial that everything from the basic business model down to the operation of the mailroom is subject to rigorous study. This means determining what, precisely, the business is aiming to offer its customers, how this differentiates it from its competitors, and how well it is delivering on these core products and services.

Much of this analysis can be readily conducted by the business itself, but a substantial part of a company’s success is down to perception – how customers (existing or potential) view its products, services and overall performance. However, determining such perceptions is notoriously difficult for companies that typically lack personnel trained in the specifics of marketing, public relations and advertising.

The most obvious alternative, turning to outside experts – dedicated market research companies, for example – is often impossible when money is tight and budgets small, but this does not mean entrepreneurs can ignore the example set by the most successful corporations. What almost all business success stories have in common is a relentless commitment to factors that reinforce competitive advantage: product research and development; marketing, advertising and public relations activities; and customer relations.

What the most successful companies have recognized is that survival hinges on two separate, yet intertwined factors – being the best, and being recognized as being the best.

Being the best requires a commitment to excellence in all areas. That means small business leaders cannot shy away from hard decisions, where employment is concerned for example. Staff that consistently fail to perform must be replaced with those that will. The smaller the company, the more difficult such actions may be to take, but they are essential. Similarly, leaders need to ensure they have staff who are prepared to do what it takes to deliver results, no matter if that means asking for a commitment from staff far greater than business rivals demand of their employees.
Being the best also requires a company to recognize when it is lacking in excellence in key areas, and to identify whether that excellence can be delivered through hiring new employees, retraining existing staff, or seeking outside counsel. Money invested in improving core business competencies is never better spent than in tough times like today, because it directly impacts productivity, sales, and perceptions.

Making sure a company is recognized as being the best is often seen by small business entrepreneurs as secondary in importance to “real” issues such as production, distribution and sales. The common viewpoint is that if the product is “right” the customers will buy it. Yet it is precisely this attitude that dooms many businesses, regardless of the quality of their products or services. Small businesses need to give as much attention to their public relations, marketing and advertising strategies as large corporations.

Many entrepreneurs cry that this is simply beyond their means – they cannot contemplate spending tens of thousands of dollars on “fancy” market analyses from specialized researchers. The argument is valid, but consider this: if marketing, advertising and public relations dollars are in short supply, how critical is it that those dollars are well spent? A small business can far less afford just one marketing effort to miss its target than can a huge international corporation.

What small businesses must do is learn the core skills marketing experts take for granted. They need to take every opportunity to speak to customers, potential customers and vendors to uncover how well the company is perceived. Likewise, a simple analysis of publicly available materials (such as census data) can help a small business better identify key target markets, reducing the waste of valuable resources inherent in blindly blanketing an area with its advertising. Such an analysis might lack the sophistication of a professional market analysis, but it can make the difference between success and failure – and there is nothing to stop the company utilizing a more professional analysis in the future when it is growing strongly.

It comes back to the issue of self-analysis. If a company has a clear vision of where it wants to go, the task of identifying its market, and the optimal ways to attack that target, is much easier. This allows for a concentration of limited resources where they can best help deliver success. Such a focus of effort lies at the heart of corporate survival, no matter if the company is large or small.

Microsoft Moves to Small Business Accounting/Retail Market – Stakes and Thoughts

In this small article we will be looking at the new opportunities for Microsoft Small Business Server specialists, but rather look at the global business strategy and possible ways of future ERP modules standardizing and interoperability. This is important to get into consideration for midsize and large corporate business IT decision makers. Let’s look at the chronology and possible future development.

o Great Plains Software acquisition. When Microsoft took leading position on the operating system market and released stable and reliable Windows 2000 Server, the next logical step would be getting into ERP market. Microsoft decided to try midsize market, and the reason is probably this – it is wise to create small accounting as the extension to Microsoft Office, not to purchase existing small application. However if you plan to try midmarket – you better purchase something established with broad client base. Developing midsize package from scratch might deplete all the resources. As the stake on Great Plains was high – Microsoft formed business systems subdivision – Microsoft Great Plains Business Solutions, later on Great Plains name was taken off and now we see Microsoft Business Solutions.

o Navision Software Acquisition. There are multiple opinions among the MBS partners. Considering the fact that Navision Attain had strong clientele in Europe, and the fact that currently MBS promotes Navision on the majority of emerging markets: East Europe, Russia, Brazil – the point of view that Microsoft got very large pool of clients in Europe and one of the goals of Navision acquisition was geographic expansion.

o Axapta. Navision Software was indeed very robust and it was one of the Danish software “dragons” (in the good sense of this word), the other nice company was MacHanza. We would like here to credit Danish ERP vendors. Axapta was new product on the moment of acquisition and it is rich-functionality ERP and so – a rival to SAP, Oracle Financials, PeopleSoft

o Small Business Manager/Small Business Financials. This was natural way of downsizing the functionality of Great Plains Dynamics/Microsoft Great Plains to gain small business market. Small Business Financials is Great Plains Dexterity written accounting package. You see similar marketing moves from SAP and Oracle sides.

o Small Business Accounting 2006. It took Microsoft about four years to feel itself comfortable on the ERP market before it decided to create its own small business package, targeted to take over market share from QuickBooks, MYOB, PeachTree. Small Business Accounting 2006 is really nice application, which is excellently integrated with Microsoft Office/Microsoft Outlook. Microsoft is right – majority of Windows users spend their computer time in Microsoft Outlook and Microsoft Excel. And it create accounting application, allowing you to do 50% of work from Microsoft Outlook directly

o Microsoft POS. As you know that there are several thousand small retail businesses in the USA, using just one cash register and these folks have to use a lot of small Retail Management applications, which are competing on this market for a long time. And it is a good momentum to take over this unreliable and turbulent market offering cheap and solid rock solution, working with POS devises. Please, take into account that Microsoft has another high-end Retail Management system – Microsoft RMS, which can automate midsize and huge retail stores and chains.

o Market is taken over? Well – the last flint of Microsoft Small Business Accounting and Microsoft POS give customer an option to stay in Microsoft framework from the company inception till going public as a large corporation. This fact would be very difficult to ignore for such folks out there on the market as BestSoftware, SAP, Oracle, Sun.

5 Reasons Small Businesses Fail and What You Can Do to Change That

It’s not really a secret to anyone who has any experience in the world of business that most small businesses either fail or struggle just to stay afloat most of the time. That doesn’t mean that all fit into those 2 categories and that doesn’t mean that your business has to fail or struggle. What it means is that there is a chance to learn from the ones who do fail or struggle and take that learning and integrate it into your business so that you can avoid those trappings that so many others fall into.

Let’s take a look at 5 reasons why small businesses fail and what you can do to change that for yourself and for your personal enterprise:

1. Many small business owners don’t plan for success, they plan for mediocrity.

What do I mean by this? Well, if you talk to small business owners, many seem to fall into the category of just trying to stay afloat because that is what they focus their planning on. They don’t focus their plans for success as much as they are trying really hard to avoid failure. You don’t want to do that. When you only focus on avoiding failure, mediocrity is almost always the inevitable outcome.

Of course you want to have plans in place to avoid failures and to handle any challenges that come along. At the same time, though, you also want to allow yourself to break free from that thinking for a little while and do some planning for success. That means that you are going to have to think big and that can be hard to do at first. However, if you get over that initial stage where it seems hard, you might find that it becomes easier and the ideas start to really flow.

2. A lot of small businesses fail because they don’t take customer feedback as seriously as they should.

This is crucial. Customers who are happy and feel like they are almost a part of your “team” in a sense come back time and time again. In order for that to happen, you have to be willing to take their feedback seriously. You might be surprised at what you learn when you start to take in feedback and use that when making decisions.

Don’t get me wrong, not all customer feedback is useful. Some customers are just angry in their own lives and they will take any chance that they can to vent. However, most are not really like that and if you are open to hearing what they have to say, customers can end up serving up some of the best ideas to help increase consumer satisfaction and even how to sell more of your products or services to them.

3. Small businesses fail when their owners look at it as a hobby.

It can be a hobby in some sense of the word as in, it is something that you like to do and you are passionate about it. However, when you treat it as though it doesn’t matter all that much, it is not going to grow the way that it should. Look at it as a business and one that you enjoy being in and most of the time you’ll find that things begin to change for the better.

Now, some people get the wrong idea and they see a picture of a stressed out business owner who only thinks about business and nothing else. That doesn’t have to be the case at all. You can brainstorm ideas that help you grow without being stressed out and you can think about other things as long as you set aside time each day and each week to have a serious look at things.

4. Small business struggle and fail when their employees are not passionate about the business.

You want to have passionate people in your business, people who enjoy what they are doing and don’t dread coming into work. You really can’t expect to have a lot of success if most of the people working for you don’t really like their job.

A good way to deal with this is to hire people who are passionate and another good way to deal with this is to be an example that they can look to. It’s hard for an employee to be passionate about what they do if they see the owner looking like they have little to no passion themselves.

5. Small businesses struggle and fail when they don’t take their marketing seriously.

You can have the better mousetrap and still fail to stay afloat, much less thrive, if you neglect the fact that you have to market your business. It might not be the thing that you are most passionate about just yet, but when you see the results of effective marketing, it will probably inject a little bit of enthusiasm as the sales and orders come in.

The reality is, the business with the better product or service doesn’t always win. A lot of the time, it is the business with the better marketing that does. A good example of this is when you look at movies. The best movies from a story and plotline point of view don’t do that well at the box office when there is little to no marketing push behind it. Yet, a generic movie with a predictable plotline and great marketing behind it will often lead the pack at the box office. Marketing makes a huge difference.

Small businesses don’t have to fail. They are the lifeblood the economy, especially at the local levels and they should thrive. You have to take it seriously, be passionate about what you are doing and you have to be willing to market your business. You can’t expect the world to just find you, you have to put yourself out there and in front of your ideal customer.

Small Business Failures in America – Cash Flow Issues

We are noticing an increase in the length of time it takes Large corporations to pay on their invoices to our team. Fortune 500s are tending to pay their vendors more slowly, which will hurt the already strapped small businesses in America. These same small businesses employ 2/3 the population and do a great service in supplying the needs of corporations.

At the company I run, The Car Wash Guys, has retail and fleet customers. Retail pay cash, which tends to offset the problems with the extended late payments from fleet accounts. It appears that the corporations are conserving their cash to keep earning up until the next quarter, however this will hurt their long term efforts in that the small businesses who provided real time services and parts will not be able to meet the real time demand and therefore cause cost overruns for the Manufacturing sectors. Therefore decreasing productivity and causing a problem with their efficiency efforts. Who will be hurt worst? Likely high tech non able to perform on time for their industries, and their stockholders in decreased valuations of stocks, which do not hit their earnings guestimatation or quotas. Also hurt will be the retail outlets who need items in the store on time to meet consumer demand. The biggest hurt in the long haul will be all of us in America due to increased small business failures of those operating on a shoe string.

Some of these weak small businesses should be weeded out through abnormal free market factors such as this slow pay and others who are just working to hit ROIs and pay off loans will be hurt. This hurts interest rates because risk adverse banks stop lending to small businesses. It hurts SBA guaranteed loan programs and that affects all of us. It is serious and will most likely lead to unnecessary laying off of people who make up the largest percentage of American working people. Small businesses represent 2/3 of all American Workers. It think this problem will get worse as CFO look for ways to keep cash as long as possible, by stringing out their receivables. Phone companies, electric companies and other bills must be paid on time by the small businesses, whereas theses companies are notorious for slow pay in tough economic times. It seems to be the little guy who gets it in the shorts, such is life and an acceptable given, yet it also effects us as our customer base is decreasing.

What about the labor and layoffs? As small businesses are unable to employ the lion share of the masses, there will be fewer with money to spend on those items sold by larger corporations.

How does this occur and how are small businesses losing? Slow pay means slow payment of bills and adverse credit scores. Also the 60 days of cash flow in the bank will be used in the float. That float some small businesses can absorb, but some small businesses will be beaten down and become inefficient and cannot last that 60 days and neither can most of the nearly 28 million small businesses in this country that pay their bills, buy products and services and feed the families of their workers.

This is the most serious problem facing the US economy and it is still moving in the wrong direction as of first quarter 2001. This is not good. Historically Car Washing tracks the new car sales markets, so our particular company should be fine. Also as any small business will tell you they must be constantly adapting their methods of operations to those forces, which might be a threat.

Deciding Which State To Incorporate Your Small Business In

Once you’ve decided to incorporate your small business the next step is deciding which state to incorporate in. A common misconception is that businesses must incorporate in their state of operation. You can, in fact, incorporate in any one of the 50 states and the District of Columbia regardless of where your business currently operates.

It is perfectly acceptable to incorporate in a state other than your current area of operation, but it is not always a good idea to do so. If your company chooses to incorporate in a state outside its area of operation life becomes a little more complicated. Your business becomes a “foreign corporation” in any state outside of the state it is incorporated in. If a corporation is “transacting business” in a state other than where it is incorporated, it must register for a certificate of authority to transact business in the other state or possibly lose access to that state’s courts and face fines.

Registering for a certificate of authority, of course, costs money and is only one step in the process of qualifying to do business as a “foreign corporation” in another state.

There are advantages to incorporating in different states with regard to corporate laws and tax structure. Delaware is by far the most popular state for incorporation. Most of the fortune 500 companies are incorporated in Delaware.

Some of the most attractive features of incorporating in Delaware include:

1. Lack of corporate income tax for corporations incorporated in Delaware but not transacting business in the state.

2. Delaware has a separate corporate law system that uses judges appointed for their knowledge of corporate law as opposed to juries, whose knowledge of corporate law is limited at best.

3. Shares of stock owned by persons outside of Delaware are not subject to Delaware taxes.

For a small business deciding weather or not to incorporate in Delaware it is necessary to measure the cost of qualifying as a “foreign corporation” in the state of operation versus the amount that will be saved by incorporating a small business in Delaware. Typically it is not advantageous for small businesses to incorporate outside of their home state as even small businesses are usually required to pay corporate taxes in both the state of foreign operation and the state of incorporation. If you’re not sure where to incorporate, visit www.small-business-assistance.com. We can help you decide if the cost of local incorporation will be less than incorporating in another state.