How to Know If Your Small Business Idea is a Good One
An average of 80 percent of small businesses fail within their first year. That is a scary reality for anyone who may be thinking of starting a small business. With the majority of new businesses not lasting a year, it makes it hard for people to decide if starting a business is a right choice for them. No one wants to put everything they have into a business just to watch it sink. Before starting a company you need to be prepared, but how do you know if your small business idea is a good one?
You should always have a plan. All businesses are selling something. It may be an actual product or it could be a service. Either way all businesses are selling something. You need to determine how saturated the market in your area is for whatever it is your business is selling. To determine this you could do a simple Internet search and see how many similar companies come up. You should also do this if your small business idea will be an online business. The Internet makes it easy to start a home business, but because of that it make also mean there is a lot of competition.
Then, you should figure your costs and also a competitive pricing for your product or services. You can determine the cost by figuring what it actually costs you to produce whatever product you are selling. If you are selling a service, you will want to figure out any costs involved throughout the entire process. For example, if you are providing a cleaning service, you will need to determine not only the cost of the cleaning products but also, the gas and mileage it will use to get to the job. You will also want to figure any monthly bills you may have into your overhead. These are things like rent, electric, and heating costs. Now that you have your costs determined, you will add how much profit you want to make to determine your pricing. For example, if you have a cleaning service and your costs are $100 per job and you would like to make $50 per hour. Then you would charge the client $150 for an hour long job. Now you can do an online price comparison to see if this is a competitive rate. If it's competitive and fair, then you probably have a good small business idea. If not you should cut costs somewhere and re-figure.
Now that you've reviewed the market and finances, if you still believe your small business idea is a good one, you should look at one more thing. The amount of time you can afford to put into your business each week. Businesses are sure to fail if there is a lack of focus and dedication. As long as you have a plan and can stick to it, then maybe it's time you became a small business owner!
Small Business SBA Loan Info – Is Anyone Out There Making Loans? Will the Federal Government Bailout
In the first two articles we talked about the prospects of small businesses finally receiving needed capital and some of the sources you can turn to. So assume you have selected a couple of smaller SBA lenders and are now ready to give your pitch. How do you present yourself? What information or documentation should you furnish? Let me tell you it is not going to be easy. Here are some suggestions to soften the blow:
o Don't be intimidated. For some reason, people are naturally fearful of meeting bankers. Maybe it is the fact that their personal information will be disclosed or the prospect of rejection. Or simply that their whole livelihood may be at stake (Thanks, Sue, that really gave me a comfort level). Don't be that way. Take the mind set that they are in business to help you. They don't really have ice water in their veins (well, maybe lukewarm on a good day).
o Dress appropriately. Unless you're a lawyer or planning to go to a funeral later on, you don't have to dress in a business suit. That's all pass
Are You a Small Business With Too Much Debt? Legal Tips to Eliminate Bad Debts
According to my knowledge banks offered loans to small business men without considering whether he would be able to pay the loan amount back or not. Are you a small business with too much debt? Small businesses have acquired loan totaling to $10,000 before the economic recession faced by the world in the past few years. They thought they can easily pay back the loans by doing business as at that time even small businesses were earning well. Are you are small business with too much debt? Then fear not, keep your self relaxed and put your brains on finding out ways to flourish your business as the tension of debt can easily be solved.
Debt settlement is one effective way with the help of which small businesses can get relaxation from the amount of loan they had taken to do business. According to debt settlement all those businesses who have taken a loan of $10,000 can get relief from the tension of debt in a legal manner. When your creditors try to push you too hard to pay back the loan, threaten them that if they did not stop doing so then you will file for insolvency. This will make the creditors defensive and they will stop pushing you hard and they will offer you a liability elimination method called debt relief.
Are you a small business with too much debt? Then get ready to solve your debt problems as the method offered by the creditors known as liability settlement will help you. In this method the debtor and the creditor negotiates with each other and agree on a discounted amount of the loan to be paid back. This discounted amount of loan is 30 to 40% of the original loan. This means that 60 to 70% of the loan amount is written off. You can even negotiate for more time to repay your loan amount and to lower the interest rate.
This way you can get rid of too much liability without doing any thing illegal or unethical. If you have doubts that you are not an effective negotiator then you can hire a liability settlement company. This company will negotiate with the creditors on your behalf and will break the most favorable deal for you. These companies have the appropriate skills needed to negotiate with the creditor and with their experience they can be of great worth to you.
All About the SBA Microloan Program
Whether you've been recently unemployed and are thinking about starting your own home-based business or you're an entrepreneur who is already running a small business, being unable to access capital is a problem that can keep you from achieving your dreams. The Small Business Association's Microloan program might be able to help. The Microloan program helps entrepreneurs who need small amounts of capital. So if you own or would like to start a business but are having trouble qualifying for a traditional bank loan, the Microloan Program might be right for you.
Here's how it works: the SBA doesn't lend you the money directly. Instead, it makes funds available to local non-profit intermediary organizations that, in turn, provide loans of $35,000 or less to existing small businesses. These intermediary organizations have their own lending criteria, set their own rates, and ensure that all credit decisions are made locally.
These loans are not grants. They must be paid back in six years or less. And the loans can't be used for everything. You can't use the money to pay off existing debts or to purchase real estate. But an SBA Microloan can help you obtain working capital or finance the purchase of equipment or inventory. More specific details will be determined by your intermediary lender. The lender sets the interest rate and determines how much money you can receive-most applicants will not receive the $35,000 maximum. The SBA reports that the average loan amount is around $13,000. But the paperwork is relatively simple, the loans can be approved quickly-which is helpful if you need capital in a hurry-and entrepreneurs who wouldn't qualify for many traditional business loans do qualify under the Microloan program. An extra benefit of the program is that borrowers can receive business-based training and technical assistance. This guidance can be a helpful to you, as a new business owner.
If you want to receive a Microloan, the first thing you need to do is find a intermediary organization. You can do this by contacting your local SBA office. If you don't know where your local office is, you can always look it up on the Small Business Association's website. Go to http://www.sba.gov, and then look under the local resources section. You'll see your local office listed there. And while you're on the website, take a look at the free online courses that the SBA offers. You can get information on business topics such as e-commerce, marketing and preparing a business plan without ever leaving your desk.
After finding an intermediary organization, take a look at the loan application. You will have to provide some information on your company. If your company is new and you don't know how to answer the questions, go back to the Small Business Association website and take another look at the free courses-they'll provide you with more information on the practicalities of starting your business.
You'll also need collateral-an asset that you pledge toward repayment of the loan, should you not be able to repay the loan in cash. If you aren't sure what you can use as collateral, make a list of the resources you already have for your business. Do you have office equipment? A company vehicle? These are items that can be used for collateral. If you are still not sure what to use as collateral, ask your intermediary lender. They might be able to help you find some creative solutions. You should also be ready to sign a personal guarantee promising to repay the money.
Because the Microloan program is funded with federal dollars, it is vulnerable to changes in the political landscape, and the last few have been tumultuous-with funding being cut further each year. In his 2008 budget, Bush proposed to cut funding to the program entirely, suggesting that other SBA loan programs, especially the 7(a) business loan program could pick up the slack. While investigating the 7(a) program is also worthwhile for small businesses, it does tend to give larger loans. The Microloan Program is still the easiest way for a small businesses that doesn't qualify for a bank loan to obtain credit, so as the credit market tightens, more entrepreneurs will find themselves in this pool. What is going to happen to the program in the future? Only time will tell. But if you are an entrepreneur or small business that needs capital now, the SBA Microloan program currently remains a very viable option.
Accounting Tips For Small Businesses
With tax time nearly upon us, many small businesses and first time entrepreneurs are scrambling to get their accounting information straightened out in order to file on time. When many small business owners think of accounting, they tend to associate it with income tax preparation and filing. The accounting for your small business should not be relegated to tax time. Accounting information can help business owners make better decisions, and improve the management of their business. It can also help them secure financing, and facilitate reporting to stakeholders (such as creditors, banks, and government agencies), and it can tip them off to any serious problems that might be brewing, such as dwindling cash resources, or debt burdens which may become overwhelming.
The accounting aspect of many small businesses is often the most neglected. Most small business owners don't feel they have the time or expertise to devote to keeping their books. Let's face it, most small business owners didn't start a business because they were eager to deal with the finance and accounting aspects of it. The accounting is a function done at the end of the year for tax purposes. This attitude is unfortunate, because the accounting results of a business can represent a wealth of information, and can help business owners make better decisions. The fact is that accounting information really serves as an indicator of how healthy your business is. Think of your accounting information as a reading on a thermometer.
If you only see the value in accounting at tax time, you are missing out on an opportunity to get a true picture (and not just a "gut feeling) of how your business is performing financially. It is not likely that the individual who prepared your information is going to give you any tips or guidance with respect to the management of your business (unless your accountant or bookkeeper is also a relative or associate). Remember, in this instance you've paid them to prepare information for tax filing purposes, not provide consulting services on how to improve the performance of your business.
If you've already paid someone to prepare financial information for you, then the information is all there, waiting to be used. Business owners need not be the ones who prepare financial information, but they'd better be ready to be the ones who pay attention, and interpret, that financial information (or have a trusted associate who is willing to do this for them - although most accountants don't come cheap). A responsible small business owner makes it a point to understand how to read financial statements, and draw conclusions from the information contained therein.
Unfortunately, you can't really purchase accounting advice tailored to your small business over the internet. The good news is that you don't need to be a financial genius to understand your balance sheet. There are many resources available on the web which can guide you through the process of understanding your financial statements. You may be just starting out, and looking for potential solutions. Or, you may be a seasoned business owner looking for some tips. There is a wide variety of solutions available, and these range from tutorials and e-books, to accounting and bookkeeping software. Learn more about these here: Accounting Tips for Small Businesses
With tax time nearly upon us, many small businesses and first time entrepreneurs are scrambling to get their accounting information straightened out in order to file on time. When many small business owners think of accounting, they tend to associate it with income tax preparation and filing. The accounting for your small business should not be relegated to tax time. Accounting information can help business owners make better decisions, and improve the management of their business. It can also help them secure financing, and facilitate reporting to stakeholders (such as creditors, banks, and government agencies), and it can tip them off to any serious problems that might be brewing, such as dwindling cash resources, or debt burdens which may become overwhelming.
The accounting aspect of many small businesses is often the most neglected. Most small business owners don't feel they have the time or expertise to devote to keeping their books. Let's face it, most small business owners didn't start a business because they were eager to deal with the finance and accounting aspects of it. The accounting is a function done at the end of the year for tax purposes. This attitude is unfortunate, because the accounting results of a business can represent a wealth of information, and can help business owners make better decisions. The fact is that accounting information really serves as an indicator of how healthy your business is. Think of your accounting information as a reading on a thermometer.
If you only see the value in accounting at tax time, you are missing out on an opportunity to get a true picture (and not just a "gut feeling) of how your business is performing financially. It is not likely that the individual who prepared your information is going to give you any tips or guidance with respect to the management of your business (unless your accountant or bookkeeper is also a relative or associate). Remember, in this instance you've paid them to prepare information for tax filing purposes, not provide consulting services on how to improve the performance of your business.
If you've already paid someone to prepare financial information for you, then the information is all there, waiting to be used. Business owners need not be the ones who prepare financial information, but they'd better be ready to be the ones who pay attention, and interpret, that financial information (or have a trusted associate who is willing to do this for them - although most accountants don't come cheap). A responsible small business owner makes it a point to understand how to read financial statements, and draw conclusions from the information contained therein.
Unfortunately, you can't really purchase accounting advice tailored to your small business over the internet. The good news is that you don't need to be a financial genius to understand your balance sheet. There are many resources available on the web which can guide you through the process of understanding your financial statements. You may be just starting out, and looking for potential solutions. Or, you may be a seasoned business owner looking for some tips. There is a wide variety of solutions available, and these range from tutorials and e-books, to accounting and bookkeeping software.