SusanRanford

The Essential Guide to Budgeting and Business Planning For Entrepreneurs

February 18, 2020 by SusanRanford

While running any business getting bogged down is very easy in your daily problems making you forget the ultimate goal. Nonetheless successful and rich businesses take time to manage and to create budgets, monitor performance and finance regularly, review and prepare business plans.

Any planning that is well structured can be the difference that you have wanted to make your business’ growth robust. It enables one to have resources concentrated on enhancing profits, increasing investment returns as well as reducing costs.
As a matter of fact, even without any formal processes, several businesses can carry out almost all business planning associated activities like profits, cash flow, competitors as well as contemplating about areas of growth.

When this is converted to a consistent process that can manage the development of your business, it needn’t be time consuming nor difficult. Additionally, the plans made are supposed to be dynamic as well as well communicated to every involved personnel.

Important Steps in Calculating Ending Inventory.

There are several crucial steps one needs to follow to ascertain your plans and budgets are useful and realistic.

1. Make time to budget
If you take time in creating a realistic and comprehensive ending inventory, it is going to be effortless to manage and become more effective, ultimately.

2. Use yesteryear’s figures as a guide only
Historical info on costs and sales need to be collected if available. They are a nice indication of costs and sales that are more likely. However, it is prudent to consider what sales plan you have, how you will use sales resources as well as any alteration in competitive environments

3. Make realistic budgets
You can make good use of the business plan, historical info as well as any alterations in priorities or operations to have overheads budgeted for as well as fixed costs.

It is essential to properly work out on the relationship between variable sales and costs then utilize the sales forecast to have the variable costs projected. For instance, should your unit costs decrease by 10% for every additional 20% of sales, how much will that unit costs reduce should you possess a 33% sales rise?

Ascertain that your budgets possess sufficient info in order to have the essential drivers of that business easily monitored like working capital, costs, and sales. Accounting software has the ability to have your accounts managed.

4. Have the right personnel involvedIt is good to enquire from personnel that has financial responsibilities in order to give you with figure estimates for your ending inventory. For instance, certain project control, production costs, or sales targets should you have your estimates balanced against theirs then be certain to get a very realistic budget. With such involvement, it’ll give them a greater commitment in meeting that budget.

How to Calculate the Ending Inventory Balance

The Unit Cost approach
This approach needs one to calculate the price of every unit of the goods inventory that is finished. In order to achieve this, add the direct materials’ costs, factory overhead amount that was allocated to every sector of the entire unit cost and direct labor.

You need to determine the number of finished goods inventory units is left in the stock. This information is obtainable using the physical inventory counts or via the formulae;

The number of units in goods inventory at the period’s beginning plus a finished number of units during that period minus the units sold during that period.

For instance, if t the beginning you had 50000 unit in the form of finished goods then had 25000 more in that period then the total is 75000 units. And should you have sold 45000 units then 30000 units is the ending number in the finished goods?

Extrapolate the units of the finished goods inventory by unit cost. For example, 30,000 units by $18 would give $540,000 in the finished goods inventory.

Account Method
Check the finishing amount of goods inventory from the last accounting period. This type of info is obtainable from the balance sheet. For instance, assuming that the last ending inventory totaled to $900,000

Add the manufactured goods’ cost to the starting inventory amount. To obtain the price of manufactured goods add the raw materials cost, direct labor’s cost, and factory overhead cost.

Then add that result to the beginning balance of that period for the goods inventory that is finished. For instance, should the price of manufactured goods be $450 000 in the current period, have that added to the starting finished goods inventory that costs $900000 which totals up to $1,350,000?

Subtract the sold cost of goods from the entire cost of manufactured goods and beginning finished goods. Should the sold goods cost be $810,000, for instance, the expected calculation could be $1,350,000 – $810,000 to get $540,000 in the finished goods inventory.

Both approaches help on how to calculate ending inventory, which can be used to help you monitor current trends in your business.

Conclusion
The ending balance for the 1st month will be the starting balance for the following month. You will do the same analysis. Every month you might need to interpolate more items to the analysis of cash flow with the growth of your business.

Budgeting and Business Planning in 5 Simple Steps

February 18, 2020 by SusanRanford

All great plans commence with a very sound budget. For any business to succeed, budgeting and planning are processes come with much importance.

While planning outlines the company’s financial direction and expectations over a specified period, budgeting specifies how the overall plan will be executed throughout the period, with more detailed expenditures. The company’s financial department usually undertakes the process under close monitoring by the chief financial officer.

Some companies, depending on their size, find it easier to use tools like Excel for budgeting, planning, and inventory balance calculations among others. There is however better software for fast-growing companies which consolidates and centralizes financial information, make it easier for finance managers to produce more accurate budgets.

Budgeting and planning software can be purchased on its own or as part of integrated corporate performance management (CPM) system. Regardless of your budgeting and business planning tools, the process lends itself into simple steps outlined below.

NB: You need to understand that these business terms are different from forecasting, though related. Forecasting is a process which uses accumulated historical data to predict the future financial outcomes.

1. Calculate expensesThe first business order is knowing how much it is that you spend every month. You can do this via consulting financial files, receipts, and bank statements.

This is because some of the expenses are intermittent, like insurance payments, you will get very accurate financial picture should you calculate the average for six to twelve months. Add everything up for the past six to twelve months then get the average to help you know the average monthly expenses.

Do not forget that getting through when adding up expenses is crucial in coming up with a budget that is realistic. A bill which is forgotten would throw a wrench really in the savings plan.

When you are having your expenses calculated you need to interpolate unexpected bills like car repairs. A good thumb rule is adding extra 10-15%.

2. Determine your average incomeAfter figuring out the amount that you will need to remain financially afloat every month, you will need to have the actual income determined.

In addition to your normal salary, acquire a correct picture via interpolating in any additional funds which might come the entire year like garage sales, cash gifts as well as online item sales.

Plus remember every other source of income such as rental income, dividends, interest, child support as well as alimony.

3. Set goals of debt payoffs and savings.
To have your realistic savings determined as well as your goals of debt payoff achieved you need to find out whether you possess a budget overage or shortfall.

This is done by subtracting your income and monthly expenses. Should you find out that you’re making money more than you are spending well cups of coffee. That amount may be earmarked to your savings as well to pay off creditors.

However, should you find out that you are spending more than you are making it might be high time to cut on other things in order to get a thing to save so that you don’t fall further in debts?

A great way to have that figured out is where you are able to cut from those expenses and track every spending via recording all expenses for every month — insignificant items like cups of coffee that interpolate up over time. For example a five dollar snack a week might add up to about $260 annually which is a huge lot.

This will help you for one because you will get a blue, black frame of where every dime goes, be ruthless in cutting out expenses till your budget is in black. Cut sufficiently so that you get 10-20%of your monthly income to add it up to savings account. Should that be impossible, you might need to consider ways which might help you increase income.

4. Prediction of One-Time Spends

The importance of having a budget created has the ability to interpolate one-time purchase accurately. Although some items might unexpectedly come up such as replacing damaged laptops, others might be budgeted in advance for months such as enhancing office chairs to satiate staff need or staff thanksgiving party.

ONE-TIME SPENDS are like
• Gifts
• Office supplies
• Furniture
• Software
• Computer

5. Put it all together
After you have all the financial, you have listed your financial situation you’ll have a much clearer understanding of your position and be able to plan for the future.

Your next agenda should be on how to harness your spending to assist you in gaining your set financial goals. The aforementioned five steps above can help you outline a feasible budget that can help you achieve and reach your goals.

Conclusion
It may seem unachievable to create a business plan, but it is all for the good. It is something you can’t do without if you are a serious business mogul and would love to have a successful business tenure.

Do not hesitate to take the step. It is an essential practice which builds for you the conscientious financial structure that keeps any business on track while seeking to outgrow beyond its potential.

How To Make The Most Out Of Your Next Trade Show

October 7, 2019 by SusanRanford

Trade shows offer an excellent way to get your name out there with industry professionals and consumers who are already searching for the types of products and services you offer. With that said, they also mean you’re in a space where there is lots of competition, and you’re vying for the attention of the same people as your competitors.

How can your company stand out in the crowd? Take a look at these tips, which can apply to a wide range of industries (manufacturing, software, retail — you name it) and roles within a company.

1. Be Strategic About Your Booth’s Placement

The earlier you opt into a trade show, the better your booth positioning can be. The high-traffic spots typically go quickly. Seasoned trade show-goers understand the importance of choosing the booths that are right by the entrances or within the main walkways. While these are often the most expensive booth locations, they’re also the areas that receive the most attention.

It’s also important to see where your competitors’ booths are located. You probably don’t want to have a booth directly next to the largest brand in your industry. Instead, look for booths next to complementary companies with which you can network and bolster visitors’ experiences.

2. Have a Contest

People love winning, and they love great prizes. At a trade show, this is the ultimate win-win for vendors and visitors. Your contest can be something as low key as a fishbowl drawing or a ballot box in which attendees provide their information to enter your drawing. This is a great way to generate leads. However, remember that not all leads will be qualified for your particular business.

It’s important to give away items people want. Yo-yos and flying discs won’t bring droves of crowds to your booth. Objects such as Bluetooth speakers, noise-canceling headphones, and high-quality travel coolers, however, might deliver excited visitors directly to your virtual front door. Invest in solid promos that boast of your branding to ignite excitement among visitors.

Infographic Courtesy of Enplug

3. Get Social — in Advance

You want people to know you’re going to be at a particular trade show, so start amping your advertisement early. Head to the social sphere to tout about which booth they can find you, and encourage them to schedule meetings if you’re looking for one-on-one time with audience members. Send emails in advance and create a banner on your company’s homepage so people have all the information they need at their fingertips.

Take time to write blogs about who will be presenting at the show, how long they’ve been with your company, and why they’re excited to showcase the products and services they’ll be offering. This is also a great time to boost SEO potential while you’re promoting upcoming trade shows.

Have you considered creating a unique hashtag that brings attention to your brand’s attendance at this year’s shows? Advertise it early and often on social media so people know where to go to find updates as the show gets underway. You can also integrate the hashtag into your giveaway competition by randomly choosing one person who uses your hashtag to win a prize.

4. Invest in Digital Signage

Perhaps you manage and oversee visual content on multiple digital screens for your business; this area is where you can really help your company’s booth gain an edge. Ignore bland, boring black curtains. Why not enliven the space with digital signage that will draw passersby directly to your booth? Demo products, showcase your office, or simply light up the booth with a crystal-clear image of your logo that will stick in people’s minds long after the show ends.

With a little planning, you could yield great ROI when attending trade shows. The key comes with a little strategic forethought. Trade shows might even become your go-to marketing tool!

Author bio: Jessica Ellspermann is Marketing Manager at Enplug, a digital signage software company. After launching her career in the luxury hospitality space, Ellspermann knows the power of content-to-business value, and she uses that expertise to help companies grow engaged client communities.

How to Fund Your Small Business

June 3, 2019 by SusanRanford

Getting funding isn’t easy in any economic climate, especially right now when businesses are more competitive than ever. Unfortunately, no matter how brilliant your ideas are, they need money to come to fruition. Remember, a business is still a business, no matter how small or passion-driven. You need capital to pay your staff, buy equipment, promote your brand, and survive day to day. While there’s no single best way to get funded, you’ll find that some methods might suit your business model or goals more, so it’s important to study all your options carefully.

Whether you’re offering IT Services for small businesses in New Jersey, artisanal café, or a boutique agency, here are a few ways to get started with funding.

From Your Own Pockets

You might have heard of the term “bootstrapping” when it comes to the world of development, but it applies to businesses, too. Chron defines a bootstrap company as one that operates on minimal investment or financial dependency, and is typically started with minimal upfront investment from the founder’s own money. The biggest advantage of this method is that it avoids making loan repayments that end up eating up cash.

Of course, there’s also the risk of having limited resources. So, consider having multiple streams of income that you can use to fund your business, like taking on freelance gigs or keeping your day job. If your schedule doesn’t permit either of those, then this method is best combined with some of the other types of funding below.

Friends and Family

One effective way to gain capital is to get your friends and family in on your business. After all, who better to support your vision than your loved ones? However, be aware that things can get messy when you mix work with personal relationships. Should the business fail, you risk damaging your connections and losing their trust.

Therefore, make sure that there is a clear structure that dictates the guidelines of the funding, especially with regard to interest and borrowing rates. Have a third party outside of your relationship to oversee the process, and seek legal advice before inking any deals.

Get Crowdfunding

For start-ups, crowdfunding has become the go-to way to pay. This method drives power back to consumers by allowing absolutely anyone to pitch in for ideas they believe in. On the business owners’ side, it lets them to avoid having to deal with venture capitalists or drowning in a sea of debt.

Though it’s similar to peer-to-peer lending, it does not require repayment. Sometimes, a company would instead pledge free products, discounts, or other benefits in return to make sure that the supportive public doesn’t go unrewarded. Tech writers on Digital Trends list some of the most popular crowdfunding platforms, such as Kickstarter, Indiegogo, and Gofundme.

Apply for a Small Business Grant or Loan

For those who’d rather not give away a piece of their business, applying for a grant or a loan is a viable choice. The main difference between the two is that a loan requires you to pay for the money you borrow, while a grant does not.

There are various institutions from whom you can apply for grants, such as state governments and private groups. However, the application process can be a job in itself. From looking for opportunities to solidifying your business model, there are many steps you need to take to make sure you’re qualified. Of course, the effort is more than worth it if you happen to succeed.

Similarly, a loan comes with strict lending standards and qualifications you need to meet. Businesses that are just starting out might have difficulty applying for a loan, since most banks would require some form of cash flow for at least a year to prove that you can repay the money borrowed. But for businesses that have had at least a year of revenue and transaction history, then SBA loans, term loans, and business lines of credit are all possible options — provided that you read and understand the terms of the loan well. There are various factors to keep in mind, such as banks’ interest rates. FXCM’s article ‘How Central Banks Control Interest Rates’ details how exactly they work, and it is important to understand so you don’t come out with a bad deal. Fortunately, with today’s improved economic conditions and increase in competition, more lenders are willing to slash interest rates for small business loans. This doesn’t mean it’s easy, but if a bank approves you, then you’re more likely to get a lower interest rate in favor of scaling up your business.

Angel Investors

Business writer Katharine Paljug states that angel investors are also called informal or seed investors, usually backing promising business in their early stages. Along with funding, they are also likely to provide mentorship and advice.

But although they may sound like a gift straight from heaven, they have their fair share of barriers. Like we previously discussed here on Strategics 360, it’s imperative that your product or service is unique and offers something that customers can’t get anywhere else. This is especially true for these investors who tend to be extremely selective about where they put their money. However, if you can hammer down your business plan and are transparent with your projections, it’s possible to grow your relationship with an angel investor from there.

4 Ways Small Businesses Can Entice Entry-Level Employees

April 12, 2019 by SusanRanford

Recruiting is a challenge for small businesses, particularly those that compete with enterprise for talent.

According to Inc., competing with bigger companies is one of the top four recruiting challenges a small business faces.

That challenge becomes even more daunting when seeking candidates for entry-level positions.

Due to the nature of these lower-level positions, plus the stigma of working for a small company, it can be difficult to attract the top candidates.

There are three main strategies your small business can use to attract entry-level talent:

Build your brand online
Tout the benefits of working for a smaller company
Align your company’s strengths with the candidates’ interests
Seek outside resources

Using these strategies to earn an advantage against larger competition and increase interest for your company’s entry-level positions.

1. Polish Your Digital Reputation

Job seekers mainly turn to online sources to learn about a company and its culture. To adapt to this behavior, you small business’s digital presence needs to be both updated and appealing.

The first place to start is your website. Your website is your calling card – candidates will associate their impressions of your website with the overall impression of your brand.

A website that is outdated, aesthetically flat, or nonresponsive produces a negative impression of your company and turns off job seekers.

Invest in professional assistance, such as a web design firm, if you don’t have the in-house resources to build your website.

You also need to ensure that your company maintains a strong social media presence. While LinkedIn is typically the main business social recruitment platform, candidates will also review Facebook, Twitter, Instagram, and YouTube profiles to learn more about your company’s culture.

Post regularly about daily life company. Short, succinct videos are effective and provide insight about how a job seeker fits in with your team.

Finally, set up a company profile on job search sites such as Indeed and Glassdoor and encourage current and former employees to rate your company and share information about the employment experience.

Source

The more content you have on these platforms, the more clarity you provide candidates about the employment experience at your company. Be sure to monitor the reviews to perform any reputation management if someone shares a negative experience.

2. Promote the Benefits of Working at a Small Business

There are a lot of misconceptions about working for a small business.

The comparison they face against large businesses and enterprises are tough to compete with. For example, large businesses simply have more resources for salary, mobility, and benefits.

Small businesses, though, generally measure higher for employee happiness.

Your small business should actively promote the benefits of working for a small company. While every workplace is different, some of the common small company benefits are:

Collegial atmosphere: A tighter-knit team works in close proximity, which can foster a closer bond between employees.
Collaboration: Smaller companies provide the ability to call a huddle with the entire team at any given time, making brainstorming and feedback easier.
Diverse experience: Employees may have multiple different responsibilities in a small company, as opposed to being siloed into one role.

3. Play to Candidates’ Interests

Every generation has different preferences and expectations for their ideal workplaces. Millennials, for example, value freedom and relationships with colleagues. These preferences don’t directly translate to their immediate successors may not resonate with their immediate successors, Gen Y, who value opportunity for advancement.

Source

There is, though, areas of common preference between the age groups that can help you mold your company culture to attract and retain new talent for entry-level positions.

A few areas of appeal in today’s workplace include:

Flexibility/work-life balance
Opportunity for advancement or recognition
Mentoring/coaching (professional and personal)

Try to identify small perks and advantages of your company that make it unique for the particular group you are targeting for your entry-level roles. These can be small perks, but may make your company more attractive over larger firms.

4. Don’t Be Afraid to Consult an Expert

Small businesses may also struggle to hire entry-level employees simply because they don’t have as many HR or recruiting resources as larger firms.

Larger companies often have presences on college campuses, which helps them attract young candidates before they even hit the market. They also often have software and other resources at their disposal that help them streamline their hiring processes.

If your small business is struggling to keep up with hiring in general, it may benefit from an outside expert. Recruiting agencies are helpful resources that have expertise targeting your ideal candidates.

Staffing firms, on the other hand, can help provide you with short-term or contractual employees for product pushes or to fill resources gaps.

Small Steps Pay Big Dividends

Competing with large companies for entry-level employees can seem daunting, but many large companies are rigid when it comes to attracting talent.

Your small business can take advantage of this by positioning yourself as an appealing alternative to enterprise culture.

Take risks and be creative building your digital brand, tout the benefits of a smaller workplace, research and play to candidate preferences, and review expert resources if needed.

Your efforts don’t have to be elaborate or expensive, but they can still have exemplary return on investment when it comes to recruiting and keeping entry-level talent.

Riley Panko is a Senior Content Writer at Clutch, a B2B research and reviews platform in Washington, D.C. She leads the team’s HR services research.