Planning for Small Business Growth: A Webinar

We wanted to start posting the first of our Small Business Bootcamp webinars with you. Today is our third webinar. Every small business eventually needs to grow in some way, whether expanding to new locations or adding to the current stock. Learn about the ways to plan for growth in our video below!

The Small Business Bootcamp is a LinkedIn group and weekly newsletter that provides information on how to provide for your small business. We discuss everything from marketing to employment to getting loans and more. Once a month we provide a webinar that outlines a content stream that we then talk about for the rest of the month.

Thinking about making changes to your business? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

In November, we put out this video about what to know. It is based in part on our article “If You Don’t Plan for Growth Now, You’ll Hate Yourself Later,” which gets deeper into some of the details about our webinar. Feel free to watch the video and reach out for more advice! We would love to provide it.

Here are some of the points of advice that we mention in the video:

      1. Focus on what you will need financially and with employees. Delegate if you need to.
      2. Make sure that you’re going to be ready to be put in a position where you will have responsibility. You’ll be the CEO of a new kind of company soon.
      3. Know what you need before you get a loan. And have a set business plan in advance as well.

All of these details are what will matter most in planning for growth. Growth is key to any small business, so get in the right mindset now.

If you want to know more, join our LinkedIn group. It might help you learn more. This group includes small business owners across the New York area who are in similar positions. We want to help small business owners, and how better to do that than communicating. 

Join us, won’t you?

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Delegation: Letting Go is the Key to Grow

delegation

Delegation is key to the successful growth of any organization. However, delegating in the right way can be tough. Delegation is not abdication, and it requires clear metrics and the ability to hold people accountable – including yourself. While you may be an expert in your own field, it’s fine not be an expert on running the business end of the things. Too many small business owners spend time muddling through financial problems to get the necessary things done without mastering them. If it’s not strategic, it takes us away from growing our business. And this is where delegation becomes important, and where we introduce the story of our client, Adela. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Adela's Story

Adela is an amazing veterinarian. She had worked as a junior member of a practice until she decided to start her own. The senior partners were getting older and thinking of selling and Adela had already established a base of pet owners who loved her. So together, they worked at setting up a practice for Adela to run. 

Adela got a lot of help and advice in setting up her clinic from her partners. She had the space, the systems, the equipment, and everything else that she needed. After she secured a loan from her former partners’ bank by leveraging their connections, she was all set. What Adela wasn’t ready for was the backend of the company. As a junior partner, Adela wasn’t involved in the day-to-day running of the practice, and she quickly realized it was more work that she had thought. As a result, Adela was limited in taking on new patients because she could barely serve those she already had.

Adela's Delegation Dilemma

We met Adela through her past partners. We had been working with them on how to sell the practice. They were concerned about her. They introduced us to her, and after our first call, it was clear as to what needed to be done. We started to talk about how Adela could begin thinking about delegation with our four painless steps: 

Delegation to employees means finding the right people to share tasks wtih
      1. Choose the right tasks.
      2. Choose the right employees.
      3. Make it automatic.
      4. Document company knowledge.

Chosing the right tasks

We started by making a list of all Adela’s daily activities and then sorting them as critical or not critical. Sometimes, small business owners are task hoarders. So, the analogy of ‘keep’ vs. ‘toss’ when cleaning out a full closet of clothes can help be a helpful visual. You’ll often find you have clothes that you haven’t worn in years stuffed in the back of your closet. The same is true for your daily tasks. 

On that same list, after we marked critical vs. not critical, we asked Adela to mark those, which she was good at doing vs. those she was not. The list of critical tasks that she was ‘not good at doing’ helped us with the next step in determining what to delegate and when. 

Other Things to Keep in Mind

What’s critical for an owner to keep, here are some thoughts from the Forbes Business Council: 

      •  Remember, only you have the vision for your company. While you can give people a glimpse of it, no one can see the company vision like you can, and no one has the drive to see it succeed as much as you do. This is one area of control that small business owners should never relinquish. 
      • Read, learn and grow. Every day, read and learn something new. This is so important to growing your business and yourself. Read about your trade and know how it’s changing. Read about people who have succeeded. They have much to teach us — not only about business, but about character strength. If you’re lucky, you will have a mentor. If not, these people can be that to you. 

Here’s some things to consider letting go: 

      • What you don’t know well: No man or woman is an island. We all need to accept that we need help. The exercise about will help sort this out. 
Finding the right talent means delegating to the proper employees
      • Work on your business, not in your business. In the beginning, you will need to wear a lot of hats to get your business off the ground. But remember, the objective is to have the time to work on your business—not in your business. To work on your business is to keep the vision front and center and direct the outcomes. To have that view and that perspective, you should build a team of competent, trustworthy people. This will take a little time but be sure it’s a priority. 

Choosing the right employees

We have a technique we like to use when it comes to finding new employees. Adela found that she did have some of the right talent currently, but she also had tasks where no one was the right person. That’s fine. It just meant we may need to look outside of our current set of employees and hire a few positions. There is an argument to be made to running lean when it comes to hiring, but there needs to be a balance between managing expenses and burnout. Both can keep your business from growing.  

Delegating means hiring and firing as is needed for new employees
Delegating means hiring and firing as is needed for new employees

If you do decide to hire, it important to consider that you are hiring someone for both their current role and their ability to learn and grow into greater roles. It benefits both the business owner and client to know that there can be a future for everyone. With Adela, we found that she needed help in booking, record keeping, bookkeeping, accounting, and – eventually – marketing. We built an interviewing process that Adela used, which helped evaluate their fit for the existing job and their potential for growing and learning new roles.

Making it automatic

In Pain-Free Delegation – How-To Guide, we offer a process to help do this. In addition, there are few good points from the Forbes Business Council on this area as well: 

      • Let go of responsibility without letting go of control. As trust built between us, I gave them the responsibility of overseeing others. I followed the model large companies use, which freed up my time because I had just a few direct reports. I trusted my key people, so I still felt in control when they gave me status updates. 
      • Use checks and balances. No matter the stage your business is in and no matter how much you trust your people, always have checks and balances in place. I do this for every area of my business. I trust my staff, but that trust is based on hard evidence that gives me details of exactly what’s transpiring each day. Remember, this is your business and your responsibility, so stay informed and on top of things.

For Adela, we built an internal organizational structure, which lessened her daily tasks and her number of direct reports. We also put into place a reporting structure, where weekly status reports were due from each employee. It was a simple, one-page template that was updated each week and uploaded to their shared system. This way, Adela could do a quick and weekly review to ensure everyone was staying on track.

Document company knowledge

How do you document company knowledge? Well, we already had. We had job descriptions, an organization structure, an interviewing process, and a reporting process. What seemed to Adela originally to be an overwhelming task, was found to be not that hard if she followed our process. We also created a worker’s manual and an onboarding process.

Business Issues 2019

Adela's Results

Within 3 months, Adela had all her job opening filled. Since we had the onboarding process in place before hiring, the new employees were successfully onboarded quickly. After about 4 months, Adela was able to start taking on new patients. She has continued to grow her business because she was more able to focus on right tasks, where she excelled.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Succeed During Downturns with These 4 Proven Tips

Managing a Downturn

Just this summer, we were discussing how growth was challenging small business. A few bad policy decisions, and bam, now, we are looking at the real possibility of a downtown. But there are ways to succeed, even during a downturn.

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

1. Keep Cash on Hand

Make sure that you have enough cash on hand to cover two months of expenses. You should plan to have enough access to cash to manage a slump in sales. In truth, it is unlikely that you will have two months without revenue. If you avoid wasting your reserves, you are buffering yourself against a revenue shortfall of up to 16.67% of a year. This gives you enough to remain successful during an economic downturn, plus a bit more to pursue opportunities as soon as the storm breaks. 

2. Choose Your Customers Wisely

The last Recession still has effects that are hitting America over a decade later, and a new economic downturn could be just as bad

It may seem counter-intuitive to become more selective in a downturn. But, if you issue any credit, e.g. get paid after the service is provided, you need to make sure that the business you take on isn’t going to stiff you with the bill. It may be tempting to take all the business that you can during a downturn, but if your prospects aren’t serious, well-funded, and/or managed, it is a risk you need to be willing to take in order for success.

3. If Possible, Shift Your Mix into More Countercyclical Areas


While we don’t recommend waiting until you’re in trouble to hire a consultant, the reality is, most people don’t seek help if they don’t believe they have a problem. Therefore, our type of work tends to be somewhat countercyclical. Are there areas in your business where you can focus that are more recession-proof?

4. Don’t Be Afraid to Grow During Downturns

In every downturn, there are still industries that are successful. As long as you have a buffer, as discussed previously, it’s smart to invest if a strategic opportunity or hire comes along. There are plenty of bargains to be had if you are in a position to acquire them.

An economic downturn hitting the country might really change how our country is looking in 2019

Why Planning for a Downturn Will Help you Be Successful

We don’t know what will be happening throughout the rest of the year, or if a recession is likely. In the long-term, it is hard to say what will happen. But if you can keep a hold on your money and be aware of how to prevent issues before they happen, you make be able to get away safely.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Bank Fear Gets in the Way of Loan Approvals

If approval rates are at record highs, why are businesses still struggling to be approved for small business loans? It’s usually for two reasons. First, there is a significant amount of fear of banks. It’s not surprising. Bank speak can be intimidating. The second reason is less than stellar credit history. These two problems can combine to create small business growth issues. 

Today, we will look like a second example of of how ProStrategix helped people get loans. Unlike yesterday’s protagonist, Phil, today we will look at Amy and how she dealt with her light fear of dealing with bankers. Recent interest rate decline means that now is great time for loan approval rates, especially if you can qualify for a good one. And that’s how we got involved with Amy. 

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Amy's Story

Having fears of banks can damage your wallet in the long run

Amy operates a small, but highly profitable salon. Amy built her business for a twochair beauty salon with 4 stylists, and now she oversees a 5chair salon with even more stylists. In those 4 years, Amy’s business has nearly tripled. She had built a very successful formula and brand at this location and had outgrown her space. When we met, she was considering expansionBut, she wasn’t 100% sure exactly how best to go about that kind of growth.

Amy was cautious with her spendingbeing careful with getting capital. While she was an amazing businesswoman with phenomenal intuitive business skills, she didn’t have any formal business training. So, “banking stuff” took her out of her comfort zone. 

Numbers and bankerspeak was intimidating to her. She is a bright woman. She just did have the formal training so it’s only natural to feel a bit out of place when bankers are speaking in jargon you don’t understand. All professionals speak in code. It’s not intentional. It’s just how they were taught. After using it so much, they forget that it’s not the way most people speak. Even when confronted and confused by other professional jargon, they fail to recognize it. A doctor is likely as confused by banker speak as a banker is by doctor speak. 

How We Helped Amy Conquer Her Bank Fear

Amy was in ideal candidate for an SBA loan

Unlike many of her peers, her training wasn’t as costly so we student loan debt wasn’t crushing. In fact, she had nearly all of it paid off. Her personal debt was low, and she had excellent credit. In addition, she has a successful track record. These are just the type of businesses the SBA program was designed to help. 

hacks for business loan

We went straight to the smaller banks

With a loan debt load and excellent credit score, we knew the smaller banks would be more than happy to help her get over her fear of banks. We just needed to get her application and business plan in order so we could streamline the process and get her the capital she needed relatively quickly. The SBA loan process is slow, so the better prepared you are, the faster it will go. Plus, her capital needs were modest <$100K to open another studio.

Loan approval can be influenced by fears of banking

Amy was approved on her first try. The SBA backed ½ of the loan, which meant the Amy only had to guarantee ½ of the cost of the loan, which is a much lower burden on the businesses. We applied in June, and she had funds in August, which is almost record time. Amy’s bank fear has all but disappeared ever since.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Loan Approvals Are at Record Highs. Don’t Let Credit History Hurt

If approval rates are at record highs, why are businesses still struggling to be approved for small business loans? It’s usually for two reasons. First, there is a significant amount of bank-phobia. It’s not surprising. Bank speak can be intimidating. The second reason is less than stellar credit history. 

Across the next two days, we will look at two examples of people we at ProStrategix helped to get loans. It is something quintessential to succeed in the long term. Today we will look at the story of Phil, who had made some decisions earlier in his business that left him with poor credit. The good news is that in smaller bank or alternative lenders, the trend is much better. In fact, approval rates are over 50%.

Unsure of how to take your business from good to great? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Phil's Story

Phil operates a small, but growing catering company. His niche was in providing untraditional services (food choice, attire, etc.) for Millennials and Gen Z’ers. Phil was able to provide less transitional graduations and weddings to his audience. Phil’s own youth is part of the reason for his success. While that’s helped him with his small business, it’s hurt him a bit too. Phil is a people person, who has a lot of friends and likes to hangout with them. It’s part of how he gets business, but it’s expensive in NYC. Plus, like his peers, he was heavily burdened by student load debt. He need money to expand, but banks weren’t willing to work with him. Understandably, he felt stuck and frustrated.

How We Helped Phil's Credit History

Personal Debt is Painful in More Ways than One

Phil’s case is all too common, especially for people in their 20s and 30s. Student loan debt is crushing. In fact, the average student owes nearly $40,000. While these rates are typically low, they are a millstone, even if you never miss a payment. Most business owners don’t realize that their personal debt level impacts their access to business capital.

We Skipped the Big Banks

With this debt load and his good, but not excellent (750+) credit score, big banks couldn’t help him. It’s not worth the time or hard inquiry on his credit report. We worked with an alternative lender, who specializes in cases like Phil’s. Phil has a strong payment history. Phil was in business for more than 2 years. Phil only need a modest amount (<$100 K). Luckily, a bit more than half of the applicants are approved. Typically, SBA loans are the loans of choice. They reduce the risk for both the lender and the borrower. 

“The U.S. Small Business Administration (SBA) is the largest economic development agency in the world,” says SBA New York District Director, Beth Goldberg. “With an annual credit line of more than $30 billion allocated by Congress, SBA guaranteed loans help bridge the gap between small businesses that lenders might turn away and those who are able to start or grow companies with financing.”

A Clear Plan Won the Day

It was perfectly smooth sailing, but with a solid plan with proven business model, we were able to get Phil approved. Small business owners often look at business plans as a formality. In this case, it really made a difference. Like I said, Phil is a non-traditional guy. He was able to show that in his application. His plan captured the essence of his brand beautifully. Without it, I don’t believe the bank would have understand his unique benefit and its appeal to his target.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

Fast-Growing Businesses: 3 Things They Get Right

We’ve been in the small business sector for over 25 years, and it’s safe to say that the environment has evolved and changed dramatically in that time. Yet with all of these changes, there are a few trends we can’t help but notice, namely when it comes to small business successes. We’ve seen three things that fast-growing businesses get right, time and again. They are: 

      1. Talent – People are your #1 asset. As machinery and materials were the drivers of the Industrial Revolution, people are the driver of the Digital Revolution. Those who have a competitive edge with talent win. There is a little caveat I would add. It’s not always the best talent on paper, but the more often the best talent that works as a cohesive team.
      2. Staying Current –Most fast-growing companies begin as agents of change, but then, human nature sneaks in. A reluctance to change in hard-wired into human nature. You need to have a natural curiosity and desire to always want to learn more. This can go back to talent. Hiring younger workers can enfuse an organization with new ideas. 
      3. Showing up – Do what you say you are going to do. Prove your value quickly both internally and externally. 

To help you understand how these successes work, we want to introduce you to Jake. 

    1.  

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Jake’s Story – A Fast-Growing Business and a Rocky Future

Jake runs a tech company. He started out a small start-up that grew quickly. This rapid growth put strain on his team. When we met him, he was concerned about keeping up the pace of growth. His team was starting to show some symptoms of burnout, but he didn’t have the time to set aside to think about how to fix it. 

People are your #1 Asset

Clients often ask how can you keep costs to a reasonable level while keeping people happy? Hiring and retaining talent is hugely important, as it was to Jake. The golden rule that employers tend to forget is that people stay for the intangibles more than the money. Money is important, but other things can matter more, such as: 

      • Flexibility 
      • Sense of belonging 
      • Clear and copious recognition 
      • Transparency 

When we talked to the team, we found they felt that Jake was running short on recognition and transparency. When we shared that with Jake. He was open to the feedback. It was clear to us that it wasn’t that he did want to do. He just didn’t have time to breathe with his business growing so fast. 

Mistakes are Opportunities to Learn

Mistakes happened infrequently as Jake’s team got stretched too thin. The team was getting frustrated with each other. They were frustrated for a good reason. Mistakes had a domino effect. One is mistake from someone meant more work for someone else. This was adding to the tension. When we worked with the team, we used this as an example. The mistakes were a symptom of the larger problem. They needed more people. We used this as an opportunity to learn the root cause of the mistake, so we could fix it.

Empowering People to Make Decisions Makes Them Feel Like They are Part of Something Bigger

This is often a scary proposition to business owners. It’s your baby. How can you trust it to someone else? Luckily, Jake did have this problem. He had clear rules for delegation, and his small business’s team felt that they had the ability to make decisions. This is the key to keeping your business growing fast. Delegation is about setting boundaries and accountability. Allow someone to make a decision means they need to know they are responsible for the outcome. It doesn’t need to be draconian or punitive, but it does need to be enforced.

Jake’s Solution

It was pretty clear that Jake was doing a lot of things right. His business wouldn’t have been growing so fast if he wasn’t. However, it was also clear that he needs to hire if he wanted to maintain his trajectory. We recommended and created a hiring plan for him, which we helped him execute. We created job descriptions. Posted them on several hiring sites. Screened applicants. Finally, we recommended those to bring in for a formal interview. Jake hired two people, who were desperately needed, and his business continues to thrive. 

Summary

The key takeaway from Jake is acting before the strains from growth become highly visible. It’s easier to cure a disease if caught early. The same is true in fast-growing businesses. The longer you wait the more repair work is need, and the harder it is to expand. But Jake was able to find his problems and come out stronger overall. 

Unretirement: The Secret of a New Workforce

unretirement

I have a term for you that you will start hearing more and more over the next few years: unretirement. The title explains itself really, with the idea being that retirement is no longer a necessity. Now, you can keep your small business expanding beyond what you may have thought possible in the past, staying in charge past when people may see you as “expired.” Because why stop doing what you love because of something as arbitrary as age?

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

What Is “Unretirement?” Exactly?

As I’ve gotten older, that evil ‘R’ word kept creeping closer. I spent a lifetime of gaining knowledge. Am I to toss that away and sit in a home and wait to kick it? No, I don’t accept that. So, instead of thinking about retirement, I started to think about unretirement. My little 5-foot tall Italian grandmother worked with her sisters until she was 90. It gave her purpose. So, I used her as a model and started ProStrategix. 

The amazing thing was I’m not alone. Listening to an interview with Chris Farrell from NPR’s Marketplace was really eye-opening to me. 

It is time to shift the conversation about aging away from Social Security, retirement, physical decline, and an economic crisis, [and] focus on boosting the odds of healthy, active, and purposeful aging through working longer- including launching an entrepreneurial venture. Older minds who are involved in a community are happier.

Chris Farrell, interviewed on the Small Business Radio Show

So. What to do with this information?

Bam, Unretirement – A Whole New Workforce 

If a small business was willing to look past the stereotypes, this could be a real opportunity to access experienced workers. Age discrimination is a real issue, and people who want to work are often not hired at large companies. Think about it. Since when have you had someone with 20 or 30 years of experience in your market want to work at a small business, knowing it comes with a smaller salary? I bet the answer is never.  

It is a talent pool that is underutilized and underserved. So let’s think about ways to change that and to expand both your employee base and audience.

Unretirement – A Whole New Set of Entrepreneurs 

I was amazed by the statistic Mr. Farrell shared. 

For the first time, 25% of all business are started by people who are 55 to 64 years old. These older entrepreneurs are turning their passion into a business. What is different for these people is that many of these new entrepreneurs start to focus on a business with a purpose rather than just earning more money. 

Farrell, SBRS

Speaking as a Gen X’er, I know that I can be a little cynical when it comes to baby-boomers. However, it seems that they and I are sharing the same goal: work because you like it, not just because you need to. So let’s embrace these new employees for your market.

Working Longer May Keep Us Happier 

As we live longer, the traditional model for retirement really doesn’t make sense. We should embrace the idea of unretirement. Age has value if the aged are willing to learn and adapt. When I think back to my grandmother, who was born in 1914 and died in 2014, I am amazed at how much change she experienced. But in the end, she managed to evolve and adapt. If she could do it, why can’t we? 

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

5 Ways to Benefit from Your Small Business Size

use size to advantage

A problem that many of our clients at ProStrategix present is that they find their company’s size to be a disadvantage. Maybe your business is struggling against a large company for the same customers? Or maybe you are feeling like a David facing a Goliath. But here’s the thing: your business’s size can be the biggest success. Here are five ideas for how to look at the positive side of being a smaller business.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

5 Ways to Use Our Small Size to Create a Business Advantage 

Growth is something you should plan for and that you may soon need, but don’t ignore how your small business’s size can help you now.

1. Create Unique & Targeted Experiences

Make the experience for your customer unique. We don’t have the bureaucracy. For instance, if you’re a gym, how can you make it feel like a family or clique? Anyone can go to a mega gym, but your clients choose to join you. Why? Well, you’re one of the cool kids. Encourage bonding with your trainers, staff, etc. Relationships keep people coming back.

Even a clinic could do the same. Is your staff welcoming? Do they know your patients by name? If they know there’s a backlog, do they take the time to explain to the patient why? Our size allows us to build experiences where people can feel valued, not a number.

2. Customize for Your Clientele

You’ve created experiences that are unique to your own company, but you can also customize and personalize to your existent audience. We can use our small size to create an advantage for our small business. Personalization and customization take time, which is a precious resource. You can’t make every experience personal, but we can avoid the canned “one size fits all” approach. While marketing automation can be a godsend, it can also be a killer on this point. Where you can, the more you can personalize the experience the better. 

3. Be Flexible 

Building on the first two points, experiences and customization are two examples of flexibility. We can use our flexibility to create an advantage for our size of small business. How?

  • Less red tape
  • Provide faster decisions
  • More personal contact
  • More!

Also, don’t forget to reward and recognize your staff when they exhibit flexibility in servicing a customer or client.  

4. Listen to What Your Clients Want 

We’ve talked before about screwing up the sale. Think about this: how many times have you been at a big box retailer searching for something or someone to help? And when you do find them, how many listen? Like, really listen.

Don’t be that business. You’re small and have a dedicated staff that wants to be there working with you. Listen to your customers and help them help you. That can only help you grow in the future. 

5. Be Creative! 

We don’t have long chains of review and approval. Let’s use that to create an advantage for our small business. If you’ve done all of the 4 steps above, it’s probably not that hard to think of creative ways to make things better. If you know your customer on a personal level, and you’ve been listening, they’ll tell what they need. Jump on it.  

It’s Hard to Compete, but Your Size Can Be Your Biggest Advantage 

It will take resources, time and change to bring all of these steps to life. We know that’s the case too. It’s taken us time to figure it out ourselves too. We’ve created a base who feels welcome. They recommend us to others. They feel they’re being heard, and you are being flexible to their needs. So, it’s likely reciprocity will kick in, and they will volunteer ideas. 

All of the five above steps are interrelated. We’ve helped a number of businesses differentiate themselves using these steps, and you can do the same too. The size of your small business doesn’t mean the end of your business, and it will only grow with you as the business grows too.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

How to Avoid a Common Small Business Mistake

Common Small Business Mistakes

After years of helping clients, we’ve found that the most common small business mistake is poor cash flow management. Cash flow is one of the key financial documents you should monitor and keep up to date. Your accountant can help you. QuickBooks or other software can do it for you. If both make your head spin, we can help you too.

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

Why We All Should Care about Small Business Success

Every business has ups and downs when it comes to cash coming in. Customers pay late. Things get delayed. Projects start late. The problem is we all have monthly costs, such as rent, payroll, etc. going out regardless of how much is coming in. That’s what results in people living paycheck to paycheck, or being forced to be overly thrifty with their money. Cash flow management is developing a strategy that creates a buffer so you always have enough to weather these fluctuations.

“[The most common small business mistake] owners make is that they don’t understand their cash forecast, and business can be going very well, but you can run out of money,”

— Karen Mills, the former administrator of the U.S. Small Business Administration (SBA) during President Barack Obama’s presidency in Yahoo Finance

In 2017, small businesses created 1.7 million new jobs. That number rose to 1.9 million in 2018, and another 1.9 million in 2019. There are nearly 31 million small businesses in the US, which employs about ½ of the US workforce. When cash flow falls apart and you face this mistake, your small business is more likely to fall behind. Karen Mills hit the nail on the head when she said that small businesses “…create a path to the American dream, so it’s not only part of the economy, but it’s part of economic mobility.”

How to Manage Cash Flow to Avoid this Common Mistake in your Small Business

Here are four easy tips to learn how to easily combat this mistake in your small business.

1. Know You Average Billing Cycle

What’s a billing cycle? It’s the average time between the date you send an invoice and the date the cash is available in your bank. Available is important because it can take a band 1-2 business days to clear a check. During that time, that cash is NOT available for you to use. Typical billing cycles are between 40-70 days. Cash flow is important for most aspects of business management

2. Keep Enough Cash on Hand

In an ideal world, you would have enough cash on hand to cover your expenses over your average billing cycle. In plain English, you should have enough money in the bank to cover 2 to 3 months of expenses. Now, no one lives in an ideal world, so what can you do?

3. Have a Backup Plan

For many, this takes the form of a line of credit. A line of credit is when a bank agrees to loan you money up to a fixed amount. The interest rate is usually variable, meaning it is set based on the Federal Reserve rate plus some fixed percentage. You would treat this as a regular loan, with TWO major advantages.  First, you take only the amount you need. Second, you can pay it off early

 

Lack of cash on hand always causes problems

First, you take only the amount you need. Second, you can pay it off early without penalties. Most term loans are lump-sum payments. They also tend to carry early payment penalties. This is why lines of credit are much more preferable to loans when dealing with short-term cash flow problems.

4. What to Do if You Can’t Get a Line of Credit

Lines of credit are hard to get. You need stellar personal credit. Plus, you need to be in business for at least 2 if not 3 years. We’ve gone into depth about the challenges you face getting loans and how to avoid them. So if you can’t get a line of credit, your best bet is to get a term loan. It’s not ideal, but it’s better than running out of cash. However, if you don’t qualify for a line of credit, you’re not likely to qualify for a term loan.

We review the alternatives in our post “Denied a Small Business Loan? Try Alternative Lenders”. But always remember, the time to ask for a loan is when you have money in the bank. Don’t wait until you have a cash flow emergency to do it, and NEVER take a merchant cash advance. You’ll only make your problems worse.

In summary…

…to avoid the most common small business mistake, always keep your cash flow forecast up to date. We know that’s more easily said than done, and that it pulls you away from doing what you love. Fortunately, you can turn to us for help.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.

3 out of 4 Small Businesses Were Successes Last Year

Small Business Success

According to SmallBizTrends, 3 out 4 of small business reported that they were successful last year. Were you one of them? If so, you have some planning to do. If not, you may have some fixing to do. 

Your business is doing well. But what’s next? ProStrategix knows how to help. Read some of our other articles below, or feel free to connect with us and get a complimentary thirty-minute consulting session.

The Success of Small Businesses is Key to Continued Economic Growth

The success of small businesses is extremely important to the overall economy of the U.S. because of their sheer volume. The Small Business Administration (SBA) puts the number of small businesses at 30.2 million for 2018. In other words, that’s 1 small business for every 5 Americans.

So, What About 2019?

When 3 out of 4 small businesses are growing, that’s great news, right? Yes and No. All economies are cyclical.  So, it is important to understand the projected trends as well. As we mentioned in our blog “The Hidden Risk in the Spike of Small Business Optimism”, the forecast for 2019 remains strong.

In fact, “(74%) also say they expect their business to grow in the next six to 12 months. This is a 12% increase from the 2018 survey.” (SmallBizTrends).

Small Business Success is forecasted to continue for 2019 and beyond

The respondents from the 2019 small businesses were optimistic overall about their future, and the future of the economy as a whole.

Confident in Their Small Business Growth

77% say they are confident their business is going to grow in 2019, a 2% increase from 2018. But close to half of those, or 34.2%, say they are very confident.

Confident in the economy

The confidence also extends to the overall economy. More than two thirds (68%) say they are confident about the economic conditions of the U.S. in 2019. The same percentage of owners feel this way for the next two to three years about the U.S. economy.

What are the most common growth strategies for small business success?

Half said “Improving customer satisfaction and loyalty”, which is consistent with our post “Want to Grow Faster than Your Competition? Focus on Your Current Customers”.  So, it seems successful businesses are doing just that.

1/2 were expanding their customer base

Slightly less than half said finding new customer segments. In “4 Simple Steps to Write a Successful Marketing Plan”, we discuss some tips on how best to achieve this goal. Expanding your customer base can be challenging if you don’t do it right.

1/3 were providing new products

Similarly, about a third said “creating new products and services”, which is also covered in “4 Simple Steps to Write a Successful Marketing Plan”. But, equally important is to communicate the benefits of these new services.

1/4 were expanding locations

A quarter of businesses are looking to expand to new locations. In our post, “4 Tips for Expanding Your Business into New Markets”, we cover how to do this in detail.

Small business growth requires capital

Regardless of what they plan to implement, in most cases, they will need funding. In “Small Business Lending is Booming”, and “How Not to Sound Stupid When Talking to Banks” we share strategies that can help if you are looking for financing. 

In the survey, roughly 4 in 10 are tapping into personal savings to fund growth. Personally, I think that’s a mistake. If they could qualify, they would be better off leveraging those savings as collateral.  However, that’s a personal decision each business must make.

What if you were the Quarter of Businesses that Weren’t Successful?

Not everyone wins every year. If you struggled, it’s time to take stock. We suggest that you start back with the basics.

Time to Get Back to Basics for Small Business Success

Business Model

In “5 Steps to Take When Analyzing Your Business”, we talk about how to take a hard look at your business model to see what’s working and what’s not

Business & Marketing Plans

Once you’ve identified the issues, then it’s time for a new business and marketing plan. Both “4 Simple Steps to Write a Successful Business Plan”, and “4 Simple Steps to Write a Successful Marketing Plan” can help you get started

When writing those, we suggest reading “5 Proven Methods for Accelerating Small Business Growth”, and “5 Ways to Grow Your Business Without Spending a Penny”.

If you’re still struggling, both are free “Want to Learn About Business for Free” and paid services, like ProStrategix, that can help.

In summary, the outlook for small business success looks good. If you are successful, you should be planning for more growth. See “If You Don’t Plan for Growth Now, You’ll Hate Yourself Later”. If you are not, you at least have the wind at your back.

At ProStrategix, we know you have concerns.  We’re designed to help give you the business support you need so you can focus on doing what you love.  If you would like to learn about how we might be able to help you, please contact us.