The Top 5 Reasons Why Now Is the Best Time Ever to Start a Business

Early in my career I had to drive into NYC on one of those grid lock alert days. A grid lock alert is one of those days during the holiday season when you either take public transportation or expect to spend a lot of time in your car during a prolonged traffic jam. To my surprise I made it into and out of NYC in record time. There was very little traffic let alone any of the massive delays the news people predicted. I learned two things that day. One-grid lock alert days were the best days to drive into NYC and Two-don’t believe everything you hear.

If all you hear about is how bad the economy is don’t believe it. Today the opportunities to start and grow a successful business are better than ever! Here are the top 5 reasons why I believe this.

1: GOOGLE – they have developed an extremely powerful suite of FREE tools to help small businesses operate in “The Cloud”. Gmail, Google Docs and Google Sites and Google Apps can help provide a communications infrastructure that used to cost a small fortune.

2: Abundance of experienced, talented workers – with over twelve million people on unemployment it’s a buyers market. Not only do businesses have a big pool of people looking for employment they can tap into freelancers sites such as odesk.com, guru.com and peoplehour.com.

3: The low cost of marketing – there is an abundance of tools and resources to get your message out there to a highly targeted audience. You can easily create a blog that interfaces with your Facebook Fan page, Linked In and Twitter accounts to reach all of your fans and followers. Want to up your exposure? Start an email campaign with a free http://www.mailchimp.com account. You can send to up to 2,000 subscribers at no cost.

4: Tech cost are at an all time low – wireless networks, laser color printers, cheap computers and laptops. And everything is configured so a non-nerd can be up and running in no time.

5: A wealth of information and resources – just go to http://www.google.com and type in anything you want to know.

These are just a few of the reasons why this is the best time ever to start a business. It wasn’t long ago that starting even a home based business required an investment of ten to twenty thousand dollars with ongoing cost to maintain the technology and marketing campaigns. Not only is it easier and less expensive to start a business, there is an abundance of opportunities for any motivated entrepreneur. The need for capital has been replaced by the need for motivation and an ability to think out of the box.

Many successful businesses have been started in worse economic times. If you believe this is a bad time to start a business you are right. If you believe that you are going to succeed no matter what you are also right. William Shakespeare said “There is nothing either good or bad but thinking makes it so.” That’s why I believe that this is the best time ever to start a successful business.

How to Manage Cash Flow at Your Small Business

Not understanding how to effectively manage cash flow at your business is the primary cause of failure among small businesses today. As money comes in and out, it can be complicated to keep track of what you owe and what is owed to you. Here are five tips to keep your business’ cash flow running as smoothly as possible:

1. Be quick to deposit checks

As soon as you receive a check, deposit it. Remember the obvious – banks are closed over the weekend, so any check you put off on depositing until Friday will not show up in your account until Monday. Furthermore, it is important to familiarize yourself with your banks’ hours of operation because every bank is different. Some banks don’t deposit checks on the same day if they are deposited after a certain time, which could be as early as 2:00 or 3:00 PM. Also, banks have different policies about how quickly money can be withdrawn from the check you have deposited, and how much you can withdraw at a given time.

2. Be precise about how much inventory to keep on hand

Sure, one day your inventory can be converted into cash – but in most cases, that process will take a lot longer than you realize. Keep very close track of just how much inventory you need to have on hand. Even though you might save money by ordering a large quantity of your product, first consider how much you really need. Keeping track of how quickly your inventory is transforming into cash for your business is crucial in order to keep a close estimate of your cash flow and how quickly that cash can be made available.

3. Collect receivables as quickly as possible

Do your customers owe you money? It is your job as a small business owner to figure out why – and fix that problem fast! This part of running a small business that can be tough, but given how important it is to maintain an adequate cash flow at your business, you have to be strict about collecting your receivables quickly. This includes conducting credit checks on any new customers before extending them any form of credit. If a customer has owed you money for over a few weeks or a month, be sure to charge a late fee for any money that is owed to you. If worst comes to worst, consider contacting your lawyer, or a collection agency, if necessary.

4. Take a pay cut

As a business owner or CEO, taking a pay cut for the sake of increasing your small business’ cash flow is an important investment for your business. The last thing you want is for your personal salary to have been so high that it ultimately hurt your business. One rule that many new business owners abide by is not paying themselves for a year, and then seeing how the business fares after that year. In many cases, payoff can be significant.

5. Save money by offering other perks to your employees

Upon deciding where to work, many employees will put their quality of life above their salary. As a small business owner, you can have a huge impact on how happy your employees are at your business aside from simply how much you are paying them. Offering perks, such as a laid-back office environment, equity in the company, a social space in the office, or a more lenient vacation policy might be enough to convince your employees to work for less money. Any additional money you can save on payroll means more money for your business, and offering these perks to employees might even reflect in their work ethic.

Planning the Exit From Your Business

Sooner or later, willingly or unwillingly, deliberately or unconsciously, a small business owner decides how they’ll leave their business. Whether they’re carried feet first out the door at death; they sell; they transfer the business to the next generation; or they take some other path out the door: the day will come when each owner makes their final exit from their business.

Even where an owner has partners, other shareholders or equity owners in the business who have agreed on a plan allowing one owner to leave the business while the remaining owners carry on its operations; there may be a problem where the partners or equity owners are all of approximately the same age and are likely to exit the business at about the same time. Unless the existing plan for the departure of owners insures a transition from an older to a younger generation, the presence of partners or other equity owners may simply mean that the problem of how to leave the business is an issue for the owners as a group rather than for just an individual.

Anticipating their inevitable final exit should prompt any small business owner to realistically consider their options and plan for their departure well in advance. An owner should begin thinking early, often and realistically about how they can best realize the value of their business when they leave. An owner’s thoughts should adapt to the changing possibilities and opportunities for leaving their business as both owner and business age. An owner’s ultimate exit from their business is inevitable. Only how an owner leaves their business and whether that departure is deliberately made before they die or become incapacitated is within their control.

The point of this short note is simple. If you don’t have a plan for leaving your business, make one. If you have a plan, review it regularly to make certain it will work. If necessary, change your plan as conditions and opportunities change. When opportunities appear, consider them carefully in the context of both your present and your long term goals. Like most things, the more an owner thinks and plans on leaving their business, generally the better and more satisfying their exit will be.

© 08/30/2011 Lawrence B. Hunt of Hunt & Associates, P.C. All rights reserved.