Tag Archives: economy

Technology is a Finance Issue – Ask Any Small Business Client

By Charles H. Green

Technology advancements over the past 20 years have had a significant impact on busines and industry, which has led to major changes in output, costs, productivity, employment, marketing and connectivity among other business metrics. Small companies have often been on the leading edge of these changes because they are more nimble and will often realize faster improvements (and profits) by adapting sooner.

The National Small Business Association (NSBA) recently conducted their second survey of technology adoption and dependency among their members and posted some interesting results. Among their key findings was a marked increase in usage of laptops also, from 67 percent in 2010 to 84 percent in 2013.

An interesting tangential finding was the drop in the number of small-business owners who pay an outside firm to handle their information technology (IT), which they asserted was likely driven by two factors: the economic challenges small businesses have faced in the past few years; and improved IT platforms and the growing reliance on–and therefore need to understand—these technology tools and platforms.

Other results from the small companies surveyed:

41% use tablet devices (which were not available during the 2010 survey);

60% allow some employees to telecommute (an increase of over one-third);

50% don’t have broadband or fast-speed internet because it’s still not available;

27% still don’t use social media to promote themselves.

Why is technology a ‘finance issue’ that should concern business lenders? Because it represents a harbinger of the future horizon for the success of that business.

1. Adaptation of new technology signals better productivity is ahead at a cheaper price;

2. Smaller firms can compete more effectively when visable through the web and recognized in social media. Without breaking into these frontiers, that business will be lost to anyone trying to find it.

3. Mobility will be the most heavily-travelled portal through which future consumers conduct business.

Read more at NSBA.

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Gallup Finds American Economic Confidence Improving

By. Charles H. Green

Gallup’s weekly survey of Americans’ confidence in the U.S. economy improved slightly over the past two weeks. Their U.S. Economic Confidence Index was -15 last week, similar to the -16 from the previous week, but up from -18 in the week ending Sept. 1. However, Americans continue to be less positive about the economy than they were in May and June.

Gallup’s Economic Confidence Index is based on Americans’ ratings of current economic conditions in the U.S. and their assessments of whether the economy is getting better or worse. The three-point increase in the overall index over the past two weeks is solely due to Americans’ rosier economic outlook.

Last week, 42% of Americans said the economy is getting better and 53% said it is getting worse, for a net economic outlook score of -11, six points higher than the -17 in the week ending Sept. 1.

Seventeen percent of Americans rate current economic conditions as “excellent” or “good,” while 35% rate them as “poor.” That results in a -18 net current conditions score, identical to what Gallup found for the week ending Sept. 1.

Economic confidence among consumers and businesses bode a directly relationship to short terms and long term economic activities such as household spending, large purchases and even marriage among consumers, and capital acquisitions, borrowing and investment among businesses.

Read More at Gallup Economy

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Got the Next Great Small Business Idea? Launch a Startup

by Sara Miller

Many of us have that sure-fire business idea mulling in the back of our minds. That doesn’t make us entrepreneurs, however. Entrepreneurship demands action—one step after another, until your business is launched and thriving. Whether you’re just setting out on the journey toward entrepreneurship or well down the path, take the next step to make your dream a reality.

Stage 1 – You Have an Idea

Every good business starts with an idea. Maybe you want to launch a vegetarian taco truck or start a virtual personal assistant firm. Your next step is to develop a business plan that outlines your first three to five years of business. SBA.gov suggests the following outline for business plans:

• Executive summary – A quick snapshot of your business
• Company description – Who you are, who you serve and what you do
• Market analysis – Who your competitors are and what separates you from them
• Organization and management – What organizational structure best suits you
• Service or product – What you sell and what your product lifestyle is
• Marketing and sales – How will you market your business
• Funding request – Who will fund your business and how will you ask for money
• Projected finances – What do you hope to make per year
• Appendix – Additional information relevant to your business, such as licenses and permits

Stage 2 – You’ve Completed Your Business Plan, Now What?

Your next step is to work toward the achievable goals outlined in your business plan. Many young businesses need capital to invest in equipment and infrastructure. A business credit card can help you make these initial purchases at a time when your cash flow may be limited. According to the Better Business Bureau, a new business credit card can actually help you establish good credit and may even have a reward or loyalty component.

Stage 3 – You’re Hiring Your First Employee

That credit card and business plan helped fuel initial growth, and now you need to hire an employee to work toward launch. As DailyMuse.com notes, having an employee dedicated to reaching your goal can help you get there that much faster. The site suggests hiring as soon as you can afford to do so and investing in the potential of a passionate employee rather than choosing someone with demonstrated experience who may not be passionate about your business. If you have multiple stakeholders, have everyone on the team interview that person to ensure a strong cultural fit before hiring.

Stage 4 – You’re Ready to Launch

All your initial goals have been accomplished, and you’re ready to launch your business. Your next step is getting the word out about your products and services.

As a small business, you probably don’t have a marketing maven on hand. Take advantage of social media to connect with other local businesses in your field of expertise, find potential clients or customers and expand brand awareness. Marketing Land suggests that you pick a metric you’re interested in measuring—for example, customer service or brand awareness—and find ways to measure your marketing and social media outreach to see if you’re increasing your target metric. Track how quickly you gain Twitter followers or Facebook fans to see what tactics help expand your reach.

Stage 5 – Steps Toward Stability

After the initial buzz of a grand opening dies down, your business’ success will depend on regular patronage and stability. If you can’t imagine your business failing, taste this grain of salt: half of small business will fail within the first year, according to Smallbiztrends.com, and a staggering 95 percent will close shop within five years.
Ups and downs are inevitable. The businesses that survive struggles usual have a stable base of clients, customers and partners who help keep the lights on. As you embark on small business ownership, build relationships that result in continual business.

A tip: The little things make a difference. Remember your customers’ names, ask about their families and do the other things larger competitors can’t.

Sara Miller
From first grade through graduate school, “B” was never in Sara’s vocabulary. In addition to being a perfectionist, she has always been fascinated by the anatomy of successful start ups.

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When It’s Time to Go Plastic

A clean, accessible accounting system that accounts for every transaction is a requirement for every small business, especially when the company begins to realize increased daily sales.

Trying to keep track of every transaction manually with a paper system can be a nightmare, often leading to missed items and a backlog in processing the postings. Since you also need to know current cash flow and prepare for critical tax reporting and payments, how do you handle all of this efficiently and comprehensively? One way to simplify and make things easier could be going plastic as soon as your doors open.

With electronic payment so widespread, accepting “plastic” payment allows a company to process both credit and debit cards on most of the major networks. Doing so creates easy-to-manage records and paperwork for accounting purposes. Accepting credit/debit card payment also allows a business to be paid immediately rather than waiting for a large personal check to clear.

For small businesses, cash flow is critical. Receiving sales funds as quickly as possible helps a business owner manage his or her company finances on a more predictable basis, paying off vendors in a timely manner. With credit card payments, bounced checks and cash flow hiccups are eliminated. The business knows exactly when and what payment has arrived and can use those funds immediately.

Going plastic also allows a small business to integrate better with e-commerce. Most customers buying goods or services online use a credit card. Small businesses that accept such payments access wider markets, regardless of distance or even country, because the credit card processing companies manage the risk and movement of payments electronically. The customer enjoys risk-free purchasing and the small business enjoys a wider portfolio of customers not possible with cash or check payments.

For tax reporting purposes, most card processing services provide easy-to-download activity records that break out incoming and outgoing funds, the payer and payee, amounts, dates, and what the transaction covered. These activity logs are actual transaction records that are very useful as supporting documentation for tax reporting. So instead of chasing various receipts all over the place, a small business has all it needs on one clean report that can’t be easily disputed in an audit. This reporting format works well for both reporting sales tax as well as business income taxes. Further, the reporting is easily imported into major financial off-the-shelf software programs, producing even easier financial management benefits.

Finally, customers tend to spend more via a credit/debit card payment versus cash. Because the money isn’t due right away, customers find it easier to purchase higher cost items. That in turn means larger sales per transaction for small businesses, which is a good thing when every revenue dollar counts. Up-selling becomes easier too because customers are not concerned about cash in hand.

Using credit cards for your business is a valuable transaction tool and produces greater revenue as well as easier on-the-go financing and important tax records. Smart businesses take advantage of all opportunities, including available payment tools. Go plastic today!

About the author

Kristen Gramigna is Chief Marketing Officer for BluePay, a merchant services provider and also serves on its Board of Directors. She has more than 15 years experience in the bankcard industry in direct sales, sales management and marketing.

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Can There Be Too Much Profit?

Yes, that is a serious question. And in my reasoning, yes is also the ultimate answer to the question.

Trust me when I assert that I am a committed free-market capitalist. I believe in the power of the profit motive to move mountains, revolutionize the world, and spread assorted good things to millions of people. Without it, we might be still be living as serfs in 18th century conditions under the knuckles of some knight.

Profits motivate ordinary individuals to unleash their imagination, energy, and industry to create opportunities, innovation, and relief. Profits solve problems, feed people, and change the planet. Without profits, the world would collapse on a moribund economy that couldn’t even feed us, resembling the failed communist societies that herded citizens into forced labor in collective, state-owned enterprises, rife with corruption, fraudulent output, and dispirited participants. Read More More

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F(r)ight Zone Ahead

Over this past weekend the federal budget drama ended with an hour to spare ahead of a threatened shutdown. Congress passed a continuing resolution to keep funding operations after a deal was cut to reduce the remaining 2011 budget by $38 billion, while taking several social issues off the table demanded by conservatives.

The story was covered like a natural disaster with hourly updates and frequent progress reports. Realistically, it was only the prelude to a larger fight looming over the 2012 budget and the necessity of raising the federal debt ceiling in the weeks ahead. Now comes the frightening part. Read More More

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Economy at Rest

Across the media I keep seeing the discussion going back and forth about who or what is the culprit for tight business credit and a continuing sluggish rate of economic growth. Depending on the guru you tune into, the average projected 2011 growth of the Gross National Product is only about 3%, meaning that new job growth will remain lethargic for the foreseeable future. At that pace, it may take 15+ years to return to the same employment level enjoyed prior to the housing bubble.

So where is the money to fuel a more robust economy? Let’s look at all the players in that cycle: Read More More

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Who Do You Trust?

Have you heard the phrase “information age?” Truly we are living in that time, as free information connects the world more rapidly than ever before with an increasing frequency and volume than ever before possible.   Technology has made everyone an expert capable of distributing facts, fiction and opinions to most of the literate world, if they will only click on your site or email. You are reading this blog as an example.

 

To quantify this information, Wikipedia reports that as of 2006, Google had already indexed more than 25 billion websites (long before this one existed), and was getting 400 million inquiries per day. In 2010, YouTube reported that 35 hours of video was being uploaded every minute, and that it already consumed more bandwidth than the rest of the internet.   Read More More

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What Is The Real Problem?

Remember the imagery of an ostrich with its head buried in the sand? That is sort of how I view the average American taxpayer. They may be opinionated, but choose to remain purposely blinded to what is really happening around them. It is much easier to just not see anything in the periphery and keep to ourselves, or maybe just vent about what we think we don’t like and won’t try to understand.  

The Concord Coalition (www.ConcordCoalition.org) was formed in 1992 to create a bi-partisan dialogue on fiscal responsibility by then U.S. Senators Warren Rudman (R-NH) and Paul Tsongas (D-MA). Obviously it has not made enough progress in the years since to raise awareness of the need to reform the U.S. budget or its drunken propensity to continue an endless cycle of spending growth and income reduction. Read More More

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Living With Less

I keep hearing that we are waiting to recover from the great recession of 2008, but I will share a few thoughts on that statement that you might ponder. First of all, this period we are experiencing is no recovery. Nothing resembles the typical way our economy has always performed by taking a few months of rest, and resuming steady growth with consumer confidence restored and good job still held. We Americans always expect to return to the good life with gusto. And to do so quickly.

In fact, my view is that we are not in recovery – we are at the beginning of living with less. Recovery assumes you will return to where you were.   Think about residential housing and new bank start-ups. We are not going back to the heedless growth in those two sectors, and they were a significant part of the economy that fueled our blind confidence. The fallout from the loss of those two sectors continues to reverberate in virtually every sector of our economy. Read More More

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