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Small Business List – This is the Place to Be

There are many small businesses everywhere. The majority of the time we go to these small businesses to get a needed product or service. They are part and parcel of our daily lives and there is no way we can avoid them. These makes them present in every element of business that you can think of. These businesses are offering so much to the general public that even as a small business owner you can benefit from them. This is because they have an exploited group of customers.

This would greatly benefit any business owner who also provides products or services if they lay strategies of how to get a piece of the action. Luckily, with the growth and expansion of technology it has become easier to access a small business list. It has become straightforward to get into contact with these small businesses. It is possible for you to get current information about the company. These details will enable you to see how you can work with the said company.

Alternatively you can source small business lists that have been provided by brokers and compilers on the web. These lists are continuously updated so you will always get accurate information. This will save you time when you need the information urgently. When you have the small business list, you can now use it to your benefit. You can do this by using it to conduct market analysis and research. This will help you identify a need in the market and find ways to offer it.

This small business list can also be used to promote material to a specific target market. You can send fliers, brochures etc to the businesses on the list who could eventually become your customers. You can choose to compile a list or rent one but it would require a lot of work since you have to constantly update it.

Small Business Success – Organisations and Professionals Who Can Help You Make it Happen

Starting and operating a successful small business requires a great deal of determination enthusiasm and motivation. The success and failure of your small business will greatly depend on your choosing the right business to start with. Having chosen the right business what next? The advice and help you are able to secure from various professionals and organisations will indeed play a vital role in the success of your business.

1. Banks

Your Bank will naturally be playing the pivotal role in financing your small business and giving you all the necessary advice and assistance to help you run your business successfully. The bank will constantly monitor your business and advise you.

2. Small Business Association (SBA):

In the United States they help small businesses start, grow, and compete in global markets by providing quality training, counseling, and access to resources.

There is a misconception that the SBA grants loans to Small Businesses

The SBA only guarantees loans made by banks and other private lenders to small business clients.

Similarly most countries have their own Small Business Associations to help and advice small businesses.

It is advisable that new entrepreneurs seek their advice and help when starting their new business.

3. Business Mentors:

Mentors are useful people with vast experience in starting and running a successful business. Very often they are people who have gone through the mill and their advice can be very helpful, especially if you have had no previous business experience at all.

4. Accountants:

Proper accounting procedures have to be adopted right from day one to ensure that your business is running profitably. For this the services of an accountant is absolutely essential. Negligence of this can end up in disaster.

5. Business Associations/Organisations:

Many new entrepreneurs are unaware of the advantages of joining an association that represents their business. For that matter being a member of any business or trade association will be enormously beneficial to your business. These associations provide their members a vast range of information such as sources for raw materials and markets for their products. Workshops and seminars conducted by them exclusively for members provide useful tips, know-how and other valuable information. Membership of certain associations also adds prestige to your small business.

6. Libraries:

Libraries are a great place where you will be able to find a vast range of books and periodicals relating to starting a business, marketing, accounting and other allied fields. Many successful entrepreneurs make good use of the libraries to gather vital information or to update their knowledge.

7. Internet:

Today the Internet is the source for information on anything and everything under the Sun. You can ignore anything but certainly not the Internet. You just have to visit the the big three search engines such as Google, Yahoo or MSN and type your query and lo and behold you get your results immediately. You may at times have to wade through unwanted and unnecessary results but nevertheless it is a goldmine you simply cannot ignore.

Conclusion:

You have started a small business with the sole objective of succeeding in you business venture. The usefulness of these organizations and the expertise of these professionals are beyond question. How soon you can establish yourself as a successful entrepreneur will depend on how best you make use of them.

Small Business Inventory – To Manage Or Not to Manage

What does small business inventory have to do with profitability?

Most small business owners are not inventory management experts and they shouldn’t be. Most of them possess some special skill or knowledge and build their business upon it. At the beginning, it is usually rather simple, even if they sell products – the range of products is small and it’s relatively easy to keep track of them.

But when things go well and their business grows both in size and complexity, problems emerge. And many of those problems will have to do with inventory.

Challenges with small business inventory
You see, most tasks having to do with management and control of a business can be performed relatively easily on a small scale. A program like QuickBooks can help you keep your books in good shape, especially if you hire a skilled and experienced bookkeeper.

But even good bookkeepers rarely have to deal with issues of setting up small business inventory, calculating margins, analyzing product mix, etc. At this point a small business has developed enough to need a higher level of skill: a part-time Controller.

Small business inventory control is absolutely crucial to long-term survival, not to mention profitability. I know many businesses who don’t even have the most basic information about their more complex products – their total cost. Sure, they know how much it costs to buy each component. But once their products get complex enough to require any assembly, that transparency is gone. If QuickBooks isn’t properly set up to track assembly items, their cost will not be known.

“Does that matter”, you may ask? Well, if you want to know your margins, yes, it does.

Small business inventory – margin basics
These days many small businesses struggle with their cashflow. They come to me and ask “why am I not making any money?” “Well, let’s see”, I say, and start looking at their financials.

It’s pretty easy to isolate problem areas with the expenses, the overhead, etc, but it will all mean nothing, if we don’t know the margins. The product margin is simply the price less the cost. If the cost isn’t known, we won’t know the margin. It’s very simple:

Sales less Cost of Sales = Margin
Margin less Expenses and Overhead = Net Profit

And as I said before, once a business starts selling more complex products, their costs are no longer known, if QuickBooks (or any other software a business may be using) isn’t set up to properly keep track of them.

Small business inventory – product mix
Even when you know your margins, do you know what they mean? Do you also look at the mix? ‘What is product mix?”, you may ask.

Well, imagine you have two products:

- Product A costs you $1.00 to make and sells for $2.00
- Product B costs you $1.00 to make and sells for $5.00

Which one is more important to you? It’s not as simple as it may seem. What if the demand for Product A is a 100 greater than demand for product B? What if you can sell a lot more of Product A than you will ever be able to sell of Product B?

If during an average month you can sell 100 Products A and 5 Products B, Product A is generating more margin:

Product A
Sales Price: $2.00
Cost of Sales: $1.00
Margin: $1
Qty sold: 500
Total Margin: $500

Product B
Sales Price: $5.00
Cost of Sales: $1.00
Margin: $4.00
Qty sold: 5
Total Margin: $20

Now things get more interesting. You may want to know a lot more – how much overhead is needed to generate that high margin? Is it even worth it? If it is, maybe you should focus much more of your energies and resources on Product B? Since these products are so diametrically different, maybe we should track their profitability even below the margin level?

Perhaps we need to allocate some of the expenses which can be directly attributed to them so we see their “contribution margin”? Without that information, how can we possibly make the right decisions?

And now imagine that you now have 50-1000 products, all with different margins and different sales levels…

Small business inventory – summing up
All those considerations cannot even be entertained until you know your product costs. You won’t be able to make any intelligent decisions about your inventory mix, advertising, personnel etc. until all this is easily calculated and monitored on a regular basis.

And remember – without accurate costs, your net profit cannot be accurate, either. That’s why I always say to my clients:

“Accurate financial information is power!”