Tips To Help You Become A Better Online Business Person

Starting and maintaining a home business enterprise is a bold move. Home businesses can be immensely successful if you know how to maintain your businesses affairs in the right way. This article will cover some of the essentials you need to consider, to ensure the growth, success and profitability of your online business.

If you have a home based business, don’t miss out on the home office tax credit. You can claim this space even if you don’t devote an entire room to your business. If you have an area which is only or primarily used for business purposes, you can claim it based on square footage, and calculate the portion of your home that is taken up by your office space.

Once you’ve decided on a product to sell, do your homework and check out your competition. Look at their prices and study the quality of the goods that they are selling. Make sure not to price yourself out of the market, and figure out how to deliver the best value to your customers.

Set up a Post Office box for all your business mail. It’s best to do this, rather than put your family at risk by using your physical address. This is especially important if you are doing most of your business online. Don’t ever post your home address online, for any reason.

To reduce distractions keep your office off limits to children. Have set work hours that enable you to run your business and still have time for your family. Older children should understand not to disturb you while you are working. For your business to succeed your family needs to be supportive and respectful of your work schedule.

Take all of the home-business tax deductions that are legally allowed. For example, you can deduct the cost of a second telephone line or a mobile phone if you use it exclusively for your business, but be sure to keep sufficient records to prove your deductions. Taking all permissible write-offs helps you keep more of what you earn.

Although you may be used to working eight hours a day and then being off, you have to realize that in order for a home business to thrive more of a time commitment may be needed. Once everything is in place you will be able to relax a little.

Maintain a professional attitude as you begin your home based business. Keep your personal life and your professional life separate. Just because you are working from home, does not mean that you should engage in any family responsibilities during the time that you are supposed to be working. You will not be successful if you do not put the time into running your business efficiently.

Don’t walk into a home business enterprise blind! There are many online discussion forums designed for small business owners to discuss the unique obstacles in this field. Look locally for other small business and home business organizations that meet in person. Either way you go, networking with other business owners gives you an excellent support system.

Having a business license for your home business often allows you to purchase things wholesale. This is excellent news for people who make their product, since you can search on product search engines for bulk orders of raw materials. This minimizes trips to the store, and frees up your wallet for other expenditures.

In the end, for most, having a online business allows for a level of control and creativity that the mainstream approach lacks. However, after reading this article, you may realize that you cannot necessarily go about maintaining a successful home business in the same way that you would maintain a traditional business. By utilizing these tips and advice, you will set your business up for a lucrative and stable future.

The Four Business Building Tools

When was the last time you were so impressed by a business that you just had to tell someone about it? Sadly, it’s probably been a while, but if you’re an entrepreneur, this represents a tremendous opportunity. Just think of the business potential that’s out there just waiting to be realized.

So what’s the problem? Why are there so few outstanding businesses?

Well, the problem isn’t a shortage of dreams. Most entrepreneurs have more of them than they can count. The problem is the challenge of turning those dreams into reality. Oh sure, every entrepreneur starts their business with the best of intentions, but somewhere along the way they loose sight of their dreams as they become more and more consumed with the daily grind of running their business.

After years of helping people build their companies, I’ve come to realize that growing a business comes down to two main things… people and time. If you can learn to properly manage both, you’ll eventually be a success.

To do this properly, you must design your business to function independently from you. It’s the necessary goal of any organization that wants to achieve success. Without this, you are stuck. You are doomed to forever bump your head against what we call the “glass ceiling” You’ll recognize the symptoms if you ever find yourself running out of time to get your work done, complaining about your employees work ethic, or feeling frustrated with your customers’ seemingly unreasonable demands.

There are four basic tools you can use to confidently give your business the independence it needs to grow.

1. Business Manual

2. Employee Manuals

3. Analysis Manual

4. Business Calendar

Used properly, these tools will form a solid foundation for your growth. They are designed to give your business its independence, so you can focus your efforts on guiding it to the next level. There’s a little work involved, but I’ve never met a lazy entrepreneur. And besides, owning a successful, thriving business is more than worth the effort.

The first business tool is your Business Manual. It functions much like an operations manual does for your car. It houses your strategies, your policies, your systems, and other basic information. Basically, everything you might need to run your company is located here in one central location.

The value of a well documented Business Manual is significant, to say the least. Not only does it help smooth out the daily management of your operation, it gives tremendous confidence to a potential investor or purchaser, helping to raise the value of your business in the process. Why? Because a business that runs on its own is a much more solid investment. In fact, it’s a critical factor in determining its market value.

The second business tool is really a group of tools. These are your Employee Manuals. Employee Manuals are the most common of the Four Business Building Tools, but rarely do they provide the value they should. A good Employee Manual should serve double duty as a Training Manual. This means it should contain not only your important company policies and contact information, it should also contain a detailed job description, complete with applicable systems. In other words, it should show an employee not only what is expected of them, but how to do it as well. The goal is to make the process of bringing in a new employee as smooth as possible and then empower them to take ownership of their work.

The third business tool is your Analysis Manual. Think of this as your “business dashboard”. Here you will keep all the relevant numbers that you want to review on a regular basis concerning the status of your business.

Certainly this includes your financial statements, but those aren’t the only numbers that are important. For example, you may want to track the amount of overtime your employees are putting in per month, or the number of new prospects your salespeople are meeting with each week. It doesn’t need to be complicated, but it does need to be useful, so take a little time to identify the numbers that mean something to you. Then, share these numbers with your employees.

Not only is an Analysis Manual a powerful goal setting tool (helping to keep you on track), it can also warn you of potential problems before they arise. For example, if you know that you need sales of $200 thousand next month and you know that your salespeople tend to convert 33% of their leads into sales, you’ll want to be sure you’ve got at least $600 thousand worth of quotes in place for next month. Now you’ll know with some certainty if you’re on track for a great month, or if you’ve got some work to do to reach your target. And you can do this with all sorts of numbers from your business.

The final business tool is your Business Calendar. This is simply a place for you to track the annual cycle of your business.

For example, there may be times of the year when you want to run various marketing campaigns… times of the year you want to review your budgets… times of the year you want to have employee reviews… and so forth.

It’s not rocket science, but a good Business Calendar is an essential tool for keeping things from falling through the cracks. After all, when was the last time you had an employee review? When is your next employee review? Do your employees know this date? Can they count on it happening on a schedule, year after year? If you implement a Business Calendar you’ll be able to confidently answer these questions and more.

Recently I met a fellow who grew his business from $10 thousand to $100 thousand per month in just under 6 months. Know where he was in month 7? He was bankrupt. He couldn’t keep up with his customers’ demands and his business simply imploded on itself. It’s a sad story, but his problem wasn’t new. The number one killer of small business today is unmanaged rapid growth. That’s not to say that rapid growth is bad. Growth isn’t the problem, all businesses need to grow… it’s the unmanaged part that can kill a good business.

Banks Have a Lot of Reasons to Reject Your Small Business Loan

For a small business to grow into a big business, it needs a loan unless it has exceptional sales and profit margins. A small business owner has quite a few places where he/she can go with a loan request. Banks seem to be one of their options on most occasions. What these owners might not realize is that banks have recently developed a reputation for rejecting small business loans. It seems that banks are more interested in financing large businesses due to their benefits. A bank can come up with a variety of reasons to reject loan approval for a small business. Some of the common reasons are as under:

Reasons for Banks to Reject Your Small Business Loan

Credit History

One of the barriers between you and the business loan is credit history. When you go to a bank, they look at your personal as well as business credit reports. Some people are under the impression that their personal credit does not affect their business loans. But that’s not always the case. A majority of banks look into both the types of credits. One of the aspects of credit that matter a lot to the banks is credit history. The length of your credit history can affect your loan approval negatively or positively.

The more information banks have at hand to assess your business’ creditworthiness, the easier it is for them to forward you the loan. However, if your business is new and your credit history is short, banks will be unwilling to forward you the desired loan.

Risky Business

You must be aware of the term high-risk business. In fact, lending institutions have created an entire industry for high-risk businesses to help them with loans, credit card payments, etc. A bank can look at a lot of factors to evaluate your business as a high-risk business. Perhaps you belong to an industry that is high-risk per se. Examples of such businesses are companies selling marijuana-based products, online gambling platforms, and casinos, dating services, blockchain-based services, etc. It is imperative to understand that your business’ activities can also make it a high-risk business.

For example, your business might not be a high-risk business per se, but perhaps you have received too many charge-backs on your shipped orders from your customers. In that case, the bank will see you as a risky investment and might eventually reject your loan application.

Cash Flow

As stated earlier, your credit history matters a lot when a bank is to approve your loan request. While having a short credit history increases your chances of rejection, a long credit history isn’t always a savior too. Any financial incidents on your credit history that do not favor your business can force the bank to reject your application. One of the most important considerations is the cash flow of your business. When you have cash flow issues, you are at risk of receiving a “no” from the bank for your loan.

Your cash flow is a measure for the bank to know how easily you return the loan. If you are tight on cash flow, how will you manage the repayments? However, cash flow is one of the controllable factors for you. Find ways to increase your revenues and lower your expenses. Once you have the right balance, you can approach the bank for a loan.

The Debt

A mistake that small business owners often make is trying out too many places for loans. They will avoid going to the bank first but get loans from several other sources in the meantime. Once you have obtained your business funding from other sources, it makes sense to return it in time. Approaching the bank when you already have a lot of debt to pay is not advisable at all. Do keep in mind that the debt you or your business owes affects your credit score as well. In short, the bank does not even have to investigate to know your debt. An overview of your credit report can tell the story.

The Preparation

Sometimes, your business is doing fine, and your credit score is in good shape as well. However, what’s missing is a solid business plan and proper preparation for loan approval. If you haven’t already figured out, banks require you to present a lot of documents with your loan approval request. Here are only some of the documents you will have to present to the bank to get approval for your loan.

Income tax returns
Existing loan documents
Personal financial documents
Affiliations and ownership
Business lease documents
Financial statements of the business
You have to be exceptionally careful when these documents and presenting them to the bank. Any discrepancies can result in loan rejection.

Concentration of Customers

This one might come as a surprise to some, but a lot of banks consider this aspect of your business seriously. You must not forget that loans are banks’ investments. Businesses that approach the banks are their vehicles to multiply their money in the form of interest. If the bank senses that your business does not have the potential to expand, it can reject your loan request. Think of a mom and pop shop in a small town with a small population. If it only serves the people of that town and has no potential to grow further, a rejection is imminent.

In this particular case, even if the business has considerable profit margins, it relies on its regular customers for that. The bank might see it as a returnable loan but not as an investment opportunity.

Conclusion

The good news is that you have a lot of funding options as a small business owner. Today, banks are only one of the many options for you to fund your bank. You don’t necessarily have to apply for loans when you have crowdfunding platforms actively helping small business with their funding needs. If you are seeking a business loan from a bank, that’s fine. However, if the bank does not approve your request, it should not worry you much.