Small Business Development Center
At Chemeketa Center for Business & Industry
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Monthly Archives: November 2011

Year-End Numbers Can Aid Plans

By Chemeketa SBDC

Preparing for the end-of-year wrap-up (or frankly any time, but why not now?) is a great time to take stock of your business. Naturally, you want to do everything you possibly can to ensure the survival and growth of your company. One of the greatest skills you bring to the table is the understanding, tracking, and use of numbers to manage your business.

Although you may feel you aren’t good at math, or don’t know accounting, or can’t figure out the computer — you are probably selling yourself short. Anybody can work with numbers and the kind of number tracking you need to do here is not magic. And you are the expert on your business. Nobody else is as motivated or informed as you are to get the numbers working for your business.

First, get a financial snapshot of your business.

This should be simple. It is meant to be easy to prepare and able to be digested by you in no more than five minutes. The point is to get the quickest possible handle on key aspects of your operations. You may decide that a monthly snapshot is adequate; some owners want to see this on a weekly basis. It is used to determine your cash reserves, your accounts receivable status, inventory levels and to compare trends. The financial snapshot should include the following categories: Current Assets, Inventory, Current Liabilities, Fixed Monthly Expenses, Loans Outstanding, Monthly Sales to date, and Yearly Sales to date.

Second, cash flow statements that are regularly updated.

Projecting cash flow is one of the most important ways you can use numbers to manage and grow your business. As you begin this exercise, keep an Assumptions Sheet on which you list all the assumptions you used to develop your numbers. This way the numbers will have meaning and you will know how you got them.

Next, project your monthly sales for a full year. From these projections, deduct your monthly expenses. You can divide expenses between fixed (same every month) and variable (those that change with volume of sales). The balance is the monthly operations. To that you will add the monthly cumulative cash position (it looks very much like your checkbook) adding last month’s balance and determining the next month’s beginning balance. To this projected cash flow, you will compare actual numbers and determine where you stand in relationship to your plan.

Third, conduct a cost analysis of your product/service.

Understanding the cost of selling your product/service is critical to understanding the cash position of your business. There are many different opinions of what should go into cost of goods sold, and each business will vary — the important thing is to be consistent and to include those costs that are directly related to the expense of selling. What is “left over” is the contribution margin to pay the fixed cost of doing business, and after that your profit.

Facebook Boot Camp

By Chemeketa SBDC

Small business owners

Are you ready to take your Facebook skills to the next level?

Learn how to grow your fanbase and keep them engaged! Start generating revenue using this vital business tool.

Choose one from the three levels — or take all three!


Ideal for business owners who have created a Facebook account but are not using it and/or are overwhelmed by Facebook.
Date/Time: Tuesday, February 26, 10:30am – 12pm

  • How Facebook can help your business
  • Facebook terminology and getting around on Facebook
  • The difference between your wall and your news feed
  • What is a business page and how to create it


Ideal for business owners who have a Facebook personal profile and a business page and want to upgrade to using Facebook more effectively to generate goodwill and more fans.
Date/Time: Tuesday, February 26, 12:30 – 2pm

  • How often to post – finding a balance
  • Increase the number of your followers and “likes”
  • Creating meaningful content
  • How and why to insert a Facebook link on your site


Ideal for business owners who are comfortable with Facebook and want to benefit from all the extra features Facebook offers.
Date/Time: Tuesday, February 26, 2- 3:30pm

  • Refining your Facebook strategy
  • Analyzing your traffic with Facebook Insights
  • Customizing and branding your business page
  • Using Facebook ads
  • Plenty of time for your specific questions


Taught by Jennifer Hofmann, owner of Inspired Home Office and advisor at Chemeketa SBDC.

This is not a sit-and-stare series of classes. Interaction is encouraged and there is plenty of time for your questions. Since it’s taught in a state-of-the-art computer lab, you’ll also try out numerous hands-on activities and apply the learning in real time.

  • “Jennifer is a very good listener – responded to everyone, included everyone in discussion & participation.”
  • “Excellent presentation! The comfortable environment was conductive to learning & questions.”
  • “This was the best class that I have attended at SBDC. It got me going and I’m ready to use the information.”
  • “Based on what I learned in this class, I will make major changes to my Facebook page – it will be better because of this class – thank you!”


3rd floor of the Chemeketa Center for Business & Industry (626 High Street NE in downtown Salem). Free parking available at the Marion Parkade (map).


$45 for one level or $125 for all three

Space is limited to 22 participants so sign up today.

Next step:

Contact SBDC to register your spot: 503.399.5088 or email us at

Running a Business is a Project

By Chemeketa SBDC

Running a business can be a monumental task and, taken in its entirety, can sometimes seem overwhelming. One of the greatest services we may perform at the Small Business Development Center is helping an owner and/or manager step back and see the pieces of the puzzle that make up the entire organization. To tackle any given part of the organizational needs may best be viewed as a project. Managing a project (or many projects) may give you the perspective you need to solve one issue at a time.

So, how do you manage a project? Break it into several steps. Identify the problem (issue, opportunity, etc.) Then design the solution. Next, implement your plan. And finally, evaluate the results. By the way, this last step is often left out and all your efforts may or may not be effective. For this article, let’s concentrate on steps 1 and 2 – Identification and Design. Next week we’ll look at Implementation and Evaluation.

The first one is to analyze the situation. What is the problem, issue, opportunity? Define it as clearly as you can – the more clarity here, the easier the design, implementation and evaluation will be. For example, if you are seeing a decreasing cash balance in the bank you may identify the project as “increasing the number of customers”. If that is the solution then your efforts (project plan) will be focused on getting more people into the business or it could be about increasing sales to existing customers. But (and a big but), if loss of cash is really about having a miscalculation in your pricing strategy, bring in more customers will simply break you faster than the current rate. This is the most critical part of project planning. Identify the real issue.

Next, design the solution. This includes the scope of the project, the budget required, the return on investment expected, the activities, the timeline and specifically, who will be responsible for each outcome. This cannot be done in your head. This must be documented, consulted and updated on a regular basis. Again, this is a step that you cannot skip. If you don’t know where you are going – you are not going to know when you get there. In our example, if your project is to “increase the number of customers,” you need to know by how many? Compared to what? In what given time period? How much will it cost? What does that translate into as a cost per customer? (If it costs you $100 to recruit each new customer and their average sale is $10 – this plan makes no sense.) How will you attract the customers? What tools will you use and when?

This is the beginning of project management. Before you begin, you need a plan. If you jump into the water without knowing how far it is across – you may or may not make it, you may or may not expend a lot of energy (and resources) without an achievable goal. Next week we will consider implementing your project plan.

Consider Implications of Discount Vouchers

By Chemeketa SBDC

As a business owner, you’ve probably considered signing up with Groupon or one of the many similar “deal of the day” online discount voucher services out there. Consumers get deep discounts, often 50 percent or more, and merchants get heightened public awareness, increased customer traffic and new potential repeat customers. This can be an excellent marketing and sales tool for your business, but think through the implications of all this before making a decision. Here are three major areas to consider.

1. Customers: What kind of customers will this deal bring you? The hope of course, is that the folks who come in with the discount coupon in hand will return later (and frequently) as full-paying customers. But be careful about this assumption. Oftentimes, these are price-conscious coupon-waving customers. They look for deals and don’t spend money on extras, nor do they return without a price incentive to do so. Be careful whom you invite to your party.

And once you get them in the first time, how will you get these folks to return to shop with you in the future? Remember that these deals reward people up front for coming to the door. And that’s fine the first time, but what happens after that? Develop a reward system (like a punch card, or additional coupons) to keep them coming back. After all, that’s what you really want from them.

If they come back, how will you recognize them? You’ll want to track whether your Groupon initiative was successful in getting you repeat business, so give them a “counter” like an additional coupon, a discount for mentioning that they were there before because of the deal, or something else. You’ll need to assess your return on investment for this campaign, so build in ways up front to measure success.

2. Products and services: Which product or service will you offer, and how will this make sense for your business model? A couple of right answers here would be offering something that you have excess capacity of in the first place, or want to highlight as a loss leader for the rest of your line. Ask yourself what offering your good or service in this type of deal says about you in the marketplace. Ask yourself whether what you offer makes financial sense now and in the near future. Think through the implications for inventory levels, margins and product mix.

3. Capacity issues: Do you have the staffing, time and resources to be able to handle a large influx of business? You’ll need to pay the same attention to these new, low-dollar clients as you do to your regular customer base. What will that look like on a daily basis for the duration of the campaign? Lay in plans in advance to provide high levels of service to this wave of new customers.