Tag Archives: Marcia Bagnall

Budgets in Tight Times

By Chemeketa SBDC

Marcia Bagnall, SBDC Director

Times are still tight, so are a business owner’s finances. You need to survive this downturn, but how? Now, even more than ever, you need to know your business.  And you need to determine what level of cash cushion you feel you need to maintain your solvency over a period of time.  As part of your analysis you should know the areas that are viable for cost containment and that could be targeted for streamlining.  Most likely you will cut expenses to increase profits allowing you to build the cushion you need for the long term.

You will need to develop an operating strategy for effecting changes.  One of the first things you need to do is to set a basic budget floor for the area(s) you will be cutting.  When you establish the basic budget, it is critical that you include an amount sufficient to meet all the needs of the department or operations covered.

If you operate machinery or equipment, be certain to budget adequate maintenance and accrue an amount to set aside in case new equipment is required.  Cutting too close to the edge could leave you out of production as a result of one major malfunction.

Travel and entertainment are an easy target for tough budget cuts.  But, for many companies, these costs are an absolute sales necessity  – your customers expect it and your competitors will be hot on your heels if you do not maintain these contacts. In many cases, the loss of business won’t be felt initially and you might feel that you saved money without any effect.  Take the time to create a budget that allows your company, through all its sales efforts, to keep up a high profile with your customers.

If you know that your administrative cost is way out of line, don’t just storm through and fire every third person to save money.  First, determine what work is essential and how many people it takes to accomplish those tasks.  What support do they need in terms of equipment and outside services?  Put a number to that to find your minimum floor.  But, that is not the level that your have to reach.  Always leave room above minimum service.  You will do your cutting on the margins above this operational level.  If you get down to the bare minimum, you leave very little in the way of real service and have no margin for error.  While you don’t need ten people doing the work of five, cutting back too far will mean if someone is out sick or resigns, important work may not get done.  Your intention is to be efficient, not at a critical edge with no margin for error.

When you begin a program of serious cost reductions, you should develop a target percentage for the costs and where you are going to focus for the reduction.  Spreading the cost cuts fairly across departments won’t ease the difficulty that managers have when budgets are cut, but it will make others feel that this is a group effort and not a punitive attack.


Working with Gen Y’s

By Chemeketa SBDC

Marcia Bagnall, Chemeketa SBDC Director

Are you starting to employ younger workers in your business? If so, you may be wondering who these young people are and how best to manage them. What you probably know for sure is they aren’t like you, but how can you turn that into an advantage?

The latest generation to join the workforce is the Next Generation, sometimes referred to as the Y-Generation (“Gen Y”) or “Echo Boomers.”  This group, born roughly between 1977 and 1997, is about 70 million strong. They are comfortable with technology and can create new trends overnight. They have short attention spans, but high social consciousness. They are the beneficiaries of “everyone gets a trophy” parenting and school systems. They seek meaning in the workplace and will give up financial and security rewards to get it.

So what’s an employer to do? Here are some smart strategies to turn the Gen-Y’s tendencies into a win-win situation for your business and for them.

  • Create feedback systems and work them regularly. Gen Y’s as a rule were raised with parenting techniques that were heavy on self-esteem. These young people believe in themselves, which can make them high performers. It can also make them high maintenance, as they crave continuous feedback and praise.
  • Allow for an open flow of communication, and respond quickly. Consider assigning the Gen-Y a mentor, which links him or her to a more experienced person and provides an additional avenue for feedback.
  • Lay out a plan of advancement (with a lot of small steps) to help them understand the realities of your workplace. Although they may expect a corner office and big salary right away, this won’t happen and they need to be clear on that (keep in mind the parenting their generation got praised someone just for showing up!) 
  • Discourage the use of a “control” style of management. This generation prefers to speak their minds and have input. A top-down, “my way or the highway” style doesn’t resonate with these young people. They’ll choose the highway every time.
  • Show them how their work makes a difference to your company, point out their contribution and its value. Gen-Yers seek meaning in what they do. This generation volunteers in their communities more than any other in American history. So capitalize on that by letting them know their work matters. You’ll benefit from their increased commitment to your business.
  • Harness their use of technology. Allow a Gen-Yer to show you how to build efficiencies into your workplace using technology (shorter meetings, more immediate communications, upgrades to your online marketing, etc.)
  • Offer flexibility. For Gen-Yers the line between work and home is blurred (thanks to technology) and they’re big believers in work-life balance. They’re also world champion multi-taskers. So allow for flexible work schedules and telecommute options. They’re high achievers; they’ll get the work done. And they’ll work harder if they get to choose how.

Tips for Naming Your Business

By Chemeketa SBDC

 Marcia Bagnall, Chemeketa SBDC Director

Thinking about starting a new business and need a name? Or perhaps you’re rebranding an existing business and the name needs a face lift. In either case, there are guidelines you should consider, and rules to follow. It’s an important decision, so give it plenty of thought.

First, go to www.filinginOregon.com (the Oregon Corporation Division website) and click on the “Business Name Search” link. Enter in the words, names, or phrases you are considering using. Is someone else already using them? Is your potential name really close to someone else’s name? You’ll need to make sure yours is different enough to avoid confusion, or you will not be able to register your business using that name.

Next, learn the rules for whether your business name is an Assumed Business Name or not. If you are a sole proprietor or a general partnership and not using only and exactly your own legal name(s) for the business, you need to register an assumed business name with the Business Registry.  There’s a nice lesson on this on the Corporation Division website (www.filinginoregon.com) that explains this well. 

Here are some tips for choosing names:

  • Remember your business name has one primary function –to identify your business to your customers. Choose a name that, at least partially, identifies what you sell. Why make your customers wonder who you are and what you do? You might think they’ll be curious and ask, but most of them won’t. They’ll go to a competitor instead.
  • The name you choose can be distinctive but it should also be descriptive (Food For Less, One Hour Photo, Coca Cola).  You’ll get very tired, very fast, of explaining what your business is about, so why not let your name (your brand) do it for you? Use your name as a calling card, isn’t that what a name is for?
  • Avoid names that are difficult to pronounce (why make your customer sound like an idiot?) or spell (why make your customer work hard to find you on the web or in the yellow pages?). Customers will go elsewhere if you’re not easily accessible.
  • Test your choices out on friends and family – can they tell what your business is about? Can they easily pronounce the name? If you get lots of negative feedback don’t ignore it! Make changes, you’ll be glad you did. Once you settle on a name it’s hard to change it, so get it right the first time.

Niche Marketing

By Chemeketa SBDC

Marcia Bagnall

little-marcia

A sound piece of advice for business owners is to focus on niche markets as a way to more effectively reach a target audience. But what exactly is niche marketing anyway? Niche marketing is about identifying a specialized customer and then delivering your product or service to them.  Once you identify the characteristics of a very specific group of ideal customers, you can then customize your business and service delivery to meet the needs of these customers. 

Niche marketing involves discovering the biggest frustration your customer faces when dealing with your industry, and then solving that problem for them. It has to do with specializing in a particular area of your industry. It is becoming an expert at a certain facet of your business. You offer something that no one else is offering, or you do it in a way no one else is doing it in your industry.

 

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Selling a Business Requires Planning

By Chemeketa SBDC

Marcia Bagnall, Chemeketa SBDC Director

 

little-marcia

 

If you’re considering selling your existing business you know that it’s not as simple as selling a car or other assets. There’s more involved than that, and much of that work centers around the books (financial statements).

When we attempt to sell a business, we are trying to sell something that has performed. Performance is best reflected through financial statements. Are yours in good enough shape to show a potential buyer?

Many business owners don’t know how to get ready for buyers. But it’s not that difficult if you plan carefully and give yourself enough time. Getting yourself ready to sell your business should begin at least a year in advance. You’ll need the time to implement these specific steps to enhance your business value and marketability:

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Protecting Your Trade Secrets

By Chemeketa SBDC

Marcia Bagnall

little-marcia

 

It’s common knowledge that patents, trademarks and copyrights are all forms of intellectual property that can be protected by the law. But there is another, less well understood category of intellectual property, and that’s trade secrets. What are they exactly and how can you protect yours?

Trade secrets can be recipes, procedures, customer lists, expansion plans; in short, anything giving you a leg up over the competition that you want to keep strictly to yourself. They are things that differentiate you from your competitors, and if leaked, could cause harm to your business.

Consider implementing these steps to protect your company.

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Diversifying Your Customer Base

By Chemeketa SBDC

Marcia Bagnall

little-marcia

Have you ever heard a business owner speak longingly of scoring a big client by saying “catching the elephant” or “reeling in the big one” or “landing the whale?” Big clients can mean more prestige, better connections, and bigger paychecks. But consider that relying on a single client for a large chunk of your revenue can have a flip side. You could be vulnerable, especially if you’ve neglected your other clients or hired more staff. 

A big client is wonderful when they’re there, but can create a lot of pain when they leave. And you can’t predict what that client might do, nor can you prevent the pressure of circumstances creating a situation where they have to leave you. This can be very problematic.

Experts often caution businesses not to rely too heavily on any one client too much. Tempting as it is, consider the following guidelines.

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Working At Home Scams

By Chemeketa SBDC

Marcia Bagnall, Chemeketa SBDC Director

little-marcia

 

Are you considering starting a home-based business?
Perhaps you need to take time out from your job to care for children or sick family members. Maybe you just want to get out of the rat race for awhile. There are plenty of decent opportunities to use your skills.

You may have skills that you can teach to others, like playing a musical instrument, training animals or working with plants. You may be an excellent handyman or mechanic. Technology makes it possible for you to be a call center agent, survey conductor or medical billing agent right from your own living room. There’s no shortage of possibilities.

But at the same time there are lots of bad ideas out there you need to stay away from. You’ve probably seen those ads that promise you will “make $1,500 a day stuffing envelopes” or “lose 20 pounds in your sleep tonight and your friends will line up to buy your secret formula!” Clearly those are scams, anyone would recognize this. But there are legitimate opportunities out there too, so how can you tell the difference?

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Simple Rules for Entrepreneurship

By Chemeketa SBDC

little-marciaMarcia Bagnall, SBDC Director

Why are some entrepreneurs wildly successful and others merely get by? What do these leaders know that the rest of us can learn? Well, it turns out there are some pretty simple rules to play by if you’re planning on thriving in today’s competitive business environment. Master these and you’ll be unstoppable.

1.    Find problems and solve them. Wherever there are customers with unmet needs there’s an opportunity for you to jump in. Don’t make the mistake of providing a solution to a problem that doesn’t exist, no one will buy it! Instead, focus on gaps, pain, needs and wants. This is where your best chances exist.

2.    Keep your focus on the customer. This is the person who matters most. Know everything you can about these folks, think about them all the time. They should drive everything you do. Every decision you make should be preceded by the question of whether this will benefit customers in some way. You work for your customer, your business is designed to help them in every way possible. Shift your focus off of your customer and you will lose your edge (and your business). Remember, your business exists because customers come to you with needs. Don’t greet them at the door with stuff they don’t want or need. You need to anticipate what they want so you can be ready when they show up.

3.    There are unlimited opportunities; you just need to keep your radar tuned to what’s missing for your customers. Your job is to seek out, and then solve customer problems. Concentrate on troubles that every customer has but no one else has solved yet. They’re everywhere. Find a way to provide a product or service cheaper, better, faster, or more conveniently. Create something totally new. Until everyone you know is completely satisfied all the time, there’s work to be done! This is where successful entrepreneurs live. Look for business opportunities everywhere. Develop an entrepreneurial mindset, and be continually open and curious about the needs not satisfied and problems not solved.

4.    Bootstrap as much as possible. Determine that you will invest your time, your energy and talent instead of your money to get started. Try to avoid using other people’s money as well. It takes a long time to get out from under debt, so try to avoid it in the first place. Many great fortunes were started by people with no money, resources or backing. They were started by individuals who came up with an idea and who then put their whole heart into producing a product or service that someone else would buy.


Small Business and Borrowed Startup Capital

By Chemeketa SBDC

little-marciaMarcia Bagnall

A common question here at the Small Business Development Center from our business owners: Should I borrow money to start my business?
And would doing so help or hurt their chances of success?

Here is the reality of starting a small business with borrowed money — this type of money is usually scarce, costs are relatively high and the competition is significant.  Small business loans are not simple to get because of the preparation that is required.  There is always a list of qualifications to meet, such as equity requirements, collateral, business plan, profit and cash flow projections, personal financial statements and what seems to be a ton of other loan application information.

If you take all of the people who would like a small business loan – most of them will not even apply because once they know all the requirements or won’t go to the trouble to try – few will succeed.  Of those that decide to apply for a new start-up loan, many of them will become discouraged because they didn’t realize it would take so much effort or find they do not have the minimum qualifications.

Even more important than the loan process is the debt you would put on your new business. Consider that the customers you seek to serve are currently getting their needs met elsewhere.  You want them to change their ways of buying from your competitor to start buying from you.  To do this, you have to spend money to get your business up and running, spend more on advertising and promotion to let them know of your very existence, and wait out the “start-up” time until they find you and the revenues start flowing.  So, you are spending more than your competitor and are taking in less revenue.

This is the picture without debt.  If you add debt, you now have the interest expense plus principle to pay.
It is difficult enough starting up a business without this burden.  The debt makes it more difficult not only because of the payments you have to make, but if you falter, you can potentially lose everything.  To get the debt in the first place, you typically have to pledge everything you have in your business—and probably your personal assets as well.

Try to start your business with as little borrowing as possible, and none if you can do it.
If you borrow most of the money the business needs (meaning you are providing little of it) your chances of success are much reduced.  Your chances of losing a great deal are substantial.  You are better advised to start as small as possible and let the business grow the cash flow that will allow your expansion, at least for the first couple of years.  Once established, the chances of getting a loan are greatly enhanced and the business is in a much stronger position to service the debt of an expansion loan.