Wednesday, July 31, 2013

How to Cut Down on Your Startup Costs

How to Cut Down on Your Startup Costs

Link to Small Business Trends

How to Cut Down on Your Startup Costs

Posted: 30 Jul 2013 04:00 PM PDT

cut startup costs

A snazzy office, the latest equipment, smart employees and the option to complete a project on your time, and perhaps at the beach – many new entrepreneurs dream big when they plan their first venture. The only problem is that a new business is much more about hard work, sincere efforts and reduction of costs than the way they picture it.

It is important that you pay attention to how much you spend when you begin a new business. Spend just a little above your means and your dreams could fizzle. You need to keep track of all expenses and cut down wherever and whenever possible.

You may not be able to cut down on certain expenses such as trade licenses, business permits or any other aspect that directly affects your business. But there are ways that you can reduce costs and still attain your dream.

Cut Startup Costs Down

Start From Home

A well-equipped office space may feature high on your wish list, but it is best to hold off for now. Buying, or even renting, an office requires a considerable investment, which you had better avoid until your business starts to make money.

Start your business from home. This saves overhead charges, which makes it easier for your venture to break even in the early years. Designate a space for this and treat it the way you would treat a corporate office. If the space is appropriate, you may meet your clients there. Or you may book an office space such as a conference room for particular days or weeks.

Don't Recruit Immediately

Starting a new business requires donning a number of hats and you have to handle different aspects of it at times. If you have a partner, he/she can lend a helping hand with the tasks.

While it is much easier to manage different tasks when you have a team of professionals, it also increases the costs. Wages can add to the startup costs quickly. If you are not comfortable doing something on your own, the smart thing to do is to outsource it to a professional. This way, you only pay for the work you cannot do on your own.

Rent Instead of Buy

If a moving business needs a heavy piece of machinery, but only for specific tasks that require its use for a few days in a month, a decision to buy it would be worthless. In such a situation, renting makes more sense.

The same applies to all new ventures. You can always keep off the purchase of big desks and ergonomic chairs for the present. Instead, you can rent furniture, fixtures and accessories for your home office and invest the money in something more fruitful. Moreover, this can also reduce your tax burden as leasing is deductible.

Get Free Advice

Knowledge and awareness of your industry is essential for any new entrepreneur. Connect and communicate with key people from your industry to keep yourself updated.

You can attend conferences, seminars and events. Get a mentor and use your social media network. Join online forums and keep track of what's happening in the industry. You can often get the best advice for free when you connect with the right people.

Ensure Best Value for Money

The cheapest option often doesn't guarantee the best value for your money. Don't opt for the cheapest supplies or outsourcing services. Pay equal attention to the quality and the cost to get the best value for your money.

Here's an example. You can get fancy stationery for your new business at a high price. Or you can get plain stationery for the lowest price. In the first case, your money is wasted. In the second, your business image becomes poor. The right thing to do is to get simple but good quality stationery at a reasonable price.

Use Existent Resources

You need not set up a separate infrastructure to begin a new business nowadays. You can tap into the resources that already exist. This can save a considerable amount of money.

If you plan to sell something online, you need not create a website with the option of online transactions as soon as you begin, though it is often a good idea to do so. You can choose to use existing platforms for online transactions temporarily. You may have to pay for it, but it is money well spend.

Don't waste your money on superfluous things that have little to no impact on your core business when first starting out. Instead, invest it in avenues that will benefit your endeavor in the long run.

Cut Startup Costs Down Photo via Shutterstock

The post How to Cut Down on Your Startup Costs appeared first on Small Business Trends.

Apple’s iTunes Reaches One Billion Podcast Subscriptions

Posted: 30 Jul 2013 01:30 PM PDT

apple itunes

Whether you create a podcast about your marketing expertise or your latest big product, there are apparently plenty of listeners out there.

Apple announced that it’s iTunes store had reached 1 billion podcast subscriptions recently and even created a special little page in the iTunes store commemorating the event (sign in to view it).

 

Those subscriptions are to a total of 250,000 different podcasts or shows and are recorded in more than 100 languages, PC World Reports. More than 8 million episodes combined have been published to the iTunes store to date.

Podcasts are free to download so neither the creator of the show nor Apple makes any money from the subscriptions. However, businesses long ago discovered the powerful role podcasts could play in establishing expertise and building a brand.

A New Podcasts App for the Mobile Age

Podcasts may be even more appealing with the increased popularity of mobile technology.

For example, Apple recently revamped the podcast app for iOS allowing iPhone users a better experience when browsing, dowloading and subscribing to postcasts.

The Next Web reports the new app has iCloud-synced stations that update automatically when new podcasts are published. This will make it easier for iPhone users to follow your show and know when most recent updates become available.

The new app lets users create playlists of their favorite podcasts and sync them across all their mobile devices.

This means fans or subscribers can now access your podcasts and your brand from where ever they are.

The post Apple’s iTunes Reaches One Billion Podcast Subscriptions appeared first on Small Business Trends.

The Island Approach: Which Are the Best Credit Cards for Small Business?

Posted: 30 Jul 2013 11:00 AM PDT

island approach

Major credit card issuers took small steps to improve their business credit card policies during 2013, ramping up their transparency and extending minor CARD Act protections to business-branded products. But Bank of America is still the only one that has forsworn arbitrary interest rate increases on existing balances. That means the 37% of small business owners who use credit cards for financing purposes each year will need to get a bit creative if they want to attain debt stability as well as the best combination of product terms possible.

You basically have two options. First of all, you could use a card like the Bank of America Cash Rewards for Business MasterCard, which offers 0% interest for 9 months in addition to 3% cash back on purchases made at office supply stores and gas stations, 2% cash back at restaurants and 1% on everything else. Alternatively, you could implement the Island Approach.

Credit Cards for Small Business: The Island Approach

The Island Approach to credit card use is a strategy that entails using separate accounts for different types of transactions and needs. In general, this might involve a small business owner using a base rewards card for everyday spending, a 0% general-consumer credit card for financing stability, and perhaps a card offering an attractive initial bonus in order to cushion your coffers.

More specifically and with currently available offers in mind, the Island Approach could look something like this:

Financing Big-Ticket Purchases

Citi Diamond Rewards Card: This card offers 0% on purchases as well as balance transfers for 18 months and does not charge an annual fee. It does, however, have a 3% balance transfer fee, so it's best used to finance upcoming big-ticket purchases.

Lowering the Cost of Existing Debt

Slate Card from Chase: A free balance transfer credit card, Slate offers 0% interest on transferred debt for the first 15 months and does not charge either an annual fee or a balance transfer fee. For the average consumer with about $6,500 in credit card debt, transferring that balance to the Slate Card from a card with a 17% interest rate and paying it down within 24 months would be worth more than $1,000 in avoided finance charges.

Earning Everyday Rewards

Capital One Spark Cash for Business: This card offers a full 2% cash back on all purchases, with no rotating spending categories, earnings limits, or other caveats. You also stand to get a $100 initial rewards bonus for spending at least $1,000 during the first three months and another $50 for signing up an employee as an authorized user. There is no annual fee during the first year ($59 beginning in year two).

Supplemental Rewards Bonuses

Ink Plus Business Card: The 50,000 bonus points you'll get from Chase for spending at least $5,000 during the first three months are redeemable for a $500 statement credit or $625 in travel booked through the Ultimate Rewards program. The Ink Plus Card also offers 5 points per dollar on up to $50,000 in annual office supply and telecom purchases as well as 2 points per dollar on $50,000 in annual gas and hotel expenses. There is no annual fee during the first year ($95 thereafter).

Club Carlson Business Rewards Card: This card offers up to 85,000 bonus points – 50,000 after your first purchase and 35,000 for charging $2,500 during the first 90 days. Those points are redeemable for up to 18 free nights at hotel chains like Radisson and Country Inn & Suites.

While any small business would benefit from 0% rates and hundreds of dollars in rewards bounties, the best offers are only available to people with above-average personal credit standing. Creditors consider small businesses to be extensions of their owners and evaluate the personal finances of small business credit card applicants as a result.

Should you therefore need to do a bit of credit building prior to revamping your suite of small business spending tools, get a credit card with no annual fee. It will report information to the major credit bureaus on a monthly basis and won't cause you to waste money on service charges as you climb back to good credit.

Like paying down debt or laying out a budget, credit building is one of those things that isn't terribly easy or exciting. But it's important, and if you take care of it now, you, your wallet and your company will all be happy later.

Credit Card Photo via Shutterstock

The post The Island Approach: Which Are the Best Credit Cards for Small Business? appeared first on Small Business Trends.

Starbucks Sees 10 Percent Increase in U.S. Mobile Sales

Posted: 30 Jul 2013 08:00 AM PDT

starbucks sales

If you’re thinking about enabling mobile payments for your business, Starbucks is leading the way. The coffee seller and cafe chain says 10 percent of sales at U.S. locations were made from a mobile device last quarter, TechCrunch reports.

The jump in mobile sales not only shows a changing preference among Starbucks’ customers. It also helped spur one of the coffee giant’s most successful quarters and the best third quarter in Starbucks’ 42 year history, the company said.

Ahead of the Trend

Mobile may not be your customer’s preferred method of payment now, but that’s likely to change in the near future. In a report issued by Forrester early this year, analyst Denée Carrington projected mobile payments will increase dramatically over the next five years.

Carrington predicts mobile payments will balloon to $90 billion by 2017, up from $12.8 billion spent in 2012.

More Mobile Options, More Customers

Meanwhile, Starbucks isn’t stopping with mobile payments in its efforts to connect with a growing customer base of smartphone users.

The cafe chain is partnering with Powermat in a project that will allow you to recharge your smartphone while sipping that latte or nursing that Marble Mocha Macchiato at your favorite Starbucks location.

Following a test run at 17 Boston locations, Starbucks is now rolling out the new service at select Silicon Valley locations. Customers can simply drop their smartphones onto a wireless charging spot and power up, Engadget reports.

How can your small business start targeting mobile users more effectively?

Starbucks Photo via Shutterstock

The post Starbucks Sees 10 Percent Increase in U.S. Mobile Sales appeared first on Small Business Trends.

Big Questions Every Business Plan Should Answer

Posted: 30 Jul 2013 05:00 AM PDT

business plan questions

Every small business needs a business plan. It’s an essential document that’s not just for start-ups and expansions – because a great business plan can serve as a road map for your company and help you make the right adjustments when things go wrong. Your business plan should be a living, breathing portfolio that evolves along with your company.

With that said, a business plan is still one of the most vital tools for a start-up or expansion, because this is when your document will convey the viability and potential of your idea (or existing business) to other people – usually people you’re trying to convince to invest their hard-earned cash in your company.

How can you do that?

By making sure your business plan answers the right questions. Below are six crucial points that you should address with your business plan.

Business Plan Questions to Answer

Is Your Product or Service Innovative?

This does not mean the core offerings of your company have to be completely different from anything that’s out there on the market now. In fact, having what amounts to an alien concept can be detrimental to a business pitch, because you’ll have no foundation to compare your company with.

Instead, your business plan should highlight what is different, exciting, or inspiring about your product or service. An element of innovation will underline the viability of your concept, and help to persuade investors that you can succeed.

Will People Pay for What You’ve Got?

As a business owner, you can’t just put in your 40 hours and cash a paycheck at the end of the week. Your product or service needs the ability to earn its keep, so that eventually it’s turning enough of a profit to cover the overhead costs of your business, the salaries of any employees you have or plan to hire, and your own cost of living.

Your business plan should outline the potential revenue for your company by showing how much you plan to charge for your products or services, and why people will pay that amount for what you’re offering. This piece of information shows investors that you know the real worth of your company, and you’re prepared to avoid collapse and bankruptcy with realistic projections.

Is Your Target Industry Growing?

Pitching a business that’s going to "revitalize" an industry is a tough sell – mostly because it takes more than one company to save a sinking ship.

Investors like to see new or expanding businesses in industries that are either stable or growing because it presents them with a better chance that their investment will pay off.

What Have You Got That Your Competitors Don’t?

The competitive edge is more than just a corporate buzzword. A great business plan articulates the differences between your products or services and similar offerings from your competitors. You should be able to describe why people will choose your widget over the next one in line, and therefore why your business will be profitable once you’re established.

By taking the time to describe your competitive advantage, you’re also giving yourself a foundation for a solid marketing plan.

What Are Your Staffing Plans?

Few companies can remain viable forever as sole entrepreneur operations. Eventually, you’ll need to hire people as your company grows. Investors want to know that you have smart, realistic staffing plans in place for your start-up or expansion.

You might start with assigning multiple roles to yourself and/or your existing staff, and then outline the milestones that will necessitate hiring new people, and offloading roles to them.

It’s important to have your business plan show that you understand the need for management and collaboration – and that you have good timing.

Are Your Goals Rooted in Reality?

You may be completely confident that your business is going to make a million dollars by the end of the first year, but that’s not something you’ll want to say to investors. Your business plan is a place for reasonable goals, with carefully considered, even conservative projections.

One of the best rules for customer service is to under-promise and over-deliver, and your business plan should follow that rule. Use it to outline a business forecast that you can reasonably expect to meet, and then wow your investors when your (private) wild speculations come to pass.

If they don’t, you’ll at least have kept up with the promises your business plan initially made.

Business Plan Photo via Shutterstock

The post Big Questions Every Business Plan Should Answer appeared first on Small Business Trends.
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