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What is Financial Modeling and Why Should Your Small Business Use It?

Planning for the future of your small business is an important part of success. Financial modeling takes different shapes, but basically, it’s about plugging different numbers and scenarios into a formula very often on an excel sheet and seeing the effect they have. Financial Modeling in Action Small Business Trends spoke with various business experts about this useful tool and how it works for small business. Healy Jones from Kruze Consulting clarified how these tools can help a startup get rolling or an established business move forward when they are considering expansion. Understanding Costs and Profits “A well built financial model will help a business owner understand the costs and profits from their management decisions. What will it  cost to open a new location, hire a new employee, and how does that impact the bottom line?” he says. He went on to say that a good financial model can answer questions like whether your small business should buy a new piece of equipment or pay down debt too. “These can even tell businesses they have enough customer service people to take on the number of customers they want to next year.” Using Real World Starting Points Although you can pick some numbers out of the air and plug them in (what happens if we price our widgets at $400 dollars and sell 6000?) more accurate results come with more real world starting points. That’s why using financial statements and market research will give you more accurate results. It’s even a good idea to consider a professional consultant to get an objective base to start from. Daniel Feiman from BuildItBackwards.com explains how to use  base line once you’ve put one together. Establishing Extreme Outcomes “Frequently you want to establish the most extreme possible outcomes by modeling the best and worst case, then anything else that happens somewhere in between,” he says. You can get a bunch of different scenarios by changing the variables which can be factors like the size of your target market, price per unit (which can even include extra selling costs like transportation) and estimated profit. One of…

What is Kanban and How Can it Benefit Your Business?

Although digital technology has simplified many of the ways we work, it has also introduced complexities in the workflow of day to day operations. Managing these complexities effectively was one of the many reasons software developers first started using Kanban. Today Kanban is used by everyone from freelancers to small businesses and global enterprises around the world. What is Kanban? The History Kanban was developed by a Toyota industrial engineer named Taiichi Ohno in the 1940s to remove the bottlenecks in the manufacturing process. He was in part inspired by the way supermarkets handled their inventory on their shelves. Ohno translated what supermarkets did to move inventory by making the manufacturing process at Toyota match the consumption of raw materials and the output or inventory levels. Kanban, which means sign/bill-board in Japanese was applied by using cards to show the manufacturing process on the factory floor. By simply looking at the cards, the warehouse was able to replenish raw materials before it ran out so the manufacturing could keep going. The warehouse also used the system to ensure they didn’t run out of materials, which translated to an overall more productive company. Simply put Kanban uses visual cues to indicate the stage of any process. It can be anything from your personal agenda for the month to a project with teams of hundreds of people scattered around the world. Using Kanban Kanban has a simple structure of three columns tagged with To-Do, Doing, and Done. But don’t let the simplicity fool you because it is highly flexible and it can be adapted to address any size project.   You can create more columns and assign different tags for them to suit your organization or a particular project. However, it is important to keep in mind the six principles of Kanban. They are: Visualization – Make every aspect of the project visible. Hiding slows down the process and defeats the purpose of using the system. Limiting work in progress – Limit the workflow in each stage of the work-in-progress to avoid bottlenecks. Flow management – Monitor and report each state in the…

What is Visual Email and What are the Benefits for your Business?

In addition to saving you money, one of the most compelling reasons to switch to VoIP (Voice over Internet Protocol) phone service is that it can provide your business with a wide range of features that a traditional phone system simply can’t offer. Many of these features, such as visual voicemail, work by utilizing the data from your phone calls in new ways — opening up a world of possibilities. Of these features, visual voicemail is one of the most useful. When it’s activated, your voicemail messages will be automatically transcribed from audio files into text so that you can access them just as you would your email. Though simple in concept, visual voicemail contains significant potential to improve business communications – but how? The Benefits of Visual Voicemail Take a closer look to see how visual voicemail can save time, streamline workflows, and more. Increase productivity With visual voicemail, you no longer have to dedicate time to listening to voicemails or taking notes while you listen. You’ll spend less time by reading instead of listening, and you can see the message in the same place as your emails, chats, and other communications. Access messages from any location When voicemails in your business voicemail inbox are transcribed and turned into emails, you don’t have to be at your desk phone to keep in touch. Visual voicemail allows you to check your voice messages consistently, no matter where you are. Even when you’re in a situation in which you can’t pick up the phone, you can be on the go and still stay in touch. Maintain your privacy This is a great reason to use visual voicemail. If you need to listen to a time-sensitive message containing potentially confidential information, you don’t want to be worried about someone else overhearing. Use visual voicemail to keep your private details private. Forward messages with ease If you receive a message by mistake that wasn’t meant for you, you can fix it easily with visual voicemail. Because this feature turns voice messages into text, you can simply forward the message along to the correct party as you…

What is a Microloan and Where Can You Get One for Your Small Business?

Microloans are small loans which are issued to businesses by individuals opposed to credit unions or banks. The concept of microcredit originated in the developing world, as a means of helping people in smaller economics have the ability to launch their own business. Microlending subsequently took off around the world, and today, small business microloans are an effective way to lend entrepreneurs and small businesses in the U.S. with the funds they need to start and develop their business. General Terms of Microloans The maximum amount a microloan will typically lend is up to $35,000. However, in some instances, lenders will lend up to $50,000. The average amount microloans lend is around $10,000.  Businesses can use microloans to borrow as little as $500, making these types of loans a good option for small businesses needing to get their hands on smaller funds. One of the key attractions of a microloan is that they are generally easier to qualify for than a traditional small business loan. Specific eligibility criteria vary from lender to lender, and can be influenced by the type of industry the business operates in. Rather than being solely about credit scores, microloans work more closely with the small business owner applying for the loan, to find out about the business and its goals and objectives. The lender uses such information to determine whether they will lend the applicant the funds. The maximum repayment terms for small business microloans is generally six years, giving small businesses sufficient time to pay back the loan whilst they get their business up and running and make it profitable. Why Small Businesses Might Need a Microloan This type of loan is usually borrowed by a startup to help them fund the items required to get the venture up and running, such as equipment, the lease of an office, or employees’ salaries. Microloans are also sometimes used to provide small businesses with working capital to enable them to manage cash flow more proficiently, such as to cover outgoings as they wait for invoices to be paid, to develop a comprehensive marketing program, or to stock up…

What is the SBA 7(a) Loan Program and How Can It Help Your Business?

The 7(a) loan program is the SBA’s most popular financing program. It provides working capital for small businesses that need working capital of up to $5 million. It’s also a guaranteed loan program. So essentially, small businesses work with traditional lenders, but the money is guaranteed by the SBA in order to support small business growth. Here are some of the details about the program so you can determine if it’s right for you. What Is It? Essentially, it’s a guaranteed loan program that’s made to help more small businesses get access to funding. Robert Harrow, head of credit and loans at ValuePenguin, explained in a phone interview with Small Business Trends, “A great way of thinking about it is that 7(a) loans are for small businesses that would normally be a “maybe” from a bank. They’re not an immediate no. They meet all the minimum requirements. But this program helps to fill the gap for banks that are still on the fence about certain candidates to promote them and help them get funding.” Who Is Eligible? In order to qualify for the 7(a) loan program, you must fall within the SBA’s size standards, which vary by industry. You must also operate a for-profit business. It’s not restricted by industry, but you do have to try to use other types of financial resources, like personal equity, before applying for a loan. What Can You Use 7(a) Money For? You also need to have a specific purpose in mind for the funds you request. This can include money to fund startup costs, purchase equipment, purchase land, repair existing capital, fund growth opportunities, refinance debt, or purchase supplies. How Much Can You Get Under a 7(a)? Qualified small businesses can borrow up to $5 million. There is no minimum amount. How Long Do I Get to Repay a 7(a) Loan? The term of the loan will depend on your agreement with a specific SBA-approved lender. However, the terms are normally between five and ten years. What’s the Interest Rate? Again, the exact number will depend on the specific lender you work with,…

What is Hive and How Can it Help Your Small Business?

Hive is a productivity platform designed to help small businesses work at their best. This powerful and intuitive project management software allows small businesses to streamline their work, track time with greater efficiency and leverage data to help identify inefficiencies. Similar to Slack, Asana, TopTracker and the host of productivity tools available for small businesses, Hive is a valuable communication tool giving teams greater control over projects and tasks. If you run a small business and are looking for a management tool to give your business’s productivity a boost, take a look at what exactly Hive is and how it can help your small business. Hive Productivity Platform Features This intuitive productivity platform comes with a myriad of features to supercharge the productivity of your small business. The tool is designed to help your team plan projects with greater proficiency with: Flexible Projects where you can organize tasks in a gantt chart, Kanban board, or calendar, Multiple Views where you can access projects by status, team members, or assigned labels, Action Templates where you can plan and repeat tasks easily. Hive helps you manage projects and tasks more efficiently with the following features: Action Cards allow you to access the information needed to complete a task with ease, Action List allows you to create personal to-do lists and see what you need to complete daily, Hive Forms enable you to collect the important information required on each project. Hive makes communication between team members easier and quicker with these features: Chat allows you to have conversations with individuals or groups, File Sharing means you can streamline your work by connecting your Dropbox, Google Drive, One Drive or Box account directly to Hive, External Users enables you to invite partners outside your business such as contractors or clients to collaborate on a single project. This comprehensive productivity platform also allows you to monitor data, so you can make valuable changes and predictions related to tasks and productivity with the following features: Hive Analytics is an interaction dashboard providing actionable insights to productivity, Predictive Alerts are real-time notifications about anomalies in your…

What is a Disruptor in Chief and Why Does Your Small Business Need One?

If you want your small business to grow and thrive, you’ll need to embrace change. If your business is fairly established, then change can represent a pretty big risk making some business owners uneasy. But failure to change can get your left behind, as plenty of retail store owners, travel agents and newspaper publishers can attest to. In order to find opportunities for change and growth, you might consider designating a specific team member as you “Disrupter in Chief.” Michael Haddon, CEO at business software company Kradle, said in an email interview with Small Business Trends, “A Disrupter in Chief (DC) is a stakeholder in a business who inspires and supports positive change by challenging the status quo.” Why You Might Need a Disruptor in Chief Haddon also shared some insights on why this position can be so beneficial for small businesses. Here are the top reasons why you should consider adding a disrupter in chief to your team. You Need to Change, But Are Afraid to Do So Change is essential for any growing business. But it also represents a significant amount of risk. So many entrepreneurs simply hope to grow without taking that necessary risk that goes along with it. Haddon says, “As businesses evolve, often the biggest hurdle to future success is an unwillingness to change – or the desire to keep doing things the same way as they have always been done. As an example, based on research we commissioned in 2018 (a comprehensive survey of 700 small to medium enterprises (SMEs) across USA, UK and Australia), we found that 76% of businesses in the US would like to grow however only 27% of those same businesses anticipated change in the next 12 months. A DinC embodies the 27% of businesses which recognize that in order to grow, change must occur.” You Need Someone to be Proactive in  Making Change Happen Even if you’re open to change, you might not be able to put enough focus on looking out for those opportunities while you’re busy running all of the other aspects of your business. A disruptor…

What is Slack Actions and How Can It Help Your Business?

The integration of apps within Slack are becoming more intuitive thanks to the new tool it just launched called Actions. Any Slack message can now be turned into a follow-up or next step using Jira, Bitbucket, Asana, Zendesk, HubSpot, and more without leaving Slack. Introducing Slack Actions The goal for Slack is to be a hub for the way people within an organization connect, communicate and transfer work-related content. Actions will give developers and the more than 1,500 applications, bots and workplace services within the Slack App Directory the opportunity to improve their functionality by connecting users even more. For the many small businesses who have integrated Slack into their workflow, doing more within the app means being more efficient. And because the workforce of even one single company can come from different parts of the world, everyone is looking for a comprehensive solution. Slack Platform general manager Brian Elliott explained the need to address this very point. Elliott told VentureBeat, “The world has changed dramatically. Users have choice in the enterprise space as well, and they’ll vote with their actions in terms of what they want, so what we’re building is the ability for these systems to interoperate with each other because it’s what the user wants.” Interoperability On the official Slack blog, the company shares examples of this interoperability with other apps. Specifically, interoperability with project management platform Asana lets your team receive Asana updates, take action on those updates and even translate Slack messages into tasks or comments in Asana. So you can create Asana tasks and add details like due date, project specifics and the person responsible for completion. You can also leave comments that stay attached to each task and all of this can be done without leaving Slack. Integration with inbound marketing and sales platform HubSpot gives you the ability to use Slack messages to create tasks in HubSpot and connect them with a specific company, contact or deal. The company says this integration increases the collaboration possible within sales teams to help close sales. Finally, interoperability with customer service platform Zendesk lets your…

What is Mix and How Do I Use it for My Business?

On June 30, 2018, StumbleUpon is moving to Mix. And the new platform has a few features that might be of interest to small business owners and entrepreneurs. Similar to StumbleUpon, the social network site that helps users discover unique and interesting things across the web, Mix provides a new way to discover and save people’s favorite things on the internet. What is Mix? Mix is created and provided by the makers of StumbleUpon. Like StumbleUpon, Mix is part of the Expa family. Expa works with proven founders to develop and launch new companies. Expa was founded by Garret Camp, co-founder of Uber and StumbleUpon. Built upon the legacy of StumbleUpon, Mix enables you to curate and share the best of the internet. The platform learns what you love browsing and searching for across the web, to show you even more of what you are interested in. So entrepreneurs and small business owners can use this site either as a research tool to learn more about their industry and passions, as a networking tool to connect with partners and customers who share their interests or as another way of sharing their content with a specific target audience. From articles and images to videos and music, you can save anything from anywhere on Mix. As long as it’s on the internet, you can add your favorite things to Mix. The social media platform enables you to delve deeper into new topics and explore interests with greater comprehension. Rather than being merely a source for breaking news, Mix is aimed at taking its users deeper into the things that interest and matter to them, helping them learn more about their favorite topics and discover new and interesting things. On this interactive and engaging online discovery site, you can share what you find with other users who have similar interests. How Do You Use Mix? You need to set up an account with Mix to be able to start using the site. You can set up a Mix profile with a StumbleUpon, Facebook, Twitter or Google account. When setting up on Mix, you’ll…

What is Business FOMO and How Do You Avoid It?

You’ve probably heard of the saying FOMO before. It’s the fear of missing out on experiences when you see other people doing them. FOMO can happen in your personal life, and it’s a real phenomenon in business as well. It seems like every day there’s a new business fad that’s being touted as the next big thing to make you a gazillion dollars. Pivoting, growing and experimenting is good for business. Pursuing every fad haphazardly because you don’t want to miss out on the fun can be terrible for business. A business grows out of consistency and switching your approach to keep up with trends will pull you in all different directions. Here are some ways I’m working on overcoming business FOMO: How to Avoid Business FOMO Take Social Media Fasts I take social media breaks for my personal life and business life. Social media fasts can be helpful if you’re working on a big project or idea. It limits how much outside influence you’re getting that can impact your work. Looking at competitors for market research at the beginning is necessary. But afterward, you want complete tunnel vision when you’re working on a project like a book, coaching program or course. Create With the Customer in Mind Listen to your customer and shut everything else out when you feel pressure to follow the crowd. What is working for some business owners may not work for you. You can miss out on opportunities to best serve your customer when you’re looking at other business owners for direction. For example, if your audience loves reading your blog and they tell you they’re interested in a book from you, you should write a book. But you could hop online and see that business owners are having huge success with courses and decide to do a course instead. Would that make sense for your business? Would it be well received by your audience? Maybe or maybe not. Don’t create something because of FOMO. Create it because it’s right for your customer. Commit to Seeing Things Through Recognize if you have problems with seeing things through because you’re…

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