Connect with us

Uncategorized

Save on your Franchise Start-Up Costs

Entrepreneur

Published

on

14164,14062,13988|676-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/h/?a=676&z=789&title=AutoCrew,647-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/h/?a=647&z=765&title=Oneserv,711-logo.jpg;http://franchisedirectory.entrepreneurmag.co.za/h/?a=711&z=822&title=Silverline+Group,654-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/h/?a=654&z=768&title=ACDC,709-logo.png;http://franchisedirectory.entrepreneurmag.co.za/h/?a=709&z=820&title=Fibre+Clean,314-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/minuteman-press.aspx,677-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/h/?a=677&z=788&title=Pizza+Perfect,388-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/braza.aspx,454-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/butterfield.aspx,670-logo.gif;http://franchisedirectory.entrepreneurmag.co.za/h/?a=670&z=783&title=Col%E2%80%99Cacchio+Pizzeria|Nedbank-LB-1-728x90_A.GIF|Franchise-House-Ad.GIF|http://www.facebook.com/entrepreneur.mag.SA?sk=app_112493455447504,Join us on Facebook to receive regular updates. Click here and click “Like”

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

Uncategorized

Simple Tips For The Small Business Owner To Manage Cash Resources Efficiently

How to manage the funding of the operational and trading needs of your business.

Published

on

cash-flow-management

The entrepreneur needs to know what is happening in his bank account at all times

At the time of launching the business and whilst preparing the annual budget, the funding required for the various parts of the business should have been determined.

This would have included the long- term funding of assets such as computers, plant and equipment, buildings etc. which, if funded, are normally paid off on a once a month basis.

At the same time, the payment arrangements for the operational or trading side of the business will have been put in place. This could be by way of an overdraft or be self-funded.

It is an essential part of the business owners’ duties, to ensure that the business is operating within these funding constraints.

Related: Great Email Marketing Tools For Small Business

It should be noted that in most cases where funding has been obtained the business owner would have signed personal surety so should the business fail he or she would be liable to make good any such debt.

How to manage the funding of the operational and trading needs of your business

Operational Cash Flows

These are the revenues received less the operating expenses incurred in order to achieve those revenues. The level of revenues and expenses should have been determined in the budget and that budget forms the guideline as to what kind of profits we should be achieving.

We thus need to constantly monitor:

1. Sales

Sales are the lifeblood of any business. Use the budget to determine what your daily sales are going to be and check daily. The entrepreneur must also be aware of the extent of cash sales to credit sales.

2. Gross margin

This is the difference between the selling price and the cost of the item sold and must be high enough to cover the overhead expenses the business incurs monthly.

3. Expenses

There are 2 elements here, one being the cost of sales and then the expenses such as salaries, rent, stationery etc.

Related: How The SA Government Can Help Small Businesses Thrive

Ensure positive cash flows

positive cash flows

  • Revenues must be greater than expenses. Once your revenues fall below a certain level your business will be using cash not generating cash
  • A large part of your total expense bases consists of what we call fixed costs and are not affected by the level of revenue. An example would be:
    • rent payable. You would have to pay your rent even if you made no sales.

Costs that vary depending on sales levels are known as

  • variable costs – A good example of a variable cost would be the cost of
    • commissions payable to salesman. I.e. the more the sales the more the commissions.

The second part of daily cash management is the

  • Management of working capital which consists of :
  1. a) stock
  2. b) debtors
  3. c) creditors.

Any inefficiencies here could have a severe impact on cash flows.

Stock

You always need to monitor your stock levels, as stock that lies idle on your warehouse floor is costing money. Software that monitors your stock levels and determines your fast-moving items, as well as determines your optimum levels and reorder quantities, is essential to proper management.

Related: Smart Money For Small Businesses

Debtors Balances

You must have a credit policy which must be enforced. Make sure that you provide in your budget for nonpaying debtors, as some of your customers will not pay you on time if at all.

Set credit limits and enforce them. Stop supply if payments are not being made in time. It is never wise to be reliant on just one or two major customers. Management of your debtors is critical to the success of your business.

Creditors

It is so important that you obtain the best possible terms from your suppliers. This is vital in businesses where the margins are tight and in industries where payment from customers is slow.

You must be careful to ensure that you do not pay your suppliers faster than you receive your cash from your debtors. Suppliers will try and entice you with settlement discounts, but this will not help if your customers (debtors) are taking too long to pay you.

Your business

The small business owner needs to pay attention to these areas to be successful. These are very basic guidelines on the management of cash and it is recommended that the small business owner research this topic further and customise to his own business.

Continue Reading

Setting & Achieving Goals

An Often-Overlooked Secret to Success

Practice the principle of reciprocity. You’ll reap unexpected rewards.

Published

on

Secret-door_key-selection

Entrepreneur and CultureIQ are searching for the top high-performing cultures to be featured on our annual list. Think your company has what it takes? Click here to get started.

In his book, Influence: The Psychology of Persuasion, Robert Cialdini lists six principles of ethical persuasion. The first s reciprocity.

“The reciprocity rule says that we should try to repay, in kind, what another person has provided us,” Cialdini states. And therein lies the key to what I’ll call the oft-overlooked secret to success: appreciation for what another person does for us.

Related: 5 Lessons for Entrepreneurs from the Most Famous Sling in History

Cialdini relates an experiment a university professor tried several years ago: He sent Christmas cards to a select list of complete strangers. And the response was overwhelming. He received dozens of thank-you holiday cards back from these people he’d never met.

Why? Because they appreciated getting a card from him and, as the law of reciprocity says, we respond to a positive action with another positive action.

How can this help you as an entrepreneur?

When you are in a state of appreciation and gratitude for what has been given to you, you are actually in a state of abundance – appreciating what you do have instead of focusing on what you don’t. Because what you focus on expands, if you are constantly focusing on what you can do for others and at the same time appreciating the things you already have, you will inevitably get more of what you want because that is your focus.

Remember, like attracts like. The more you are in an appreciative state, the more you will attract that which you yourself are appreciative for.

My friend, Lamar, completely lights up whenever I give him a gift. I love his genuine reaction of thankfulness so much that now I look for special things I know he’ll like, just so I can surprise him. His appreciation causes me to continue to give.

What if you similarly gave your audience something every day with no expectation of reciprocation? What would that do for your own psyche and your business’s bottom line? There is a famous biblical scripture that says, “Practice giving and people will give to you.” Have you tried that lately? Here are three practical tips on how you can display this concept in your life and business:

1. Create an alert on your phone to go off three times a day

When it does, take time to be grateful for three things in your life. Make time to appreciate three people in your life. And look for three ways you can give something useful to your clients.

Related: 4 Reasons Why You’ll Never Be a Millionaire, and How You Can Change That

2. Surprise someone

Recall a time when you received a completely unexpected gift out of the blue. How did it make you feel? I want you to create that feeling for someone else. When you make someone else feel appreciated, you will be remembered. Look for ways to make your customers feel that they are one of a kind.

3. Think about the three ways in which our brains take in information

There are three ways in which we can express our appreciation for others. Some people need to hear it, others need to see it and still others need to feel or experience it. Once you determine the dominant type preferred by those you’re trying to reach, the sky’s the limit.

This article was originally posted here on Entrepreneur.com.

Continue Reading

Uncategorized

7 Tips to Inspire Young Entrepreneurs On Youth Day

Combine good values and good sense with a good idea, add a lot of work, you’ll succeed.

John Pilmer

Published

on

The world needs new entrepreneurs. Entrepreneurs create jobs, lift the standard of living, usher new technology into society, and keep competition alive in the marketplace. Starting a business is difficult, and it’s crucial that the next generation has as much ammunition as possible. We are all relying on you to carry on the proud tradition of innovation.

As the CEO of a successful startup myself, with decades of experience launching prosperous companies, I know what it takes to make it. If I could go back and give my 20-something self a bit of advice about starting out as an entrepreneur, these are the seven tips I’d start with:

1. Passion

You will fail. That is part of the game. Your failures are most likely to lead to success if you get involved with something you believe in. Starting a business just for its own sake will leave you directionless, burned out and ultimately, back where you started.

Choose an interest that you can be passionate about. Marrying charity to traditional business models may be a great way to combine the things you – and potential consumers – care most about.

Related: (Slideshow) Quotes to Fuel the Fire of Young Entrepreneurs

2. Define your market

You’ve heard this before. It’s one of the most common mistakes that entrepreneurs make. Go with something that makes sense for your scope. If you’re a small startup and still a student, staying local or targeting fellow students might be the best direction.

The Internet gives us almost infinite reach, but it’s vital to narrow your market down to what is realistic, and stick with those who have a reason to be interested.

3. Price point

Risk taking is important in any new business venture, provided that it is sensible. Consider providing your product or service at the most basic level possible (also called minimum viable product).

A small investment up front can hook new customers/donations before risking more money. Your target defines the ideal price. Survey your defined market and adjust accordingly. You can always reevaluate your prices as you grow.

4. Be honest

This advice applies to yourself, your employees and your customers. Be honest about what you can commit to your business. It doesn’t do any good to over-extend yourself when in truth; you don’t have the cash or the hours to commit to a project.

Be honest about what your partners can expect from, and what you expect in return. And be honest with clients. At PilmerPR, our #1 rule is “First be good, then talk about it.”

5. Utilise, but don’t over-use, social media

Young people are always eager to jump online, and that’s not a bad thing. But it is important to think carefully before plastering marketing materials on the Internet. Social media is obviously a powerful tool. Focusing it on your business can get word out quickly and cheaply.

That said, be careful not to put all of your eggs in the online basket. Experiment and measure results, then constantly evaluate and decide what is working, and what you are wasting resources on.

6. Don’t forget PR

Traditional and online press relations can yield coverage that has longer shelf life and costs less than advertising. Think about what makes your product new, interesting, and relevant. Then, talk to the media about it.

You might get great reviews, mentions on blogs, or even appear on news segments. Many media outlets have sections dedicated to people in the community doing outstanding things. Even an article in your campus newspaper can be a valuable source of publicity.

7. Look for mentors

The beginning of any venture can be exhilarating, frustrating, liberating and terrifying all at once. Remember, although younger generations can be more tech-savvy than those who have been in business for years, there are still basic principles that are refined by experience.

Many communities offer networking opportunities for entrepreneurs young and old. Take advantage of this, and you may be surprised at the wealth of knowledge your colleagues have to offer.

Related: 7 Insanely Productive Habits of Successful Young Entrepreneurs

These tips won’t earn you certain success, but every bit of knowledge you can gather before you begin your entrepreneurial career can help you avoid serious mistakes.

This article was originally posted here on Entrepreneur.com.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Follow Us

Advertisement

Trending

FREE E-BOOK: How to Build an Entrepreneurial Mindset

Sign up now for Entrepreneur's Daily Newsletters to Download​​