Category: Business

Success requires a balance of being tough on yourself with a capacity for self-compassion, according to Entrepreneur Magazine.

Becoming too tough on yourself can lead to a path of self-destruction. Being too compassionate can lead to poor performance.

Becoming tough on yourself means making decisions even when they are difficult. When making hard decisions, don’t let lack of information, fear, or regret over past mistakes stop the truth from coming through clearly.

Raise your standard of excellence and demand the same from everyone else. The best people will appreciate the firm leadership.

In the long run, a business profits when people are tough because they will continue to improve over time and create a culture of high standards.

While being tough on yourself can drive strong results among a team, having compassion for yourself is equally important, according to The New York Times. Humans are naturally prone to obsess over their flaws and shortcomings. Unfortunately, dwelling on these issues can lead to depression, anxiety, negative self-image, and even lower productivity over time.

Acknowledgement of past mistakes is key to improving but remember to approach yourself as you might approach a friend with the same problem — by providing support and encouragement without apologizing for their behavior.

It is typical for a small business to have some ownership transfer or sale during its lifetime, and it is crucial to know the differences between selling, transferring, or closing your business, according to the Small Business Administration.

Selling a business will require a lot of work upfront to ensure that everything is in order before the sale such as legal documents, proof of ownership, and the correct valuation. During this phase, experts recommend that the owner seek out a lawyer and a qualified business appraiser. The business appraiser will consider all physical assets owned by the company as well as things like brand value, intellectual property, and the book of business or projected future earnings. Typically, they will value the company based on future revenue (income approach), comparisons to similar business sales (market approach), or a basic subtraction of all liabilities from assets (assets approach).

When transferring ownership of an LLC, the most critical factor is who the current owners are and who the future owners will be, according to LegalZoom. Typically, a transfer of ownership that isn’t an outright sale involves adding or removing members such as when bringing on a new partner, buying out an existing one, or when there is a death. When the LLC formed, especially when there are multiple parties, there should have been an operating agreement signed by everyone that outlines how such a transfer will work through the buy-sell section. This section might include the requirement to buy out shares of a departing member or stipulate that a certain party will always be the majority owner. In some states, the entire business must be dissolved and recreated any time there is a change of ownership.

The decision to close a company could stem from the desire to retire or just to quit a business that isn’t working out. All owners must agree to the closing, and there are dissolution documents required to be filed in every state to prevent future tax filing requirements. Any licenses, permits, and other business registrations will need to be cancelled and final employee checks issued. The final tax returns for the last operating year must be filed as usual to fulfill any obligations to the IRS and records should be maintained for at least three years.

Managing payroll for a small business can be a complicated and expensive task, but new online payroll solutions are available that can bridge the gap for many small business owners, according to Inc. Magazine.

Many business owners try to handle the paperwork and regulatory compliance on their own, and the IRS has shown that about 40 percent of them are incurring average penalties of $845 per year due to filing errors, omissions, and lapsed deadlines. The best services are those that are specifically geared towards small business, set up employee wage rates, track benefits-related hours, and withhold taxes automatically while providing online access to both employers and employees.

Most small business owners could benefit from a digital solution that will save them money compared to a traditional full-service provider while saving them time and eliminating the risk of potential legal troubles for mistakes they make on their own. According to Entrepreneur Magazine, one of the most popular and highly rated examples of these services is Intuit Payroll. Their product starts at just $20 per month with an extra $2 per employee, and it runs the entire payroll system and calculates taxes, but does not file them. Their full service, meanwhile, costs $79 but automatically files taxes and can fully import data from a pre-existing payroll provider. Other options to look for include check printing, direct deposit, and 24/7 customer support.

For owners that want to add additional benefits for their employees, a few new digital online providers have entered the market to make the process as intuitive and straightforward as possible for owners while meeting the high expectations of this generation’s tech-savvy entrepreneurs, according to Forbes Magazine. One such company, JustWorks, can pool employees from different companies together in its network to get better prices on things such as health insurance, vision, and dental insurance as well as access to 401k’s. They also track and automate paid time off, commuter allowances, workers’ compensation, and more.

The best small businesses will excel in many areas, but the most critical quality for long-term success is having exemplary customer service, according to Entrepreneur Magazine.

Corporate giants like Amazon have risen to the top based on their value of providing genuine satisfaction to their customers and continuing to evolve within an ever more competitive market. Jeff Bezos states that Amazon not only wants to meet customers’ expectations but that they actively try to solve problems they don’t even know they have yet.

Keeping a customer through excellent customer service is much cheaper than acquiring new customers through advertising or sales teams. Customers that are happy with a transaction also have around a 60-70 percent chance that they will buy something in the future. When a customer is treated poorly, however, they are more likely to return products, tell their friends and family about their negative experience, and even feel obligated to seek legal compensation.

On the other hand, one fan of a business can help convert many more people through word-of-mouth advertising, and when enough people agree that a company is good, it will attract strangers that are buying based purely on reputation.

Employees, aware of how owners treat their customers, are more likely to take pride in their work.

Small businesses have found that online lending platforms can be a reliable alternative to the traditional banking sector and received nearly $10 billion in loans from these sources between 2015 and 2017, according to a study by NDP Analytics. Access to capital is one of the most significant hurdles that new and small businesses face to get off the ground or expand their operations and traditional small business loans have been in decline since 1995. The research showed that for every dollar borrowed, business sales increased by $2.31 meaning that the $10 billion investment led to approximately $37.7 billion in economic output along with an estimated 358,911 jobs created.

Major players in the online space, including Kabbage and OnDeck, saw a fifty percent jump in their loan issues during this time and the vast majority of those borrowing had sales of less than $500,000. The companies used the funds to produce more inventory, cover payroll, and invest in equipment and more extensive facilities during critical moments in their growth path. The average business borrowed $55,498 which shows that most are not overleveraging with their decision to take on debt to move forward.

Online lenders provide many advantages for small businesses compared to traditional institutions such as offering smaller loans with shorter terms, making credit decisions and access to cash extremely quick, and allowing payments and most business to be conducted through an online portal. These options will enable a company to be more nimble in how they approach financing and to find the terms that best suit their particular operation.

Most seasoned business professionals agree that networking is an incredibly significant part of their success, but many people just starting out have not grasped the importance of joining a networking group or how to make the most of their time, according to Jan Plutzer, COO at Apcera. During her career, she also discovered that cultivating a collection of both informal and formal networking groups was even more beneficial to her than having an individual mentor in her field.

Using an informal combination of business partners, employees, bosses, and current and former co-workers, she was able to bounce her ideas and problems off of a diverse group of people that had a keen understanding of her background. The best groups will not merely agree with you at every turn but rather provide brutal honesty and ask tough questions to uncover the best way of handling a situation. Her group helped her navigate challenging career choices such as leaving a prestigious job to join a startup as well as merely acting as a sounding board for new ideas and directions.

Many different types of formal networking groups exist that can fulfill a variety of roles for a young professional. Jan recommends joining groups with others in your field or that share your title to gain access to the most relevant experience. Similarly, special groups for women or minorities can help provide an added layer of support for people that might feel left out of more traditional groups. If there isn’t a group in your area, then creating one can be a great option that only requires one extra trusted professional to get started.

Importantly, just joining a networking group or participating in a few events is not enough to gain all of the benefits. To reach its full potential, networking requires effort to maintain and build new relationships as well as to provide benefits to the other members of the group that will be relying on you for the same support.

Many small businesses are started to help solve a problem or innovate upon existing solutions, and the Small Business Administration’s (SBA) Small Business Innovation Research (SBIR) exists to provide funding to those that qualify, according to Entrepreneur Magazine.

This group was formed in 1982 to help identify the feasibility, commercial potential, and technical merits of young projects and gives more money over time to successful teams.

Currently, the division has around $2.5 billion across a variety of federal agencies, such as the Department of Health and Human Services, that are looking across America for projects aligned with their goals. Joining the program is possible through one of their local events or conferences that serve to educate potential participants on how the program works as well as highlighting important calendar dates and deadlines. Once accepted, Phase 1 businesses can receive up to $150,000 and up to $1 million over time based on their criteria for success. Because each federal agency will be looking for different types of projects, it is crucial to sort through everything to find the place with the best fit. There are also opportunities during the early application stages to speak with agency contacts about questions and details.

Small operators should remember that their local Small Business Development Center will provide them access to an advisor that can help them navigate the hurdles involved with getting SBIR funding. In addition, they also offer free general business counseling as well as inexpensive training options.

While not typical, sons that decide to start a business in the same field as their fathers tend to fare much better than those striking out in their own direction, according to a study published by Germany’s Institute of Labor Economics. In it, they analyzed the data from Norwegian firms between 1999 and 2007 to discover that while only four percent of new entrepreneurs decided to start their own business this way, they were found to perform much better than their peers in a variety of metrics. Results were the same whether the father had started a business himself or had just worked as an employee in the field.

Survival during a business’ first four years is often a very telling sign of its future success and the sons in the study were able to achieve a six percent increase over similar firms that did not have a family influence. Most remarkable, however, is that sales, total assets, and the number of employees in these companies was around double their peers which landed them in the top five percent of their industry for those respective categories.

Although there is no direct, measurable cause for the advantage, the study identifies the edge as ‘dinner table human capital’ as many interviewed participants said that they learned much of what they knew from simply listening to their fathers around the dinner table at night. They would recount stories of success and failure as well as discuss problems that they were facing within their walls and as an industry as a whole. The children were also likely to have a head start on building relationships in the marketplace and were able to use their father’s name to establish trust.