Slow Business or Slow Economy

As of late I’m asked “Is business really slow? How come I can't sell anything? Or The economy is so bad, I’m going to have to sale everything off and get a ‘real’ job." In this slow economy I’m hearing all over that buying is slowing down drastically. I do see a slow down in certain areas of the country, some more than others; but there are areas that are still booming and business is good. So is the question so many people are asking, “Slow Business based on Slow Economy really valid?”

In my business (custom jewelry) I’ve seen a slow down in the big ticket items (single item priced over $100); however, I’ve seen an increase and interest in the lower to mid-market priced items (single item prices $25-45). So, this begs the question, is it really the economy slowing down the purchasing or are people just looking harder at the price of things and then determining if there is enough ‘disposable’ income to make these ‘personal, impulse’ buys? History has shown that when times are good, money is flowing and the value of a dollar is measured in ‘how many toys you have, how big your house is, how stylish a car you drive, what private schools your kids go to, and how much money spouse makes and the type of job’.

Now that times are a little tougher, big businesses are cutting back jobs, and the financial and housing industries have seen their worst years in decades, the trend that many are seeing of people not buying is really, people pulling back, evaluating their situation, and looking to justify their purchases, only after the bills have been paid. It’s a cycle seen many times over the course of history…and if history is correct, this too shall pass…..will we ever seen the ‘good times’ such as the past 10 years, probably not that good, but people will return to the days of impulse buying once the housing - financial - big business dust settles; but the days of the small business owner may not be as successful and may be much tougher than they once were, As a small business owner that wants to last and survive, I’m stepping back to evaluate the situation, listen to my customers and those around, making adjustments as needed in my business. To survive in any situation, one has to evaluate and move forward…learn from history!

Year Ends – What Do We Do Now?

Disclaimer: Please note that I am not an expert in owning a Business. This series is meant to solely provide information to the reader.

Business Series: Business Plan or Road Map
Ok, so now that you’ve paid your annual (or quartely depending on how you pay) Sales Tax, Business Tax, Use Tax, and any other ‘Tax” that Uncle Sam can come up with. What to do next with your business? There’s the budgets, strategies, new booth look or displays, website updates or what about more marketing? All these questions and not many answers. It’s this first part of the year where we all breath a little ‘sigh’ of relief and just ‘vacation’ until it’s too late. It’s all enough to make one’s head spin and decide to quit while you’re ahead.

The first question I’d ask, is when was the last time you looked at your business plan? (Right about now, you’re scratching your head and thinking ‘what business plan??’) Since the day you opened your doors (or internet site), you should have had some ‘plan’ to determine where you’re going, how you’re going to get there and what are your goals? Without some type of a ‘map or plan’ to get the answers, one’s business probably will grow at a much slower pace than anticiapted.

A really good business plan allows you to look at all of the big issues facing your business in a balanced analytical way. A good business plan helps you take full advantage of your strengths and helps you to discover your weaknesses. A good business plan (whatever type you choose) directs all your business activities in a solid cohesive direction.

Here’s a list of a few basic things to include in any business plan or roadmap:

*Vision/Mission Statement: List why you started your business and what your business means.
*Market Analysis: Look at your competitors; Brick & Morter, Internet, and Catalog (direct mail). Research their weaknesses and strengths so you know how your business stacks up against them.
*Financial Analysis: Startup money needed, budget for Marketing, Profit, Vendors, Materials, and Equpiment. Look at what type of profit and pricing structure you want to have in your business. List your finanical goals for the next year and then build on them year after year.
*Business Goals & Milestones: What are your business goals? What do you want to accomplish in the first few years? Where do you expect to be with your business in five years? Then set milestones to accomplish these goals; even if they are marketing goals, product goals, or even goals you have set for yourself. Small goals help us to achieve the larger goals that look to big to ever accomplish.

Whatever you do, put some things down in writing and then dig them out from time to time to review. Change as your business changes and you will see your successes and challenges much clearer. Don’t short-circuit your success by cheating yourself out of the roadmap to get there!

Disclaimer: Please note that I am not an expert in owning a Business. This series is meant to solely provide information to the reader.

Business Series: A Business Plan

Disclaimer: Please note that I am not an expert in owning a Business. This series is meant to solely provide information to the reader.

Statistically between 55 to 60 percent of all new businesses fail within the first five years and about 95 percent of these failures are due to poor management of the business. If you think about it, you wouldn’t want to purchase a home from a contractor who didn’t have a blueprint and skill as a builder. And yet thousands of people with little or no business sense try to build a business without any kind of plan. Typically, home-based businesses will start out as a dream, a way to make quick extra cash, believing that the home-based business is a good idea and with hard work it will become a big profiting business. Don’t let the statistics scare you, but the statistics stand as a reminder that there is a certain amount of business and management skill, knowledge and experience and hard work needed to be successful enough to profit and grow into a business.

That is where a business plan comes in for the new business owner. This is like a road map of knowing what you need to do, how much it’s all going to cost, and where you can go wrong. It forces the business owner to think specifically about their goals and the path they would like to take to reach those goals. But don’t just write your business plan and walk away from it; review it regularly to make sure you are on the right track, answer questions you may have, and to spark new ideas that you never thought of or forgot about. And by no means does your business plan have to be written in stone, it is recommend that you change it as your business grows and develops. This helps planning for the future of your business a little easier as you can see how past experiences have affected your business.

There is no set type of business plan; it can be as short as one page or as long as several hundred pages. Ultimately, it is up to you to determine how long your road map needs to be to grow your business.

Here are a few elements of a typical business plan to get you started……

1)Business History: How, why, and when the business was started.
2)Business Summary/Mission Statement: A definition of your business. Include a description of your business goals, products, and services and include unique features or customer benefits.
3)Management Information: List who is behind the business; their experience, education, background, qualifications and discuss the legal form of the business.
4)Manufacturing Plan: Here you will describe the required equipment and facilities needed for your business. Make a list of raw materials needed to start the business; how and where to obtain them, their estimated costs, how/where to store/inventory the materials, and include labor and overhead costs involved in the manufacturing process.
5)Production Plan: Define and list how the work will get done; by whom and at what labor cost, if you are using labor other than your own.
6)Financial Plan: List your expected sales projections and expense figures, cash flow figures, and a balance sheet showing the business assets and any owner investments all for one year; with projections for the next two to five years. This section of your business plan should be visited on a regular basis, as it will change quickly and is often dependant upon all these figures within the balance sheet to begin showing your road map of successful or failure within your business.
7)Market Research: Make a list of your target market, your customers, and your competition. When listing your competition, include their pricing structure (if known) and method of distribution as these will also affect how you market to your customers.
8)Marketing Plan: List how you are going to reach your customers, the distribution method, and the anticipated costs of your marketing efforts. You will also include any advertising campaigns, such as web sites, online selling venues, business cards, brochures, and any craft shows or festivals you will participate in.

It is not hard to get started with a business plan, just remember to visit it often to see your business evolve and grown into something big. Use your business plan to mark your successes and learn from your failures. Start with a small business plan and let it grow with your business; this is one way to watch and see how your business and goals are achieved.