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Business Problem Solving
Approximately one million new businesses are started every year in the United
States. About 80 percent of all new businesses will fail within five years. As the
manager of a small business, you must wear several hats. Never stop investigating new
ideas to improve all areas of your business. The astute manager will gather information to
assist him or her in making the changes necessary to stay profitable in a competitive
business world.
Here are some tips to improve your profits:
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Listen to your customers. You are not really selling products or
services; you are selling customer satisfaction. Satisfied customers return to spend more
money and are likely to refer new customers to you.
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It is estimated to cost ten times as much to acquire a new customer as it
does to retain a current customer through good customer service.
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If your company runs well now in your absence, it will run well in the
event of your disability or death. If you are currently indispensable, start training
people now. One of the most rewarding forms of retirement is to own your own company and
to be absent as much as you like.
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The word ability spelled "A.B.I.L.ity" could stand for
Accountant, Banker, Insurance Agent, and Lawyer. These professionals handle a variety of
business problems every day. They make excellent sounding boards for proposed
transactions. Consulting with them before you conclude any deals can save you many
problems.
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You can be your own best business troubleshooter. Consider arranging a
trip to visit a half dozen businesses just like yours, but outside your trade area.
Discuss products or services, customer relations, vendors, physical plant and equipment,
and financial statement information with these noncompeting colleagues. Arrange a five- to
ten-day trip. Take your financial statements, a copy of your floor plan, your camera, and
a long list of questions. When you return, you will be able to inform your staff of all
you learned. This trip is especially beneficial if you are not affiliated with a franchise
business.
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Every business should operate from a budget. Your last year's financial
reports serve as an excellent guide to setting this year's budget. Since it is designed
with the best information you have available at the outset, the variances from the budget
figures may give you valuable information in preparing the next year's game plan.
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Before you start a new business, be sure the community can support such a
business. Some areas are not large enough to warrant certain specialty shops. A bicycle
shop, for example, may take a population base of 50,000 people to make it profitable. A
grocery store, on the other hand, can be profitable in a town of only a few thousand.
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Is it necessary or profitable to have accounts receivable? Credit is
necessary to attract some business, and it is profitable if properly managed. For example,
a construction company finds it impractical to issue credit cards to all its employees and
inconvenient to use a check for every purchase. In exchange for the courtesy of an open
account, such a customer should be willing to pay immediately upon receipt of a billing
statement.
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Business deals and special franchises which sound too good to be true usually
are. We will gladly assist you in reviewing any new purchase or business proposal.
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Business partnerships (marriages) seldom have the same courtship afforded
most marriages. In the absence of this courtship, you should have your attorney draft a
well-written partnership agreement. It is also important for family partnerships.
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Don't incorporate your business without first checking the long-range tax
and nontax considerations. There are many small corporations that would have been better
off operating in some other legal form.
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Some businesses receive penalties for late payroll tax deposits. To avoid
such problems, don't sign payroll checks unless the first check in the stack is the
payroll deposit to your bank. This may have you paying deposits earlier than required, but
you will not be receiving penalties.
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What makes a business successful?Business problems and their
solutions are as varied as are different businesses. There are some universal truths,
however, in managing any business.
Whether you are starting a business or operating a going concern, we can help you
select the proper organizational structure and help you secure adequate financing. We will
work with you and your banker, lawyer, insurance agent, and other advisors to solve your
business problems.
We will assist you with loan applications, pricing, credit policies, cash flow needs,
cost controls, and other management issues. We will gladly assist you in reviewing your
operations to see what you might do to be more profitable.
Give us a call for a no-charge initial conference. You should interview us, as you
would any professional, to determine if we will be a good long-term match for you and your
business. If we don't have the answer to your problems, we will assist you in locating
someone who does.
You may find the superb links below to be interesting and useful. The links lead to
numerous calculators for finances and other computations as well as some very good
reference sites. We always welcome your questions. Contact us by phone or e-mail. We
appreciate hearing from you.
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