A friend of mine recently told me he has become a cash buyer. If he doesn’t have the cash, he doesn’t buy. In my personal life I follow this logic, to some extent. Our home is financed as is one of our cars, but everything else is paid for in full at the time of purchase. My husband and I are both simple people so this work for us. However, this might not work for you in your personal life, but can it work for your business?

What would happen in your business if you only made purchases when you had the cash to do so? Note, we are talking about big purchases, not your daily operational costs associated with inventory or supplies to provide your products or services. Would your manufacturing process suffer because you don’t have the most modern equipment? Can you get by with the computer equipment you current have?

We have all heard the saying that you have to spend money to make money. And while this saying does make sense, especially for advertising and outsourcing, we should strategically plan for how we use our cash. Incurring debt to buy a new laptop creates additional burdens on the business owner for how they manage the cash available for daily operations or emergencies.

I challenge you to only make purchases when you have the cash on hand for one month. Can you do it? If so, does the “cash only” negatively or positively impact your gross sales? If your sales are not negatively impacted, could you use this strategy for one more month? What changes do you notice in your bank account? To your stress levels?

Share your story here.

This shorter-version business plan can include items that are important for your business. There are many templates available, but I recommend creating a document that makes sense for your business so that you will actually use it on a regular basis.

When writing this short business plan consider the following sections:

1. Vision/Mission. When you started your business did you create Vision and Mission statements? If so, copy/paste them into this document so you can easily refer to them. Does the Vision or Mission need to be updated? Or do you need to re-evaluate how your business is following the original Vision and Mission? If you did not write a Vision or Mission, go ahead and create them now. The Vision Statement is more about the big picture – what do you want to accomplish.

The Mission Statement is about why the company exists, i.e., what is it that you are trying to accomplish with the services or products the business offers. Many Mission Statements include a brief declaration regarding employees, customers, and/or the community.

2. Product/Service Summary. Since many businesses are constantly changing their business offerings, it would be a good idea to include 2-3 sentences within the document that summarize the product/services you are offering. A business plan Executive Summary includes this information too, it is the basis for everything else in your document.

3. Target Market/Competitors. In this competitive environment it might make sense to re-evaluate your target market. Are the demographics of your customers the same as they were 18-24 months ago? If not, how would you describe your current customer? What about your competition? Have new competitors entered the market? How have they changed the way you attract or retain your customers? Have any competitors left the market or changed their focus? What were some reasons for them doing so? Can you gain insights as to how their exit might impact your business, either good or bad?

4. Tactical Goals. What are some tasks or projects that you want to complete within the next 9-12 months? For example, obtain XX number of new clients or XXX number of quality Twitter followers. Maybe you want to open XX number of new locations or add XX number of new products to your retail mix. The objectives should be measurable and realistic. You’ll use this information to create your strategies and plans.

5. Long-term Strategies. What are the long-term goals of your business? What types of activities will help you move from where you are today to that goal in 3-5 years? If you are a sole-preneur, would you like to add employees? If so, what would that look like for you and your business. If you have a retail operation, have you considered moving to a bigger location or adding stores? Think about what your business should look like in 3-5 years and create both long-term and short-term objectives to help you get there.

Remember to include a summary of the action steps you will take to achieve your objectives. For example, let’s say you want to attract 10 new clients for your coaching program. What types of activities could you engage in that might drive clients to your program? Establish Teleseminars, create a referral program or book speaking engagements/seminars. Where do you currently find your clients? Use that information to determine what activities you should be participating in to drive business to your door.

A short (or single page) business plan is easy to create. When you don’t have time to update your regular business plan, this is a great alternative. You can create these types of plans for different divisions, departments or product/service lines. Update your business plan at least once per year or when a major change occurs in your business or marketplace.

Consider the book by Jim Horan, the One-Page Business Plan to create this type of document for your business.

A corporation might sound like a good idea to a small business owner because Corporations are their own separate entity. Meaning that the corporation stands alone so there is little to no risk of loss of the owner’s personal assets, unless they personally guarantee a business debt. Whereas this is not the case when you operate as a Sole Proprietorship- where the owner is at risk for ALL business related debts.

Forming a corporation might not be the best decision for a small business owner, but it might be the right decision for larger businesses. There are several reasons why this is so.

After a corporation is formed there are many rules and regulations that must be followed by the business. These rules and regulations might not sound bad at first but for a small business owner these rules might be a bit constricting. Also, there are forms that must be filed on an annual basis to maintain the corporation in “good standing” with the local Corporation Commission.

Other disadvantages are associated with how items are taxed within the Corporation. Sometimes corporations are subject to what is known as double taxation. This occurs when a Corporation pays a dividend to the shareholder, i.e.,owner. The Corporation does not get to treat the dividend as an expense, yet the shareholder treats the dividend as income. With a Sole Proprietorship or LLC any losses flow through to the business owner on their personal income tax returns. But with a Corporation those losses remain within the Corporation until the entity generates positive taxable income. For a small business owner this can be tough, because it could be a number of years before that business really turns a profit.

If at some point in the future you want to “go public” consult with your CPA or attorney to determine if a Corporation is the right decision today. Sometimes it might make sense to start as an LLC then convert to a Corporation when the timing is right. There may be tax consequences with this approach so you have to weigh the benefits of another entity type, such as an LLC, with the limitations of a Corporation.

One primary disadvantage of a sole proprietorship is that the owner is personally liable for ALL business debts and lawsuits. Meaning a sole proprietorship, i.e., the business owner, can lose personal property (such as their house, cars, jewelry, etc.) and savings to cover business related debts or to cover the costs of lawsuits. The sole proprietor is also responsible for the mistakes made by employees, if any, that can result in lawsuits or loss of income.

A sole proprietorship is also limited in the ability to obtain business financing. Financing for this type of entity structure is usually in the form of personal loans and credit cards because the business is not separate from the owner. Another disadvantage of a sole proprietorship is that it will be dissolved upon the death of the owner meaning this entity structure does not have continuity.

When choosing a business structure think about the future of the the business. Decide what the current and future business goals are for the company. Think about the longevity of the business and the protections afforded by organizing under a different form, such as a Limited Liability Company, S-Corporation or Corporation. Consider the ability to raise capital by adding partners or shareholders.

A sole proprietorship can be started simply by setting up “shop”, but unlimited liability is the main reason you should consider another form of organizational structure. Take into account the long term goals of the company and the protections afford by certain forms of organization. It is best to consult with your CPA or attorney to determine which entity structure makes the most sense for your business.

Ultimately, the owner makes the decision as to which form of organization is best. It is ease and relatively inexpensive to register an LLC, Corporation or S-Corporation with your local Corporation Commission. Visit their website to read the instructions and determine the fees based on the entity type you choose. If you decide you need help, there are many online sites that can help for a small fee.

I have been teaching undergraduate and graduate classes for six years, yet I had never written a Teaching Philosophy. I had to do a little research to determine what a teaching statement/philosophy was and review some samples so that I could write my own. What I found is that a teaching statement is a fairly formal document approximately 1-2 pages in length. At first I thought it was going to be impossible write more than one paragraph, but found my words flowing effortlessly on paper.

A teaching statement or teaching philosophy is used as a hiring tool by colleges and universities. It allows the hiring managers to assess the applicant to see if they have similar philosophies on what the classroom experience should be for students. This can be both bad and good for the applicant.

The more I think about the teaching statement, though, the more I like it. If a college hires me as an adjunct faculty member it will be because they agreed with my approach to teaching. In the long-run the use of the teaching statement during the hiring process should help establish a good fit between the faculty and the school.

Could a tool like this be used for traditional hiring for a business? Would prospective employees be honest in their essay about their work ethic and expectations from the employer? Such an exercise would weed-out the candidates who are not really serious about working for YOUR company. You would have to check with your HR department to see if this is a tool you could use during the hiring process. Or if you cannot use it during hiring, maybe have your staff write a paragraph or two about what their expectations are for the next 12 months and how they plan to help your company achieve it’s goals.

To read more visit the ASCPA.

It is particularly important for small business owners to establish tactical planning goals to help achieve success. It is much easier to create realistic budgets and to create action steps when there is a sound plan in place. It is imperative to allow some flexibility in this type of plan because of unexpected occurrences. Small business owners gain focus when setting goals and objectives for a specific period of time, such as 12 months.

A tactical plan usually includes between three to five goals that may be challenging, but are achievable. An example of tactical planning includes the notion of increasing sales by a certain amount within a one year time frame, such as increasing sales by twenty percent within the next 12 months. Or they may commit to adding a new group of customers during their plan time frame. Another example could be the reduction of employee turnover and operational costs. All of the above examples would be especially beneficial to the small business owner.

Because every business is different and their needs are unique, tactical plans are individualized and tailored accordingly. Tactical plans can promote teamwork because they promote clarity as to how certain goals will be achieved. Tactical planning allows everyone to be on the same page and to work together to reach specific goals. 

Small businesses, in particular, tend to run much smoother when specific goals are developed and a plan is put in motion to reach them. Although each business may have a different set of goals, it is important to strategically plan for the future and establish proper tactical planning to support the strategic plan. When plans are followed, goals are easily achieved.

There are many different methods of benchmarking. In this post we will discuss, financial, performance, and strategic benchmarks. With financial benchmarking you are reviewing how competitive and productive you are. Performance benchmarking is how well your product or services compares with competitors. And Strategic benchmarking is the process of reviewing how others are competing, and can include data from industries other than yours for comparison purposes.

The financial aspect includes doing a total financial analysis of your business. There are many accounting and financial ratios you can use, but the ones you choose should be meaningful to your daily operations. For example, a retail store would want to know the sales per square foot and a service business might want to know the profitability by client. The financial information will help you determine where you may need to adjust your spending, sales efforts, marketing campaigns or employee compensation in order to generate more profit or productivity.

Sometimes you may not care how your business compares with your competition, but you should be knowledgeable about how their product or service is performing in relation to yours. Are you loosing contracts to your competition? If so, have you found the one or two key reasons? Are your customers frequenting their store more often than yours? Or are customers spending more money with you or with your competition, i.e., how profitable is each customer? This process will help you to determine what you need to fix in order to be more competitive. This process can take a lot of time in order to complete because you have to gather the information, although some of it can be found within the numbers (i.e., your financial statements).

The last benchmarking aspect as to do with strategy. When you started your business you created a business plan which provided you with direction as to where you were going and how you were going to do it. Now that you have been in business for a few years, it is time to reassess your planning. This process will not only include the industry that your business is in, but other aspects from other industries that might be applicable to your business.

While benchmarking does take time, it can provide valuable information that you can use to improve your business. The different types/methods of benchmarking can be used together for a more accurate picture of where your company is in relation to your competitors, the industry, and your own internal goals.

You can use benchmarks to compare your business to itself or you can use them to determine how you compare to the competition. The type of benchmarks you use will be dependent on the type of business you are in, your industry and the information available about your competitors (i.e., is data available for free or low cost).

A great example of benchmarking is a yearly review for an employee. All employees have specific job functions in which need to be performed daily, weekly or yearly. Usually once-a-year a performance review is done with each employee to see how he or she is performing his/her job duties. The results will determine which areas need improvement as well as which areas the employee is excelling. This is much like benchmarking for businesses. By assessing your own company on a regular basis, you can determine what needs to be done to improve on the weak areas and capitalize on the strengths.

There are various ways to implement benchmarking into your business. Some ideas are to identify and address known problem areas, areas that can use improvements (these are not necessarily problem areas), and areas that are doing well. Establishing a plan for how frequently to preform benchmarking and which items to measure will help maintain consistency in your analysis.

Once the problems are identified, start with internal research to determine any possible establish quick fixes. Interviews with business owners or companies who are doing good in your area of weakness can be helpful for either establishing a new benchmark or for gaining ideas on how to improve upon a weak benchmark. Establish a positive relationship with a prosperous business to gain insight and ideas on how they overcame the obstacles your business is facing. Once this information is learned and collected, the most important step is to implement the information and continue to monitor results. A benchmark should be revisited at least annually, or as needed.

Benchmarking is an important role that the company leader should utilize to ensure the business is meeting goals and performing effectively. Adding benchmarks for different units or divisions of a business is good practice as well. Revisit your benchmarks yearly to ensure they are still relevant to your core business so that you can remain competitive and successful.

Recently I submitted an application for a Public Service Award. I’ve been volunteering for years and it is something I truly enjoy. I’ve even said that if I could volunteer for a living, I would (assuming I was independently wealthy). When the application arrived in my email box I debated about filling it out. I asked someone to help me and submit the application on my behalf. She did. And she told me that no one deserved the award more than I did. When I was considering completing the application a little voice popped up into my head, it said, “You can win this award.” What? In the past I had replayed the story that I had to work hard to achieve ______ (fill in the blank).

I recently told my business coach and everything was clicking easily with my business. I am more confident today than I was two years ago. I know that I am doing the work that I was meant to do. When I first started my business I was thinking small, now I am thinking big. When you change your mindset about one area of your life, such as a challenging relationship with a family member or co-worker, it is amazing how it carries over to every area.

So is your mindset holding you back? What are the little voices in your head telling you about _____ (fill in the blank). As 2010 approaches, establish your business goals and tell yourself you WILL achieve them. Not that you will try, but that you will.