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13 Business Resolutions for 2013

2013Here they are, along with some of our best tips and strategies to help you pull each one off:

Resolution #1: Fix my website!

Here are 10 things that are probably wrong with your site, and how to fix them: 10 Things Wrong With Your Website

Resolution#2: Improve our customer service!

Here’s how: 8 Ways to Earn True Customer Love

Resolution#3: Be a better tweeter!

Here’s one way to do it: The Right Way to Retweet

Resolution#4: Boost my social influence!

These 16 tools can help: 16 Sweet Social Marketing Tools You Gotta Try

Resolution#5: Nurture our leads!

Become a lead nurturing pro: 9 Steps to Lead Nurturing Success

Resolution#6: Find a business mentor!

Here’s how & where: 8 Places to Find Your own Free Business Mentor

Resolution#7: Launch a new product or service!

And when you do, here’s how to market it! 14 Ways to Market a New Product or Service

Resolution#8: Try A/B testing!

Here’s what you need to know:  The Magic of Test-and-Learn Marketing

Resolution#9: Keep better books!

These basics will get you there: The 10 Bookkeeping Basics You Can’t Ignore

Resolution#10: Get serious with Facebook!

Can’t go wrong with this Facebook cheat sheet: A 10-Step Facebook Cheat Sheet for Biz Owners

Resolution#11: Network more!!

These tips will really help: 9 Ways to Make your Contacts Really Count

Resolution#12: Review our pricing!

There’s more to pricing then you think: What Every Business Should Know About Pricing

Resolution#13: Innovate more!

Here’s how to make it happen: 4 Rules for Fostering Innovation in Your Business

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

The 10 Bookkeeping Basics You Can’t Ignore

Millions of business owners and startup entrepreneurs are masters at creating great products and services, building awesome teams and winning over customers. Many of them, however, would probably flunk basic bookkeeping.

But if you don’t understand the different types of “accounts” your bookkeeper uses to organize your finances, measuring the success (or failure) of your efforts will be futile.  Being deft at digital marketing, for example, isn’t enough if you don’t have a clear financial picture of your business and run headlong into cash flow problems.

What do your accounts receivable look like? Are you constantly paying your own bills late? Not sweating the small stuff like understanding your own books is trouble in the making, says Lita Epstein, who designs online courses about reading financial reports and is the author of Bookkeeping Kit for Dummies (Wiley, 2012).

Here are basics of the 10 most common types of bookkeeping accounts for a small business that you should know:

  1. Cash. It doesn’t get more basic than this. All of your business transactions pass through the Cash account, which is so important that often bookkeepers actually use two journals—- Cash Receipts and Cash Disbursements — to track the activity.
  2. Accounts Receivable. If your company sells products or services and doesn’t collect payment immediately you have “receivables” and you must track Accounts Receivable. This is money due from customers, and keeping it up to date is critical to be sure that you send timely and accurate bills or invoices.
  3. Inventory. Products you have in stock to sell are like money sitting on a shelf and must be carefully accounted for and tracked. The numbers you have in your books should be periodically tested by doing physical counts of inventory on hand.
  4. Accounts Payable. No one likes to send money out of the business.  But it’s a little less painful if you have a clear view of everything via your Accounts Payable.  Good bookkeeping helps assure timely payments and – importantly – that you don’t pay anyone twice.  Paying bills early can also qualify your business for discounts.
  5. Loans Payable. If you’ve borrowed money to buy equipment, vehicles, furniture or other items for your business, this is the account that tracks what’s owed and what’s due.
  6. Sales. The Sales account is where you track all incoming revenue from what you sell. Recording sales in a timely and accurate manner is critical to knowing where your business stands.
  7. Purchases.  The Purchases Account is where you track any raw materials or finished goods that you buy for your business. It’s a key component of calculating “Cost of Goods Sold” (COGS), which you subtract from Sales to find your company’s gross profit.
  8. Payroll Expenses.  This is the biggest cost of all for many businesses. No matter how much you beg, few people want to work for nothing.  Keeping this account accurate and up to date is essential for meeting tax and other government reporting requirements. Shirking those responsibilities will put you in serious hot water.
  9. Owners’ Equity.  This account has a nice ring to it. Basically, it tracks the amount each owner puts into the business. “Many small businesses are owned by one person or a group of partners; they’re not incorporated, so no stock shares exist to divide up ownership,” says Epstein. “Instead, money put into the business is tracked in Capital accounts, and any money taken out appears in Drawing accounts. In order to be fair to all owners, your books must carefully record all Owners’ Equity accounts.
  10. Retained Earnings. The Retained Earnings account tracks any of your company’s profits that are reinvested in the business and are not paid out to the owners. Retained earnings are cumulative, which means they appear as a running total of money that has been retained since the company started. Managing this account doesn’t take a lot of time and is important to investors and lenders who want to track how well the company has done over time.

Many business owners think of bookkeeping as an unwelcome chore.  But if you understand and make effective use of the data your bookkeeper collects, bookkeeping can be your best buddy, helping  you run your business more effectively.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

The Right Way to Retweet

Let’s start with two key assumptions: 1) Twitter is a great way to build business so you should be using it, and; 2) Part of doing so is retweeting other people’s tweets that you think are worth sharing. But while most people simply use Twitter’s built-in RT function (one of the basic engagement options offered at the bottom of every tweet), it leaves much to be desired.

First off, the standard RT is static, which means you can’t modify it, include your own comment or tell your followers why you deemed this particular item retweet-worthy. You simply pass it along “as-is” and the other person’s photo or image appears in your tweet stream as if they’d tweeted directly to your followers (aside from the little green triangle and arrow in the upper right indicated it’s a RT).  What’s more, the person you retweeted might not even notice that you made the RT unless they regularly check the “Connect” tab on Twitter which lists RTs and other interactions. In short, this leaves much of the potential value of retweeting off the table.

A Better Way to Retweet

Fortunately there’s a better — if slightly more time-consuming way — to do RTs. It boils down to doing the process manually rather than relying on Twitter’s quick-and-easy RT icon.

It’s simple and works like this:

1. Copy the tweet you want to RT and paste it into your own “New Tweet” box.

2. Add to the very beginning: RT @________ (the person’s twitter handle) and then the remainder of their tweet. If it’s really short you can simply add your own (very) brief comment or “thank you” before (preferred) or after the original tweet text. The same process works even if you use an outside service to schedule your tweets. Some even have an edit tool that helps you do this quickly.

3. If it’s long, you may have to edit a bit, eliminating unnecessary words while taking great care not to alter the essence or meaning of the original tweet. You can also use an ellipse (…) to indicate gaps where words have been left out. When a retweet has been modified in this fashion, some people start it out with MT (for modified tweet) rather than RT

4. If there was a link in the original tweet, make sure it still works (sometimes they break in the copy-and-paste process)

5. Send your tweet.

NOTE:  One possible, but relatively minor downside comes fro Klout and Kred. These social influence scorekeepers include retweets as one small factor among many determining your outreach activity, so to the extent they don’t recognize your modified RTs as “official” Twitter RTs, you’d lost a little ground. But you can still do some RTs the regular way, and besides, the advantages you gain by retweeting this way would greatly outweigh this.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

9 Steps to Lead Nurturing Success

If your business is spending precious ad and marketing dollars to generate leads, and you have prospects calling or clicking as hoped, great! But what now? Leads must convert to sales – either now or in the future – before they can benefit your bottom line.

How and when you respond to leads is critical – especially those not quite ready to buy…yet. This is where “lead nurturing” comes in.  Basically, lead nurturing is the process you use to follow up on leads and ultimately turn those prospects into customers. How well businesses do this varies radically, and so do results. The goal of lead nurturing is to keep your prospects engaged and moving through the purchasing funnel.

The best way to do this is to keep providing valuable information that informs them about your products and services in drip-like fashion (gently, with a light hand), in a way that’s memorable and has impact.

Here are 9 steps to implementing lead nurturing for your business:

1. Establish a nurturing plan

Have a detailed plan that begins immediately (think real time) and shepherds prospects down the path to conversion in a consistent, logical fashion. That is, of course, easier said than done.  Millions of businesses regularly lose leads because they lack proper follow-up policies, which means they are wasting money and ultimately paying more for the leads that they do convert.

2. Be quick and nimble

When it comes to converting leads, speed counts, big time. Most lead conversions go to the business that responds first. Quick response should be at the top of your list. If you don’t respond quickly, you lose.

3. Nurture the “not yet ready” prospects

While some leads may be ready to buy immediately, many others must be carefully cultivated over time, especially in the B2B realm. To succeed you must anticipate the prospect’s needs based on who they are (using characteristics such as age, income, etc.), and what stage they occupy in the buying process. Remember: This is about converting contacts you already have, not generating new ones.

4. Add info value in bite-size pieces

During the nurturing process, give prospective buyers the kinds of information they will need to make a wise purchasing decision.  But keep it simple, and provide information in snack size increments. Keep in mind that nurturing is about helping prospects throughout their buying “journey.”

5. Tap lead nurturing tools and tech

There are many terrific tools and web-based services that can help you nurture leads. A few examples include VerticalResponse.com, SwiftPage.com and ConstantContact.com (all for email campaigns); AWeber.com and SendPepper.com (auto responder services); Enthusem.com and Thankster.com (for sending greetings and thank you messages), among others.

6. Track prospect behavior; respond to their activity

The tools mentioned above can help you do this via customized reports and metrics. Use features that automatically track and respond in an appropriate way when a prospect opens an email, fills out a form, clicks on a link or performs another action.

7. Vary your format

People respond differently to different types of communications so you should include different formats throughout your nurturing process. Don’t just keep hitting them with emails. Also include newsletters, personal notes, white papers and other content. Make it a series of communications where each step has a clear goal to move prospects along to the next stage.

8. Segment your prospects

For most businesses, prospects fall into different categories. Look for ways to build unique prospect profiles and customize your nurture messages to their particular needs. Segmenting will help ensure that your messages resonate with recipients.

9. Make it personal

This is another way of saying keep it customer focused. Use a personalized approach, addressing prospects by name whenever possible. Try to design each message so it answers one specific question related to what’s in it for the customer.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

8 Places to Find Your own Free Business Mentor

No matter what type of business or startup you run, having a “mentor” to help guide you can increase your odds of success, big time. Having a wise, loyal advisor – especially one who’s “been-there, done-that” – is like money in the bank.

Mentors can’t make decisions for you.  That’s your job.  But their expertise can be invaluable as a sounding board or reality check.  Mentors aren’t in it for the money.  Generally they work with business owners for free, for the satisfaction of helping out.

So how do you find such a person? Here are some places and organizations that help match mentors with business owners or startup entrepreneurs:

1. SCORE (www.score.org)

Probably the best-known organization providing free (and confidential) mentoring to small business owners via its national network of some 13,000 retired business executives, leaders and volunteers. SCORE’s volunteer mentors share their expertise through both in-person and online counseling (via email).

2. Small Business Development Centers (SBDCs)

Another great source of free or low-cost help and advice for current and would-be business owners of all types in all locations. There are over 1,200 SBDC locations nationwide. For help locating one, visit www.asbdc-us.org.

3. Women’s Business Centers (WBCs)

WBCs offer business training, counseling and other resources to help women start and grow successful businesses. To find your nearest WBC check the Office of Women’s Business Ownership at www.sba.gov.

4. Minority Business Development Centers

Part of the U.S. Department of Commerce, MBDCs offer free help to minority-owned businesses through about 40 centers nationwide.  Visit the Minority Business Development Agency at www.mbda.gov.

5. eBusinessNow.org

This specialized SCORE program helps biz owners use web-based technologies to grow their businesses.  An experienced SCORE technology mentor available through this program can provide personalized advice – for free.  Go to the “Find a Mentor” section at eBusinessNow to find a SCORE location near you, or search for a mentor online.

6. Trade or Professional Associations

Many trade and professional associations operate mentoring programs for business owners just starting out. Some offer formal one-on-one mentoring sessions as well as group networking opportunities.  Check associations in your industry.

7. Mentors for Government Contracting

If your business plans to sell to the federal government, the General Services Administration (GSA) offers a Mentor/Protégé Program designed to encourage prime contractors to help small businesses be more successful in government contracting and enhance their ability to perform successfully on government contracts and subcontracts. You’ll find it at GSA.gov.

8. Your own Network

Who do you know? Is there a previous boss who was very inspiring to you or a friend who is a business owner? Ask that person to be your mentor or share his or her successes and struggles. You have nothing to lose. Just be prepared to share with them why you chose them in particular, your goals and what you are looking for from them. The best way to connect these days is LinkedIn. Make sure you’re on it!

Here are some tips for getting the most out of a mentoring relationship:

  • Be organized, prepared and consistent. No one wants to waste their time if you aren’t serious about success.
  • Plan your mentoring sessions in advance. These could be as simple as having a one-on-one consultation or lunch meeting once a month to discuss where you are against your business goals, how best to tackle business obstacles, getting advice on business processes or regulatory requirements that you don’t understand, and so on.
  • Casual one-on-one sessions are good, but also have more structured sessions that address different aspects of starting, running, managing and growing your business. A good starting point is for you to prepare a detailed agenda of items to discuss at each meeting.
  • Take notes, take change of your “action items” and review progress against these in your next session.
  • Be respectful of your mentor’s time. Use their insight and apply as you best see fit. It’s still your business.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

16 Sweet Social Marketing Tools You Gotta Try

No doubt about it. People are piling into social media marketing like never before. But the most successful ones don’t go naked. They deploy a variety of digital tools to amplify and monitor their efforts.

BizBest® has researched over 100 social marketing tools – including some that are brand new – and came up with this list of 16 standouts (listed alphabetically):

AgoraPulse (www.agorapulse.com)

Great to use if your efforts are focused on Facebook. It offers tools to engage your fans, qualify them and track results. Using AgoraPulse could certainly quicken your marketing heartbeat.

Buffer (www.bufferapp.com)

Awesome way to schedule social media activity. It lets you add posts and tweets to your “buffer” from anywhere and have them automatically distributed throughout the day. By keeping your biz buffer topped off with content, you can schedule a fresh social media presence for a week or more.

Crowdbooster (www.crowdbooster.com)

Offers tools to measure and boost your social marketing. Lets you analyze performance of individual tweets and posts to quickly grasp what’s working; view engagement and reach metrics for Facebook.

Disqus (www.disqus.com)

Plugin for getting more marketing mileage out of blog comments. This takes the old, rather clunky “comments” function and turns it into a social media machine that lets users sign in and comment via Facebook and Twitter.

HubSpot (www.Hubspot.com)

An all-in-one marketing software provider that give you a complete package of tools to launch and manage your social media marketing. Super-savvy social marketers! These folks are smart.

LinkedIn “Skills & Expertise”

This tool (under the “More” tab on LinkedIn) is an effective (and free) way to find world-class professionals with whatever skills and fields of interest you want; an especially rich source of B2B contacts and leads.

Newsle (www.newsle.com)

Cool new way to find articles about you and your business, as well as colleagues, competitors and anyone else you care about, and receive notifications minutes or hours after they’re published. Sync your Facebook, Twitter and LinkedIn accounts, and it happens automatically.

Nimble (www.nimble.com)

Revolutionizing customer relationship management (CRM) for small business by taking it into the social realm in a really smart way. This “social CRM” service makes it easy to manage your contacts, communications activities and sales all in one place.

NutshellMail (www.nutshellmail.com)

This aptly named app from Constant Contact is a social media lifesaver for those who want their social activity results neatly summarized in a single email. NutshellMail tracks what’s being said about your business in social media, packages it up and sends a summary email on whatever schedule you choose.

Pagelever (www.pagelever.com)

Affordable analytics tool that’s all about measuring the impact of your social marketing efforts. Output charts and graphs showing traffic, fans, users, comments and more.

PeerIndex (www.peerindex.com)

Measures interactions across the web and helps you understand your influence (or lack of it) in social media. Better than Klout because it’s more adept at measuring real influence rather than just large numbers of followers.

Postling (www.postling.com)

Several tools in one, including alerts and insights that help you get the most out of social marketing. Publish to all of the major social media sites and schedule posts in advance. It also pulls comments from all of your social media sites into one place – a big time-saver for responding.

Shoutlet (www.shoutlet.com)

A do-it-yourself platform for managing social media marketing. But it’s a fairly sophisticated service, favored by many larger businesses as well. It offers a wide range of features, including data capture, customer relationship management (CRM) and unlimited accounts.

Slideshare (www.slideshare.com)

Great place to share content such as product or other presentations and generate traffic and leads for your business. The site is free to use and gets some 60 million visitors monthly. Presentations can appear on your LinkedIn profile.

Sprout Social (www.sproutsocial.com)

Popular tool among small businesses to monitor what’s being said about you online, schedule and publish updates to your social media pages with one click, and produce reports.

TweetDeck (www.tweetdeck.com)

Dashboard that gives you a good view of your Twitter activity. It allows you to monitor and manage unlimited accounts, schedule tweets to suit your audience and filter content to focus on what matters to you the most.

Bonus Tool: MarketMeSuite (www.marketmesuite.com)

This one came to our attention after the original Sweet 16 list was published, but definitely deserves a look. MarketMeSuite gives you the tools you need to be more proactive with your social media marketing. Some 30,000 small businesses are already using it to find targeted leads and influencers, engage with customers and get results on Facebook, LinkedIn and Twitter.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

7 Ways to Embrace a New Normal for 2013

For business owners, there’s a “new normal” out there, and it doesn’t look a whole lot like the old normal.  If your business seems to be on a treadmill, maybe it’s time for a makeover.

Put everything up for grabs, including your mission statement, business and marketing plans, budget, sales and expense expectations and more, says business makeover specialist Patricia Sigmon, president of LPS Consulting, which creates profit-focused tech solutions for small businesses.  Make 2013 about regrouping and renewing your business for the new normal. Here are seven of Sigmon’s suggestions for giving your business a profit makeover:

1. “Fire” unprofitable customers.

Sometimes, the highest-maintenance, most time-consuming customers you have are the ones who pay you the least. Analyze the profit margin or lack of profit margin that each customer or perhaps customer segment produces. Stop pursuing customers who are not helping you be profitable – period.

2. Reward your best customers.

Look at which customers are giving you the most profit, and coddle them, woo them, don’t lose them! Offer them frequent buyer rewards. Send them a small gift at their one-year anniversary. Give them a random call every few months to “check in,” thank them, and ask what else they might need. Treat them like gold.

3. Start relationships.

This coming year, it’s time to overhaul your sales behavior. Turn all one-time sales efforts into relationship sales. Start monthly maintenance plans, suggest auxiliary services, sell complementary products, or offer retainer plans covering 50-100 labor hours, for example.

4. Erase those expense lines.

Reduce your operating expense budget to the lowest possible number. If that means selling your car or closing an office, so be it. You can’t build a new profit base when you are still using yesterday’s expense model. Go through your expenses line by line and get rid of everything you can live without.

5. Outsource more.

Whatever type of skill or service you need, think hard before hiring a new employee or keeping an old employee. Look at each department or each person when you are trying to manage costs. Can you eliminate positions (perhaps through attrition), combine jobs, delete processes, and outsource tasks? Outsource exactly what you need for the right amount of time and the right amount of money.

6. Update your networking.

From blogs to Twitter to LinkedIn to Facebook, invest big-time in building the online and social media presence you need to compete in the new digital world. Businesses that don’t leverage social networking will be left behind. Jump-start new relationships in 2013 with a burst of social media activity. Update all your social sites and accounts. Keep your online relationships fresh and dynamic with news, blogs, newsletters, tips, and surveys. Find an online forum in your industry and become an active contributor.

7. Take your office with you.

With cloud technology, you are no longer bound to a desk. Log onto some new interactive cloud-based systems that can help you do your business anywhere. Make sure to you have Internet connections on all of your devices. Everything you once needed to do in your own office can now be done remotely. Best of all, when your employees are sharing files in the cloud, it makes for a much more cohesive, connected team. j2 Global offers several low-cost cloud-based services that can help.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.

Biz Cheat Sheet on Owned, Earned and Paid Media

As digital marketing continues to soar, here’s a question I’m getting more often from business owners and start-up entrepreneurs:  What’s the difference between paid, owned and earned media for promoting or advertising my business, and how do I make them work for me?

The whole “owned-earned-paid” thing is familiar to advertising and PR pros, but totally mysterious for millions of small business owners who’ve never really thought in those terms. Yet understanding the digital-world differences — and more importantly, how to deploy owned, earned and paid media simultaneously to grow sales — is critical today.  Here’s my BizBest “cheat sheet” for business owners on owned, earned and paid media:

Owned Media Basics

Perhaps the simplest examples of “owned” pieces of online media real estate are your business website and Facebook page. You built ’em. You operate ’em. You own ’em. Done well, they’ll be nicely designed, easy to navigate and chock full of helpful information, articles, photos, videos and other compelling content that customers and prospects will find interesting. Other “owned” media would include any blogs, newsletters or additional social media accounts your business has.

The basic idea with owned media is to fill them with useful and engaging content that helps potential customers discover your business when they search for something online, or use their own social media channels.  This is the realm of what’s called “content marketing,” which uses helpful, high-value information to draw people into your products and services.

Paid Media Basics

No surprise here.  Paid media are the online ads and promotions you pay for with hard, out-of-pocket marketing dollars. This includes search and other pay-per-click type ads, banners and paid promotions on social media sites, including Facebook, Twitter, LinkedIn, YouTube and others.

Using paid media is the more traditional approach that most businesses are familiar with.  You set a budget, pick your channels and spend as you see fit, while tracking results as best you can.

Earned Media Basics

Public relations fits here.  Issuing a press release that gets mentioned somewhere (either online or offline) “earns” you exposure that you didn’t have to pay for (at least not directly). But it gets trickier. The “earned media” piece is  huge, and difficult to execute — yet it’s a critical leg of the marketing/media triumvirate.

Earned media can produce really good stuff; the attention and engagement you “earn” from customers but that can’t be (legitimately) bought. For example, great comments, recommendations, reviews, mentions, likes and shares are all valuable types of customer-generated media coverage that you must earn, and can’t (directly) pay for.  This includes word-of-mouth, but amplified through the digital megaphone.

Making Owned, Earned and Paid Play Well Together

Owned, earned and paid media don’t exist in isolation. They overlap. In fact, your goal is to make them overlap and work together.  For example, paid ads might attract people to your website or Facebook page where they see some interesting content they want to “like” or share.  In turn, that engagement earns you more notice among the media.  Thanks to the nature of social sharing, the interaction possibilities are almost endless as information passes from one person’s network to others.  This is sometimes called “converged media” — the place where owned, earned and paid intersect.

To have an inkling of what’s going on here, business owners must first recognize that the way buyers research purchases and find businesses has changed radically, and rapidly. These things once occurred via isolated channels. But no more. It now happens through thousands of highly fragmented media channels on a 24/7 basis, often simultaneously as people occupy several digital platforms at once.

Big companies recognize this and now engage is what’s called “Brand Streaming” where they attempt to be absolutely everywhere, 24/7, monitoring what’s being done and said, and reacting quickly to any engagement by a customer or prospect (which is called “agile engagement”).

What to do now

First, don’t despair.  It should already be abundantly clear that since consumer behavior has changed, marketing a product or service will never be the same. You will need to embrace new digital tools and tactics (including some from all of the above categories), and deploy them in as many places as possible.

Start with a firm foundation. Look for small wins that you can reasonably achieve in each category (owned, earned, paid) and build from there.  Take it one step at a time. Don’t try to concoct some huge strategy that takes months to deploy.  Test small things to see what works and what doesn’t. It’s easier, less stressful and more effective.

Copyright 2000-2012, BizBest Media Corp. (@140Main) All Rights Reserved.

A Financial Statement Cheat Sheet for Business Owners

This is about financial statements. I’m sorry, but stay with me. Sure, social media would be a far sexier subject.  But hey, if you ever file a tax return (and you’d better), need bank financing, angel investors, venture capital or a loan from friends and family, these are things you must know.

The fact is, most business owners and startup entrepreneurs never had a formal course in business finance. With that in mind, here’s a “cheat sheet” to help you understand the three basic financial statement flavors: 1) Balance sheets; 2) Income statements, and; 3) Cash flow statements.

Your balance sheet

This shows what your business owns and what it owes at a fixed point in time, and provides details about your assets, liabilities and owners’ equity. It does not show money that flows in and out of the accounts during that period (we’ll get to that shortly).

  • Assets are things your business owns that have value and could be sold, including tangible assets such as vehicles, equipment, inventory and cash, plus intellectual assets such as trademarks and patents.
  • Liabilities are amounts your business owes to others, including loans, rent, vendor accounts, payroll and taxes, as well as obligations to provide goods or services to customers in the future.
  • Owners’ (or shareholders’) equity is your capital or net worth. It’s the amount that would be left if the business sold all assets and paid off all liabilities. This leftover money belongs to the owners.

Your income statement

This shows revenues over a specific time period – i.e. a month, quarter or year – and what you spent to generate that revenue. The literal “bottom line” of an income statement shows what the business earned or lost over that period.

Think of an income statement as a stairway. You start at the top with total sales, and then go down one step at a time. At each step, you make a deduction for costs or other operating expenses that were necessary to earn the revenue. At the bottom of the stairs, after deducting all of the expenses, you learn how much the business earned or lost.

Your Cash flow statement

This shows inflows and outflows of cash over a fixed period. It’s critical because any business needs cash to cover ongoing costs. While an income statement (above) shows profit or loss, a cash flow statement merely indicates if the business generated cash. You should also know that a cash flow statement shows changes over time, not absolute dollar amounts at a given point. The bottom line of the cash flow statement shows how much it went up or down for the period. Generally, cash flow statements review the cash flow from three key activities: operating, investing (back into the business) and financing.

Key Terms and Ratios to Know

Here’s a mini glossary of four key financial statement terms and ratios you’ll also want to know:

  • TheDebt-to-equity ratio compares total debt to owners’ equity. Both numbers come from your balance sheet. To calculate a debt-to-equity ratio, divide total liabilities by owners’ equity. If a business has a debt-to-equity ratio of 2-to-1, for example, it means that it is taking on debt at twice the rate that its owners are investing in the company.
  • Inventory turnover ratio compares a company’s cost of sales on its income statement with its average inventory balance for the period. To calculate this ratio, divide cost of sales by average inventory for the period. A 2-to-1 ratio means the company’s inventory turned over twice in the reporting period.
  • Operating margin shows percentage of profit for each dollar of sales. It compares operating income to net revenues. Both numbers come from the income statement. To calculate operating margin, divide income from operations (before interest and income tax expenses) by net revenues. Operating margin is usually expressed as a percentage.
  • Working capital is the money leftover if the business paid its current liabilities (debts due within one-year) out of its current assets.

Now that wasn’t so bad, was it?

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

10 Timeless Traits of Top Entrepreneurs

Startup entrepreneurs need a wide range of skills and traits to succeed.  Some are industry-specific or tech-related and thus subject to frequent changes and updates. Others are more timeless – the kinds of skills that foster success no matter what type of business or industry you are in, or your stage of development.

Here are 10 timeless traits that should be in any entrepreneur’s arsenal:

1)    A knack for knowing your industry

The most successful startup entrepreneurs take the time to study and become experts in their industry or profession. They attend industry events, read blogs and trade magazines, and their expertise gives them credibility and a huge leg up.  This knowledge helps them “connect the dots” and know what’s really important, and what’s not, says Vickie Milazzo, owner of an education company on Inc. magazine’s list of the 5000 fastest growing small companies in America.

2)    Ability to adapt ideas from others

As Milazzo notes, being creative is essential, but it’s not about reinventing the wheel. Successful business owners know how to adapt proven concepts and approaches from other industries and companies and make them their own.

3)    Problem solver

Entrepreneurs can’t afford to wait around for others to solve their problems. They have to figure out the solutions on their own. And that makes them better business owners for when the next problem arises.

4)    Willingness to think big

We all like to check the easy things off our “to-do” list and tend to put off the tough ones. But a willingness to dive into the big issues and go for the larger accomplishments is often a success separator. “More importantly,” says Milazzo, when you start thinking big “your creativity and productivity catch fire and the momentum keeps you pumped.”

5)    Real networking prowess

Connecting to a few people on Facebook or LinkedIn is not networking. The most successful startup entrepreneurs know that real networking only happens face-to-face, and most often with people who are not their peers.  To network successfully you have to connect with people who have more experience than you do.

6)    Penchant for partnering

Successful entrepreneurs also have a knack for sniffing out others who have skills and insights that can be leveraged in new or unexpected ways. Many people are treasure troves of untapped potential just waiting for the right person to recognize what they have to offer.

7)    Confident negotiator

Negotiating skills are difficult to develop, and successful entrepreneurs tend to approach negotiating with confidence.  Having confidence gives them an edge in bargaining power as the expectation from both sides is that they will deliver at a high level.

8)    Knowing when to get help

Even though startup entrepreneurs are creative thinkers and problem solvers, the best ones also know how to ask questions and seek help when they need it. Remember that there’s always someone out there who has faced the same challenge successfully.

9)    Aggressive goal setting

Great entrepreneurs continuously set goals and work toward them. When one goal is reached, they set another and repeat the process. Having clear goals – and also a specific strategy to reach them – helps everyone in a business stay focused and motivated.

10)  Adept at building personal credibility

Top entrepreneurs also recognize the importance of continuously building personal credibility.  They under-promise but over-deliver, meet deadlines no matter what and always do what they say they’ll do. They know their business will only be as good as they are, and if they have a reputation as someone who can be counted on, their business reputation will mirror that. When customers know they can count on your product or service to deliver what it promises, they won’t hesitate to recommend you to others.

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