The idea has germinated and some steps have been taken, you’re confident that your business idea has enough shape to be shown to a few customers and friends. Maybe this is day five, or maybe it’s month five. At any rate, you are now ready to take your work outside of the safe confines of your office.

So, what are you going to tell these potential customers? Please, don’t just give them the demo and “see what happens next.” Your meeting has to have a point.

You give it a point by figuring out who you are. View it through this lens: Is your product a painkiller or a vitamin? The differences are critical to establishing your baseline messaging. First meetings, like first impressions, can set a critical tone going forward.

The Painkiller

A painkiller is a product or service that solves a business problem. Painkiller discussions, then, tend to look back. They start with probing questions, including:

• Do you have the pain?
• How big is the pain?
• Do you want to lessen the pain?
• What have you done to address this pain in the past?
• How much have you spent on pain relief?

Your entire talk track needs to be about producing answers to these questions. Why? Because if you don’t ask the questions in some form, your potential customers might not even understand that they have a problem. And that makes you unnecessary. If your customers don’t recognise the pain and want to make it go away, a demo of your wonderfully conceived solution will kill your meeting.

The Vitamin

A vitamin is a product or service that juices some segment of a customer’s business. So vitamin discussions are more of a look forward, and the relevant questions could be:

• Do you have enough leads for your campaign?
• Is your website converting enough visitors?
• Is your management team communicating effectively?
• Are you leveraging your assets across key selling channels?

Vitamins inspire you to dream of better days. They are innately positive; they send you down “what if” talk tracks.

That’s fun, but it has a danger of its own: A vitamin is more a want-to-have than a need-to-have. And it can be hard to sell something that a buyer merely wants. That’s why your questions need to be designed to reveal everything possible about your potential customer’s strategic goals. Ultimately, it will always come down to the question of whether your solution fits their needs.

So, what are you, a painkiller or a vitamin?

Accountants help you keep an eye on major costs as early as the start-up stage, a time when you’re probably preoccupied with counting every paper clip and postage stamp. Accountants help you look at the big picture.

In fact, perhaps no other business relationship has such potential to pay off. Nowadays, accountants are more than just bean counters. A good accountant can be your company’s financial partner for life, with intimate knowledge of everything from how you’re going to finance your next forklift to how you’re going to finance your daughter’s university education.

A general accounting practice covers four basic areas of expertise:

1. Business advisory services
2. Accounting and record-keeping
3. Tax advice
4. Auditing

These four disciplines often overlap. For instance, if your accountant is helping you prepare the financial statements you need for a loan, and he or she gives you some insights into how certain estimates could be recalculated to get a more favourable review, the accountant is crossing the line from auditing into business advisory services.

The best way to find a good accountant is to get a referral from a business colleague, maybe even in the same industry. Don’t underestimate the importance of a FCA (chartered accountant). This title is only awarded to people who have passed a rigorous training and examination process.

The first step in setting the stage for a successful search is to take an inventory of what you will need. Given the level of fees you are prepared to pay, you must decide where your responsibility stops and where the accountant’s begins.

Once you have compiled your documentation and given some thought to your expectations, you’re ready to interview your referrals. Two or three candidates is a good number to start with. For each candidate, plan on two meetings before making your decision. One of these meetings should be at your site; one should be at theirs. Both parties need to know the environment the other works in.

During the ensuing interviews, your principal goal is to find out about three things:

Services
Most accounting firms offer tax and auditing services. But what about bookkeeping? Management consulting? Estate planning? Will the accountant help you design and implement financial information systems? Other services an FCA may offer include analysing transactions for loans and financing; preparing, auditing, reviewing and compiling financial statements; and representing you before tax authorities.

Although smaller accounting firms are generally a better bet for entrepreneurs, they may not offer all these services. Make sure the firm has what you need. In addition to services, make sure the firm has experience with small business and with your industry.

Personality
Is the accountant’s style compatible with yours? Be sure the people you are meeting with are the same ones who will be handling your business. At some accounting firms, partners handle sales and new business, then pass the actual account work on to other partners.

When evaluating competency and compatibility, ask candidates how they would handle situations relevant to you. For example: How would you handle an HMRC investigation seeking verification of vehicle expenses? Listen to the answers, and decide if that’s how you would like your affairs to be handled. Realise, too, that having an accountant who takes a different approach can be a good thing. Be sure that the accountant won’t pressure you into doing things you aren’t comfortable with. It’s your money, and you need to be able to sleep at night.

Fees
Ask about fees upfront. Most accounting firms charge by the hour; fees can range from £50 to £200 per hour. Quite often the fees depend on the service being provided. However, there are some accountants who offer a fixed fee spread with monthly payments. Figure out what services you are likely to need and which option will be more cost-effective for you. Get a range of quotes from different accountants.

Try to get an estimate of the total annual charges based on the services you have discussed. Don’t base your decision solely on cost, however; an accountant who charges more by the hour is likely to be more experienced and thus able to work faster than a novice who charges less. At the end of the interview, ask for references or testimonials, particularly from clients in the same industry as you.

After you have made your choice, ask for the terms of the agreement in an “engagement letter” that details the returns and statements to be prepared. This ensures you and your accountant have the same expectations and helps prevent misunderstandings and hard feelings. All professional accountants should be doing this as standard.

Make the most of the accounting relationship by doing your part. Don’t hand your accountant a shoebox full of receipts. The better you maintain your records, the less time your accountant has to spend, and the lower your fees will be. Ask your accountant if they provide accounting software, good accountants will have several cloud solutions available.

It’s a good idea to meet with your accountant periodically. Review financial statements and go over any problems so you know where your money is going. This is where your accountant should go beyond number-crunching to suggest alternative ways of cutting costs and act as a sounding board for any ideas or questions you have.

A good accountant can help your business in ways you never dreamed possible. Spending the time to find the right accountant, and taking advantage of the advice he or she has to offer, is one of the best things you can do to help your business soar.

The rise of social media has been so rapid that it’s easy to feel left behind. And it’s not just a personal scene any more – many businesses are using sites such as LinkedIn, Twitter and Facebook to attract followers and fans.
If you run your own business, social media offers you the chance to spread the word about what you do. It enables you to build a reputation, forge new relationships and bring in new business.
But if you haven’t taken the plunge yet, you’re not alone. According to research by specialist SME insurer Hiscox (2012), only 57% of small businesses currently use social media to support their marketing efforts.
And research by The Neilsen Company has found that 53% of adults who engage in social networks are active followers of a brand.
It’s never too late to start – there are exciting opportunities for most businesses on social media.

The Sage guide offers advice on how to spread the word using social media, including:

• How social media can help your business
• Choosing the right channels for you and your business
• Balancing business and personal
• Finding your followers
• Reaching out to your customers

Download the guide (1.5MB pdf)

New interns, with their expectations and beliefs that they have all this superior knowledge gained by earning a 1st in their degree. Or perhaps you have more technical interns that have earned A*’s in their engineering classes. Either way, interns are great, and I highly recommend that you hire one or two or three.

But do you know what is even better? An apprentice.

What’s the difference? Well, the Dictionary.com definition of intern includes the word “apprentice,” so on the surface it seems like they are very similar. They are both people, usually young, who want to learn a career. But the big difference is the amount of time involved.

If you remember from your history classes, young boys (and occasionally girls) were apprenticed to experts in everything from barrel making to medicine. The apprentice stayed with his “master” (not a term I’d like to resurrect) for years. How long does the average intern stay around these days? Three months? Four? or one summer.  Often, University students try to gather as many internships as they can during their time in higher education. But, what about the apprenticeship model?

Did you learn the ins and outs of your job and your business in three months? Probably not. In fact, we generally tell managers to give new hires a good six months to settle in and add benefits to the company. (It’s one of the reasons the cost of turnover is so much greater than just head-hunter fees. Hitting the ground running is very unusual.) But we expect interns to gain great understanding in a short period of time.

An apprenticeship is different. With that, there’s an understanding that the relationship between apprentice and mentor (better word!) will go on for years. The apprentice learns to do what the mentor does, not just general things about being in business.

This seems clear cut when it comes to plumbing (a profession that still has apprenticeships), but instead of using this system for other areas, we rely on universities to train people. This is utterly illogical, as many professors haven’t spent much time in the actual business world. Why would we expect them to train our future employees? I’m not knocking education, by the way. Logical thinking, technical knowledge, and the ability to write are all valuable things. And some stuff just requires lots of memorisation. (I don’t want my doctor stopping to Google if I’m having a heart attack).

But, what if you started hiring apprentices? (And yes, you have to pay them.) The reality is, even if you’re not benefiting at the beginning, you’d be benefiting by the end. What if you brought on a college student with the understanding that he or she would work for you for 10 hours a week for the next four years? And that this person would not be in an entry level job sorting mail and filing excess paper, but would sit beside you in meetings, and learn to do what you do. Not just general knowledge about your business, but what it takes to do what you do?

Think of how that apprentice could be light years ahead of his or her counterparts when graduation comes about? The knowledge of how to handle a problem, how to put together a proposal, what goes into finding a manufacturer, and what a pain it is to find good insurance for your company, would be invaluable to the apprentice.

And it would be invaluable to your company. The apprentice’s ability to contribute will become greater than any string of interns, all at a reasonable price. And when your apprentice finishes the apprenticeship, you can either offer a permanent job or another company will be happy to snap up a new grad with four years of real experience.

Business plans aren’t just used for tempting investment; they should also drive your company in the right direction and provide a benchmark for ongoing evaluation. Here are some key points that a good business plan should include.

Many entrepreneurs fall into the trap of diving in before they have fully planned their new venture and then they wonder why it fails. If they had put the time into researching and writing a business plan, they would either have predicted the company wasn’t viable, or addressed the business model straight away.

But perhaps the biggest benefit for small companies is the ability to concentrate on the business at hand and let the cloud-based service handle IT concerns as security, maintenance, backup and support.

With an increasing number of companies offering an ever-growing menu of cloud computing solutions, choosing one can be challenging. Here are 10 essential questions to ask as you screen potential providers to select the right one for your particular needs:

1. Which cloud services do you provide?
Knowing what your cloud computing needs are will dictate the type of service or services you choose, says Nicholas Bessmer, author of Cloud Computing for Small Business (Amazon, 2013).

There are software-based cloud offerings, such as SugarSync for online document, photo and video storage. Sage offers SageOne for online accounting. And there’s Salesforce for online customer relationship management (CRM).

If you need more than basic data storage, several vendors offer a range of general-purpose cloud computing services, including IT networking infrastructure with on-demand access to virtual servers, applications and software. These include IBM SmartCloud Enterprise, Amazon Web Services and GoGrid.

2. What is your pricing structure?
You should only pay for what you use, says Mike Foreman, a general manager at AVG Technologies, an Amsterdam-based internet and mobile data security provider.

Also, be wary of large upfront costs, which aren’t the norm for reputable cloud vendors, Foreman says. The pricing scheme should be pay-as-you go from the outset, with the ability to add services as needed. Fees can typically be charged hourly, monthly, semi-annually or annually, depending on the vendor. Pricing for cloud computing services can vary significantly, from as low as about £1 per month per user to £100 a month per user and up, depending on a company’s needs.

3. How secure is your cloud?
Security should be a major consideration when it comes to storing your company’s critical data in the cloud. Cloud providers should have several standard security measures in place and constantly update them, Foreman says. “You’ve got to be sure that you’re completely comfortable with your cloud provider’s approach to security.”

Security measures to look for include firewalls, anti-virus detection, multifactor user authentication and data encryption, and routine security audits. It’s also important to ask who at the cloud company will have access to your data in the cloud and whether the cloud provider does employee background checks to weed out potential cybercriminals or identity thieves.

Foreman says providers also should answer questions about compliance with government legislation specific to your industry. For example, if your business is in the healthcare industry, you’ll want to be sure your cloud provider is compliant with patient data privacy and security.

4. Where is your data centre and how safe is it?
The location and security of the data centres and servers where your company’s information will be stored are as important as online security, Foreman says. “You want to make sure you’re not doing business with a guy with a couple of servers in a spare room somewhere that could quite easily be accessed and compromised.”

To make sure that isn’t the case, Foreman suggests asking how a potential cloud vendor protects its data centre from natural disasters, including fires, floods, earthquakes and storms. Also, find out how the facilities are protected from thieves who could walk away with your sensitive data.

Perhaps the best indicator that a cloud vendor’s data centres can withstand a myriad of security threats is a Standards for Attestation Engagements 16 (SSAE 16) certification. SSAE 16 certification demonstrates that a company’s products, systems and data are compliant with the industry security standards for customer access and privacy, data centre physical security and data redundancy.

5. What happens if you lose my data?
On the off chance your cloud provider accidentally deletes or loses your precious data, you need to know how it will rectify the problem. Be sure to ask: What provisions are in the company’s Service Level Agreement (SLA) that address potential data losses? Will the provider compensate you for losses? What data redundancies does it have in place to mitigate the risks of data loss? It’s also important to ask if the company has experienced any significant issues resulting from the loss of customer data.

6. What customer support services do you offer?
Without exception, technical support should be available to you online or by phone 24 hours a day, every day, including holidays, Bessmer advises.

You should also inquire about the average response and resolution time, and whether you’ll be interacting with knowledgeable engineers or customer service reps reading scripts when you call the customer help line or use a live chat feature.

7. Can your cloud scale up to meet my business needs?
As your business grows, so will your cloud storage needs. To ensure that you’re choosing a flexible cloud provider, find out what additional storage capacity and other services can be offered over time and for how much. If you plan to increase your staff, you’ll want to make sure that you can easily add additional users to your account.

8. What’s your downtime history?
Downtime is when a cloud provider is inaccessible to users via the internet for a period of time. Naturally, the best answer to this question is never. However, even the biggest, best-known cloud providers occasionally experience downtime, as Amazon recently did during an outage that took down Netflix.

Because cloud outages can be disruptive and costly for your business, it’s best to choose a provider with as few as possible. Some vendors post their downtime history logs online. If not, be sure to ask for a cloud provider’s track record.

9. How will I get set up?
Once you choose and sign with a cloud provider, the next step is typically to log in to your user dashboard and begin configuring your account and adding employees as users. Some cloud vendors will walk you through how to install and set up their services, while others, such as Amazon and Google, simply provide online introductory guides.

10. How will I access my company’s cloud?
You should be able to access your business information in the cloud from anywhere at any time via the web simply by signing in to your provider’s client login page. You can use any device to log in, including your laptop, smartphone or tablet.

There are so many financial fires to put out in a given week that it’s hard to find the time to do any short or long term financial planning. But failing to plan may mean that you are unwittingly planning to fail.

Business budgeting is one of the most powerful financial tools available to any small-business owner. Maintaining good short and long term financial plans enables you to control your cash flow instead of having it control you.

The most effective financial budget includes both a month-to-month plan for at least a calendar year and a longer quarter-to-quarter plan you use for financial statement reporting. It should be prepared during the two months preceding the financial year-end to allow ample time for sufficient information gathering.

The long term plan should cover a period of at least three years (some go up to five years) on a quarterly basis, or even an annual basis. The long term budget should be updated when the short term plan is prepared.

While some owners prefer to leave the one year budget unchanged for the year in which it provides projections, others adjust the budget during the year based on unplanned events, such as an unplanned equipment purchase or a higher than expected upward sales trend.

Using the budget as an on-going planning tool during a given year certainly is recommended. However, here is a word to the wise: budgeting is vital, but it is important to avoid getting so caught up in the budget process that you forget to keep doing business.

It is important to budget both your profit & loss and balance sheet. This enables you to consider potential cashflow needs for your entire business, not just as they pertain to income and expenses. For instance, if you had already been in business for a couple of years and were adding a new product line, you would need to consider the impact of stock purchases on cashflow.

Budgeting only the profit & Loss also doesn’t allow a full analysis of the effect of potential capital expenditures on your financial picture. For instance, if you are planning to make a major investment in machinery for your business funded with a loan, you need to budget the effect the loan interest and repayments will have on cashflow.

In the future, a budget can also help you determine the potential effects of expanding your facilities and the resulting higher rent and rates payments.

In the start-up phase, you will have to make reasonable assumptions about your business in establishing your budget. You will need to ask questions such as:

1. How much can be sold in the first year?
2. How much will sales grow in the following year?
3. How will the products and/or services you are selling be priced?
4. How much will it cost to produce your product? How much stock will you need?
5. What will your operating expenses be?
6. How many employees will you need? How much will you pay them? How much will you pay yourself? What benefits will you offer? What will your payroll taxes be?
7. What will the income and corporation tax rate be?
8. What will your facilities needs be? How much will it cost you in rent for these facilities?
9. What equipment will be needed to start the business? How much will it cost? Will there be additional equipment needs in subsequent years?
10. What payment terms will you offer customers if you sell on credit? What payment terms will your suppliers give you?
11. How much will you need to borrow? What will the collateral be? What will the interest rate be?

As for the actual preparation of the budget, you can create it manually or with the budgeting function that comes with most bookkeeping software packages. And remember that your accountant will be able to help you with this, give you impartial feedback and advice and help you to achieve a balanced and realistic budget.

Do you make excuses? If you’re reading this, you’re obviously seriously considering becoming an entrepreneur, if you’re not one already. And though it’s only natural to be apprehensive about starting up, that first dive into the pool is the toughest, but you must have faith in yourself and your abilities.

Here are four reasons why now is the perfect time to start up:

1. You owe it to yourself.
Sometimes insecurities arise because people feel they don’t deserve success. If these kinds of limiting beliefs are holding you back, it may be time to become a little more selfish. What is it about success that instils fear? A lot of it has to do with raised expectations.

Once you’ve established yourself as an entrepreneur, people will expect quite a bit from you. You’re no longer the young kid with potential. You’re now the professional adult who realised their potential. Sure, this can be a scary transition, but you owe it to yourself to grow and adapt. You owe it to yourself to become the best person you’re able to become. You owe it to yourself to make your job and work enjoyable and rewarding.

2. You owe it to your idea.
People have a misconception about entrepreneurs: They think that they’re only in it for the money. Though making millions is certainly on the mind of any young entrepreneur, the idea that business owners are entirely money driven couldn’t be further from the truth.

Often, entrepreneurs have a great idea that can truly impact the world in a positive way. If you’re hesitant to take the plunge, consider the power and potential of your idea. Consider the mark you can make on society. Innovation and creativity are the catalysts for progress, and, throughout the ages, entrepreneurial minds have shaped the world.

3. Don’t regret not starting up.
All of us have regrets in life. We look back at moments where we wish we could have made a different decision. But eventually, ambitious and active people realise that regret is weighing them down.

Once you make the decision to banish regret from your life, you are free to take risks. You laugh in the face of so-called “failure.” You welcome challenges, and you boast about your mistakes. Remember, you won’t regret taking the wrong action as much as you’ll regret not taking any action at all.

4. Help is there when you need it.
There’s no shame in seeking guidance once you’ve decided to take the entrepreneurial plunge. Finding a business partner that shares your vision and values is a great way to gain confidence and remain motivated. Remember, no one person can do everything. Delegate your responsibilities and share your skills with others. Then you can work together to build your business.

Additionally, finding a qualified and friendly business mentor can be extremely valuable and rewarding. Someone who has walked down a similar path and stared down the same insecurities can be tremendously effective in helping you traverse your own.

What was the hardest part about taking the plunge? Let us know in the comments section.

There is more to stock control than simply buying new products. You have to know what to buy, when to buy it and how much to buy. You also need to track your stock, whether manually or by computer, and use that knowledge to hone your purchasing process.

Maintaining Enough Stock
Your business’s basic stock should provide a reasonable assortment of products and should be big enough to cover the normal sales demands of your business. Since you won’t have actual sales and stocking figures from previous years to guide you during start-up, you must project your first year’s sales based on your business plan.

When calculating basic stock, you must also factor in lead time, the length of time between reordering and receiving a product. For instance, if your lead time is four weeks and a particular product line sells 10 units a week, then you must reorder before the basic Stock level falls below 40 units. If you do not reorder until you actually need the stock, you’ll have to wait four weeks without the product.

Insufficient stock means lost sales and costly, time-consuming back orders. Running out of raw materials or parts that are crucial to your production process means increased operating costs, too.

One way to protect yourself from such shortfalls is by building a safety margin into basic stock figures.

Avoiding Excess Stock
Avoiding excess stock is especially important for owners of companies seasonal product lines, such as clothing, home accessories, and holiday and gift items. No matter what your business, however, excess stock should be avoided.

It costs money in extra overhead, debt service on loans to purchase the excess stock, additional personal property tax on unsold stock and increased insurance costs. Buying excess stock also reduces your liquidity, something to be avoided.

When you find yourself with excess stock, your natural reaction will probably be to reduce the price and sell it quickly. Although this solves the overstocking problem, it also reduces your return on investment.

Some novice entrepreneurs react to excess stock by being overly cautious the next time they order stock. However, this puts you at risk of having a stock shortage. To avoid accumulating excess stock, set a realistic safety margin and order only what you’re sure you can sell.

Stock and Cash Flow
Cash-flow problems are some of the most common difficulties small businesses encounter, and they are usually the first signs of serious financial trouble ahead. Tying up money in stock can severely damage a small company’s cash flow.

To control stock effectively, prioritise your stock needs. It might seem at first glance that the most expensive items in your stock should receive the most attention. But in reality, less expensive items with higher turnover ratios have a greater effect on your business than more costly items.

Divide materials into groups A, B and C, depending on the monetary impact they have on the company (not their actual price). You can then stock more of the vital A items while keeping the B and C items at more manageable levels. This is known as the ABC approach.

Often, as much as 80 percent of a company’s revenues come from only 20 percent of the products. Companies that respect this “80-20 rule” concentrate their efforts on that key 20 percent of items.

Once you understand which items are most important, you’ll be able to balance needs with costs, carrying only as much as you need of a given item.

Tracking Stock
Good stock tracking systems will tell you what products are in stock, what’s on order, when it will arrive and what you’ve sold.

While manual methods may have their place, most entrepreneurs these days find that computerising gives them a far wider range of information with far less effort. You can even control stock right at the cash register with point-of-sale (POS) software systems. POS software records each sale when it happens, so your stock records are always up-to-date.

Features to consider in a POS system include the following:

· Ease of use. Look for software with a user-friendly graphical interface.

· Entry of sales information. Most systems allow you to enter stock codes either manually or automatically via a bar code scanner.

· Pricing. POS systems generally offer a variety of ways to keep track of pricing, including add-on amounts, percentage of cost, margin percentage and custom formulas. For example, if you provide volume discounts, you can set up multiple prices for each item.

· Updating product information. Once a sale is entered, these systems automatically update stock and accounts receivable records.

· Sales tracking options. Different businesses get paid in different ways. For example, repair or service shops often keep invoices open until the work is completed, so they need a system that allows them to put sales on hold.

· Security. In retail, it’s important to keep tight control over cash receipts to prevent theft. Most of these systems provide audit trails so you can trace any problems.

Every business is unique; you may find that none of the off-the-shelf systems meets your requirements. Industry-specific POS packages are available. In addition, some POS system manufacturers will tailor their software to your needs.

Be the business.
Treating your business as your “baby”, identifying with it personally can help you stay motivated. “Self-identity can provide the passion that keeps the venture sustained over time, it provides a sense of meaning,” Little explains. However, be prepared to cut the emotional cords if the situation calls for a more practical approach. “If the core project is attacked or it starts to become problematic, then you do need to be able to shift to a more pragmatic focus,” he says.

Get up.
Your environment can either stimulate or prohibit motivation. If your location can’t support your goals, consider packing up the laptop and finding a new place to work, either for the day or more long-term. “Find a way in which you can be supple and flexible enough to go to different places rather than abandoning a project,” Little says.

Hang in there.
As an entrepreneur or small-business owner, you are forced to wear many hats, and some may not suit your personality or style (say, when an introvert needs to hobnob with potential investors). To stay motivated while acting out of character, Little suggests planning a retreat afterward to a “restorative niche”, an environment or behaviour that makes you feel comfortable.

How do you stay motivated? Share your tips with us in the comments below.