May 17, 2012

Easy Outsourcing for Small Businesses

Outsourcing is everywhere and almost everyone is talking about it. It affects our jobs and we might even know a few friends or family members who lost their jobs due to being outsourced. As small business owners we need to stay competitive and certain things require outsourcing – even though we might not call it that way. However, any service that a small business receives from another company is kind of outsourcing.

Outsourcing becomes more critical when it comes to things related to the Internet and small businesses should be well aware of what can be outsourced and how to outsource it. While large businesses can work with the large outsourcing providers this is not a good option for the local Heating and Plumbing business that needs some online work done (be it SEO, PPC, or web design). Small businesses can hire a local web designer or service provider and that is a good option for some stuff, but then again there are many things that would be way too expensive to be done that way.

I started outsourcing a lot of things last year and it was a lot of work. I actually went to Craig’s List Manila, posted my jobs, interviewed peopled, and assigned the jobs to someone I felt was a good choice. However, it was a difficult process which came to a halt when I posted a new ad to hire another person and one of my existing employees applied (not knowing it was me though). In the end I found out the girl was “working” 3 full-time jobs at the same time. I don’t mind if somebody wants to work a lot, but the work I paid for did not match the hours I paid for. She worked 10 hours a day fitting 3 full-time jobs into that time frame. So, instead of having a full-time person working for me, I was cheated on by someone working part-time.

There had to be a better way and I found it in oDesk. oDesk is like a market place where buyers and sellers meet. You can find content writers, link builders, software developers, data entry professionals, and many more. As a business I can post a job, interview people, read the feedback they have received from other jobs and then decide who to hire. Once somebody has been hired, oDesk has a software installed on their computer that tracks usage. This is a great tool as I can keep track of how many hours somebody works and compare it to the results.

By using oDesk I do not have to pay $50 – $75 per hour to a consultant, I can get away with a fraction of the cost and receive the same quality of work. Not everyone on oDesk works in a country where the cost of living is so much cheaper, but you can also get connected to people living and working in the US. This is important as like for content writing you want a native speaker as an example.

oDesk can be used for many things and you should definitely check it out. Look at the jobs and see what other companies are using it for. Look at the applicant profiles and see how employees can be selected and rated and reviewed. It is easy to use. Once you post a job, oDesk takes 10% on top of what you pay to an employee. As an example I posted a data entry job at a fixed price of $30 and was then charged $33.00 for the work when it was done. The same work would have taken me 6-7 hours and so I was able to do more important work instead. The same freelancer (they are not employees actually – just using the term accordingly) now has completed 3 jobs for me. While the amount of money I paid sounds very low compared to US wages, for the country this freelancer lives in it was middle-class “salary”.

Check out oDesk and see if it can be used for some of your needs. Some stuff I do through oDesk and other things I am working with US companies. Combined it is a great solution that allows me to be competitive.

The On Demand Global Workforce – oDesk

Your Business: Part-Time Real Estate Agent

Your Business: Part-Time Real Estate Agent

Is your business being a part-time real estate agent? Well, if so you better be good as otherwise the market will tear you apart. I am currently in the market trying to sell my house and I already bought a new one. I have been dealing with a very professional real estate agent who owns her own agency and does this full-time. However, during the process I visited many open houses and talked to many real estate agents and watched how everyone was doing things. It’s amazing how easy it is to separate the full-time realtors from the part-time people. And often this is the same separation between a successful realtor and someone less successful and less professional.

If you are a part-time real estate agent you have a great shot at this business. The main thing however is to separate yourself from all the other part-time realtors out there. It starts with your appearance. Look professional at all times when being a realtor. Don’t go overboard, but do not go cheap. Drive a decent car – not something too old. Understatement is fine if done correctly. Instead of driving a Lexus or Mercedes Benz you could drive a loaded 4-5 year old Jeep Grand Cherokee.

An experienced real estate agent advises customers in regards to what to do in their house to make it look more appealing. I have seen too many part-time agents not really knowing anything about home staging. Being a real estate agent means to be passionate and knowledgeable, too. This separates the boys from the men so to speak. This job is not just about the money and that is often shown in how successful a real estate agent is. They hope the house will sell itself and they can collect a nice commission. This might work in boom times to an Ok level, but when you collect $20,000 per month in commissions, your more professional counterparts make 4 or 5 times as much + build a loyal customer base at the same time.

This article only scratches the surface about this topic. Being a real estate agent can be a very rewarding business. However, treat it as a part-time business and success will never come.

Change Management Processes for Corporations

Change Management Processes for Corporations

Change Management is a critical piece for corporations. Large corporations depend on it for anything that affects their production environment. But what is change management at all? Change Management is the process that kicks in when a change is made to the production environment of a business. For the matter of this article we will use an Information Technology related case to explain Change Management.

Company “A” uses change management to keep track of changes to its web servers. The change management process also allows to inform all internal business units and departments of the upcoming change to the web servers and what parts of the business are affected by this change. The change management process is started by the decision to update the web servers with a newer version of the web application. The website administrators, the QA department and the developers have finished the final testing of the new application update and now it is time to go live.

The website administrator starts the process by writing down the purpose of the change and what steps are required to complete the task. He also describes the impact to internal and external users and which departments of the business might be affected (example: external customer service). The description of these tasks for the update are usually high level and not too detailed. The reason for this is more to inform the business about the change and not to list an exact how to step by step guide.

Once the website administrator has finished the initial change management request form (electronic or hardcopy) it goes up one level to his direct manager and with his approval the change management request is being distributed among departmental points of contact that have been defined in an earlier process. The different departments and business groups review the change management request to evaluate the impact to the department or group. If no impact is visible or if a possible impact is already addressed and covered in the change request the department or group approves the change management. If a possible impact is not addressed the group or department denies approval and ask for more information or how the issue in question will be addressed. Approval for the change request goes to “pending”.

Once all issues are addressed and worked out and every necessary approval has been submitted the change management request awaits one more step – CTO (Chief Technology Officer) or CIO (Chief Information Officer) approval might be required. This process makes sure that a track record of changes that affect the business is created and that every group, every department and the business management are aware of what is going on.

Some critics see change management as a process that slows down the ability to act fast when needed. Others see it as assurance for continuing business success as department A might not realize how big the impact of a proposed change is to department B.

7 Tips to Improving Your Cash Flow

7 Tips to Improving Your Cash Flow

Cash is King… That is what everyone tells us and it is true! You cannot function successfully in any business without proper cash flow. So if this Cash Principle is so well known, then why is it that so many businesses struggle? Sometimes the obvious is not always so obvious when you are entrenched in running the day-to-day aspects of your business. Here are 7 Tips to Improve Your Cash Flow!

1. Cash and Carry. Operate a cash and carry type business versus worrying about receivables. The best business plan is one where customers pay at the time of purchase so you don’t have to worry about invoicing or collection procedures. Invoicing and collections take up valuable time, so you want to come up with creative ways to incentivize payment immediately. Set the ground rules in the beginning so your clients know what you expect.

2. Receivables Collection. Collect your receivables in a prompt manner. Don’t let them hang out there forever until your customers decide they want to pay you. Being a good steward of your business is “good business”, so have a process in place for invoicing and collections. The longer your receivables are outstanding, the less likely you are to collect. You don’t have to be mean and rough to collect promptly from your clients. A good rule of thumb is that you should always have a due date on the invoice and then send out a follow-up statement within 10 to 30 days from the due date. Each industry and business environment has different insights as to what is the “ideal” time. I would not send follow-up correspondence any sooner than 10 days past due. Payment may just be delayed by the mail; however, waiting longer than 30 days is too long. If you have not received payment within 45 to 60 days of the due date, then a phone call should be made to follow-up with your customer. Accounts that go past due 90 or more days should be taken to the next level of collections with an outside agency, internal collection “ninja” or any other mode you have established for collections. Find what works best for your business and stick to it. Each day that you are delayed in receiving payment is an additional cost of doing business. Time is money.

3. Receivables Funding. Implement an accounts receivable funding program. Factoring of accounts receivable has become very popular and it can be a great way of keeping the cash flowing. Businesses who deal with large businesses or government agencies lend themselves to utilizing factoring programs. If your clientele is made up of small businesses or individuals, you may find it more difficult to establish an accounts receivable funding program. Why? Funding companies are monitoring risk. There is less risk with larger companies or government agencies. Or so they think!

4. Vendors. Negotiate terms with your vendors to help delay the outflow of cash payments. Lots of vendors have payment terms where you can delay the payment until end of the month or maybe even up to 60 days. This allows you a little float time to use their money while you are working on your project. Then hopefully you’ll receive payment from your customers prior to needing to pay for the products you purchased. Some companies also go the route of consignment. Then you are selling someone else’s goods and don’t have your money wrapped up in inventory. This option can help you increase your product offerings without having to invest large amounts of money in inventory.

5. Customer Deposits. Have your customers pay a deposit prior to the start of the job. This will help you cover your upfront costs as you start the projects. It’s very common to have a deposit with the signing of your contract. It decreases the risk associated with nonpayment because you’ve received a portion up front. You can also implement periodic payments throughout the contract vs. a single payment upon completion of the project so that cash is flowing in consistently.

6. Revolving Credit Line. Establish a revolving line of credit through a lender to help you with potential cash flow crunches. Especially if the amount of savings from prompt pay discounts are greater than the financing charge from the lender or the lender’s financing charge is less than what your vendors might charge for late payments. This helps give your business a safety net so that you can continue to operate during those times when you are offered great specials if you buy today but may not have extra cash available.

7. Savings Fund. Establish a savings fund to help you operate through slow times. Most businesses have swings in their business flow and managing cash effectively can be a challenge. Store away extra during the good times to help alleviate issues during the slow season. I know this sounds easier than it is, but if you take out a percentage each month and transfer it to a savings account then it will be “out of sight and out of mind.”

You may find that each of these 7 tips is viable for your business, or maybe only 1 or 2. Anything that you can do to focus on better cash flow will provide benefits to your business. The worst thing you can do is sit back and “hope” that things go well. Look around! See those “CLOSED” signs on the surrounding shop windows? They played the “hope” game and lost. What are you going to do? Hope? No…implement a plan for cash flow management starting now.

About the Author

Copyright 2005 Pam Newman

Pam Newman helps business owners keep money from slipping through their fingers. Pam is a Certified Management Accountant, Certified QuickBooks ProAdvisor, and Author of Out of the Red and Unlocking the Secrets of QuickBooks. Pam believes that it is important for you to understand the financial picture of your business, so that you can make informed decisions. For more information, please visit http://www.rppc.net

Tax Time May Mean Big Savings For Small Businesses

Tax Time May Mean Big Savings For Small Businesses

By HP – www.hp.com

For many small businesses, tax time may be the right time to invest in new computer systems and related equipment. That’s because there are a number of tax deductions available to companies that replace old technology for newer systems.

Couple that with what many say are lower prices on new IT equipment, and many businesses could end up paying less taxes while increasing in productivity. The following tips may help your company make tax time compute. They come from the experts

at HP:

•Replace older technology.

Congress has increased the amount businesses can write off on new equipment purchases to $102,000 for 2004 taxes. The increase, known as the 179 deduction, has been extended

through 2007. Since PC prices have dropped more than 40 percent since 2000, many companies have invested in new PCs and servers and will continue to do so in 2005. In addition, it is a perfect time to invest in a variety of products that improve data and system security from hackers, viruses and worms.

•Consider bonus depreciation.

A 50 percent depreciation bonus is available during the first year of service on certain capital assets acquired before January 1, 2005. The bonus depreciation applies to most equipment, machinery, and office furniture.

• Check the R&D credit.

Companies may be able to take a 20 percent credit for the cost of technology research intended to be useful in developing new or improved business components.

•Depreciate computers and electronic equipment.

Computers or other equipment used for personal purposes—such as handhelds, scanners and copiers—may be eligible for a limited depreciation deduction if they are also used for business. For depreciation tips, see IRS Publication 946 or your tax advisor.

•Take advantage of PCs.

Use your PC for bookkeeping and other small business processes that can help increase productivity and streamline operations—but be sure to track your usage. Depreciation

can be limited if use of the equipment for business purposes is below 50 percent.

•Look into leasing.

Leasing technology equipment lets businesses expense—rather than purchase outright—IT equipment. Small businesses may be able to triple what their budget would ordinarily be able to support.

•Take security precautions.

Avoid being the latest victim of identity theft and make sure all your personal and financial information is well protected with the latest technology. Take time to assess your company’s technology security priorities. Then hire a reputable vendor to help you review the wide security choices available on the market to figure out which product/solution makes the most sense for your business.

•Recycle your technology.

Many states offer tax credits for individuals or corporations that recycle equipment. Also, most major computer vendors let customers return any computer hardware through take-back and recycling programs. For instance, in addition to its standard recycling program, HP offers an acquire-toretire asset management service. It can help small businesses manage their IT investments in a costefficient manner—and dispose of equipment when it’s time to move to newer technology.

•Donate PCs to charity.

Many charities accept old PCs as part of their exempt functions. Companies can use such programs to trim bloated inventory, obtain tax deductions and give back to the community.

•Keep it in the family.

The salary paid to a family member is a business deduction. Family members can assist with bookkeeping, administration, marketing and other aspects of your business. Your teenager may be the perfect IT specialist for your company.

Article provided by HP’s Small and Mid-Sized Business Unit

www.hp.com