Archive for General
Break-Even Analysis – Your simple high value tool
Posted by: | CommentsOne of the trickiest aspects of bringing a new product to market is to estimate the total cost involved in its production. Cost of production effects margin and margin determines how many units must be sold to make a profit. If the number of units sold 
can’t provide sufficient margin at a market acceptable price, then, no matter how good the product is, producing it will result in a loss for the business. The nexus between cost of production, price and units that need to be sold to make a profit, is called the ‘break-even point’.
Break-even analysis is one of the most important financial tools you can use to make better business decisions. Read More→
Discounting is Dangerous
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Offering a discount in the heat of negotiations may seem like a good idea at the time but thoughtless discounting is an easy way to lose money fast.
Before you succumb to the temptation to win new business by offering a discount take a moment to consider these ten problems associated with discounting.
- Discounting eats away profit margins!
- Negotiating a discount focuses the customer’s attention on your price. If your only competitive advantage is price you are in trouble because price can always be matched by a competitor. The focus should be on the benefits of the product to the customer that make the price, if not irrelevant, then at least not the primary influencer of the decision to buy. Read More→
Protect Yourself From Invoice Scams
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Paying on phony invoices is an occupational risk for small businesses. They are regularly the target of scammers hoping to take advantage of sloppy bookkeeping, inattention on the part of employees and poor communications between the people in the firm ordering goods, those receiving them and those approving payment. All too often they are paid unwittingly along with a number of other routine bills.
Scammers have fake invoice production for such things as stationery or cleaning services, down to a fine art. Their invoice will include names (perhaps established by a prior phone call to the business for some innocuous seeming information), figures, and other details that add up to an authentic looking invoice. And they have a range of scams other than fake invoices – solicitations for the purchase of goods or services carefully designed to look like invoices for items already received; payment for listing in a directory of some sort you never agreed to; asserting that there is a government requirement for the services offered when no such requirement exists, and phony advertising to renew an ad allegedly placed ‘last year’ … to cite just a few. Read More→
Dealing with Disasters
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For those who haven’t experienced a disaster first hand it’s difficult to imagine, even from the graphic images fed to us by the media, the realities of the situation. What pictures cannot convey is the frustration of an owner watching their business suffer through the several days or weeks during which power is unavailable, transport facilities are out of operation, communications are down and access to the premises is prohibited. It’s exactly those restrictions that can spell the death of a business caught up in a disaster and unprepared to deal with the consequences.
Are you prepared? Ask yourself these questions, they cover some of the most critical aspects of keeping the business afloat after a disaster. Read More→
Private Use of Company Computers Puts Your Business at Risk
Posted by: | CommentsAs the use of computers becomes more built in to business operations employees naturally spend an increasing proportion of their time working at them. Working? Really? With temptations such as chat, streaming video, blogs, social networking and myriad other interesting sites (weather, maps, pornography, music, games, gambling, shopping, sports) it’s no wonder that surveys such as Websense’s annual Web@Work study reveal a depressing incidence of non-work related Web surfing by employees.
And its depressing not just because of the loss in productivity due to the amount of time wasted on such activities. These private activities, because they take place at the workplace using work computers, can entangle the business in legal prosecution cases related to their illegal use. Read More→
Play It Safe With Your Home-Based Employees
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An increasing number of employees work exclusively or part-time from their home – but home is where most accidents happen. Employers still retain some duty of care responsibility for their home-based employees so it becomes an essential part of any at-home work agreement to factor in a safe workspace that minimizes the chances of accident and compensation claims.
In general, while the expectation is that an employee should be exposed to no more risk than they would be in the office or workshop, in reality an employer has little control over the home situation. Nor is it entirely clear just exactly how occupational safety and health or compensation laws cover this subject. Read More→
Perils of Unplanned Expansion
Posted by: | CommentsWhen sales are increasing and new opportunities can be sensed, many a business owner’s thoughts turn to expansion. But unplanned expansion can be as detrimental to your business as no growth at all. Fast growth can destabilize a business giving its owners a false sense of well-being while the additional revenues eat up more operating dollars than expected. If expansion is on your agenda, keep these things in mind.
Watch Your Overheads
The biggest danger in expansion is the erosion of a low overhead structure by unjustifiable purchasing or from simply being too busy to keep track of what is happening. Overhead expenses that were under control in the stable business situation now grow rapidly to cover extra expenses associated with a bigger scale of operations – transport, inventory, rental on larger storage space, and all the rest will deplete precious capital. Read More→
