Budgeting

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Budgeting is one of the biggest challenges facing small businesses. Often times the person that starts a small business is good at whatever type of business they start but when it comes to the financial end of it they fail. This is why lack of capital and bookkeeping are two of the biggest reasons why a business will fail.

The All Business Blog has a great entry on 8 Budgeting tips for Small Business.

Since yesterday we talked about technology, one of the important things to remember is that budgeting should be easier than ever today with the software that is available in the marketplace. While items such as Quickbooks Pro is very popular Intuit the maker of Quickbooks also makes a version of the personal budget software called Quicken Home and Business that many small companies could use.

The great thing about these software programs is that they are easy to learn and use. There is no excuse for not having some basic budgeting software on your computer.

One area I will agree with is number 5 that says don't budget to the last penny. I feel you need to start with zero add in your revenues then subtract out your expenses. Not doing it to the last penny will leave some fidget room that could lead to problems in the long run.

One thing I would add is to be conservative with your numbers. It is much better to be conservative with your budget that too optimistic. If you are conservative and do better that is good thing but if your too optimistic you could end up hurting yourself.

Many transit agencies across the nation are figuring that out after budgeting for sales tax increases because numbers were good for many years running and were caught with their pants down when numbers tanked in the recession.

The success of your business depends on how well you budget. Your success depends on your budget.

Are you Outsourcing?

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The word outsourcing will make most people cringe including myself because of what some companies have been outsourcing, but outsourcing should not be a bad word but you have to do it right.


Outsourcing has gotten plenty of publicity lately especially with so many companies outsourcing their customer service functions to places like India. Recently I had issues with my Internet Service Provider and it turned out the company I go through has outsourced everything to India. This is where the problem arises because the guy on the other end of the line only knew what the computer told him to do; by the end of the day I changed ISP’s to a company that does not outsource their customer service functions.

That is where many companies are absolutely failing when it comes to outsourcing. Instead of outsourcing functions that do not directly affect the customer, they are outsourcing their direct link with the customer and putting their customers and their futures in other’s hands.

So what should you outsource?

As a small business owner there is plenty of areas that you can outsource that will not affect the service your customers get but improve your operations and finances.

An example of outsourcing that a small business owner should seek is accounting services. While I have extensive experience with numbers, many small business owners are not numbers people and should try to find someone that could do their paperwork better than they could.

Another popular source of outsourcing for small businesses in the last few years is virtual assistances. Virtual Assistants do a large range of tasks that will free your time to build the business.

In other words outsource tasks that someone else can do better than you can or that will free up your time to be more productive. What you do not want to do is outsource anything that will affect the level of customer service that your customers will receive.

There are other side benefits of outsourcing including giving business to your fellow small business owners, having more people who know about your business and if you treat them right will talk about your business, and finally another source to network with.

So by all means outsource, just make sure you do it right.