When Will Your New Business Start Making a Profit?

You often hear of businesses having cash-flow problems. Put simply, when the cash going out exceeds the cash coming in, the money runs out!
When you're starting a new business, it's unlikely you'll have an income or positive cash flow for a while until the business starts to get established.
During this time, however, you are still going to have expenses: normal living expenses plus expenses to run the business, the car, service loans, pay for advertising, etc.
This is when you need to have enough funds put aside to carry you through until your income exceeds expenses. Obviously, you need to keep expenses to a minimum during this period; otherwise you could run out of money very quickly.
Your Business Plan should include a schedule or timeframe of when you expect your business to become profitable. You should expect to start making at least some small amounts of income soon after commencing your business.
You should also create a Cash Flow Forecast that shows the income you expect and when you expect to receive it, plus the expenses you expect to pay and when you need to pay them. This is not only useful for your business planning, it will also be required if you apply for a business loan.
To create a simple Cash Flow Forecast, record the following information on a computer spreadsheet, or a calendar or diary:

• the amount of money you have on the day the business starts
• the income you expect to receive, and the dates on which you expect to receive it
• the expenses you expect to pay, and the dates on which payments are due
• your running account balance, calculated after each entry

This will give you an idea of how long you can keep paying your expenses until you start making a profit (or run out of money). It can also serve as a reality check for you regarding the viability of your business idea!
Many new start-up owners are so confident that their business is going to be successful, they commit to spending unnecessarily large amounts on offices, office equipment, and other overheads.
If you don't have a large cash reserve, you NEED to think of creative ways to market, manage, and grow your business.
For example, you can take advantage of "virtual" office services to receive all of the benefits of the service while paying a fraction of the price. No need to budget for a full-time receptionist when you can hire a virtual one starting from just $29 a month. And no need to pay for a fax machine, line rental, toner and paper when virtual fax services start at just $12 a month. Using virtual services allows you to present a professional appearance to customers, while saving money (and often time) that is better spent on your core business.
By taking advantage of the latest technology and business services that are available these days, it is relatively easy to start your business part-time while working your normal job. Many successful businesses have started this way.
Once your new business develops a regular clientele and income, you'll soon have the confidence and cash flow to give up your regular job and work at your business full time.

Gail Hodgson is the Marketing Specialist at Alltel Australia. Alltel is a full service business telco and communications company specializing in services for the business market: supporting businesses of all sizes from sole traders to major corporations.
After several years of working in high tech industries, Gail is really enjoying working with products and technologies she understands! Alltel is Australia's 'best service' telco, specializing in products including 1300, 1800 and 13 numbers, and virtual office services including live answering, voice to email, fax to email, and email to fax.

You Are The Expert - Now Act Like It

While you can probably rattle off hair care tips and techniques for achieving the perfect look like you are naming your own kids, the information you have gathered from years of working in your chosen profession is a mystery to the lay person. That's why clients tend to all ask the same questions of you, over and over…
Your expertise is a valuable commodity that should not be ignored. In fact, it should be capitalized upon so that you can continue to expand your client base and reach your full potential. The best way to capitalize on the knowledge in your head is to get it down on paper. Writing an article for a local publication is a great what to be recognized in the community for what you do (see previous article Write an Article - Share Your Knowledge). But not everyone is confident enough in their writing skill to attempt getting published, so let's look at other ways you can spread your knowledge as an expert.
Talk up your trade
This is the easiest, and most obvious, way to spread your expert knowledge - talk it up. Chances are you are already doing this for the most part, but it's time to take it up a notch and work your magic. Everywhere you go, everything thing you do, find away to work your knowledge into the conversation. Girls night with your gal pals, and one of them complains about the cost of her fave products - tell her about another, more affordable option to solve her needs. Waiting in line at the grocery store, chat up the woman in front of you and mention how you love working with hair like hers. If she expresses a difficulty with her hair, offer solutions. Make it your business to talk about your business and let people know that you are the expert.
Answer the top 5 questions
Chances are the majority of people ask the same five questions. Instead of secretly rolling your eyes when someone asks again, use those questions as a marketing tool to show off your stuff. Create a hair Q&A and answer the questions on paper. You don't have to create a novel out of your tips. In fact, short and sweet is the way to go, people like information in bite-sized chunks because it's a quick read. The Q&A can then be added to your website and/or Facebook page as free hair tips and more proof of your expertise. Whatever you do, don't forget to include the most important tip - how to contact you! Make it easy for people to get more information and to contact you.
Spread the word
As you accumulate Q&A tips, create a binder of them to keep with you. Then instead of handing over a stack of magazines for your clients to read while their hair processes, offer them your binder tips. Consider making multiple copies of each tip, and slipping them into plastic sleeves within the binder so clients are free to take their favorite tips with them to share with friends (with your contact information on each page, of course).

Important Tips For Business Owners

There are a lot of things that go into building a successful business. You need to blend a combination of business savvy with great customer service. It is like mixing a combination of hard-nosed business sense and kindhearted compassion for your customers. In addition to balancing this blend of components, you also need a lot of other skills to really stand out from your competition. While accomplishing this is a challenge, it is one of the things that drive entrepreneurs. Business owners love to be challenged and the better they are at overcoming those challenges, the better their business fares. One of the ways to keep your business going strong is to stay organized. To do this, you may need to store some of your stock off-site at a contract warehouse or 3PL. This helps clear up space for work and it helps you keep better track of your inventory.
Staying organized is important for more than just your business inventory. You also need to keep your storefront organized, if you have one. If you do not have a brick and mortar story, you need to keep up with the organization of anything your customers do see. If you operate a website that sells products, you need to keep it organized too. View that as your shop and makes sure the products are displayed in a pleasing manner that makes people want to shop with you.
Another way to boost your business and ensure that your business continues to grow is to be honest with your customers. Successful business owners understand how important it is to operate a business with integrity and honesty. While being dishonest may make you a quick buck, it will catch up with you in the long run. Make sure you are honest with your customers and do the best job you can. If you or your company makes a mistake, be up-front about it and get to fixing it as quickly as possible.
In addition to basic customer service and a pleasant shopping experience, look for ways to offer customers more than what the competition offers. You should do your best to help regular customers out and invite new customers into the fray. Offer discounts and special pricing for loyalty and attract new customers with similar deals. While you may reduce your immediate profits, you will ensure long-term profitability. A lot of companies are reluctant to offer too many discounts because they view it as hurting their bottom line. The truth is, if you add more customers and give more customers an opportunity or reason to buy, it will improve your business and boost profits over time.
Finally, remember to offer the highest quality product you possibly can. Even if you do not sell the most expensive product in your field, be sure you provide your customers with the best product they can get for the money. Some people are looking for a reasonable price and are willing to purchase something that is not top of the line, but they want to feel they have gotten their money's worth. Work hard to provide good quality for a fair price.