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A family business is defined as one that has 2 or more members of the same family working for it, the business is run for the benefit of the family. Generally speaking most family business does not last longer than 25 years, or 1 generation.

There are advantages and disadvantages to working in a family business, one of the main disadvantages are; if thing go drastically wrong it can ruin a family relationship forever; there is also sibling rivalry to take into account. On a positive note family members will be loyal and have a willingness to sacrifice for the benefit of the business. For these reasons it is important the right business is selected when looking to acquire.

One of the main things that should be considered when looking to acquire a business is simply; why is the business on the market? Is it because there is a fundamental problem or are the owners simply ‘cashing out’.

Other considerations:

How will the family business be managed? In an ideal world every family member would have an equal share, however in reality this is not practical as someone needs to have overall authority otherwise decision making could become too problematic, this is one of the factors to consider in choosing the right business.

What is the long term plans for all members of the Family? Some family members may want to retire in 10 years time others in 20, these are all worthwhile considerations.

Financial situation - This may require one member of the family providing the finances to purchase and run the business, this can also prove problematic and cause resentment, ideally all members should share the same risk, this way everyone would be working towards a common goal.

In summary a family business brings a unique set of problems, however if these problems are addressed at the beginning and the right business acquired then there is no reason why the business should not go on to be successful. What better motivation can a person have than working for a business so that one day their children become part of it in the future?

If you would like any more information on this subject then please visit our website at www.bizseller4u.com

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In Part 1 of “Building Your Way To Online Success,” we took the first, very basic, step toward turning your online business dream into a reality, by deciding what exactly your business is going to be. We looked at the importance of having either a knowledge of the field that your product or service is in, or at least a passion for your particular business idea.

So with that first, fundamental, decision out of the way, it is now time to move on to the next stage–which is the essential foundation and framework for every online business. If you get this all-important step right, you will be well on your way to building that online success of your dreams.

Step 2: CREATE A WEBSITE

When it comes to running an online business, your website will be the first impression that potential customers have of your service or product. Building a website isn’t necessarily all that hard–as just about any high school student would tell you. However, building an excellent website, that has great consumer appeal, is another thing altogether. To do that requires more than a slap-dash, homemade, bargain-basement job.

With excellence as your goal, it is important that you make a decision right now to consider your business website as a valuable and vital investment in the ultimate success of your venture. It can be very tempting to try and save a few pennies here and there, particularly in these early stages, but it really is true that you get what you pay for. Saving a little bit of money on your website design now, could end up costing you a fortune in sales in the future.

So, with that decision made, let’s look at what you need to do in order to create your business website.

1. Register a Domain Name

If you were preparing to build a house, you wouldn’t go out and buy all the bricks, tiles, floor-coverings and furnishings if you didn’t already have a block of land to actually build your house on. The same is true when it comes to building your business website. Your online business “home” also needs an address. That’s why the very first thing to do when creating your website is to register a domain name.

Having a custom domain name will give your business a professional image, as well as making it easier for customers to remember your website address, or URL. When choosing your domain name, make sure that it isn’t too long or complex. Instead, aim for something that people will easily remember and quickly relate to your business, product or service.

Here are some examples of custom domain names:

You.com
YourName.com
BusinessName.com

There are many domain extensions to choose from, such as .com, .net, .org. The wide variety of extensions provides a number of alternatives should your first choice of domain not be available.

2. Designing Your Website.

Creating a website can seem like an overwhelming task to the web novice, but it doesn’t have to be that way. Thanks to technology, there are now options for everyone–those who want to do it themselves, those who need some help to do it themselves, and those who want someone else to do it for them. Here is a quick and easy guide to the options available:

A. Using HTML Editors:

If you already have an extensive knowledge of HTML and website coding, then the next thing you’ll need is a good HTML editing program to write your HTML code. I have always used First Page 2000, which is a full featured HTML editor. There is a free, slightly limited, version of their latest release, First Page 2006, which you can try by downloading the program at the link below:

http://www.download.com/First-Page-2006/3000-2048-10490779.html?part=dl-FirstPage&subj=uo&tag=button

You can also use programs such as DreamWeaver, which is one of the best HTML editors available. You can learn more about DreamWeaver at the link below:

http://www.adobe.com/products/dreamweaver/?promoid=home_prod_dw_082403

All these programs are designed for the user who has a good knowledge of HTML. If you are scratching your head and wondering, “What’s HTML?” then this type of web design program is not recommended for creating your website. Although these HTML editors are excellent tools for those with HTML know-how, they do require a certain level of proficiency to achieve a professional result.

Always keep in mind that the look of your website is critical for your business success. It must appear professional–even if you are selling something as simple as homemade handcrafts. You will quite literally only have seconds to make a good first impression when a potential customer visits your website. If your site looks as though it has been thrown together by an unskilled web design wannabe, your online presence will suffer.

Although they may not actually put it into words, most visitors will subconsciously believe that any business that did not put any expertise, thought or professionalism into the creation of their site, will probably be just as lacking when it comes to the provision of their service. The immediate impression made is that the business is inferior and unreliable–and it is an impression that is made an instant before that potential customer clicks their mouse and is gone forever.

If you do have the skills and knowledge to be able to create your own website using an HTML editor or web design program, there are still two more things that you will need before your website can be revealed to the world.

The first is that you will need to arrange for website hosting. If we think back to the analogy of the website being the house and the domain name being the address, then the web host would be, more or less, the suburb. Quite simply, a web host provides you with the space to be able to upload your website so that others can view it.

To be able to upload your website files to your choice of web host, you will need an FTP program. FTP is short for “file transfer protocol,” and is essentially a secure and simple way to transfer files from your computer to your web host’s server. If you do not already have an FTP program, it is quite easy to find and download one. Do a search on the web for “FTP program” and you will discover that there are many to choose from.

B. Use an Online Site Builder:

If you have been left with your head spinning after reading about HTML, editing programs, web hosts and FTP, then don’t despair. Thanks to some great, new, technology, there is a solution designed with you in mind.

Probably the easiest and most cost effective way to build a professional site is to use an online site builder. These online web design tools make it possible for anyone to create a site that can get results.

Website hosting is normally included as part of these services, and there shouldn’t be any need for the user to know anything about FTP. Instead of building your site using an editing program on your computer, you do it all online with an easy to use site builder. As you build your pages, your website is automatically updated from your site builder account. If you do need to upload any pictures or files, the file transfer is normally handled from your site builder account, rather than from your computer to your host.

Most online site builders incorporate technology that allows the user to create their web pages as simply as if they were typing in a word processor. However, not all online site builders are the same, and it is important to compare the relative benefits of each–but keep in mind that best value for money does not always mean the cheapest service available.

There are some very inexpensive online site building programs that do look quite good at first glance. However, these services often have many hidden costs, with the user being charged for extra features, such as additional pages, ecommerce, shopping carts, etc. So when comparing online site builders, take particular notice of what is, and isn’t, included in the initial cost. Once again, remember that it is very important not to pinch pennies at the expense of having a great website.

The best thing to do is to look for an online site builder that includes all the features in the initial cost, without the need to upgrade. One such service is the Quick Store Builder.

In my opinion, here are some of the best site builders on the web today:

http://www.quickstorebuilder.com/
http://www.highpowersites.com/

C. Hire a Web Designer:

If the thought of creating your own business website is giving you a headache, then it is probably time to call in the expertise of a web designer to do the job for you. However, be prepared that this is not an inexpensive option. Hiring the services of a good web designer can cost thousands of dollars. Even so, if you believe that this is the only option available to you, the end result should be worth the extra cost.

D. Free Services:

When considering how best to go about creating your business website, using a free service is NOT one of your options. In fact, I will go so far as to say that you should never use a FREE web hosting service or a FREE site building service, PERIOD!

Free web hosting services normally place ads on your website, which may be fine for personal use, but is far from desirable for a business website. Apart from the barrage of questionable advertisements, you will also not be able to use your own custom domain name, which is reason alone to avoid this type of service when showcasing your business to the world. A business that uses a free host and site builder is sending the wrong message to potential customers and should be avoided at all costs.

Every business website should aim for excellence, but an online business has to go even further.

Building an effective and professional online presence does require time, effort, and creative thought, however it is an investment that will go a long way toward reaping financial rewards for your online business. In fact, if done well, it will put you in “site” of excellence, and in touch with success.

Please look for Part 3 of Building Your Way to Online Success.

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Buying Whole Sale Products

Every successful business, big or small is based on the objective of profit. Every entrepreneur strives to buy low and sell high. In this article we will talk about the first half of the equation.. buy low.

A normal buying process in a corporate includes a myriad of buying sources for various requirements, not only the finished products, but also supplies and raw material etc. To keep it simple, we will consider a simple trading business, where no manufacturing or processing is involved, just buy and sell.

Sources of buying could include various sources like are manufacturers, distributors, agents, wholesalers, importers and liquidators. The decision regarding who to buy from stems from various requirements and reasoning criterion like price, product quality, reliability, warranty support, after sales service, terms of supply and fulfillment.

Wholesale Buying

Channels of distribution have evolved immensely and the process is still going on. There was a time when all steps in the product distribution cycle right from the manufacturer to the customer were considered important. Each of these steps involved a markup on the price to keep the margin for the entity handling the product, greatly enhancing its price. In a bid to reduce these markups, it has been seen recently that the steps have become overlapped and myopic. Irrespective of what steps have been bypassed, the objective remains the same, to get the products to the retailer at the minimum price. The wholesale buying sources thus have reduced to wholesalers, liquidators, and importers. Buying form these sources, you are actually buying from a discounted retailer. A lot of confusion is avoided when we see lot of internet advertising claiming wholesale prices; they are not wholesalers but discounted retailers. The evidence, lies in the fact that when you buy from a legitimate wholesale source, you will be asked for your sales tax ID.

Wholesalers: The first option is to buy from a wholesaler that stock your class of merchandise. The process is simple, just open an account and start buying. It is advisable that you open more than one account with different wholesalers to take advantage of price fluctuations and various schemes they offer from time to time, moreover, you have more sources, if the stock runs out with one wholesaler.

Liquidators: Buying merchandise from liquidators will be the cheapest wholesale source for new merchandise. Liquidators are different from wholesalers or distributors in the act they do not stock the same item consistently. They normally purchase form various sources that include off-season supplies, slow moving goods end-of-run products and goods from bankrupt traders. As a result, they have more variety.

Importers: Importers are one of the best sources of new products at wholesale or lower prices. Importers are normally product or industry specific. Importers of general merchandise are not very common. Importers normally work with large volumes and may tend to refuse low volume buyers.

Manufacturers: Another important and cheap buying source is manufacturers that include farmers, craftspeople and growers.

Factory direct: By far the cheapest source to buy goods, since it does not involve any intermediaries like agents, distributors or wholesalers. Buying factory direct for a small trader is not easy since manufacturers look to selling volumes. However, since the advent of the internet, this has become an easier process, to buy any products from anywhere direct from the manufacturers.

Certain issues like fair price, product quality, supplier reliability, terms of purchase need to be sorted out before moving on to buying through the internet.

Auction sites: provides wonderful opportunities to buy products at wholesale pricing under its Wholesale link. The page is numerous categories and sub-categories.

However, our recommendation to buy products wholesale from the best resources is on www.WholeSaleLounge.com where for example, you could find DVD’s at $4.95 instead of the normal retail of $24.95. Imagine the profit you could make at $20 a DVD on a daily basis. www.WholeSaleLounge.com lists various sources that include wholesalers, liquidators and manufacturers for numerous product categories and you could find your choosing without much effort. Find REAL Genuine Wholesalers, distributors, Drop Shippers, Liquidators and more on WholeSaleLounge.com

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Software

Current Business analytics software incorporates tools and applications for tracking, modelling, analysing and delivering data in support of decision-making processes. Simplify storage management Business Analytics software enables you to know where all your storage assets are, how they are performing and their utilization. Introducing Business Analytics software, you can see your entire storage infrastructure through a single integrated tool. Lower storage costs Business Analytics software helps reduce capital and operating expenditures by improving storage utilization and identifying misallocated or underused storage capacity. In 2005, more companies are requiring their executives to make decisions based on savvy use of business analytics software. Older business analytics companies gathered data now available through enterprise software databases, presenting it to executives to develop a business strategy. Many accounting software systems vendors have either built or added on business analytics capabilities. That makes sense since the software is aimed at the line-of-Business manager or executive who wants an at-a-glance view of business analytics.

Data

Data warehouse and business analytics/intelligence initiative for sales and operations management can deliver performance monitoring and metrics via web and ad-hoc reports. To meet this challenge, they are deploying business analytics applications, particularly those capable of performing high-level data analysis. To meet this challenge, they are utilising business analytics applications, specifically those capable of performing high-level data analysis. The nature of the overall business information lifecycle demands that companies understand the interrelationship between data, data quality, data management, and business analytics. Internally, Business Analytics provides to process owners dashboards with real-time data on SLA reporting, schedule monitoring, employee performance and process evaluation.

Market

Much work remains to be done by corporate IT departments, systems integrators and IT vendors in moving the business analytics market forward. There are hundreds of business analytics solutions on the market today. Much work remains to be done by corporate IT departments, systems integrators and IT vendors in moving the business analytics market forward…. Results from studies on market sizing, best practices, benefits, challenges, and shortcomings of business analytics deployments are presented as supporting evidence.

Intelligence

Failure is common in Business Analytics (or business intelligence) projects. Although business analytics will remain a niche within business intelligence, many agency officials are finding it to be important. More recently, the program has taken advantage of less widely used, more sophisticated business analytics tools that can expand the boundaries of business intelligence.

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Ah, how exciting it is to start your own business and be free of the corporate life! Many womento the tune of 10.6 million according to the Center for Women’s Business Researchhave cut the strings to an employer’s schedule and agenda to set their own direction. By starting their own business they are their own boss and proud of it! You may know a woman who owns her own business or you may be one yourself. One in eleven adult women is an entrepreneur!

Every woman who follows her inner voice and takes the plunge of starting a business is bodacious. Bodacious means to be bold, outstanding, and gutsy. From my ten years rising through the ranks at AOL forging my corporate career and now five years as an entrepreneur, I’ve come up with my own definition of bodacious: The courage to be in charge of your life.

It takes courage to start your own business and it takes courage to keep at it to make it successful. Here are three keys I’ve determined to being a successful, Bodacious Woman in business.

1. Figuring out what you need to know.

No one starts a business having all the knowledge they need to make their business successful. For example, if you were an accountant at an accounting firm, you’ll know how to set up the bookkeeping system for your new tax business, but you probably won’t know much about marketing your services or finding prospective clients. It’s critical that you seek out the knowledge you don’t have, and quickly. Fortunately, there are many ways to learn including books, seminars, Internet, and networking groups. A great way to get started is to simply asking questions. Bodacious Women know the answer is out there.

2. Strive for sanity!

Starting and growing your business can also feel chaotic. You not only have the roles of CEO, service provider, marketer, saleswoman, customer service representative, and administrative assistant, to name a few, you also have personal life roles such as wife, partner, mother, daughter, sister, neighbor, friend, and more. It’s no wonder women feel stressed! In my own business and life I don’t aim for balance. Instead, my goal is sanity - feeling satisfied at the end of each day, believing that I spent my time and energy on the people and activities most important to me. To do this, you have to know what you wantfrom everyday business decisions to major choices.

3. Feed the motivation meter.

In addition to gaining knowledge and striving for sanity, successful Bodacious Women in business need one more thing.. One of the biggest killers of motivation is isolation. Since many women in business are “soloprenuers,” it’s mega-important that you create relationships with other entrepreneurs and reach out often. A great way to do this is to be part of a “mastermind” group. My mastermind group consists of four other women. Every two weeks we gather on the phone for the sole purpose of sharing our mini victories and asking for ideas to overcome our latest challenges. Just knowing these women are cheering me on motivates me to stay positive and energized.

Deciding to start your own business can be exciting and empowering. It’s bodacious! To keep that lovin’ feeling and make your business successful, keep these three keys in mind: knowledge, sanity, and motivation. Here’s to your bodacious success!

Copyright 2006 Mary Foley

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One of the nice things about making money online is that it can be done with no employee overhead. It’s simply not that labor intensive. Even web sites can be built with programs that makes their creation simple enough for a single human being. But if you need help with some of the side considerations (like accounting) or simply want help at some point, what do you do?

You could hire someone, but that’s a massive pain and in my opinion, a grossly unnecessary hassle. If you hire employees, you have to consider:

• Benefits.
• Employment law.
• Meeting a regular payment schedule known as paying a salary.
• Dealing with subordinates if they decide they don’t want to cooperate.

Fortunately, none of these are necessary to endure. None of the tasks you’ll ever encounter will need a constant source of dedicated attention known as an employee. You may get the occasional necessity, which you can handle with outsourcing. This is where you go out and hire a professional or company to do something for you as a third-party contractor.

This is vastly preferable to hiring an employee because:

• You’re a customer, not a boss. The business or professional you’ve hired will be trying to retain you as a customer so you’ll pay them more money in the future. This puts you in a vastly superior position to being an employer.
• You can hire per-task. This means if you just need one thing done, you hire someone to do it, pay them, and then you’re done. The person you hire in this regard then worries about finding their own future business, and there’s no expectation of a constant paycheck from you.
• If the outsourced service does not perform adequately, you simply cease to use it and find another one. This is opposed to firing an employee, which is tough to do personally and can leave you searching months for a qualified replacement. This goes back to the ‘customer’ status as opposed to ‘employer’. The employer-employee relationship is far more restricting than the customer-business one. Customers have far better options than employers when things go wrong, and you’re a customer when you outsource.
• You suffer no massive additions of trouble. You don’t need to balloon your overhead or burden yourself with the rigors of employment law and taxation compliance. The outsourced company worries with all that, and they’re set up to deal with it already.
• You will still be helping the economy. I know you may have heard a lot of flak associated with the word ‘outsourcing’, but I don’t mean leave the country to hire someone. Unless you live in the middle of nowhere, no service you’ll ever want or need is farther away than a local phone call or a short drive from your home. There are plenty of professionals and small businesses near you if you simply look for them. When you do business with them, it means they can continue to grow and possibly employ their own personnel. So you still contribute positively to someone else’s employment prospects without hanging yourself.

So someday, if you do want or need someone else to take care of something, I highly recommend you outsource. Employees are for larger organizations. As an online businessperson working for yourself, you may want one, but you’ll never need one.

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In developing a personal, home-based, or small community business, you may find that it will grow to the point that informal transactions are no longer advisable - this is where business credit card processing comes into the picture. You will need to upgrade your operational methods in order to provide customers with the highest quality of doing business with your company, which will undoubtedly include the benefits of business credit card processing.

Some merchants prefer to keep accounts on a cash-only basis. They believe that money transactions can be handled more quickly and accurately than business credit card processing. However, what they do not take into account is the amount of manual labor and the potential for human error that typically accompany cash transactions. That is why, as your business grows, it may be time to invest in a credit card processing system.

Inexpensive and easy to operate, a business credit card processing program will attract customers who enjoy the ease of doing business with your organization. They will not need to bring in the right amount of cash or worry about overspending. Instead, they can shop for your products and services with an easy mind, knowing that you will provide the convenience of a credit card payment system. Whether you sell used books or handmade baby clothes, a credit card payment option generally attracts more clients who are willing to spend more than the person who operates on a cash basis.

Wherever your business is headed, the going may be slow unless you decide to grow your operation with business credit card processing. Low monthly or per-transaction fees make this equipment upgrade very affordable, even to merchants who are still building a relatively small business. For example, some companies require a small monthly gateway fee of perhaps $20 to $25 or so in addition to a small rate per customer credit card transaction. You may have the choice of paying perhaps 1.5% or 1.75% or 15 to 25 cents for each swipe of the card. Some companies don’t even charge installation fees. A simply monthly statement reflects the amount of business your new system is bringing to the company. If after a few months you feel the program doesn’t work well for your operation, you can always stop using it and go back to the old way of doing things.

You can set up a retail credit card processing program using a swiped card method of processing payments. Or you can use MOTO for mainstream commerce. There is even an e-commerce option when you are ready for the next step. Most systems are compatible with numerous quality banking platforms for safe, easy processing. It is important to work with a credit card processing company that you can trust. Find one with a solid reputation for quality business dealings. Get in touch with staff members to ask questions and learn more about the equipment, service and maintenance, as well as possible benefits and problems with a credit card processor. Only then should you consider signing a contract for the valuable and exciting services provided by a business credit card processing program.

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Compassion is one of five principles of the Skilled Facilitator approach. (It’s also one of the four core values of the approach.) I have already written about the other four principles: curiosity, commitment, accountability, and transparency.

Compassion means temporarily suspending judgment so that you can appreciate others’ perspectives or situations when they are different from your own. To be compassionate you need to be genuinely concerned about the other person or people’s needs. You need to think about and feel it from their perspective.

Here’s a simple example. When I’m teaching facilitators to work with groups, sometimes they get really frustrated by the group. The group members don’t stay on task or they don’t keep commitments. When the facilitators get frustrated they wonder why I can seem so “patient.” My answer is that I have compassion for the group. The team members are trying to change (which is why we’re working with them) and they don’t always change at the pace we would like them to. Getting angry at the team for not changing fast enough doesn’t help them or me.

If you’re working with someone who is feeling overwhelmed by his workload and you don’t think he has that much work to do, being compassionate means temporarily saying to yourself, “This sounds really difficult for him. Let me understand how he’s thinking and feeling about it. I may be missing things that he sees.” It’s easy to be compassionate when you agree with the other person’s situation; it’s more difficult - and more meaningful - when you’re compassionate with others who see things very differently from you.

Sometimes people think that compassion means feeling sorry for people and taking care of them in a way that rescues them. Not in our approach. Our definition of compassion means appreciating their situation and holding them accountable. It means sharing all the relevant information with someone even if she may feel bad hearing it. Sometimes a client will tell me, “I don’t want to give a coworker negative feedback because it would hurt her feelings.” But when you withhold feedback that can help someone change and improve, you take away the chance to change. I think that’s cruel, not compassionate.

When I introduced compassion to my work a number of years ago, I was concerned that my clients (some of whom work in scientifically-based organizations) would see it as “touchy-feely.” To my surprise and relief, they immediately understood the value of compassion - often because it was missing in their own workplace.

It’s hard to have compassion for others if you don’t have compassion for yourself. As a recovering perfectionist, I know this well. As long as I demanded perfection of myself, I would take myself to task when I didn’t meet my own standards. And I did the same with others. If you are always judging yourself unfairly; you will do the same to others.

Compassion makes it easier to use the other principles I’ve discussed in earlier columns. When you have compassion, it’s natural to be curious about what leads people to do what they do and it’s easier to be transparent about what you’re thinking. That’s because the questions you ask and the points of view you share stem from your interest in learning rather than simply judging. When you have compassion, it’s easier to maintain accountability because accountability is in the service of development rather than punishment. And when you have compassion, you are more likely to surface everyone’s underlying needs; that makes it easier to generate commitment.

What do you think? Share your thoughts with me and others at the Mutual Learning Action Group.

© 2005 Roger Schwarz

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It’s certainly possible to start a business with no initial money but it’s a big challenge. Whether you have funding to begin or not one of the most critical elements of your business is how you forecast and control your cashflow.

The first step is to build a business model to establish how cash much you will need. Your business model should include a month by month projection of your predicted sales and all related costs. You need to make sure you have thought of all possible costs that you could incur. And you need to include enough money to make sure you can live.

In your business model you should have calculated how much it will cost you to start your business and how much you will need to cover your early start-up phase. Never underestimate the amount of money you will need to start your business and always make sure you’re covered for slower sales and higher or unexpected costs.

Many entrepreneurs kid themselves that they are building a business when in fact they are putting all their time in for free and borrowing money from their own bank accounts and credit cards to fund the business.

If you’re going to do this, be honest with yourself and be realistic about how long it can last. Running out of money is one of the most common reasons for businesses failing. With a little forward planning you can make sure that you don’t end up as one of them.

Of course some people have created successful businesses from this type of start but many more have lost their business and ended up with large personal losses and debts. You also need to be aware that if your business is struggling then you could get into serious trouble if you start repaying debts to yourself before you repay other suppliers. This can lead to criminal charges, so be warned.

To begin your business you will need some basic start-up costs. This may include building a website, setting up a company, opening a bank account, buying some basic equipment like a PC, software, a printer, phone and internet access. You also want to consider the costs of marketing, promotion and travel.You may also have extra costs if you are setting up an office.

In the early stages of your business it is most likely you will be making a loss each month until you have reached a reasonable level of sales. An ideal business would be profitable from day one but in reality most are not.

If you have a business model that says you are profitable from day one, you may want to pinch yourself and look at it again. It’s most likely that you’ve made some overly optimistic assumptions and missed out some significant costs. Or perhaps you’ve assumed that you would begin selling on day one into a cold market where no-one has heard of you. Just take off your wishing hat and take another look with a little more realism.

When you look at your business model, you can use the monthly loss as an indicator of how much cash you will need. You need to keep adding up the monthly loss until the point at which you start to make a profit. This gives you a pointer towards the amount of cash that you need to fund the running of your business. So if your initial plan showed you losing $50k, $40k, $30k, $20k and $10k in the months before your model became profitable then your initial cash funding requirement would be $150k.

However, because of the way most businesses run this won’t actually represent your real cashflow each month. In reality it will probably take at least 30 days to collect payments from your customers and you may have to pay your suppliers in advance. Many suppliers want advance payments from start-up companies to reduce their own risk of not being paid.

To get a better feel for the amount of cash you need for running the business it is best to calculate the total of the last two months’ worth of sales before your business becomes profitable and then add that amount to the total cash that you originally calculated that you need. Let’s say that in the last two months of the example shown above you sold $60k and $80k respectively, this means you need to add another $140k to the cash funding you need as it’s very unlikely you will collect that money until two months after you’ve made the sales. This gives you a minimum cash requirement of $290k.

This is a more realistic view of the cash you need, assuming everything goes to plan. Next calculate your start up costs and add these to the total, if you haven’t already included them, and you’ll have the minimum amount of financing that you need for your business.

We say this is the minimum because the experience of most businesses is that they spend twice as much on costs as planned and take three times as long to hit their sales targets. Try changing your business model to reflect this and see how much cash you need then. It can often show you needing at least three times as much as you originally planned. You may need to rethink your business plans following this exercise.

When you’ve done all this you should also add an extra amount (at least 5 -10%) for the unexpected (we usually call this a contingency plan). This total should be your real target for financing.

The reason you go through this process, and any business owner should be doing this regularly, is to determine your real cashflow needs.

Cashflow is the lifeblood of your business and you must have an understanding of how it works. Many businesses go bankrupt because the owners were looking at their profits and when they saw they were profitable they believed everything was alright but their cashflow caught them out.

Equally many businesses have closed down or sold out due to simply not understanding the timings of cash flows in and out of their business when there wasn’t even a major problem. I’ll repeat it again because it’s so important. Cashflow is the lifeblood of your business.

Create a business model today and use it to plan your cashflow needs for the next year, no matter whether you’re just starting up or you’re already running a business. It could make the difference between success and total failure.

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Accounts Receivable Factoring is a means to meet the requirements of companies that are in urgent need of cash. Highly useful to the companies, this process of Accounts Receivable Funding refers to the process of selling of invoices and other Receivables by the company to a funding company. The funding company purchases these Receivables at a discount from the seller company. The seller company then gets the required cash that is required to run the business. Added advantages are that the seller company can then focus on the business without bothering with collecting the cash, because this becomes the responsibility of the financing company.

As a company raising funds through Accounts Receivable Funding, you have the option of managing the Accounts Receivable sales yourself, or outsourcing it to a company who specializes in providing Accounts Receivable Funding services. In fact, there are many companies providing Accounts Receivable Funding services, including designing, implementing, managing and providing solutions to clients ranging from telecommunications, education, retail, utility and the government sector, to name only a few.

The process of Accounts Receivable Management involves receiving documents, which can be either sales notes or checks, maintaining a record of the same, and providing quality checks by validating these entries to ensure that they all are defect-free.

Another aspect of Accounts Receivable Management involves eliminating all possible risks to bad debt and non-payment, thereby ensuring a smooth cash flow. Accounts Receivable Funding processes also require maintaining cordial relationships with the clients, monitor follow-up transactions and ensure a smooth resolutions of problems that may arise.

Depending on your business requirements, you can get Accounts Receivable Management services customized to your requirements. There is also Management software that you can use to keep a track of all your records, transactions and customer information in a systematic manner.

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