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Archive for the ‘planning’ Category

Making Progress on Unproductive Days.

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Roadkill on the sinus infection highway.Our scheduled moving day is less than 3 weeks away but were not ready, and barring a miracle, there’s no way we’ll be ready.  Even with the blog and non-essential business activities on hold since April, we’re just not going to make the deadline and it’s one of the most unpleasant feelings in the world.  I made a goal, set a date, and the process isn’t going to plan.

I knew moving to Michigan would be a major undertaking but  I hadn’t considered coming down with two significant colds in May and June.  I think we’ve been picking up  exotic cold viruses while making the 350 mile trek between houses since both colds struck within days of the trips.  (There will be a bottle of hand sanitizer in the car before the next jaunt!)

Most people, when faced with a deadline that can’t be met and an overwhelming number of OTC medications, would simply give up on the whole process.  Admittedly, the easiest thing for me to do right now would be to crawl back in bed with a box of tissues and my cocktail of decongestants, and expectorants but there might be one or two things I can do today.  Things that, in some small way, would bring us a little closer to completing the move.

The point is  I’m trying desperately to avoid stagnation or worse, loosing ground on progress.  So while I’ve been laid up for more than a week and won’t make my goal of July 1 to move, I have still taped boxes together and even packed a few things.

Progress may be slow at times here and in your own ventures, but as long as we find a small ways to move forward on our most unproductive days, we create the success we want to have in our lives.

Written by Karlie

June 9th, 2011 at 1:46 pm

Learning to use SCORE’s Financial Projection Model

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Yesterday, I had an opportunity to attend a workshop just for SCORE counselors where we went over the Financial Projection model that we use as part of our Simple Steps workshops. It’s not that I or any of the other counselors can’t “run the numbers,” but I, hadn’t used this particular tool and wanted to be sure I could use it if asked.

My first impression of the projection model was that it was probably overwhelming for most would-be small business owners.  Running the financials are scary enough without seeing 21 sheets of calculations.  Though now that I know more about it, I see that 21 pages isn’t 21 pages.  A lot of the sheets are the final numbers and you just need to fill in the blanks, where required, to have a Financials section for your business plan that will knock your bankers socks off.

It couldn’t be easier to get started with.  In fact, if you start on the first sheet, the basic directions are given then, there’s only one box to fill out.

The template also has a convenient color code for you to follow.  Color within a cell means you should add or modify information.  The white areas are where the auto-magic calculations occur and those area’s are protected so you can’t accidentally foul things up.

Yellow cells are the areas where you should put something in the box.  It’s loose requirement since you might not always have a number to enter.  For instance, you might not need any money for business travel, so it’s alright to leave it at zero.

Green boxes are areas where you can add modifiers that will ultimately give you a more accurate projection.  If you know the interest rate on your loan or the life expectancy of your equipment, or have other insights, feel free to add them.

The trick of creating an accurate Financial Projection is knowing that you don’t just sit down and fill it out.  It’s a work in progress and could take more than an afternoon to complete. Expect to find items that you don’t fully understand.

There will be some things you know and can easily add them in the right spots, but you’ll probably stop after each addition to research the number for the next cell.  You should also be prepared to ask questions when you’re stumped or don’t understand the relevance of a particular portion of the financials.

This Financial Projection model can also help you determine your profitability and avoid too many losses by easily modifying your numbers.  As the counselors ran through the projections for a faux bakery yesterday, we initially budgeted $15,000 for a delivery van.  Later on though, we began questioning the need for a van when our profitability looked slim.  Then again, all of our numbers were made up, so we had a little laugh about showing positive cash flow at all.

For your projection, using real numbers, it should be much easier to spot the weak points and determine if they can be overcome.  If they can’t, be glad that you know that before you sink your life savings into a business that will never earn it’s keep.

If you have any questions or comments about using the spreadsheet, feel free to leave me a note, below that way we’ll all learn more about the process.  Otherwise a tweet, Thumbs up or sharing on your favorite service would be greatly appreciated. ~Karlie


If you’d like to run some numbers of your own you can download SCORE’s “Simple Steps Financial Projection Model.” And don’t worry, you don’t need Microsoft Office for the template to work.  I used OpenOffice.org which is a free download for Windows, Mac and Linux users, or if downloading isn’t your thing, you can order Open Office on a disc.

Written by Karlie

March 29th, 2011 at 5:36 pm

Posted in planning,Start-up

Wasting Money on Software

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One of the biggest wastes of money for any business is software licenses.

The first issue is that software is a cost center, and ROI to shoot for is some sort of increased efficiency.  Regardless of how efficient it brings in customers, tracks inventory or creates slide decks for presentations, you have to have it to compete, so it all comes down to how well the system works.

The good news is that publicly licensed software allows businesses to think about starting their software roll out with the finishing touches.  Carrying a General Public License or other Open Source License is the most important part because, it’s usually available at no cost.

If getting it for free isn’t enough of a cost savings, then stick with me for another moment.

Custom software is usually the best way to get a system that works exactly like your business model dictates, but the costs grow exponentially. The more complex the system, the more it’s going to cost to build.  But it doesn’t end there, I usually recommend my clients assume an extra 30-50% above and beyond the initial construction phase for tweaks, bug tracking and resolution.  If you start with a lower cost, then your 30-50% is also going to be a much smaller number.

In some cases fixing a bug in the system could also be free if it’s submitted to the software’s development team.  It might take a little longer for resolution, but it’s hard to argue with free if your budget is tight.

With a little research it’s usually possible to find finished software suites that are close enough to meet the business’ requirements and development can begin where a custom solution would just be finishing up.  A good software developer can even combine functions that may not have been designed together to create a truly custom solution.

The library of software that’s publicly licensed these days is vast and a business that wants to go this route should start the research process by outlining what functions the software must have.  I also advise they look at what might happen in phase two of the roll-out and to consider what flexibility they’ll have to modify the system to adapt to changes in the business environment.  A good plan and a shopping list of features goes a long way to making this process successful.

Written by kasuro

February 1st, 2011 at 10:29 am

Ego’s role in Business Websites

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Learning to FishI’ve been advising one of my fellow SCORE counselors about the role of websites in business as we attempt to help one of his clients boost her sales.  In his latest email he said, “a web site must have a business purpose, not an ego purpose.”

I couldn’t agree more!

In this case, the issue is not that the client is a braggart, but that she’s unwilling to accept that she might have taken a wrong turn with her website.  I’m pretty sure I know where she’s coming from because I struggled for years thinking my websites, business cards and other materials were just fine because that’s what family and friends will say to spare feelings.  I can tell she doesn’t understand why, with all the positive feedback, the business is struggling to get off the ground.

I also assume she’s reeling from the sting of my reality check because I didn’t have many positive things to say in the website critique I was asked to give.   No item was safe as I did my best to explain why the color scheme right on through to the composition of her professionally shot photos could be contributing to the sites performance issues.

In her response to my critique she asked for a second opinion, and, I’m worried that she’ll keep looking until she gets an opinion she likes.

Hopefully she won’t have to learn the hard way that business is no place for the faint of heart.  If you’re not willing to accept the opinion of an “expert,” no matter what the field of endeavor, who has no stake in your success or failure, then you’re subconsciously choosing to wait for the competition to mop the floor with you.  Again, harsh, I know, but tough love is always a downer at first.

Shopping for complements isn’t going to save a business, but being your own harshest critic might.  If you intend to make a living by owning a small business, you need to check your feelings at the door and allow logic and honest feedback sort out the path to success.

Written by Karlie

January 19th, 2011 at 1:48 pm

The Business of Linux – Series Start

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I will be at LinuxCon 2010

It’s become quite clear to me that I’ll never fit all I want or need to say about the business of Linux in my LinuxCon talk. In fact I could make it a full day workshop and still not cover everything there is to know about making money on products your customers can get for free.

The solution is to begin evaluating what information really needs to be in the presentation and what would be better here. In some cases I’ve begun shucking slides from the deck and for others I’ve decided that there needs to be a better explanation of what I’m trying to cram into my allotted time.

With today’s post I’m going to start addressing some of the topics that could use a little more depth than what time will allow. I also hope that by exploring the topics here I’ll have a better grasp on what is most important to convey when I stand at the front of the room next month. ~Karlie

Midmarket Companies are the Key

Less than a month ago, eWeek published an article titled “Midmarket Companies Steady on PC Purchases, Report Finds.”

This article is based on The NPD Group’s Small and Medium size Businesses (SMB) Technology Report.

As you can guess from the name, the midmarket is made of up of companies who sit right between Mom-n-Pop operations and big businesses. They’re generally smaller than 500 employees and actually make up most of the US economy.

The first bullet on the slide above is fairly easy to understand – Buying is going up this year. While that’s good news, it’s the next two that set my heart all a flutter. They show me some really good numbers – Let me explain.

The biggest reason I’m in a very good mood following this report is that the percentages give me a starting point for basing a financial model off of.

Yes, 40% is less than half, and on first look can seem sort of dismal. The thing we need to understand is how big that 40% could really be.

According to the US Census Bureau, there are nearly 5 million businesses with 499 or fewer employees. So if we do a little math, 40% comes out to be approximately 2 Million potential clients. It could be even more if you set your pool to include business with over 500 employees.

We also need to factor in that the estimated market share for Linux is just about 1%. If we assume the market share is the same with SMBs, we’re looking at about 20,000 firms to get your feet wet with.

I’d also go out on a limb and suggest that if SMBs began adopting FOSS technologies that 1% market share for Linux would rise rapidly. How far? I don’t know exactly, but for every percentage point it jumps you’d be looking at another 20k or so in your national customer pool.

The lesson here is not to get hung up on what constitutes big or small in the business world, or even take a percentage at face value until you understand what those numbers actually represent.

20-Thousand businesses may not seem like that many either, but could you handle that many clients? Probably not while you’re just starting out, so 20k is really a fairly large number for you to grow into… Especially if you can grow the Linux adoption rates while you’re at it.

Written by Karlie

July 5th, 2010 at 8:06 am

The Karma of Business

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One concept I tend to be over zealous about is karma. Karma isn’t some sort of cosmic luck, it’s really just a word that translates to “Outcomes.” Good karma is just another way of saying good outcome. So imagine my sarcastic joy when this direct quote was waiting in my in-box this morning.

“They want a business plan, marketing plan and everything in between. I guess if you spend that much time doing this you should be rewarded … to pay for the headache of doing this!”

Now don’t get me wrong, I’m happy for you if the stars align and you’re an overnight success, but there’s only so much you can do with your budding business if you don’t understand the outcomes of the decisions you’ll have to make along the way. A business plan is that worksheet that allows you to look at many of the decisions you’ll be faced with so you can pick the good and minimize the bad.

Maybe it wold help if we thought about growing a business from a hobby if we didn’t use standard business imagery. Instead, let’s think of business in terms of baseball so we can get a little better idea of what the stages of success might look like.

There are hobbies that make a little money on the side. These businesses can be thought of like playing little league. You win some, you lose some, but in the end it’s about enjoying yourself and going for an ice cream cone with the team.

Formalizing your Small business is like joining the farm team. When you play at this level, you can call yourself a professional, but not everyone who plays makes enough money to support themselves, nor will everyone be called up to the majors. (Sorry, kid. Maybe next season.)

Another consideration is that the mentality changes too. At this level you’re not playing just for fun anymore. Yes, you may still enjoy the game, but the highs of winning are offset with the knowledge that if you have too many loses you’re going home.

Growing a small business into a big one is like making it to the Major Leagues. But even then, there’s no guarantee that you’ll be like Randy Johnson and pitch effectively for over 20 years.

Ok, so I can’t stay on the Baseball thing forever, but I hope you can see how the steaks are constantly going up, while at the same time, the number of successful participants is going down. You also need to see that talent and luck can only carry you so far.

The economy, customer preference and your competition fluctuate. Those without a plan and the ability to look ahead and revise those plans usually don’t advance to the next level.

So don’t think of your plan as a a pain in your butt. Think of it as a function of getting where you want to be while also helping you stay away from the bad outcomes.

Written by Karlie

May 17th, 2010 at 7:38 am

Posted in Growth,planning

Writing a business plan is suppose to be Frustrating

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You heard me! I’d even go so far as to say if it’s easy you’re probably doing it wrong.

In fact I would encourage you to really screw things up… on paper, because when you do it on paper you’re much less likely to screw things up with real money, with your house as collateral, employees that need to be paid and on and on.

Let’s think about the plan for a moment. There are two reasons why you need one. First, it’s your own personal road map. It allows you to give everything a dry run, on paper, so that when your put your money where your mouth is, you’ll know what’s going on.

Second, it says to investors, bankers and potential partners that you’ve thought everything through and they will get their money back.

While a business plan does have a formal layout that you should aim for it in the final draft, it’s not the kind of thing you write from start to finish. Even logic tells you that while you may put the Executive Summary first, you can’t write a summary until you have something to summarize. To make the process easier, dive in with what you know and try to complete it from the inside out.

Just keep in mind, it’s suppose to be hard and it’s suppose to be the place where you work out all the details before you get too far. You’ll find dead ends and numbers that don’t jive and all those other frustrating points along the way.

So when you get that feeling like you’d rather just wing it, don’t. Remember, it might suck for the moment, but not as bad as it will when your business is in a downward spiral. When it gets that bad you don’t have time to stop and research a course of action. But when you’ve followed dead ends and have already sifted through a mountain of data, you’ll get to answers quickly and have a much better chance of survival.

Typewriter Keyboard by Sergio Ianni

Written by Karlie

April 15th, 2010 at 7:11 am

Posted in planning,Start-up

Lending environment in WNY – A 7… what?!?

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For a while we’ve been getting mixed reaction about small business lending.

On one side we keep hearing that the US Government is trying to loosen the grip on bank loans, yet so few are being made. Why is this?

News out of the SBA office in Buffalo NY seems to indicate that smaller, regional banks are still lending, since they weren’t hit as hard by the financial shake-up as national banks. However the minimum credit score to secure a loan is right around a 730.

Meaning if you don’t have pristine, excellent credit, you are going to have a really hard time.

To put that in perspective, a 650 use to be considered mid range for “good credit” and the credit score tops off between 830-850 depending on the reporting company.

Might be a good time to think about bootstrapping a business.


Written by Karlie

February 18th, 2010 at 3:28 pm

Posted in planning,Start-up

Beginning with the finishing touches

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So here’s another general response that pops up all the time when I’m counseling at SCORE.

The question is usually something like “Is $1400 too much to pay for a 5 page website?”

So my answer is usually something like this…

If I knew more about the type of business, the better I could tailor my response here, but in general, you’ll want to go Open Source.

Open Source software is publicly licensed. It’s underlying code is open and available for modification and to top it all off, it’s usually been tested and tweaked a thousand times before you use it so you’re less likely to have problems or need support contracts.

Also, if you find something that’s close enough to what you want your site to do function wise, you’ll only be paying a professional to shine it up for you. So instead of months of custom code that will need complete bug testing you’ll be looking at a week or less to get things up and running.

You’ll also need to think about the site in two ways… What’s behind the scenes managing content, catalog and check-out process – usually the database portion of the website and your admin panel. Then how that data feeds out into your site.

The good news, the graphical layout is really a minor detail once the back end is working properly.

You’ll usually have a template of some sort (Cascade Style Sheet – CSS or XML) for the graphical layout with snips of code to indicate where the various components go. Menu on the left or the right – no problem. Don’t like the colors, again, no problem. Simply tweak the style sheet and all your information will fill in just where it’s suppose to go.

Every page will have a similar look and feel while allowing you lots and lots of dynamic space for content.

You might even be able to find an open source template that you can modify to suit your needs.

For instance, http://on-disk.com/ is http://demo.oscommerce.com/ We have modified the code and the database to meet our needs, but the sky’s the limit on graphical modifications. We’ve kept somethings the same, but there’s no need to be stuck with anything.

Another example is Webpath.net The back end is a custom wiki/blog hybrid that we created a long time ago, but the layout started out as a free template called Invention. I liked the general layout, but wanted it co-branded to the On-Disk.com website so the color scheme and graphical elements needed a quick change.  All in all, the updates took about an hour to complete and most of that was time I spent looking and deciding if I liked it or not.

But these are just examples. You’ll have lots of choices with Open Source Shopping carts, Content Management systems and loads and loads of templates to choose from.

Just think of your business functions in Must, Should and Can features. Knowing what you need will help you sort through options as you research components for your site.

What must the site do from the beginning? What should be included in phase 2. What can we integrate now for future upgrades so that we don’t have to re-write the code?

Have I overwhelmed you? In any case, let’s stop here for now. Comment with questions.


Written by Karlie

December 15th, 2009 at 3:41 pm

Wanna get married?

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This morning I was asked if forming a business partnership is the right move when a small business owner doesn’t bring all the necessary skills to the table. I’m always a bit nervous about partnerships, so I used my standby response…

The leading cause of divorce is money. With business, you don’t even have love to keep you together.

I quickly finished my response to the client and then popped open my spankin’ new blog* with the prospects of writing my first official post. The problem is, I didn’t know if I’m actually right about causes of divorce. Conventional wisdom seems to agree with me, but now that I’m a faux journalist, I should probably find a credible source… Shouldn’t I?

A quick trip to Google brought me to an article by Liz Pulliam Weston titled “Money isn’t the culprit in most divorces.”

The title of the article does seem to indicate I’m wrong.  However, the body presents a valid argument showing that I’m not that far off the mark.  So while I don’t have a straight answer about money being the root of all evil it does give me cause to modify my thinking and the way I’ll format this portion of future SCORE counseling sessions.

So if the question is,Is a partnership right for my business?

My answer will be, It depends.

While you might be friendly towards one another, have complementary skills and a little bit of money to bring to the table, you need to be very cautious. Becoming business partners is equivalent to marrying someone.

  • You will spend more of your time with the partner than you will with your spouse.
  • You will be splitting any money you do make with the partner.
  • If the relationship goes bad, they can walk away with a significant portion of your business — maybe enough to cause the business to fail.

If you still think a partnership is right for your business, you shouldn’t do anything until you have a signed partnership agreement. I really mean that. Until such time as you have an agreement in place, if they’re working in the business you have an employee. If they give money to the business then they are an investor.

The partnership agreement should be reviewed by your attorney and should cover everything you can think of.

  • Who owns what share of the business?
  • Where do your shares pass should something happen to you? Accidents have been known to happen. If something does, do your shares transfer to your next of kin or the partner?
  • How do you get out of the business or remove a partner? Situations change, so be flexible.
  • What jobs will each of you be responsible for? Be thinking about “Too many cooks spoiling the broth” vs. “Many hands make light work.”

*Editors note 1-24-10, This article was imported from karlierobinson.blogspot.com a general topics blog and KarlieRobinson.com is the new “new blog” devoted to business topics.

Written by Karlie

November 18th, 2009 at 10:49 am