One of the keys to running a successful small business or home office is learning to control costs. Even the smallest expenses can quickly add up and cut into profits, leaving you with a business that won’t move forward.

Many small-business owners know where their money comes from, but are not as clear on where it goes. This can have a significant impact on their businesses’ cash flow.

It’s important to review your expenses regularly – every quarter if possible – so you can accurately manage your outgoing expenditures and look for ways to save.

Demos Parneros, president of U.S. stores at Staples Inc., provides the following suggestions to save your business money.

* Buy last year’s model. Furniture, computers, PDAs – there is always something new. This also means that there is always something old. If you wait until the end of the year or for sales throughout the year, you can save on your office needs.

* Buy in bulk and buy ahead. By buying commonly used items in large quantities, you can save a lot. Replenish your supplies before you run out. Thinking ahead, and thus buying ahead, gives you a chance to comparison shop and take advantage of sales.

* Buy products that save money. Consider quality alternatives to national brands. Staples ink and toner products, for example, offer consumers quality products at a 15 percent to 20 percent cost-savings per cartridge.

* Take advantage of discounts. Professional and trade associations often offer their members discounts on insurance, travel, shipping and other common expenses. Similarly, some credit cards, like the American Express Corporate Card for Small Business, may get you discounts as well.

* Save on mail costs. Mail costs for your business can add up fast. To save money, use postcards or consolidate shipping. You also can buy or lease a postage meter or get a mail scale to eliminate overpaying.

One of the keys to running a successful small business or home office is learning to control costs. Even the smallest expenses can quickly add up and cut into profits, leaving you with a business that won’t move forward.

Many small-business owners know where their money comes from, but are not as clear on where it goes. This can have a significant impact on their businesses’ cash flow.

It’s important to review your expenses regularly – every quarter if possible – so you can accurately manage your outgoing expenditures and look for ways to save.

Demos Parneros, president of U.S. stores at Staples Inc., provides the following suggestions to save your business money.

* Buy last year’s model. Furniture, computers, PDAs – there is always something new. This also means that there is always something old. If you wait until the end of the year or for sales throughout the year, you can save on your office needs.

* Buy in bulk and buy ahead. By buying commonly used items in large quantities, you can save a lot. Replenish your supplies before you run out. Thinking ahead, and thus buying ahead, gives you a chance to comparison shop and take advantage of sales.

* Buy products that save money. Consider quality alternatives to national brands. Staples ink and toner products, for example, offer consumers quality products at a 15 percent to 20 percent cost-savings per cartridge.

* Take advantage of discounts. Professional and trade associations often offer their members discounts on insurance, travel, shipping and other common expenses. Similarly, some credit cards, like the American Express Corporate Card for Small Business, may get you discounts as well.

* Save on mail costs. Mail costs for your business can add up fast. To save money, use postcards or consolidate shipping. You also can buy or lease a postage meter or get a mail scale to eliminate overpaying.

If there ever was a living, breathing version of the American Dream, it would be Farrah Gray.

A self-made millionaire by age 14, Gray is now an internationally known and respected entrepreneur and business leader who addresses more than half a million people per year on topics such as leadership, personal development, diversity, business development and financial management.

His newest venture, with First Premier Bank and Diamond Financial Products, is the “goFarr” card, a prepaid MasterCard featuring his likeness. The card is designed to increase financial literacy and freedom for those without a credit history or who are unable to get access to a line of credit.

Because the card is prepaid, there are no interest payments, credit checks or employment requirements, and unlike most prepaid cards, the goFarr card has no monthly fees. It can be used anywhere debit MasterCard is accepted, including ATMs, and cardholders can use the card to pay bills online or get employers to do a direct deposit onto the card.

Cardholders can monitor when, where and how much they spend 24 hours a day through Web and telephone access to account information. They soon will also get financial tips from Gray through live chats, podcasts and e-mail discussions.

“When I look at the fact that one-quarter of 18- to 24-year-olds are ‘un-banked,’ I see that it is also a problem that plagues low-income people of all ages,” Gray said. “This card can be an empowering tool that will instill valuable budgeting habits and responsible money-management skills.”

Gray became an entrepreneur at age 6, selling body lotion door-to-door. At age 7, he carried a business card that read “21st Century CEO.” At 13, he started Farr-Out Foods, a specialty foods company in New York. He became a published author at 19 with his financial self-help book “Reallionaire.”

“Farrah Gray is one of the great business minds and icons of his generation,” said Keith Byrd, chief operating officer of Diamond Financial Products. “At the age of 21, he has achieved more than many achieve in a lifetime. To those who become cardholders and are able to access financial advice from Farrah Gray, you too have the possibility to ‘goFarr.’”

Common Mistakes Small Businesses Make and How to Avoid Them

Unfortunately very few start up businesses make it beyond their 3rd year. Failure is usually down to a number of clearly identifiable mistakes, which if small business owners are aware of, can increase their chances of survival.

Here are the top 10 common mistakes which small businesses tend to make.

Lack of Market Research

When a budding entrepreneur comes up with an idea for a new business he assumes that because he would buy such a product or service then everyone else will. This may be the case for day-to-day necessities but for other items this is usually not so.

Its important that when you start up you carefully research the market to check that:

There is demand at a level which would lead to a sustainable business

People are prepared to pay the price required for you to make a decent profit

Undertaking market research may appear time consuming but the effort will pay off.

Poor Record Keeping

Some business people are not born administrators; they feel more comfortable getting out there and doing the business. Paperwork is too easy to ignore but can never be put off indefinitely.

Sales, purchases and other expenditure must be carefully documented, so you know whether you are making a profit or not. Invoices must be issued on time and chased up promptly if there is a delay in payment. Its all very well having the sales but poor record keeping can hold you back.

Having your paperwork in order will also save you time when it comes to your accountant doing your year-end books!

Insufficient Capital

When starting off its easy to decide what capital is required for fixtures and fittings, machinery and stock. What many new business owners forget about is the cash needed to fund day-to-day requirements, i.e. cash to pay expenses before your customers pay you. This is known as your working capital requirement.

Small businesses can fail because they have insufficient cash to start off to meet these immediate expenses. If you wish to survive make sure you set aside enough cash to meet all your needs for the first few months.

Ineffective Marketing Or None At All

You cannot afford to treat the cost of marketing as an unnecessary expense. A business with no marketing is like waving in the dark you know you are doing it but no one else does!

There are many ways to promote your business on a small budget; its just a case of being inventive and creative. What ever you do, dont assume that people will quickly know you are in business they wont, unless you tell them.

Ingoring Changes In The Market Place

As a small business owner its very easy to get immersed in your business and not see what is happening around you in the market place. Always keep your eyes and ears open to what the competition is doing and what your customers want. Dont get left behind.

Owners Attitude

Attitude is everything in business. Dont forget that the real boss in your business is the customer. Running a business may make you feel important but dont let this develop into an I am better than you attitude. Do this and you will quickly chase your customers away.

Spending On The Wrong Things

Being in business can be exciting, especially as the cash starts to roll in! However, dont be tempted to spend it on a new car, a house or just a good time. If you are to own a successful business then you have to keep some cash back to fund future growth. A business cannot grow without cash, so commit to spending business money on the business.

Dependent On A Small Number Of Customers

Dont fall into the trap of setting up a business just because one person says they will buy from you every week or month. Setting up and running a business, which is dependent on one customer, is not a recipe for success. What happens if, one month after you have spent all your cash to set up your business, that customer says he has changed his mind and has decided to buy elsewhere? Unless you can find other customers very quickly you are faced with closure.

Before embarking on a new venture make sure you have a sufficient number of customers such that if a few go elsewhere you can still continue trading.

Growing Too Quickly

Surprisingly, growing too quickly can be a problem. You have to be disciplined enough to only take on work you can handle. If you are tempted to accept too much you could end up disappointing not only the new client but also your existing ones.

Also, dont under-estimate the impact rapid growth can have your administrative burden. As I mentioned earlier, getting behind on the paperwork can have an equally damaging effect on your business.

Trying To Do Everything

Finally, the problem most small business owners have is the fact that everything falls on their plate. Inevitably this is how its likely to be in the beginning, when the limited budget means that staff are a luxury, but as the business grows be aware that you cannot continue to do all tasks. There will come a point when you become inefficient and not have enough time to complete everything in sufficient detail. Taking on an extra pair of hands will increase your costs but you will be surprised at how much time will be saved, allowing you to do what you do best getting the business in.

Take a look at each of the mistakes and make sure that you dont fall into these traps.

Choosing a Web Site Developer for Small and Medium Size Businesses

You need a website, but how can you tell the professional business web site developers from the college kid in his basement? The answer is fairly simple if you know what kinds of questions to ask. Professional web site developers are just that – professionals. They have college degrees andor experience related to web site development. They understand small and medium size businesses for it is likely they are one too. Most importantly, they speak to you in your language, not theirs.

Purchasing a web site is a form of advertisement for your business. Would you pay for the development of a radio or television commercial if you were not sure you would get a return on your investment? Why risk your professional reputation by trying to get the cheapest site possible just so you can put the www.yourbusinessname.com on your business card? If you have seen the work of a web site developer and the pages look great, do they contain keywords, titles, and descriptions to help search engines like Google and Yahoo find them?

These are some of the basic questions a professional business web site developer should be able to answer:

1. How will you measure my ROI (Return on Investment)?

2. What information will be included in my monthly web site analytical reports? The reports should answer these questions at a minimum:

..a. What time of the day do most people visit?

..b. What search engines are they using to go to my site?

..c. How long does someone stay on my site?

..d. Which pages do they visit?

..e. Where do they go when they leave?

..f. What are the demographics of my typical online customer?

..g. Has my search engine ranking changed?

3. Will my site be monitored 247 with guaranteed 99.8% reliability?

..a. Are all links checked every day?

..b. Are broken links corrected?

4. What is my conversion rate (how many potential online customers have turned into actual customers)? Also,

..a. Why did they visit my business online?

..b. Were they happy with their purchasing experience?

..c. What would they change about my site?

5. How will you help me increase my business over time?

If you are having trouble finding a web site designer, visit the sites of your competitors or other local businesses. Most reputable web site developers list themselves and include a link in the small print at the bottom of the sites they have created. Call the businesses whose sites you like and ask the owners if they are satisfied with their Internet presence. Consider using a web site developer who is not local. They should be able to gather the information they need over the phone or through a web conference. Finally, ask for proposals with price quotes from more than one web site developer. The quality of the proposal will be a good indicator of the professionalism of the business.

Ms. Davidson is a Certified Internet Business Consultant with WSI Advanced Internet Solutions. She specializes in developing Internet Business Strategies for small and medium size business owners with the objective of providing a positive return on their Internet investment. Contact Ms. Davidson at or visit her website at www.premierwsiwebmarketing.net.