There were about 146,000 business startups a year, and an average of 12,000 business bankruptcies per year from 1994 to 2004 in Canada. A 2004 Statistics Canada study on small business failure rates Key Small Business Statistics January 2005: How Long Do Small Businesses Survive? found that the first few years were critical. While almost three quarters of small business startups survive the first year, less than one third of micro companies (less than five employees) were in business after five years.

These statistics by themselves may be of little value to you directly. We know how many small businesses survive and for how long, but its far more important to know why some survive and others do not. There are a lot of studies on small business failure. Searching reasons for small business failure with quotations on Google will give you almost 700 results (about 38 million without!). Why small businesses fail will give you almost a thousand.

The 1997 study by Statistics Canada Failing Concerns: Business Bankruptcies in Canada found major internal factors of small business failure was management deficiency, financial management problems and poor marketing.

The Small Business Administration study Financial Difficulties of Small Businesses and Reasons for Their Failure in 1998 found several causes of small business bankruptcy: outside business conditions (38.5%), financing (28%), inside business conditions (27.1%), taxes (20%), disputes (18.8%), personal calamities and other (32.9%).

There is a wealth of information on this subject, but what are the common factors? There are four basic areas:

External factors

External factors include new competition, your major client moving out of town, poor weather if youre a seasonal business, or economic downturns. Theyre often largely out of our control, and may be unique to your particular company, but there are often ways to mitigate them. For example, if you have a seasonal business, such as a landscaping company (at least up here in the cold north its seasonal) you could buy a bobcat to provide income during your off-season with snow removal. The bottom line is, have a contingency plan for external factors that could have a negative impact on your small business success.

Lack of management

Big companies have the luxury of being able to hire several people to get all the jobs done that need to be done, but chances are youre going to have to do it all yourself, at least for awhile. That means youre not only going to have to develop your product or service, youre also going to have to make financial, accounting, legal, marketing, human resources, and purchasing decisions.

You may do some of these tasks very well, but its unlikely that you do all these tasks well, and even if you do, you might want to contact a lawyer and an accountant at the very least. And, research, research, and research some more, and when youre done researching, find an expert or two bounce ideas off and give you solid advice.

Lack of planning

Small businesses often fail because of lack of planning. Let me make a bold statement: the single-most vital part of your business success is your business plan. Why? Simply put, your business plan specifically and concretely lists your goals for the next few years. It spells out, step by step, how youre going to meet those goals, and gives you something to measure your performance against at the end of your business year. Finally, a complete business plan helps you get financing and includes a marketing plan.

I have one more thing to say about business plans. It does very little good to write a business plan, put it in a drawer and never look at it again. That same 1997 Statistics Canada study we talked about earlier found that successful small business owners refer to and revise their business plans often.

Lack of marketing

Most small businesses seem to think it takes a lot of money to market their product or service effectively. Thats simply not true. There are many ways to market inexpensively. You could use direct mail marketing which is as cheap as a stamp, or email marketing, which costs nothing. The point is, you need to get your product or service out there somehow. You may have the best product or service out there, something completely unique from anything else, but what good does that do if nobody knows about it?

So there you have itmy thoughts on the main reasons why small businesses fail, and how you can avoid becoming a small business failure statistic by developing a contingency plan, consulting with experts, and developing and using a business and marketing plan.

If you are thinking of starting a small business, trust me, Im not trying to discourage you. I sincerely believe being in business for yourself may possibly be the most rewarding career there is, but a little knowledge can go a long way towards arming you against small business failure.

Numerous times folks who are curious in opening their own business make the err of going in direction over their heads and the entire matter easily becomes a huge mistake. If you’ve ever wondered why a small business seems to just go over much better then you are definitely in the right place because in this article I am hoping to provide you with some of the answers to questions such as that. A small business does have some wonderful benefits, there is absolutely no doubt about that and I have seen on many different occasions that someone’s small business always seems to become much more of a success than any of the larger businesses in that same area. Many times when someone does choose to open a small business and it only turns out to be the biggest mistake of their life, it is simply because they chose to jump into something without first giving it a great deal of thought.

Owning and managing a small business is much easier than trying to control every single aspect of any larger type of business and your stress levels will definitely be much lower if you could begin teaching yourself more about what it takes to make any business work. Maintaining a small business is really something that anyone of us could do but if you have not had the proper information given to you or have not spent enough time learning about every aspect of the business, you really are only setting yourself up for a huge financial disaster, which it surely did not have to be. Nobody goes into any type of business venture assuming that it is just all going to fail but most people that go into owning and managing any small business definitely has some little concerns about being able to keep it afloat. A small business can provide you with enough income that you would never need to work a second job for fears of not being able to afford everything. This is only possible however, for those of you who are truly committed to making the small business a huge success.

For anybody out there that is maybe considering delving into some type of small business venture, please make sure that you first speak with other business owners in your area to find out some of the small details that could really make you or break you. Knowing the important key things that could set you up for success is really something very important and if you give others the opportunity to advise you on some of the aspects of your small business, chances are you will not have to stay up all night trying to figure out how in the world you could ever possibly make ends meet. It is up to you to really make this a success because it will not happen overnight, have patience and plenty of drive, with those two things you are more than likely going to be smiling all the way to the bank!

Five Steps to Create a Budget for your Small Business

How I hate budgets!

Every time an accountant told me to put together a budget for my company, my response was – When I get the time I will! I just never seem to get the time.

For several years when I first started my company I never paid attention to a budget. I knew if I made money by looking at my financial statements and that was good enough for me. Also, every time I tried to put something together I never compared my actual financials to the budget numbers I created.

Two years ago, I decided to take a different approach. I developed a forecast for a quarter of what I expected income and expenses to be. I came up with the figures based on the previous year’s actual numbers. It was easy to look at last year and just add a percentage increase to the numbers. Then I took the time to review once a month the forecast with where we were at that point.

By using this system of creating a forecast and comparing that to actual financials on a monthly basis I was able to focus on income areas that were falling behind and stop expenses that I didn’t need to make.

I am an avid fan of informational products. I buy thousands of pounds every month. With the forecast in place I caught myself spending more then I allocated and was able to just cut back the next month. The great thing about this system is that you are not locked into a specific figure each month but yet you stay within guidelines of where you want to be before the year or quarter finishes.

The best way to set this up is to use a financial program such as Quickbooks or Peachtree. Track all income and expenses using the software. The next step is to print financial statements that track what you have done. Then take the numbers of your financial statements and increase your income by the percentage you want to raise revenue by. Then look at expenses and determine what categories will increase based on the sales increase. This will become your financial projections.

The last step is to review your actual financial statement (Income Statement or Profit and Loss) to your projections. Have systems in place to increase revenue and decrease expenses as necessary.

New ecommerce entrepreneurs can find them confused and confounded by the tax and accounting requirements of their venture. And thats a shame: If someones spotted a great new category and successfully built a web presence, heck, that someone shouldnt find themselves bogged down with the accounting minutia. The entrepreneur should focus on increasing traffic, expanding margins, and growing cash profits.

With that in mind, I offer up the following tax and accounting tips:

Tip #1: Dont Incorporate

A true corporationwhether a C corporation or an S corporationsaddles your business with more complicated tax accounting and a bunch of state filing requirements. You dont want to deal with this redtapeor at least not until youre profitable.

Instead, operate your business as a sole proprietorship. If youre concerned about legal liability protection, note that you can setup a one-owner limited liability company, or LLC. A one owner LLC is treated as a sole proprietorship for income tax purposes.

Tip #2: Start Your Business Before Making Investments

Expenditures you make before youre actually in business-in other words, before youve got a business license and before youre selling or trying to sell your stuffarent very deductible.

Specifically, you can probably deduct the first 5,000 of these expenses. But any amounts in excess of the 5,000 must be amortized over the next fifteen years.

What this means is that you want to start your business before you start spending money on advertising, training, web development, accountants and lawyers and so on.

Tip #3: Automate Your Bookkeeping & Accounting

By lawand some people dont know thisyoure required to maintain an accounting system that lets you clearly measure your income. As a practical matter, this means you need to use a product like Quicken or QuickBooks.

But you ought to go one better than simply using desktop accounting software. Make sure that youre taking advantage of online banking and bill payment features which integrate your accounting system with your banking. As much as is possible, for example, you want to be able to move money from PayPal to your bank to QuickBooks simply by typing a few keys or clicking your mouse a few times.

Tip #4: Hire a Payroll Service Before Hiring Employees

Many successful ecommerce business owners can run their operations without employees. And if thats true for you, hey, congratulations. If and when you do need employees, however, dont try to handle the payroll yourself. Oursource the payroll to one of the large payroll service bureaus like ADP, Payroll, or QuickBooks.

These services are expensive. Figure 1000 to 2000 per year. But the services let you avoid the bookkeeping nightmare called payroll and prevent you from getting into payroll tax trouble.

Tip #5: Consider S Corporation Status After Youre Profitable

Ive written and talked much about how S corporations save taxpayers money and how the right way to set up an S corporation is first create a limited liability company and then ask the IRS to treat the LLC as an S corporation for tax purposes.

Let me review the basics here again, however. Suppose that youre making 90,000 a year off your web site. If you just treat your business as a sole proprietorshipor an LLC treated as a sole proprietorshipyou might pay 12,000 in income taxes on the 90,000 and then another 15.3% self-employment tax, or roughly 13,500 on the 90,000.

If you set up an LLC and have the LLC treated as an S corporation, youll still pay the same 12,000 in income taxes. But youll only pay the 15.3% self-employment tax on that portion of the profit that you categorize as wages. If you categorize, say, 50,000 of the profits as wages, youll pay 7,500 in self-employment taxes. (The other 40,000 in remaining profits, by the way, gets paid out as a dividend-like distribution.)

Note, then, that the S corporation saves you roughly 6,000 every year. Sweet, right?

Do you remember when you first heard of Ebay. Online auction place. Who thought back then it would end up being so big and so many people would be using this auction site. Most of us are aware that you can auction off just about anything on Ebay. People are making serious money selling products online at Ebay. It is also a great resource to find those hard to find items.

Have you checked into the many possibilities on the web to making some serious cash? There are so many ways to work from home and run your own business. You can buy products wholesale and setup your own internet store. If you do not want to stock items you can find companies that will drop ship your products for you. There are even programs you can buy online that are a complete system that shows you how to do this. Did you ever think you could get your own business up and running for roughly under 100 pounds?

You can make money selling ebooks, writing articles for websites, creating websites…
There are so many ways to make money on the internet today. It just takes a little research and then time on your part to really learn the best ways to promote your idea and become knowledgeable about all the different ways to advertise online.

Do you have what it takes to become an aspiring entrepreneur to start and manage a home based Internet Business? Do you have the Entrepreneur Bug?

Seems with the growth of the World Wide Web more people are becoming entrepreneurs. Just what is an Entrepreneur? There are many definitions the most simple is a person who owns, operates, and takes the risk of starting a business venture. An entrepreneur can also be known as an inventor.

Do you need to invent a product to be an ruthless entrepreneur? Absolutely not, just take an already existing product or idea and create a business and profit from it. Organize a business venture and assume the risks for it. Come up with your own niche to get clients, close deals and start making some serious money. What ever you decide to get involved with you should make sure you really know your product inside and out. What are you waiting for? Start brainstorming today and make your dream of being independently wealthy a reality.

Small Business Owners: The Importance of Always Keeping an Eye on Your Competition

Are you a small business owner? If you are, whether you run an online business or a storefront business, you will need to make sure that you keep an eye on your competition. After all, your competition and their success will actually have a huge impact on the success of your own business.

When it comes to keeping an eye on the competition, there are many small business owners who wonder why it is so important to do so. As it was previously mentioned, how your competitors runs their business will actually have an impact on your business. For instance, if you and your competitors sell the same type of exercise equipment, but one of your competitors is having a huge sale on their exercise equipment, you may notice a slight decrease in your sales for the week. That is why it is extremely important that you know exactly what all of your competitors are doing at all times. In all honesty, if your business is a profitable one, your competitors, even the large ones, are likely to keep tabs on you as well.

Above, sales were used as an example. You will want to make sure that you keep up-to-date on any sales that your competitors may be having. This is important because if you notice that one of your competitors is having a sale, especially on products that you also sell yourself, you may want to think about offering a similar sale. Of course, to protect your reputation and your respectability, you dont want to have the exact same sale, but a similar one should be okay. You should definitely use this approach if you are considered to a specialty store. With keeping with the above mentioned example of a sale on exercise equipment, if your specialty is just selling exercise equipment, a massive exercise equipment sale from your one of your competitors may seriously hurt your businesss sales, even if it is just temporarily.

If you run an online business you may want to check out your competitions websites and compare them to yours. Is your small businesss website just as attractive as your competition? Also, is it easy to navigate? If you know that one of your online competitors is having more success that you, you may want to try figuring out what they are doing right, as it may make it easier for you to figure out you are doing wrong. As with the above mentioned monitoring sales, you are advised against stealing ideas or web designs from your competitors. Actually, doing so could land you in hot water, as many businesses, especially large corporations, copyright their entire website content.

If you run a business that has a physical address, instead of a .com address, you will want to think about visiting the competition to check out the appearance of their establishments. If you are running a retail store, you will want to checkout other local retailers that can be considered your competition. You will to examine the cleanliness of the establishment in question, as well as the way that everything is set up, product wise. Many larger retailers have complex systems that are used to determine where products should be placed for sale in a store. Since you may not have the time or the knowledge to come up with these same results yourself, you may want to get some ideas from your comeptition; especially your competitors that you know are successful.

As outlined above, there a number of different ways that you can go about keeping on eye on your competition, as well as number of different reasons as to why you should do so. As long as you do it in style, you shouldnt cause any problems or raise any concerns. In fact, what you may learn from scouting out your competition may actually help make it easier for your business to be a successful, profitable one; one that will a tough competitor for years to come.

Would you like to run your own small business? Have you an idea for a small business but do not think that you could make it work? Are you bored of being an employee and yearn to become your own boss? Have you the required skills to run a small business? In this article I look at the type of skills that people need to possess to be able to successfully run a small business.

My name is Stephen Hill and I have been running my own business for around nine years now. Previously I had been employed by a major insurance company and even though I progressed well during my time there, I always wanted to run my own business, to choose my own hours of work and basically have no one to answer to etc.

I am now a speech coach helping people who stammerstutter to achieve fluency and I also help people to promote their websites as a form of web marketer or web promoter.

I love what I do as it allows me to to take my children to school as well as to pick them up from school. I am able to watch their football and netball matches and attend their school plays and other functions.

I am not bound by what hours I work, for example nine to five. I sometimes work late at night when I do the web promotion work but have the day free to relax. This is not to say that I do not work hard, because I think that I do work very hard.

Self belief is an important skill required to be your own boss. If you have an inner belief and self confidence that you will make the business succeed, then you will have a great chance to make it work. There will be times when during a month you only earn a small amount of money but in other months you should earn quite a lot. Some people prefer to know exactly what their income will be each month and these people may struggle to be their own boss.

Discipline is another requirement if you are to be a success at running your own small business. It is very easy to become lazy and to watch too much television or to have an extra couple of hours in bed in the morning. Even though you may have nobody to answer to, you have to be of the character to ensure you put in the required amount of hours and work.

I also think it is important to have a positive attitude. There will be periods when business is slow, this is where you may start to think in a negative way. This can lead people into becoming very stressed and even depressed. By thinking in a positive way and by working even harder to attract more work is the only way to react in this situation. This of course is not that easy to do but in my opinion there is not enough time in the day to get depressed.

Lastly is the ability to always try and improve your own self and to learn from any mistakes you make. We all make mistakes which is fine and natural. There is again not enough time to beat ourselves up over these errors, all we need to do is to learn from them and to then move on. We should always be looking at ways of improving the business as well as our own knowledge. Standing still and treading water is no way to continue.

Opening a new business in the real world or online in cyberspace requires thinking beyond all the money you will make. Most small business owners are clear on their ultimate goal, yet often many fail to spend time planning their marketing image. To succeed, first impressions are critical, or you may violate what I call My 5 Second Rule:

When a new prospect finds your web site, you have 5 seconds to convince them to stay.

The rule applies in the physical world, also. Your printed materials may be dumped in the trash just as quickly, or a visitor to your company may browse briefly while in fact the no sale decision was made in those critical first few seconds.

Regardless of your business, your image as a professional and credible source for a product or service depends on making a positive first impression. While most people don’t realize the subconscious dynamics that occur during an introduction, how you are perceived is clouded with prejudice.

In a face to face meeting, subconsciously your prospect will categorize you immediately by sex, age, and race. This fact may be hard to believe, however, individual life experiences connect your combination of these 3 characteristics into a fixed profile based on past encounters. Overcoming any negatives begins when you speak. A warm and friendly approach while being prepared to offer the benefits of doing business will help you succeed.

In print, your business card, ad, or brochure tells a similar story without the subconscious human preconceptions. The message will still elicit a reaction, good or bad, so how you present your company in print needs to get past My 5 Second Rule. This is equally true for the home page of your web site. Here’s some advice.

Customers have a need (problem), and you provide a product or service (solution). Matching these 2 for a successful sale is easier than most people realize. Front door selling, printed ads, or online web offers should all address the benefits (solution, again) and not the features (it’s about the customer, not about you).

Your marketing materials need to project a mental image in the mind of the viewer. Stimulate their imagination so they picture themselves enjoying the benefits of your offer, and you can overcome My 5 Second Rule. Here’s an example that was created for a used car dealer. How do you glamorize a business that is the subject of so many disparaging jokes?

This client had a featured monthly special vehicle that they wanted to promote on their web site. The photos taken in a chain link enclosed parking lot didn’t convey the excitement or mental picture necessary to stimulate the viewer. The chosen vehicle was an upscale Jeep, and the client specialized in exports to Puerto Rico. To add pizzazz, I did an edit of the photo to remove the background, and placed 2 views of the monthly special on a bluff overlooking a gorgeous beach in Puerto Rico. If my descriptions succeeded creating your mental image referring to the chain link and gorgeous beach, the subtle difference in presentation should be apparent.

Bonus Tip: What to Say When a Customer is Wrong
As a small business owner, you know your business and as an expert, reacting to an email or face to face comment that you know is absolutely wrong will work wonders if you answer with two magic words: “You’re right!”. This works for several reasons. Most importantly, your customer may be expecting an argument, so they will only hear half of what you have to say if you reply saying they are wrong. The listener will be busy mentally sorting comebacks and supporting evidence, and may not hear any of your expert advice.

Telling someone “You’re right” will have them on the edge of their chair waiting for your next comment. Shifting your argument to what you know to be the truth is easy. With a brief pause after your magic two words, continue with “…and there are many people who feel the same way. From years of experience, I’ve found that in fact (insert the truth based on your expertise here)… etc.” and you give them the opportunity to accept your slant on the subject without having their opinion challenged. It works. For those concerned about ethics, the phrase “You’re right!” is simply an acknowledgement that they have one view, and it is valid because that’s how they feel.

In summary, a professional image includes a wide range of materials for making a positive first impression. Consider the feelings of your prospect and how your product or service will benefit them, and you’ll do well in converting first introductions into sales.

How Your Small Business Can Benefit from Custom Screen Printed T-Shirts

America is the land of opportunity and with that the land of small businesses. The U.S. has made it easy for just about anyone to work up the courage and capital and start up their own business. Having realized that you can do it, one arrives at the paradox that so can everyone else. How do you make your small business stand out and rise above the competition? One way is to use custom screen printed t-shirts as a way of looking more professional and as advertising.
When it comes to looking professional the importance cannot be stressed enough. People are very hesitant to trust a company or individual who doesnt look like heshe is capable. In a sense the clothes make the man here. Those who appear qualified will have a much easier time attracting customers, employees, and even be courted by vendorssuppliers. People are by their very nature timid and worrisome. If you can appear professional and legitimate it appeals to primal urge to feel secure and that will make people instantly feel more comfortable with you and your business. Screen printed t-shirts do just that by making you appear like you have it all together. Think about the following two scenarios. In the first a people from you firm show up to do a job in a hodgepodge of random and assorted clothing. They look, although are not, unprofessional because they offer no sense of order and thought. In the second scenario, the crew arrives wearing the same t-shirts with bear your logo and demonstrate the legitimacy of your business. If I had to guess, the second scenario is how you as the owner of a small business would like to present your business. If you do nothing more than have the appearance of thought before hand, your business appears to be professional and inspires confidence.
The second way custom screen printed t-shirts can help out your small business is through the wonder of advertising. Custom printed t-shirts are among the best ways to advertise for small businesses. Think about your target audience and it is easy to see that small businesses benefit exceptionally well. Small businesses more than likely want to target people in your area. That is what custom printed t-shirts do. They walk around and give you unlimited advertising in your own local area. Give the t-shirts to your friends and family and they can wear them around and advertise for nothing more than the cost of the t-shirt. Another idea I find often works is giving a t-shirt to people for whom you do a job. These people will unlikely make it their favorite piece of apparel, but even if they wear it to the gym then they offer advertisement and can offer their own form of advertising. Consider if you will Ralph as he stands outside washing his car one Saturday morning. His neighbor Jim walks by and sees Ralphs shirts offering services that Jim is looking for himself. Ralph now has advertised for you and can do even more by saying that he loved your services and describe the great job you did. This strategy offers both printed advertisement as well as word of mouth advertising. My company keeps the images that you used on file, so ordering more t-shirts down the road is a snap.
I hope have found this article to be somewhat informative and thought provoking. Small business are the majority of my clients and Im always happy to help come up with design ideas and ways to improve not only their t-shirts but promotional products as well, all with the same idea of advertising and looking professional. After all those two key points can really set you own small business above the completion. Isnt that what you want?

How Your Small Business Can Benefit from Custom Screen Printed T-Shirts

America is the land of opportunity and with that the land of small businesses. The U.S. has made it easy for just about anyone to work up the courage and capital and start up their own business. Having realized that you can do it, one arrives at the paradox that so can everyone else. How do you make your small business stand out and rise above the competition? One way is to use custom screen printed t-shirts as a way of looking more professional and as advertising.
When it comes to looking professional the importance cannot be stressed enough. People are very hesitant to trust a company or individual who doesnt look like heshe is capable. In a sense the clothes make the man here. Those who appear qualified will have a much easier time attracting customers, employees, and even be courted by vendorssuppliers. People are by their very nature timid and worrisome. If you can appear professional and legitimate it appeals to primal urge to feel secure and that will make people instantly feel more comfortable with you and your business. Screen printed t-shirts do just that by making you appear like you have it all together. Think about the following two scenarios. In the first a people from you firm show up to do a job in a hodgepodge of random and assorted clothing. They look, although are not, unprofessional because they offer no sense of order and thought. In the second scenario, the crew arrives wearing the same t-shirts with bear your logo and demonstrate the legitimacy of your business. If I had to guess, the second scenario is how you as the owner of a small business would like to present your business. If you do nothing more than have the appearance of thought before hand, your business appears to be professional and inspires confidence.
The second way custom screen printed t-shirts can help out your small business is through the wonder of advertising. Custom printed t-shirts are among the best ways to advertise for small businesses. Think about your target audience and it is easy to see that small businesses benefit exceptionally well. Small businesses more than likely want to target people in your area. That is what custom printed t-shirts do. They walk around and give you unlimited advertising in your own local area. Give the t-shirts to your friends and family and they can wear them around and advertise for nothing more than the cost of the t-shirt. Another idea I find often works is giving a t-shirt to people for whom you do a job. These people will unlikely make it their favorite piece of apparel, but even if they wear it to the gym then they offer advertisement and can offer their own form of advertising. Consider if you will Ralph as he stands outside washing his car one Saturday morning. His neighbor Jim walks by and sees Ralphs shirts offering services that Jim is looking for himself. Ralph now has advertised for you and can do even more by saying that he loved your services and describe the great job you did. This strategy offers both printed advertisement as well as word of mouth advertising. My company keeps the images that you used on file, so ordering more t-shirts down the road is a snap.
I hope have found this article to be somewhat informative and thought provoking. Small business are the majority of my clients and Im always happy to help come up with design ideas and ways to improve not only their t-shirts but promotional products as well, all with the same idea of advertising and looking professional. After all those two key points can really set you own small business above the completion. Isnt that what you want?