Checklist for Starting a Hub Business: Essential Ingredients for Success
If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Hub business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!
For more insightful videos visit our Small Business and Management Skills YouTube Chanel.
A Step by Step
Guide to Starting a Small Business
This is a
practical manual in a PDF format, that will walk you step by step through all the
essential phases of starting your Hub business. The book is packed with
guides, worksheets and checklists. These strategies are
absolutely crucial to your business' success yet are simple and
easy to apply.
Copy the following link to your browser and save the file to your PC:
https://www.bizmove.com/free-pdf-download/how-to-start-a-business.pdf
Your Brother-In-Law Needs A Job?
One of the most common problems in a family business is
the hiring of relatives who do not have talent. But what are you
to do when your sister or another close relative says, "Bob
needs a job badly"? The emotional aspect of such family
relationships is hard to fight. But try to go into it with your
eyes open. It will be hard to fire Bob if he turns out to cost
you more money than his presence is worth.
The main thing is to recognize the talent or lack of
it. Suppose your brother-in-law, for example, has little or no
ability as far as your company is concerned, Perhaps you can put
him in a job where in spite of his weaknesses he can make a
contribution and not disturb other employees.
The major concern is not necessarily the relative but
how he or she affects other employees. In some cases, a relative
can demoralize the organization by his or her dealing with other
employees. For example, he or she may loaf on the job, avoid
unpleasant tasks, take special privileges, and make snide
remarks about you and other relatives.
If you are stuck with such a relative, try putting him
or her in a job where he or she will have minimum contact with
other employees, out of the mainstream of decision making. For
instance brother-in-law Bob might be placed in a sales office in
another city some distance from the company's headquarters where
he will be under the supervision of a top producer. Another
alternative is to change his attitudes by formal or informal
education.
The key is to see that the non-talented relative does
not affect the relationship that you, the manager, have with
other members of your staff. Other employees will respect you
for keeping relatives in line.
Strange things sometimes happen. There is always the
chance that the non-talented relative may be under your
direction and turn into an asset for your company.
Is Non-family Turnover High?
Some family-owned companies are plagued with a high
turnover among their non-family top people. Sometimes relatives
are responsible. They resent outside talent and, at best, make
things unpleasant for non-family executives.
In other cases, top notch managers and workers leave
because promotions are closed to them. They see your relatives
being pushed into executive offices.
The exit interview is a useful device for getting at
the root of this type of turnover. A key employee who has
decided to leave may be eager to tell you the true story - or at
least enough of the facts to help you develop a course of
action.
When a manager has the facts, he or she may have to
confront the trouble-causing relative with an unpleasant story.
What comes out of the confrontation is anyone's guess. Rare is
the owner-manager who can fire a troublesome and close relative
and make it stick. One way to remove such a thorn from the side
of key executives is to help the relative start a business in a
noncompeting line-provided he or she has the management ability
that is necessary for success. Another way is to "exile" him or
her to a branch office or find a job with another company.
Spending To Save Money?
Many times, as the owner-manager you feel that you must
make an expenditure to improve efficiency, yet other family
members oppose the expenditure. They view it as an expense
rather than an investment. They feel that funds spent for items,
such as more efficient equipment, encroach in their year-end
dividends.
One way to help these relatives see that "you have to
spend money to make money" is to base your arguments for the
expenditures on facts and figures that non-family employees have
gathered. Suggest to the opposing family members that the matter
be settled on a cold dollar basis: for example, "by spending
money for this machine, we can increase profits and get our
money back in four years."
If the opposing relatives refuse to accept your
projection, try calling in outside business advisers. Relatives
will sometimes believe advisers, such as your banker,
accountant, or attorney, when they won't accept your judgment.
But keep in mind that outside advisers who are personally close
to other family members, should not be included among your
counselors.
Paid consultants can also be useful in proving the
worth of an expenditure. Such help is particularly valuable on
specialized projects that require more research that you or your
regular advisers have time to do.
Status Quo Blocks Growth
When some of the relatives in a family-owned business
grow older, they develop an attitude of status quo. They don't
want things to change and are afraid of risk. With this
attitude, they can, and often do, block growth in their family's
business.
The solution to such a problem is to urge or suggest
that the status quo members slowly disappear from the scene of
operation. One way to do this is to dilute their influence in
management decisions. For example, the status quo relatives
might be given the opportunity to convert their stock in the
corporation to preferred stock. Or they might sell some of their
stock to the younger relatives.
It might also be possible for the status quo relatives
to think in terms of gradual retirement. Their salaries can be
reduced over several years, and they can relinquish some of
their interests. With the proper legal advice, it might be
possible for a small corporation to re-capitalize. A new
partnership agreement might be drawn up when the company is a
partnership.
Such actions can take into account all of the growth of
the business to that particular point and can enable the
retreating members to recover their equity. Meanwhile, the
manager and active relatives can renew their efforts toward
expanding the business.
How Is The Pie Divided?
Paying family, members and dividing profits among them
can also be a difficult affair. Many persons feel that they are
underpaid, but what about relatives who comment as follows:
"Uncle Jack sits around and gets more than I do."
"Aunt Sue goes to Europe on the returns of money her
husband put into the business before he died ten years ago."
"Your brother goofs off and rakes in more than you do."
How do you resolve such complaints? You don't entirely.
But if the business is a small corporation, certain equalizing
factors can be accomplished by stock dividends. By
re-capitalizing the company, some stockholders can take
preferred stock with dividends.
Salaries are best handled by being competitive with
those paid in the area. Find out what local salary ranges are
for various management jobs and use these ranges as a guide for
paying both family and non-family personnel. When you tie pay to
the type of work that the individual does, you can show
disgruntled relatives the value that the industry puts on their
jobs.
Why do some Business managers reach the
gain goal more often than others? They do it because they keep
their operation pointed in
this direction - management of
profit earning. They never lose sight of the goal - to complete
the year with a gain.
This guide Gives suggestions which
should enable an owner-manager to zero in on profit earning. It
points out that you have to
keep educated, make timely
decisions, and take effective action. In effect you must control
the actions of your company rather
than being controlled by
them.
Topnotch Functionality in golf, shooting, and
fishing demands knowledge, practice, and endurance.
Likewise in Small businesses, year-end profit arrives to the
owner-manager who strives for topnotch performance. You achieve
profit making targets by understanding your operation, by
practicing the art of earning timely, balanced decisions and by
controlling the organization's activities.
Adapt the
Suggestions in this manual to your circumstance. They ought to
allow you to call the shots to keep your company headed
in
the right direction - toward profit making.
First Rule
of Profit Making: Know Your Small Business. The Time-honored
truth"Knowledge is power" is especially pertinent to this
owner-manager of a small business. To keep your company pointed
toward profit you must keep yourself well informed about it. You
have to be aware of how the organization is doing before you may
enhance its performance. You must understand its weak points
until you can correct them. A number of the information you
require you pick up from day-to-day personal monitoring, but
records
should be your principal source of advice about
gains, costs, and earnings.
Know Your Profit. The gain
and loss statement (or income Statement) prepared regularly each
month or each quarter by your
accountant is one of the most
vital indicators of your company's worth and wellbeing. You need
to be sure that this announcement
contains all the details
you need for assessing your profit. This announcement must
pinpoint each earnings and cost area. By way
of example, it
should demonstrate the gain and loss for all your products and
product lines in addition to the profit and loss for
your
whole operation.
It's a great Thought to have your own
profit and loss statement prepared that it shows every single
product for the current
period, for the same period this past
year, and also for your present year-to-date. By way of example,
a P&L statement for the
month of November would show expenses
and income for the current month, for November this past year,
and totals for the eleven
months of the present year. Many
corporations publish their annual reports with several previous
decades so stockholders can
compare earnings.
Comparison is The trick to utilizing your P&L announcement. If
your accountant isn't already furnishing figures which you may
compare, you should discuss the possibility of having them
provided.
Financial Ratios out of the balance sheet also
help you to understand whether your gain is what it ought to be.
As an instance,
the proportion of net worth (return on
investment ratio) reveals what the company brought on the equity
capital invested.
Know Your Costs. An owner-manager
should understand prices in detail. Following that, you can
compare your cost figures as a
proportion of earnings
(operating ratio). Be certain that your costs are itemized so
that you can set your fingers on those that
appear to be
climbing or decreasing according to your experience and the
price figures of your own industry. When costs are
itemized,
you can spot the offender once the overall figure is greater
than what you'd budgeted. Take advertising costs for
example.
It's possible to catch the offender should you split out your
advertising expenditures by product lines and from
websites.
In addition, a thorough check of inquiry returns from
advertising will help avoid unproductive publications.
In understanding your Prices, keep in mind that the formulation
for profit is: Profit equals Earnings minus Costs.
Know
Your Product Markup. Be sure The pricing of your goods provides
a markup adequate for the kind of profit you expect to
attain. You must keep constantly informed on pricing because you
have to adjust for rising costs and at the same time keep prices
competitive. Knowledge about your markup also helps you to run
workouts with your eyes open. Continuing to generate something
that
only a few customers want is an effective merchandising
tool just when you use it on purpose - for example, to hold or
draw buyers
to additional high markup products. Don't
hesitate to shed a loser out of your line.
Garbage-In,
Garbage-Out. An Owner-manager should not fudge the documents.
The acronym GIGO that the computer industry uses is
accurate
with manually stored records in addition to with
machine-processed ones. When an owner-manager allows"garbage" to
go into
the records, the reports will include"garbage."
Reports do not need to be extensive but they must be accurate.
Search For Trends. Try not to look at a single month's
sales or Profit picture by itself. The characters on your
operating
statements are meaningful only when you set the
image in the ideal frame - which is, look at your characters in
the context of
what's happened and what's very likely to
happen. In that manner, you catch a downward trend before it
gets out of hand.
You should also Concern yourself with
the figures behind the dollars - for instance, the amount Of
units sold or the number of
orders. Insist on cost-per-unit
statistics. The Fluctuation of the cost-per-unit can be much
more meaningful than simply looking
In the dollar figures .
Another idea is to exhibit these comparative Figures on graphs
so that significant trends can be seen
readily.
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