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Is the best time to relocate your business before, during, or after the holidays?

(ENTREPRENEUR NEWS) If your business has outgrown its current space, it may feel like there’s never a good time to relocate. When can you pack everything up without disrupting operations, going offline, and sinking your sales?

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If your business has outgrown its current space, it may feel like there’s never a good time to relocate. When can you pack everything up without disrupting operations, going offline, and sinking your sales? The answer may be during that post-holiday slump.

Though the holiday season is marked by increased shopping and general economic activity during the run-up, once the holiday season actually begins, we tend to see a slowdown that leads to low first quarter profits. Decreased profits during this period don’t mean we’re looking at an overall economic slump, but rather that everyone is recuperating from holiday spending sprees, while companies assess and prepare to launch their start-of-year marketing strategies. It’s a time of renewal and reconsideration, from an economic perspective.

If you’re thinking about staging a move for your business this holiday season, you’re on track for decreased business disruptions, but that doesn’t mean you have an easy road ahead of you. Here’s what you need to know to execute the move smoothly.

Have A loose timeline

One of the most challenging things about planning a business move is that it can be hard to predict how long it will take to properly execute your move. That means, even if you tell your customers you’re relocating, you shouldn’t expect to give them a hard re-opening date. Rather, the length of time it takes to move tends to hinge on a number of factors, including distance, size of your business, infrastructure issues, and regulatory concerns, not all of which are easily predictable.

You’ll also want to leave some buffer time when planning your move because you can’t predict problems that might arise with the moving company. Bad weather or a broken down truck can delay a move, especially if you’re working with a small company. Moving companies may also offer you a lower rate if you’re flexible with your move dates.

Consider your employees

Another question you’ll want to ask before moving is, “Where are my employees in all this?” Some companies firmly believe in giving employees holidays off, even if it means closing a profitable business like a restaurant during an otherwise profitable time. Other companies, however, typically assume employees will be in the office during or immediately after major holidays.

Regardless of your usual philosophy, you need to determine what role your employees will play in your move.

While they shouldn’t be responsible for the physical process of moving, do you expect them to participate in packing and setting up the new location? You should be clear about your expectations while recognizing that moving is outside the scope of typical job duties. You also will need to budget to pay your employees during this downtime while also financing the move, even though you won’t be bringing in a profit.

Mind the locals

If you’re primarily an online business, you may not have to worry about how your move will impact customers – other than some downtime, these individuals will be minimally affected. However, for businesses that run a brick and mortar storefront, changing locations can have implications for your community relationships.

If you move outside your original area, for example, you may lose customer goodwill or even sacrifice some of your customer base altogether. Depending on the service you provide, they may come back, or they may find another option closer to home.

The holidays are a busy time in general, but they’re an unusual time for businesses since economically it’s the pre-holiday period that’s actually the most hectic. Take advantage of this imbalance to move your business with the least fuss during the last few days of the year or at the start of the first quarter. You’ll be pleased to find how smoothly a company move goes when customers are otherwise occupied.

Larry Alton is an independent business consultant specializing in social media trends, business, and entrepreneurship. When he's not consulting, glued to a headset, he's working on one of his many business projects. Follow him on Twitter and LinkedIn.

Business Entrepreneur

Why receiving big funding doesn’t guarantee startup success

(BUSINESS ENTREPRENEUR) You finally got that big funding check that allows you to make your dreams come true, but most startups fail because they shoot for the moon.

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The first thing every startup needs to get off the ground is funding. It’s crucial to have enough capital to cover equipment, inventory, and employee salaries, along with other basic expenses unique to the industry. Most startups cover these initial costs through business loans and capital from private investors.

Some business owners perceive getting funded as the first milestone toward success. While receiving capital is critical for success, being well-funded doesn’t guarantee success. Plenty of well-funded startups have failed, gone bankrupt, and all but disappeared.

How could so many well-funded startups possibly go under? The 90% failure rate for startups is due to a variety of factors including bad timing, no market, and most of all – mishandling of finances.

Here’s why receiving big capital doesn’t guarantee success.

Getting investment capital provides false hope

Getting funded can make you feel invincible and cause you to be too relaxed about spending money. It’s a powerful feeling to have plenty of money and know an investor believes in your business. Investors are smart; they wouldn’t throw money at a startup unless they had every reason to believe it will succeed, right? Not exactly.

Startups in big tech areas like Silicon Valley and San Francisco often have an easy time generating large amounts of capital from investors who can’t wait to throw money at the latest startup. Many investors ignore risk and throw their money at long-shot bets hoping to invest in the next Facebook or Instagram. The size of the pot is too mesmerizing not to take the risk.

These long-shot bets carry similar odds to winning a “Pick 6” bet in horse racing. The Pick 6 is one of the hardest bets to win because you have to pick the winning horses for six consecutive races. What if the top horse becomes injured before the sixth race? Investors who toss money at random startups have to pick a startup that will continue to meet all the right circumstances to become profitable long-term. Some of those circumstances are unpredictable.

No business owner wants to view their startup as a long-shot bet. However, the reality is that many startups are. You can’t gauge your potential for success based on how much funding you receive.

Having plenty of cash encourages premature scaling

When you’ve got the cash to scale your startup it seems like a waste not to dive in. Just one look around the internet reveals plenty of videos and articles encouraging entrepreneurs to scale their business. Advice online gives the impression that if you’re not scaling your business, you’re falling behind. However, scaling too soon can tank your startup.

Research conducted by Startup Genome found premature scaling to be the number one cause of startup failure. Nathan Furr from Forbes.com explains this finding and what it means for businesses. Premature scaling is defined as “spending money beyond the essentials on growing the business (e.g., hiring sales personnel, expensive marketing, perfecting the product, leasing offices, etc.) before nailing the product/market fit.” Furr says any business is susceptible to premature scaling – not just startups.

The problem is that premature scaling depletes your cash reserves more quickly. This leaves you with less cash to fix mistakes and readjust as you go along. Failure is what happens when you don’t have the necessary cash to fix mistakes and move toward success.

How to make the most of your funding and increase your odds of success

To increase the odds of developing a long-term successful startup, here’s what you can do:

Save as much money as possible. For instance, you don’t need a giant office with expensive furniture right away. Work from home and hire a remote team until an office is absolutely necessary.

Make sure the cost of acquiring each customer makes sense. Know how much money you’re spending to acquire each customer. Track all marketing efforts and eliminate the avenues that don’t generate paying, loyal customers. If the cost to acquire a customer is more than what they spend with your company, revisit your marketing strategy.

Aim for an order-of-magnitude improvement with your innovation. Skip Prichard advises startups to strive for a 10x increase in the value of whatever innovation is being provided to the world. For example, if your company is offering a lower price for a greater value, aim to increase the value 10x. Attract the early adopters who want big improvements and they will validate you.

Money is a tool – use it wisely

Celebrate when you get your funding, but keep that money in the bank for necessary expenses. Money is a tool that doesn’t guarantee success, but if you budget wisely, you’ll have a better chance at beating the startup odds.

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Business Entrepreneur

‘Small’ business was once a stigma, but is now a growing point of pride

(BUSINESS ENTREPRENEUR) Small businesses make up the majority of companies, employers, and money makers of the American economy, that’s something to be proud of.

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Prior to the Industrial Revolution, all businesses were small businesses. Independent craftsmen served communities with vital services. Small merchants opened shops to provide the community with goods. Lawyers, doctors, and other professionals hung out a shingle to offer their services to neighbors. Small businesses were the norm. Some of the most beloved American companies started out local. John Deere, Harley Davidson, and King Arthur Flour, all got their start as small businesses.

Business changes led to a attitude change

It wasn’t until manufacturing allowed businesses to scale and produce more efficiently that the idea of big business became more important. Post-World War II, the idea of a small business became derogatory. It was the age of big government. Media was growing. Everyone wanted to be on top. Small businesses took a back seat as people moved from rural to urban communities. Small business growth plateaued for a number of years in the mid-20th century. Fortunately, the stigma of small business is fading.

Small businesses are the backbone of the economy

According to the Small Business & Entrepreneurship Council, the “American business is overwhelmingly small business.” In 2016, 99.7% of firms in American had fewer than 500 workers. Firms with 20 workers or less accounted for 89.0% of the 5.6 million employer firms. The SBE also reports that “Small businesses accounted for 61.8% of net new jobs from the first quarter of 1993 until the third quarter of 2016.” Small businesses account for a huge portion of innovation and growth in today’s economy.

Modern consumers support small businesses

According to a Guidant Financial survey, the most common reason for opening a small business is to be your own boss. Small business owners are also dissatisfied with corporate America. Consumers also want to support small businesses. SCORE reports that 91% of Americans patronize a small business at least once a week. Almost half of Americans (47%) frequent small businesses 2 to 4 times a week.

Be proud of small business status

Small businesses are the innovators of tomorrow. Your neighbors want to support small businesses, knowing that their tax dollars stay in the community, and that they’re creating opportunities within their own city. Your small business status isn’t a slight. It’s a source of pride in today’s economy. Celebrate the fact that you’ve stepped out on your own in uncertain times. Celebrate the dirt under your fingernails, literally, or figuratively, that made you take a risk to do what mattered to you.

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Business Entrepreneur

3 types of clients you should fire as a freelancer (without feeling guilty)

(BUSINESS ENTREPRENEUR) Being a freelancer, it can feel like a luxury to fire a client, especially in 2020. But there’s a few clear signs they’re not worth your time.

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Freelancers often bend over backward to accommodate clients, many times to the detriment to the freelancer. Bad clients are toxic. It’s never easy to say “you’re fired” to anyone, but as a freelancer, sometimes, you need to weigh the cash value of a client against your time, mental health, and sleepless nights. Here are some reasons you can fire a client without feeling guilty.

Clients who aren’t paying on time

Clients who don’t pay or avoid you when there’s a problem need to go. You waste a lot of mental energy chasing down payments and juggling your bills. I know it can look like a bird in the hand kind of situation, but if your client isn’t paying your bill, the bird isn’t really in your hand. My best clients have been with me for over five years. Both consistently meet the payment schedule. Not to say there haven’t been glitches, but they’ve always taken the initiative to explain and got it fixed right away.

Clients who become more demanding without offering more payment

There are always jobs that need to be done right away or need more work. A client who puts demands on your time without compensation is hurting you. When you say yes to one thing, a short deadline, you’re putting other work off. You may be able to deliver to other clients within their deadline, but if you’re tired and grumpy, will it be your best work? High maintenance clients who want to micro-manage are another type of client you may want to kick to the curb. At the very least, raise your rates to account for the extra time it takes to mentally deal with them.

Clients who don’t act professionally

You need to set good boundaries with clients who may be your friends. It’s hard to find that line, but if you don’t set up good professional rules at the onset, you’re going to find yourself doing more for a client out of “friendship.” You’ll become resentful because you’re doing favors and not getting anything in return. Clients who violate contracts aren’t any better, regardless of any outside relationship.

It isn’t easy to fire a client. It’s your paycheck on the line. If you’ve got a bad client, think about the hours you waste worrying about them. Believe me, they are not spending the same energy. Use your energy to find better clients who appreciate you and your work.

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