MacStartup

As one that uses Square on my iPhone for selling products and services using a customer’s debit or credit card in my business there’s a new announcement from Square that coincides with Apple’s hush, hush event in the next week.

Will Square And Apple Stores Announce Partnership On Monday?

Now we know why the business team members were added to the change over team starting on Saturday and Sunday, to get ready  for a new retail experience for business customers.

What do you think?

Related articles

• Square credit card reader for iPhone now available from Apple Store (intomobile.com)
• Square launching new iPhone card reader this summer with encryption at read head (slashgear.com)

Startup entrepreneurs are always looking for cash to keep running their business. But here are some smart ways to look at cash in your business.

How to “think cash” in  your business:

1. Sell your stuff – this is the #1 reason to stay in business.
2. Think cheap market research – ask someone to buy what you currently have, if they don’t, you’ve not wasted a ton of money on market research. If it doesn’t sell well, it’s either you or your product, that’s your market research.
3. Think less – if you have $1000.00 in the bank, think you have $100.00, you’ll find more efficient ways of spending your money.
4. Work from home –  saves on rent, commuting costs, and you can deduct some of your home costs for tax purposes. Especially with what Virtual Assistants (VA) can bring to any startup table and computing “in the cloud,” it can save you both time and money. If you can wing it, work from your parent’s home (See Hello, my name is Scott, he started in his parent’s basement for a number of months), but pay for what you use at their house, you don’t want to be a freeloader.
5. Manage cash flow – ensure there’s more coming in than going out, you don’t want to spend what you don’t have.
6. Manage your time – time is money, but you don’t manage your time, you manage your priorities, we all have the SAME amount of time allotted to our lives. In addition, what is your TIME worth? $10 an hour? $100? $250? Lastly, investing your time wisely into something, think thrifty.
7. Barter – for your products / services in exchange for something you really need. Lousy entrepreneurs only “take” from others. Be a Go-Giver instead.
8. Get customers to pay upfront –  by selling membership, subscriptions, gift certificates, and other initiatives to get their money now and deliver within 30 days.
9. Get used – instead of buying new equipment.
10. Lease or rent equipment – and other major purchases instead of buying, especially if the item “turns over” quickly.” Always try to push off payment to the future, your payment is deductible.
11. Get free publicity – by contacting reporters with a story idea or work the social media such as Facebook, Twitter, and LinkedIn. Watch for your copyrights, YouTube licensing says they own any content loaded on their servers. Do guest blog posts where your customers might be visiting. Post comments about subjects that you know about around your business subject matter.
12. Do side work – doing contract work keeps you “in the loop,” but as a last resort you may need to get a part time job. While “jobbers” may think that you’ve failed, startups and entrepreneurs think “raising capital” for your business rather than going into debt.
13. Sweat equity - for employees instead of paying a salary, but think the above avenues as well, like a used piece of equipment that is no longer needed as payment.
14. Keep your cash – Take as little as you can out of the business and focus on growing the company so you can bring in more cash in the future.
15. Pay yours, your neighbor’s, or your friend’s kids – John D. Rockefeller during the late 1800s paid his kids to monitor and turn off the kerosine lamps when they were not in use in his house. He knew precisely what he was paying to light his house. Paying his kids 80% of the oil savings taught his kids the value of earning their money; he was efficient, not wasteful, with his resources; and kept his household costs down.
16. Pay your parents and siblings – this may not be the best solution, but it’s worth a try if they believe in you. Give them a stake in your new venture.

There you have them, what are your thoughts?

Related articles

• The Affordable Way to Launch a New Business (ghazbizin.wordpress.com)
• Working from Home: A Bootstrapping Technique (startupbiz.wordpress.com)
• Bootstrapping Your Start-Up Business with Little or No Money (entrepremusings.com)
• Most Startups Get No Professional Investor Cash (startupprofessionals.com)

When you become a startup entrepreneur you move from “idea” to “what’s your numbers” to find out where you are in your life and business goals.

Here’s a great link by KBJOnline (she’s a Mac fan girl to boot ) to a guest blog post It’s the Numbers….Stupid! 3 Tips for Justifying Social Media Now and Beyond knowing numbers that affect your business and include social media.

Related articles

• Are You Ready For The Social Media Slow Down? (smallbusinessmavericks.com)
• Social Media Addiction: Sometimes You Need to Detox (soshable.com)
• Social Media Topics That are Igniting 3/25/2011 (ignitesocialmedia.com)
• Do you need a social media detox? [infographic] (holykaw.alltop.com)
• Social Media Strategies (ontargetmarketinggroup.wordpress.com)

Image via Wikipedia

Anytime a startup entrepreneur starts their dream idea the number one thing to keep straight is: Cashflow. In this Bloomburg Business Week article For Small Business, a Cash-Flow Crisis it discusses how tough times affect small businesses even harder. Why?

Net30 Float!

In business lingo a Net30 account means a larger company such as Apple creates account for you (or you create for your customers) so if you purchase something that you will pay them at 30 days after the completion of the job or work. It means that Apple is loaning the money to a business customer for 30 days. But you as a business can create Net30 accounts for your customers, but there are problems with this.

But as the article above states, having a Net30 account and getting paid at 30 days is not the norm these days? It’s more like 60 days, and even up to 120 days or over before you get paid. A sort of Net60 or even a Net120 account.

This means that a small business is going to need cash in the bank to handle this “float” of bucks.

How does one handle this? One way is the get paid for paying early, i.e. such as 5-10% off the bill if it is paid off within 30 days. Check with a CPA or other financial professional to discover ways of getting paid on time. It’s worth your money.

Related articles

• Late payments ‘top small business insurance holder worry’ (premierlinedirect.co.uk)
• Six Tips for Managing Cash Flow | Intuit Small Business Blog (bjconquest.com)
• Cash Flow Management (donaldconnor.wordpress.com)
• 6 Tips for Services Startups When Profits Plateau (businessinsider.com)

When it comes to startup entrepreneurs, most work at keeping their costs down in order to make their finances last. But most entrepreneurs have a different mindset than those that work at jobs, or even some business owners that still have the job mentality. Entrepreneurs think thrift, economical, and frugal, but not cheapskate or miserly. Let’s take a look at the definitions first.

Definitions:

• The definition of being thrifty: |ˈθriftē| adjective ( thriftier , thriftiest ) (of a person or their behavior) using money and other resources carefully and not wastefully.
• The definition of miser: |ˈmīzər| a person who hoards wealth and spends as little money as possible.
• The definition of a spendthrift |ˈspen(d)ˌθrift|a person who spends money in an extravagant, irresponsible way.

Now, what’s the difference in their view of money?

There are two perspectives in how you see money:

1. Save money or spend money to make money.
2. Save money only.

What sparked this post was having a conversation with a fellow entrepreneur. The discussion was around spending money, specifically spending $5,000 just to watch another highly successful business person at work, no discussion or asking questions.

Would you spend that $5,000?

A person that has a job mentality or only saving money probably will not. Sometimes a business owner that has not mentally switched from job thinking to business ownership thinking would not either. You know, these “business owners” just switched from earning a paycheck to a higher paying job with more responsibilities. No business owner thinking here.

The business owner in our discussion that spent $5,000 stated that within five minutes of watching the more successful business person at work saw how he could save $2,500 right away in their own business. That’s a business owner thinking.

So, next time someone asks you to pay for their advice, let’s say $60 (or $1 a minute) for an hour worth of advice, ask yourself this:

• Will I save at least $60 or more in time and money with the advice I’m being given? If less than than, no, if more than that, pay the person.
• For every $1 invested to get at least $1 in ROI is not bad, but don’t short the advice giver either. Why? And here’s the kicker: is that a one time savings, i.e. a one time investment of money, or is the savings over many weeks and months? How many times will that savings pay off? Five times? 10? 100?
• If I charge $120 an hour to do something, do I save at least 30 minute worth of my time or more? How many times do I save these dollars over the course of a week? Month? Or year?

Never be a spendthrift, a person who spends money in an extravagant, irresponsible way, or a miser/piker/scrooge who will keep the money to themselves, because what reputation will you gain from this?

A great entrepreneur will pay for the savings realized, so let’s invest our money as good entrepreneurs, especially those that give us good advice by paying them for that advice.

Related articles

• In Praise of Thrift: An Old Idea for a New Economy (getrichslowly.org)
• How to Be Thrifty (money.usnews.com)
• Virtues of Thriftiness (mirandairvin.com)
• What Frugality REALLY Means: It’s Not About Being Cheap (dumblittleman.com)
• Spendthrift Splendor (dotcom2740.wordpress.com)

When a startup or an entrepreneur looks for customers, for the most part they look for ANY customer just to bring in revenue. Any customer that pays the bills is a customer that a new startup company wants. It’s all about generating sales, revenue, and ultimately profit. But then again, there is always a good customer, bad customer approach to your customers, customers that are more difficult than the others and potentially more costly.

Using the Pareto principle, we’ll see how to analyze your customer base, to find which customers are your most expensive or profitable to maintain. The Pareto principle is normally referred to as the 80-20 rule. For example, 80% of your revenues come from your top 20% of your customers, or the richest 20% of Americans pay 80% of the federal tax bill, or fixing the top 20% of software bugs that cause 80% of software crashes.

The Pareto principle is a tool to analyze data to find the sources of a problem and to determine the priority of resources to apply to the problem. Asking the right question is the start of good Pareto analysis.

In our example to the left, customers A-G shows a transaction count and you can see using the Pareto principle you see that almost 80 percent of the number of transactions come from customers A-D. But this also begs the question for more information: How much is the average sales per transaction and how much time to service your customer are additional data that needs to be examined? How much can you reduce your time and effort in handling a less than ideal customer? Is there something within your operational capability that can change your customer dynamics? Your first choice, in most cases, is to look inside your business data to find answers.

The next question is how much time and effort does it take to service your top 20%? Generally whenever you are looking at your customer base your worst customers probably will be in the bottom 80%. But not so fast, customer revenue is only one factor in determining business profitability, a customer’s expense, the time and effort it takes to service one, is equally as important. So it is the combination of both revenue and expense that will determine the Pareto principle used in analyzing your customer base and finding other solutions for your less than ideal customers.

No one wants to lose a customer or have to let one go to a competitor, but it is about being profitable as a business.

Once you have done the analysis, now is the delicate balance on how to handle a less than ideal customer.  And that is for another blog post.

Startups and entrepreneurs have a difficult time about one subject: Pricing.

Here’s a great article at the web site On Startups, Secrets Of Freemium Pricing: Make The Cheapskates Pay about how to consider pricing for certain types of customers.