Cash Flow Planning for Solo Professionals

April 14th, 2012 by saosis | No Comments | Filed in Entrepreneur Blog

You’ve heard it a million times – cash flow can make or break a business. Lack of cash flow planning is the reason why many businesses fail. In fact, many PROFITABLE businesses fail because of cash flow issues. Without adequate cash flow, you can’t pay your bills and you can’t make plans for your business.

So… what is cash flow planning? Cash flow planning is projecting your future cash inflows from sales, services, and loans, and comparing them to your future cash flow needs (suppliers, salaries/wages, loan payments, taxes, etc.). The difference between the two is your net cash flow.

Why is cash flow planning so important? Cash flow planning can help you identify problems down the road, and fix them before they occur. Cash flow planning can also help you make decisions such as should I attend that conference I’ve wanted to attend, should I buy the new computer I’ve been wanting, or do I need to work extra hard this month to avoid a cash flow deficiency next month?

The first step in planning your cash flow is knowing where you spend your money! Solo entrepreneurs need to have a good grip on both their personal and business spending, as most solo entrepreneurs rely on their business income to meet personal finance goals (i.e., pay the bills!). So, you should track both your personal and your business spending, although I recommend that you keep them separate (that’s a topic all by itself).

What’s the best way to track your spending? You can use pen & paper, spreadsheets or a software program. The best method for you is the method that you will actually use on a regular basis.

You should project your spending for at least the next 12 months so that you include annual and other periodic expenses. If you are experiencing a cash flow crisis, you should track & project your cash flow on a weekly basis, instead of monthly.

If you are an existing business, you can project your cash flow for the next year by reviewing your expenses for last year. If you are a new business, you will need to estimate your start up costs in addition to regular operating expenses.

Start up costs include inventory, legal expenses, advertising, licenses & permits, supplies, and many more costs that you may not have thought of. To research startup costs you should contact your local Small Business Development Center, contact a SCORE counselor, join groups of similar business owners, and read as many books or articles you can find on the subject.

To improve your cash flow, you should:

1. Complete the first 3 steps. You have to understand cash flow planning, track your cash flow, and project your future spending needs before you can improve your cash flow.

2. Create best and worst case scenarios and create appropriate responses to both scenarios. For example, if your best case scenario is to increase sales by 50%, how will you use the profits? Will you put the profits back into the company by investing in new equipment, training, etc.? If your worst case scenario is a drop in sales by 50%, how will you continue to cover your monthly expenses? By planning for the best and worst case scenarios, you’ll be ready for any situation.

3. When estimating your future income, realize that some people will pay late, and account for that fact in your projection.

4. Charge what you’re worth. Many businesses, especially service professionals, under-charge when they are first starting out. This is a great way to go out of business. Make sure you are charging what you’re worth, and remember you’re in business to make money, not to give your expertise away for free.

5. Watch your business spending. Focus on the value the item brings to your business, and avoid lavish spending (i.e., do you really need the fastest, newest computer available?).

6. Don’t hire until necessary. Consider using virtual assistants or temporary employees before hiring permanent employees.

7. Give incentives for early payment for products and services. On the flip side, chase down invoices the minute they’re late. Charge interest or late fees to encourage timely payments.

8. Update your cash flow regularly. Your cash flow plan will change frequently as your business grows. You may want to update your cash flow plan weekly when you first get started, then switch to monthly once you’ve got a good handle on your cash flow.

Remember – whether you are a new or growing business, your cash flow projection can make the difference between success and failure.

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Entrepreneurs Who Didn’t Bother With A Master’s Degree

December 29th, 2011 by saosis | No Comments | Filed in Entrepreneur Blog

Believe it or not, it is possible to get filthy rich without spending half of your life in school. And you don’t have to be on a chest-baring reality show to do it. These wildly successful people did it, all without setting foot in grad school. Many of them never even earned an undergraduate degree. If you’ve got enough brains, you’re willing to take risks, and you’re just a tad cocky, consider following in their footsteps before you shell out hundreds of thousands of dollars for that pretty piece of paper.

Continue reading here: http://www.huffingtonpost.com/greg-voakes/entrepreneurs-masters-degree_b_1171682.html

10 Ways To Be Professional at Work

October 5th, 2011 by saosis | No Comments | Filed in Entrepreneur Blog

Acting like a professional really means doing what it takes to make others think of you as reliable, respectful, and competent. Depending on where you work and the type of job you have, this can take on many different forms.

There are, however, quite a few common traits when it comes to being professional. This includes the following:

1. Competence. You’re good at what you do – and you have the skills and knowledge that enable you to do your job well.

2. Reliability. People can depend on you to show up on time, submit your work when it’s supposed to be ready, etc.

3. Honesty. You tell the truth and are upfront about where things stand.

4. Integrity. You are known for your consistent principles.

5. Respect For Others. Treating all people as if they mattered is part of your approach.

6. Self-Upgrading. Rather than letting your skills or knowledge become outdated, you seek out ways of staying current.

7. Being Positive. No one likes a constant pessimist. Having an upbeat attitude and trying to be a problem-solver makes a big difference.

8. Supporting Others. You share the spotlight with colleagues, take time to show others how to do things properly, and lend an ear when necessary.

9. Staying Work-Focused. Not letting your private life needlessly have an impact on your job, and not spending time at work attending to personal matters.

10. Listening Carefully. People want to be heard, so you give people a chance to explain their ideas properly.

The more you put into practice the 10 points listed above, the better your chances will be to create a positive reputation for yourself. This can ultimately translate into raises and promotions, chances to work on more assignments that you enjoy, less likelihood of being downsized when layoffs are being considered, and the respect of peers and senior management.

How do I Value my Small Business?

July 17th, 2011 by saosis | No Comments | Filed in Entrepreneur Blog

The problem with selling any small business ($500,000 and below) is how can a realistic value be put on the business. If a business is valued too high no one will be interested or worse value it too low prospective buyers will think there is something irregular. Also where it is listed for sale is important, EBay is a tremendous medium for certain things however fraud is common place.

Unfortunately there is no fixed system when it comes to valuing any private business, the IRS, Courts of Law and the Inland Revenue all use there own systems. There are also many wonderful mathematical formulas that can be used; however there is no fixed system. To be honest the whole system is complicated with no fixed rule apart from one. What price is a person is happy to sell a business for and what is the buyer happy to pay?

If you are either buying or selling a small business do not be afraid of negotiation, it is a natural process within business. There are many good negotiation techniques; Maitland Kalton of Kaltons Solicitors London is considered an expert in this field.

The following list is a simple aid to assist people who are interested in finding a value of a business, either for the sale or purchase.

1. Does the business have employees either full time or part time? Prospective buyers should be aware that any business in the UK which employs 5 or more people has specific duties in regards to Health & Safety.
2. Is the business purely an internet business? Be warned it is very easy for an online business to appear to be doing very well, when the truth is completely the opposite. This practice unfortunately is leading to the devaluation of genuine online businesses.
3. Does the business have fixed assets or stock? It is much easier to value a garage where real estate and equipment can easily be valued, where as it is less easy to value a business with no fixed assets i.e. Legal specialists, Solicitors, Health workers etc.
4. Does the business have a full audit trail; it is surprising how many small businesses listed for sale do not.
5. What area is the business in; it goes without saying that businesses located closer to major cities are valued higher than businesses in a rural district.
6. What are the future growth prospects for the business?
7. Will the business require insurance/liability policies?

These are just a few factors that have to be considered, as you can see there is much more to take into account than how much revenue is generated by the business.

How to Start a Home-Based Business That Will Succeed

May 8th, 2011 by saosis | No Comments | Filed in Entrepreneur Blog

The best home-based business is the one you start with your own two hands – not the one in the ad or the one your friend is promoting.

So, you’ve decided to take the plunge and start your own home-based business. Congratulations! You’re on your way to true financial independence. Protect your business and your livelihood by making sure you have paid proper attention to the following:

1. Assess your talents
How do you find a business to start that is right for you? Consider your talents, your skills and your passions. If you are good at numbers, and enjoy being detailed-oriented, you could start a freelance bookkeeping service. Love the outdoors and gardening? How about a landscaping enterprise. Do you play an instrument? You could teach classes to kids or give individual lessons in their home. If you love crafts and enjoy making quilts or scrap booking, could you teach this talent to others?

2. Put your talents and skills together and generate business ideas
Now you must consider whether or not your idea will work as a home-based business. If you love baseball and want to set up a batting cage, do you have the space? Is your property zoned to take on vehicles driving up and parking all over your street? You can’t start a manufacturing venture in a residential neighborhood. If you are thinking of baking bread and selling it to restaurants, make sure you call your county clerk’s office and find out if you need to get a “food handler’s license.” Requirements vary in each state so make sure you check it out!

Don’t censor yourself as you list home business ideas. List all your ideas at this stage; crossing off choices comes later.

Give your business ideas the home-based business test
Can you make a profit with the type of business you’ve selected?

If you want to start a pet-sitting business, for example, make sure your region has a client base to support your small business. Will people be willing to pay you for what you are selling? Next, ask yourself how much are people willing to pay for this product or service, and will you be able to make a sufficient income from that?

Write a business plan for your home-based business. There are many templates available online that you can use as a basis for your document. It can be 2 pages or 20 pages, but what the plan will do is help you answer all the questions you might have about your small business before you even launch the company.

The cash & the business plan
Do you have adequate working capital to support your business (to support you!)during its early stages? Have you started your business part-time while continuing to work full-time to make sure it is a viable income producer for you and that income is adequate for your needs? DON’T give up your day job until you can give an unequivocal YES to these questions.

The business plan is absolutely essential if you want to borrow money, so prepare the document. It will give you a great sense of security knowing that you understand every aspect of your venture.

Figuring out the profit angle and doing a business plan are two important parts of the process of starting a home-based business – two parts that many people starting a home-based business don’t bother with. But if you want to start a home-based business that will succeed, rather than just being another business failure that drained your time and wallet and left you disappointed, you need to pay particular attention to these two steps of the starting a home-based business process.

Establish a professional image

Have you obtained all necessary licenses and registrations for your business? Do you comply with your local zoning regulations? This is especially important for both legal and insurance reasons if you expect to have clients visit your home office.

Most of your customers might never see your home office, so impress them with your professionalism and attention to detail by selecting a good-looking stationery system consisting of high-grade letterhead and business cards. Get a separate phone line so no one answers the phone and just says, “Hello,” which could turn off potential customers. Get a fax machine, an answering machine or voice mail and you are in business!

Doing business
Print up a flier, get involved in local clubs and other networking opportunities, send out a press kit to local newspapers, prepare a direct mail piece, try and place yourself as a guest—an expert—on local TV or cable, investigate advertising, become active in local civic groups and associations, offer to give a speech at a local club or gathering, send out discount coupons, send out holiday greeting cards, teach a class at adult education, attend trade shows as a guest or exhibitor.

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Organic Materials, Manures, Compost and Oil cake comparison Factsheets

March 15th, 2011 by saosis | No Comments | Filed in Fact Sheets

The following document is the FACT SHEETS of the research conducted by the International Rice Research Institute to promote the use of Organic matter for agricultural use. This FACT SHEETS also differentiate values of % N, % P2O5 and % K2O in Organic matter, Manures, Compost and Oil cakes.

Saosis organic fertilizer made from Oil cakes:
Saosis organic pellet fertilizers are scientifically formulated from natural ingredients. They contain no manure and there are no foul odors so often associated with natural fertilizers. And, because nutrients are released as the plant needs them, there is no danger of burning or killing your plants due to an overdose of chemicals. Saosis organic pellet fertilizers are naturally rich in nitrogen [N], phosphorus [P], and potassium [K]. N P K are the three major nutrients that plant needs, to grow strong and healthy.

Saosis organic fertilizer made from oil cakes continue reading here ->

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Procedure and practice of organic certification in India

March 15th, 2011 by saosis | No Comments | Filed in Fact Sheets

Source: http://www.afcindia.org.in/Jan-feb2009/20-25.pdf

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Passive Income

December 28th, 2010 by saosis | 2 Comments | Filed in Entrepreneur Blog

Ever wondered how your colleague at work, who earns the same salary as you, has bought a BMW while you are still driving your 5-year-old Honda City?

Chances are your colleague has utilized his or her existing salary smartly to generate passive sources of income, on the back of which the car has been bought. By generating passive income you can achieve financial freedom and flexibility through the creation of alternative sources of income that can complement your salary income. People rarely achieve their financial goals and dreams only on the back of their salaries – one needs alternative sources of income that can increase one’s wealth and consumption capabilities. Here we share with you some tips on how to generate passive income that can facilitate wealth creation.

What is passive income?

The salary you get from work is a direct result of your efforts at work, during your active working life. Passive income, on the other hand, is income that you can generate without having to directly work for it.

For instance, if you invest a part of your salary into instruments that will earn income for you without you spending any time on it, you can create passive sources of investment income for yourself. Apart from the act of investment, you are not directly doing any active work to generate investment income. In effect, your money works for you to earn more money for no incremental effort on your part. Over time, if you have invested smartly, you can have enough money through these passive sources to make a down payment on an apartment or buy that dream car.

Even if you start small, the idea is that you should start creating passive income for your self. Through the sheer power of compounding of capital, small savings today can grow into a large amount within just a short period of 4-5 years.

When can I start earning passive income?

You can start as early as today! All you need is a regular source of salary income and the discipline of setting aside a part of this salary, even if it is a small amount, towards investment purposes before you start spending your money on your lifestyle or your living costs.

This of course might not always be easy, and depends upon the state of your personal finances and your family situation. Also, if you are just starting out your career, you might not have the flexibility to invest immediately. To add to these is the peer pressure to spend money on items of conspicuous consumption like the latest mobile phone or a cutting edge flat screen LCD TV. The choice whether to invest or not is of course yours, but please bear in mind the tradeoff in the long term – you can either consume today, or save up to consume for later.

If, however, you are in your middle age, you might not be left with much of a choice and your key goal should be to use as much of your income as possible from your remaining peak earning years to create a source of passive income, which is often the only source of funds for most people during retirement.

What is the tax impact of passive income?

Like your salary income, any passive income that you generate will also create a tax liability for you.

Depending upon the source of the income there might be different tax treatment applied. For instance, dividends from equity instruments such as stocks or equity mutual funds are tax free in the hands of the investor. However, dividends distributed by a debt or a liquid fund will be subject to a dividend distribution tax paid out by the fund.

Further, the tax treatment also depends upon the time duration that you hold an asset or an investment. If you make a gain on a capital market investment, but hold it for less than 12 months, short-term capital gains tax rules will apply. If you hold the investment for more than 12 months then long-term capital gains tax rates will be applicable. Similarly, for property the holding period that determines a short or long-term capital gain is whether you have owned the asset for more or less than 3 years. The tax rates for capital gains vary by the type of investment in question. Sometimes you might also be able to use losses from your investments to offset your taxes from other sources of income.

Whatever be the source of your passive income, you will need to declare it in your annual tax return, and pay taxes on it according to the existing tax rates and rules.

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Welcome to Saosis Blog

December 24th, 2010 by saosis | No Comments | Filed in Press Center

Namaste, India!
To day we are delighted to announce the start of our official Saosis blog. This is where we’ll share our latest news and initiatives, so check back often for updates and Saosis feeds.

Thank you,