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Monthly Archives: June 2017

Candle Business

One area that has been popular among those looking to augment their reduced income or even replace their entire income after being laid off has been candle making. At first this trend began with hobbyists because the line between candle hobbyist and candle business is easily blurred. But now there many folks entering candle making that have no interest in it as a hobby.

Candle making as a business has much to be said for it – you are your own boss, you can be creative, make your own hours, and best of all you are out of the corporate rat race. It also has its difficulties – you will work harder than you would as someone’s employee, success or failure rests on your own shoulders.

The first step in entering the candle business is learning to make good candles. Although it is easily learned, candle making is far more complex than most people realize. Those who think it is just melting wax and pouring it into a mold with a wick are in for a rude awakening. It is vital to make good candles if you want to succeed in this business. Do some research, buy a good book or two, or even take a course such as those offered at Artisanschool.com

Next, practice. When you are done, practice some more. Test burn and give away as many candles as possible. But request honest feedback, because it’s important to know what others think of your products. Never sell a single candle until you are sure it is as good as you can make it because it takes 10 satisfied customers to offset the damage to your business done by one dissatisfied customer (unhappy customers talk about it to friends much more than happy customers).

Specialize – Select one type of candle and do it well. This is called niche marketing and for a start up candle business, is the best way to go. You will not be able to produce or supply a vast product line so don’t try. Select a small segment of the candle market and try to dominate it. Preferably this niche will be something large manufacturers can’t or won’t make. Trying to compete with huge manufacturers or cheap imports is a recipe for failure.

Marketing is an area where you can get really creative. Popular marketing strategies include word of mouth, craft fairs, home parties, open houses, web site, and fund raisers to name a few. A retail storefront is also within range of those who desire a full time business, but has greatly increased overhead making it that much harder to turn a profit. Don’t limit yourself to common marketing strategies since creative marketing may sell far more candles.

Scented candles are the largest portion of the market and the easiest candles to sell in most cases. Your scented candles should have a strong scent throw when burning or you will not get much repeat business.

 

Tips to Manage Your Assets

Healthy habits with regards to book keeping and accounting practices will always save you time and money in the long run. When dealing with your cash accounts and assets, you need to keep exact track of income and spending – irrespective of how small or insignificant the dollar value may be. Every cent added up over a period of time can make a vast sum.

Following of a good accounting practice and asset management is extremely important, especially when you are required to submit tax to the government. There are numerous cases where small issues that appear insignificant come under the eye of scrutiny and can haunt you for years with the IRS on your back.

Accounting is also essential when you require loans/grants for business expansion/development. Such loans require submission of detailed accounting books. Under these circumstances, possession of proper documentation and books with accurate records enables you to establish your credentials as a responsible member of the business community.

Often, small business owners tend to overlook certain items, not realizing that they are actually assets. Anything worth money, or that can be sold, is considered an asset. For instance, most of us know that our computer equipment is an asset, but we may overlook the desk or even the chair we’re sitting on. Take a look around and see if you’ve missed any assets in your reconciliation.

Managing and properly reporting your physical assets needs to take several things into account. One of these is depreciation. When we talk about cars, the concept of depreciation becomes very clear. When you buy a car brand new at $15,000 you can’t expect to sell it five years later for the exact same price. As soon as car is driven off the lot it deprecates in value. Mileage, wear and tear, and any accidents also play a role in the depreciation of the car. The same goes for almost anything else you may be considering an asset. Property is an exception to this rule and in many areas goes up in value.

Office equipment and most other equipment purchased for a small business does follow the deprecation rule and must be taken into account when you are recording your assets. You may be feeling confused and overwhelmed at this point, but asset management can be fairly easy, given the proper tools.

The mature business market offers numerous software programs that can assist you with your asset management and book keeping. While most of these are heavily documented and are very user friendly, some assistance from a software expert can get you customized solutions too. However, when choosing to seek external assistance for your asset management and accounting, then the right choice would be a qualified CPA.

The main point to remember that asset management in small businesses is just as important as it is in large ones. Be sure to take this into consideration and document everything. You may end up paying a high price if you don’t.

 

How to Avoid Legal Mistakes in Small Business?

There are many web sites that offer legal advice for the small business owner. Here are just a few situations that may arise where you should know your legal rights. In all these situations you may find it necessary to contact an experienced corporate attorney.

Service Agreements – Conducting business involves drafting up a Statement of Work or a Written Agreement. Without a contract, it is difficult to enforce the law. Carefully draw up the business terms, draft it in the company’s favor, and provide flexibility and protection.

Your service agreement should definitively state exactly what you’re agreeing to do and the specifics of that. It should detail the definition and scope of your service. You should also define what is not included in your service and if any extra charges may be applicable. Don’t leave anything out.

Employment Termination- To keep overhead costs down, a major percentage of small businesses begins with a low number of employees. Staff members come and go, as business growth changes. It makes no sense to keep staff on the payroll if the business can’t support the wages.

In order to avoid unlawful discharge law suits carefully select your employees and read up on the proper procedure for terminating employees. This may be a situation were you should immediately contact a corporate attorney.

If you need some additional help many small businesses choose to hire independent contractors. Hiring independent contractors can seem like a simple choice since you’re not responsible for reporting their earnings to the IRS.

You should know that some jobs are actually considered to be an employee’s job regardless if it is done by an independent contractor or not. The IRS has its own definitions that you should be aware of before hiring any independent contractor. Protect yourself and your business and be fully aware of any legal ramifications before making any business decisions.

When starting your business you need to know how your business is classified. You may be a sole proprietor or perhaps in a partnership. Each of these designations carries its own legal ramifications. For instance as a sole proprietor you are vulnerable to legal action taken against your company.

A better choice would be to start a business as a limited liability corporation. This means that if your business is sued, any personal finances and funds can be excluded from the ruling.

No matter what sector your company is in you need to be concerned with intellectual property issues. It is important that you know and understand the term and issues surrounding copyrights, registered trademarks, confidentiality agreements, and invention assignment agreements.

Accounting and record keeping are vital to any company. Failure to do so can get you into serious trouble with the IRS. Keep proper paper and electronic copies of all business transactions.

You may want to hire a bookkeeper or accountant to deal with accounting issues. If you can’t afford to do so be sure to take a course on business accounting to ensure you have proper records of everything.

Do your research and compare fees. The long term relationship you build with your corporate attorney will have its value. All businesses should make an investment in a “good” corporate attorney.

Choose an attorney that you’re comfortable with and can afford. It is important to build a relationship with your attorney so that in times of need he or she will better understand your situation.

Common Mistakes New Small Business Made

1. Improper or No Research

The most fundamental thing to do before starting a small business is to do a market research to find out whether there is sufficient demand for the product or products you have to offer.
Perhaps the reason for the failure to generate the funds is that there is no market for your product or the market is saturated. The need for your product in your area of business activity should be your prime consideration before starting a small business. Only if there is sufficient demand for your products, you will be able to generate the funds necessary to help you run your small business, survive and succeed.

2. Improper or Under Funding

Quite often the urge to start a small business is so great that the very vital aspect of funding is not given due importance. Businesses are started on a shoe string budget and shops open with very little stock and offices with insufficient equipment. To ensure the purchase of stock and equipment it is absolutely essential to have proper funding in place before commencing your business. Furthermore your business might take several months to start making a profit and hence funds are necessary to help your small business survive and keep your morale up during these early months.

If you don’t have sufficient funds of your own, it will be wise and proper to obtain a loan before starting your business. This could be obtained from your bank or you can seek the assistance of the Small Business Administration which offers numerous loan programs to assist Small Businesses.
It is important to note that the SBA acts primarily as a guarantor of loans made by private and other institutions.

Taking huge loans out of proportion to your needs can also be detrimental to your small business since provision has to be made for higher interest payments.

3. Insufficient Advertisement and Promotion

No Business can be successful unless the public is made aware of the existence of your small business and its products. The best of equipment and stocks cannot generate sales unless the public is made aware of it. Hence advertising your small business and the products before the commencement of your business and thereafter should be a major consideration. Failure to do so has been the cause of failure of several small businesses.

4. Unnecessary expenditure

One of the major causes for the failure of a small business is the improper handling of the funds. Extravagant expenditure at the initial stages such as the purchase of expensive cars, equipment and expensive business lunches completely out of proportion to your needs can eat into the capital and leave your small business with very limited working capital. Hence proper and wise handling of funds especially at the early stages can make all the difference between success and failure.