Business Problem Solving

Approximately one million new businesses are started every year in the United States. About 80 percent of all new
businesses will fail within five years. As the manager of a small business, you must wear several hats. Never stop
investigating new ideas to improve all areas of your business. The astute manager will gather information to assist
him or her in making the changes necessary to stay profitable in a competitive business world.
Here are twelve tips to improve your profits:
1. Listen to your customers. You are not really selling products or services; you are selling customer
satisfaction. Satisfied customers return to spend more money and are likely to refer new customers to you.
2. It is estimated to cost ten times as much to acquire a new customer as it does to retain a current customer
through good customer service.
3. If your company runs well now in your absence, it will run well in the event of your disability or death. If
you are currently indispensable, start training people now. One of the most rewarding forms of retirement is to
own your own company and to be absent as much as you like.
4. The word ability spelled "A.B.I.L.ity" could stand for Accountant, Banker, Insurance Agent, and Lawyer.
These professionals handle a variety of business problems every day. They make excellent sounding boards for
proposed transactions. Consulting with them before you conclude any deals can save you many problems.
5. You can be your own best business troubleshooter. Consider arranging a trip to visit a half dozen businesses
just like yours, but outside your trade area. Discuss products or services, customer relations, vendors,
physical plant and equipment, and financial statement information with these noncompeting colleagues. Arrange a
five- to ten-day trip. Take your financial statements, a copy of your floor plan, your camera, and a long list
of questions. When you return, you will be able to inform your staff of all you learned. This trip is
especially beneficial if you are not affiliated with a franchise business.
6. Every business should operate from a budget. Your last year's financial reports serve as an excellent guide
to setting this year's budget. Since it is designed with the best information you have available at the outset,
the variances from the budget figures may give you valuable information in preparing the next year's game
plan.
7. Before you start a new business, be sure the community can support such a business. Some areas are not large
enough to warrant certain specialty shops. A bicycle shop, for example, may take a population base of 50,000
people to make it profitable. A grocery store, on the other hand, can be profitable in a town of only a few
thousand.
8. Is it necessary or profitable to have accounts receivable? Credit is necessary to attract some business, and
it is profitable if properly managed. For example, a construction company finds it impractical to issue credit
cards to all its employees and inconvenient to use a check for every purchase. In exchange for the courtesy of
an open account, such a customer should be willing to pay immediately upon receipt of a billing statement.
9. Business deals and special franchises which sound too good to be true usually are. We will gladly assist you
in reviewing any new purchase or business proposal.
10. Business partnerships (marriages) seldom have the same courtship afforded most marriages. In the absence of
this courtship, you should have your attorney draft a well-written partnership agreement. It is also important
for family partnerships.
11. Don't incorporate your business without first checking the long-range tax and non-tax considerations. There
are many small corporations that would have been better off operating in some other legal form.
12. Some businesses receive penalties for late payroll tax deposits. To avoid such problems, don't sign payroll
checks unless the first check in the stack is the payroll deposit to your bank. This may have you paying
deposits earlier than required, but you will not be receiving penalties.
What makes a business successful?
Business problems and their solutions are as varied as are different businesses. There are some universal
truths, however, in managing any business. Whether you are starting a business or operating a going concern,
Hough & Company can help you select the proper organizational structure and help you secure adequate
financing. We will work with you and your banker, lawyer, insurance agent, and other advisors to solve your
business problems. We will assist you with loan applications, pricing, credit policies, cash flow needs, cost
controls, and other management issues. We will gladly assist you in reviewing your operations to see what you
might do to be more profitable. Give us a call for a no-charge initial conference. You should interview us, as
you would any professional, to determine if we will be a good long-term match for you and your business. If we
don't have the answer to your problems, we will assist you in locating someone who does. We always welcome your
questions. Contact us by phone or e-mail. We appreciate hearing from you.
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Get in Touch
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Address: 248 Nokomis Ave. S, Venice FL. 34285
Telephone: (941) 488-7768
FAX: (941) 484-3975
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