Bizzalley's Business Q&A

Q)What's the best way to manage cash flow?
Bizzalley's Answer-The best way to manage cash flow is to cut down on costs. Weigh every spending decision before making it. Some items are better off leased than bought. The world is digital and a lot easier now so get your business an accounting software that helps track your income and expenses. That way, you don't get cash-strapped out of the blues. Whatever you do, you must be on top of your expenses.

Q)Do I start out fresh or buy a franchise?
Bizzalley's Answer-There's a lot of pros and cons to this, but buying a franchise is so much easier if you have the right amount of money to do a complete setup. With a franchise, you already have an established customer base which means you can cut down a bit on your marketing budget and it's a lot easier to get loans and investors with a franchise than a fresh startup. However, if you do not have the right funds to set up a standard franchise, you'll be playing yourself, therefore you are better off starting out with your small business and growing from there.

Q)I can't seem to attract investors. What am I not doing?
Bizzalley's Answer-Investors typically do not just look out for great ideas, but ideas that would rake in both income and profits. Ensure that your business proposal and books show that if you get the funding, you'll be able to convert it to sales and then profit. Something else investors look at, is you and your team. How reliable are you? Do you have the right skills to actually do the job or are you just someone with a great idea and good presentation skills. Ensure you have the right people on your team and watch investors finally look your way.

Q)Do I need to have a lawyer on retainer?
Bizzalley's Answer-Lawyers are great and they will help you avoid making a lot of errors and wrong business moves. They look out for hidden clauses in contracts, watch out for and advise against moves that could land you in a lawsuit and generally have your back. However, having one on retainer would cost you a bit, so keeping a lawyer on retainer largely depends on what level your business has gotten to. For startups, it's not a great idea especially as there are less contracts to pore over. With great sites like Rocketlawyer.com around, you could read up and get any information you want. There are also small law firms who deal with startups and do not charge an arm and leg, you could use one of those whenever you have the need. However, for bigger companies, having a lawyer on retainer is inevitable and it is one of the best decisions you should make.

Q)What do I look out for in an employee?
Bizzalley's Answer-The most important thing to look for when employing is how well the person can fit in with your company culture. You don't want to hire someone who'll stick out like a sore thumb amongst your other employees, it will not only affect your business but also the person's psychological state. You also need people who can motivate themselves and who do not have to be micromanaged. Don't hire someone who you'll have to babysit, it's a job, not an internship position. Whoever you hire must have the skills, be a team player and be customer-centric. Those are what you look out for when hiring.

Q)How important is insurance for my business?
Bizzalley's Answer-Every business should have insurance, whether you're a startup or a full-blown business. Insurance covers you from unplanned damages and liabilities. Every business has a risk level; from floods and hurricanes to a mishap on the job, insurance takes care of that and ensures that your business does not fold up. Insurance also protects you against lawsuits from perhaps a disgruntled employee, or client. Theft, fire and other common workplace accidents are also covered by insurance, so you don't have to worry about staying afloat just because of any incident.

Q)Is it possible to go bankrupt even with a great net income?
Bizzalley's Answer-Yes it is. Net income simply means the total amount of money which comes into your business over a period of time. If your expenses are consuming almost or more than your net income then even if your net income is pretty great, you still have a high chance of going bankrupt. Also if your business is highly dependent on credit lines gotten from banks and the banks suddenly pull out, you are quite likely to go bankrupt even with a high net income.

Q)What is the best salary payment plan for a startup owner?
Bizzalley's Answer-There's no cast in stone payment plan that works best and between picking a salary range or paying yourself a percentage of the profit, every method has its own challenges. However, be sure to factor in your projected or expected salary when making your business plan, you can then adjust the numbers to fit in with your startup realities as you grow. The trick is to not hurt yourself to keep the business afloat and not hurt the business to keep yourself afloat. Find a middle ground and pay yourself exactly what your business can afford without going far into the red line.

Q)How do I know the right time to start hiring?
Bizzalley's Answer-Hiring new employees is a whole new set of expenses and we're not talking basic salary here. Hiring employees means more health care cost, travel benefit cost, and generally the whole works. Consider all these and be sure you can handle at least a year's worth of the bills before deciding to take on more hands. Do you really need an extra cashier or is the surge in customers just because there's an holiday? Remember employees = expenses and you don't want more expenses except they're totally unavoidable.

Q)What percentage is okay to give to an investor?
Bizzalley's Answer-Whatever percentage of the business that gets you the funds you need. A lot of times, startup owners are so emotionally attached to their startups that they dwell so much on the ownership part of the business. Keep your emotions aside and do what it takes to make sure you get funded, throw in a clause which ensures you don't eventually get kicked out and then grow your business. That's not saying you should hand over 99% of your business just to get funded, but detach yourself and think of the best possible deal you could get which would benefit the business.

Q)What level of accounting is necessary for a startup?
Bizzalley's Answer-Accounting for startups should start from day 1. Every transaction you make should be recorded, it would help you a great deal especially if you intend getting serious investors. Thankfully, there are various accounting software which would help with your accounting problems.
The truth is, having a great accounting system in place from the first day will help you when you start making tax returns and proposals. It takes off that stress from you so you can focus on other things that actually matter.