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Family finance: moving your home business to an office

May 3rd, 2017 Posted in Entrepreneurship
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Starting a home business is a dream come true for the most people, especially when you include your family into starting a business together. As a matter of fact, running a business from the comfort of your home allows flexibility and an opportunity to save money by doing business tasks yourself, without having to hire employees or having to get an office space.

However, once your business starts to grow and expand beyond the possibility of operating from home, the question of moving your home business to an office will emerge. Moving a business from your home to an office means sacrificing flexibility and certain liberties, but it only sounds more frightening than it actually is. After all, your business has achieved a level of success and you must allow it to grow further. Here are a few tips on how to move your home business to an office.

Determine the reasons for moving

Running a business from your home is a perfect situation, so why would anyone want to move out in the first place? Home conditions are best suited for startups or small business in their early stages of development. Simply put, when there is not enough business to go about and you can do almost everything from home. However, once your business starts to grow, you will have to weigh your options carefully about whether staying at home is possible or not.

For instance, will your business require you to hire additional employees beside your family members and can you outsource those employees or will you need them to gather in one place. Will you have to have personal meetings with business associates or will video calls still suffice. Can your budget and current business growth handle the expense of moving to an office or will moving to an office actually help your business grow further and see a return on investment? These types of decisions will have to undergo careful planning and the best way to start is to consult with your family and examine all the options.

Understanding the costs

The big question, when it comes to moving a home business, is whether you should buy or lease a commercial real estate. The answer entirely depends on your budget and whether your business will continue to grow further or will it stay idle for a prolonged period of time.

Leasing or renting an office space is upfront cheaper at first, but staying under lease for too long and the expenses may surpass those of buying a real estate. However, leasing offers the opportunity to grow your business at a steady pace, while upfront costs of buying a real estate and maintaining it, will hinder your ability to grow your business.

For instance, buying a real estate for moving your home business will cost you a lot upfront. Will you be able to afford that money and tie it in a down payment for your mortgage, and even if you can afford it, wouldn’t it be better to spend that sum on growing your business instead?

When leasing property, you have to pay the landlords a security deposit that is equivalent to one month’s worth of rent. Also, if you use a broker, there is 10 percent fee based on yearly lease total, times the number of lease years for their services, as well as attorney fees for lease negotiation. Compared to down payment for mortgage and fees such as due-diligence fees and closing fees, the upfront leasing cost is considerably lower than those of buying a commercial real estate. On that note, there are three most common types of leases you should familiarize yourself with.

  • Net – Rent plus some or all of building costs such as utility, maintenance, taxes and so on.
  • Percentage – Monthly rent plus percentage of your monthly sales
  • Gross – All-inclusive rent meaning a landlord pays for maintenance, utilities, insurances etc. while tenant pays for monthly rent.

Once you understand the costs, you must find the right commercial property location that suits you best. After all, you should consider the distance of your office from your home, as well as rent prices that are lower on the outskirts than in central locations of your city or town.

Benefits of moving to an office

Moving your home business to an office will enable it to grow further. You can hire more employees and have personal meetings with clients and business acquaintances. Furthermore, you no longer have to mix business agenda with a harmony of life, and even if your family is involved in your business, a home is still a home.

Nevertheless, financial expenses should be planned carefully and even though moving a business to an office can get expensive, the increase in revenue after business growth will provide a return on investment.

When your business outgrows your home, moving it to an office is a good idea. From a monetary point of view, it may be a better investment to buy commercial property than to lease it in the long run. However, monetary standpoint isn’t always the determining factor. After all, you’d want to allow your business to grow first and have some flexibility before finding a more permanent residence for it. In the end, the choice comes down to you and your future business goals.

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Money Drains In Every Small Business

March 29th, 2017 Posted in Entrepreneurship
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Whether you are a business owner yourself or helping your children kick off their own startups, it’s important to understand that there is many different money drains that can have a significant impact on profits. It’s important to remember that the best way to boost your business profits is to plug up these money drains and cut costs – without affecting quality. With this in mind, let’s take a look at those biggest small business financial drains and explore what you can do to improve them.

Employee turnover

If your small business has a high employee turnover, you are wasting a lot of money. The hiring process is expensive – advertising for available positions; setting aside time and resources for checking resumes and holding interviews, and training up new staff all costs cold, hard cash. If you want to plug this particular gap, focus on training current employees, so they are up to speed, offer them a fantastic working environment, and ensure they are happy – it is a far more cost-efficient way of working than continually hiring new people.

Process inefficiencies

How tight are your business operations? While small businesses tend to be leaner and more flexible than their bigger competitors, many suffer from inefficient processes, which, ultimately, cost you a lot of money. It could be stumbling blocks in your marketing that mean you are focusing too much on cold prospects rather than warm ones. It might be that a particular team in your business is using programs or software that is far too complicated and cumbersome than needs be. As a business leader, you need to be proactive in finding these inefficiencies and productivity drains if you want to save money.

Contract issues

There is a huge range of issues that can occur with contracts – or the lack of contracts. You have to make sure that your contracts are as tight as possible, or the likelihood is that you will face problems in the future. As https://www.meadowbrookdirect.com/ points out, you could counteract any issues with contractors that break the law by looking at surety bonds. And you should also consider including indemnity clauses in every contract you make, whether with a customer, supplier, or employee.

Poor customer service

Treat a client well, and they will be more likely to come shopping again. Treat them poorly, however, and they will never come back – and, even worse, they will also tell up to ten of their associates about their experience. According to https://www.snapsurveys.com/, bad customer service is a huge money drain for small businesses, and if you want to survive – and thrive – you will need to have a long, hard look at your service provision if you want to turn things around. Don’t forget, finding new customers costs six times more than selling to new and old customers alike. That’s a lot of money that you won’t need to spend if you can provide first-class service each and every time.

As you can see, there are many areas of your business that can lose a considerable amount of money. Plugging those gaps is essential if you want to get your business finances in good shape.

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Kids Make Great Entrepreneurs: Here’s How To Teach Them About Business And Life

February 22nd, 2017 Posted in Entrepreneurship, kids and money, learning about money
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If you don’t fancy the idea of your children spending all their holiday time watching TV and down the skate park, what should you get them to do? One idea that is becoming more and more popular among parents is getting kids to start their own businesses. Not only is this a good idea, given the direction that the economy is going, it’s also beneficial for helping kids develop confidence and people skills.

Here’s how to help your kids achieve their business goals.

Let Them Pursue Their Passion

Kids find it really difficult to focus on things that they aren’t interested in. This is why getting them to go to school can be such a mission: smart children hate the fact that they have to sit in rows all day, doing things which are boring.

Kids Make Great Entrepreneurs: Here's How To Teach Them About Business And Life - lemonade stand image

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If you want their new business venture to be sustainable, take a step back and ask them what sort of business they’d like to run. Kids who love animals will probably be quite happy to set up a dog-walking business or even a pet sitting business. Children who are gifted in music or acting could hold their own after school classes. The possibilities are endless.

Tony Hsieh, the founder of Zappos, set up a worm farming business when he was a child, selling worms to passers-by at the tender age of nine. His goal was to become the number one worm farmer in the world.

Introduce The Concept Of Money Management

Because parents provide all the resources that kids needs, many children grow up with the impression that money is infinite. The reality of business soon teaches them that it is not. In fact, it shows that it is often very hard to come by. They’ll soon find out that most companies have to go through lenders, like Colbeck, in order to make ends meet, especially for the first few months and years. Teenagers, for instance, can do things like calculate profit and loss, and how much they would have to repay to a lender every month at a given interest rate. Younger children can practice things like counting up how much money they have in the till and what they’d need to spend to expand their business.

If your children are particularly adept, you could even hold your own investor meeting, where members of the community come to hear the business pitch and commit small sums of money if they like the idea. This will get children used to the fact that they have to offer value to investors in order to receive money in return.

Teach Them About Customer Service

Being able to listen and communicate with people is an essential entrepreneurial skill. It’s what forms the building blocks of all entrepreneurial careers. One of the key skills children need to learn is how their business idea can actually benefit other people. Why do people want to have somebody sit their dog, for instance? Getting children to understand that people want problems to be solved (like the fact that they are worried what their dog will do to the house if it gets distressed while they are out) is the key to giving them good “business sense.”

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Running Your Business The Right Way For Your Staff

February 16th, 2017 Posted in Entrepreneurship
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Our businesses can be treacherous areas, full of individuals with their own little lives, hopes and dreams and when these meet – there can be a lot of issues. Humans have complicated lives and can bring issues to work, what’s more they can take them home with them from the place of work.

It can be issue, after issue, after issue. That’s not good. Not good at all.

It might be easy to compare your employees to your family. They are the kids and you’re the adult. You’ll find that this approach doesn’t work – you can’t act like the mom or dad at work and you’ll find this out the hard way.

Communication is the best way of fighting problems in the workplace. The way you talk to employees can have a huge effect on how they not only perceive you, but how they will respond to you and your actions.

An open-door policy is the best way forward, truly. There’s nothing wrong at all with allowing your employees to speak to you on an ‘as and when’ basis. Your employees will value this and while you may think that it doesn’t give you the respect, authority and exclusivity that you as a boss probably deserve, it’s key. Your employees deserve to speak to you about their issues and about anything that is troubling them. If you lock yourself away, your personal office could very well develop into a metaphorical ivory tower – separating you from your workforce and putting your needs above theirs. Bad idea.

As stated earlier, our workplaces are packed full with unique individuals working in an environment which could stress them out. This is the perfect place for friction and conflict to develop in. Problems will arise in a workplace and if they are not dealt with, your team will suffer for it. If problems do linger, they can only evolve into more threatening beasts and this can cause serious issues. Problems that linger are bad for business. What’s more – your employees will see your refusal to deal with problems and could lose a lot of respect for you, especially so when it is an issue that affects them personally.

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Meetings are a great way to address workplace policies and practices and a good idea for your team to help foster good communication habits. If your team feel comfortable speaking up and leaving nothing unsaid – keeping it professional of course – then you’ll be saving a lot of time. If they do have issues and queries with practices and policies instituted by yourself, then this is the best place to bring them up.

Everyone in the workplace will require time off work – from sickness, to parental leave. It’s important that you clue yourself up on the legal aspects of leave from work and don’t come down unduly harsh on employees when it is not necessary. If strict action needs to be taken, make sure you are doing it to what the law says. Legal advice should be taken on anything and everything – especially if there are areas you don’t understand, like adoptive leave – this post explains it in more detail. Make sure you do your research.

It’s your job to foster an environment where your employees are happy and productive and almost every issue can be solved with basic communication and it is better that this information is known to you before you start out, before it’s too late.

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3 Brilliant Tips For Becoming A Landlord

December 23rd, 2016 Posted in Entrepreneurship
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The property development industry is highly appealing to any prospective entrepreneur or investor, so it’s no wonder that you want a slice of the pie too. Of course, it’s not quite as simple as diving in head first. As with any investment, you need a plan of action if you want to ensure that you’ll be getting the returns you need for the whole venture to even be profitable.

Becoming a landlord - street image

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Investing in the buy-to-let industry is not a decision you should take lightly; especially not on the basis of the success enjoyed by other property developers. In this current economic climate, judging real estate value and the returns on any investment, no matter how good the property, is a difficult task. It’s worth it when the investment turns out to be a wise one, but you’ve got to enter into this with a clear head.

  1. Don’t be tempted by low rates without thinking it through.

Eventually, all rates must rise again. If you purchase a property on the merits of it simply boasting a low rate. It might seem good for you on the investment side, but sometimes spending less today doesn’t necessarily mean more tomorrow. There were so many investors who bought during the growth period before the recession and were left in an awful situation by 2008 when mortgage rates skyrocketed and the property they thought they could afford a few years ago was now eating away at their investment, leaving them very little wiggle room and very little hope of a sizeable return any time in the future.

  1. A credit tenant lease is a fair way of borrowing money.

As with any investment, you get out what you put into it. That, for the majority of new property developers in the buy-to-let trade, involves borrowing money. Of course, the best method of financing real estate can seem impossible to figure out, because you don’t want to take risks and you don’t want a lender to turn you away if they think you’re ‘high risk’.

If you’ve got a plan, however, and you know how to turn your property into a lucrative development business opportunity, then borrowing might not be as hard as it seems on the surface. There are credit tenants who help new landlords to finance their properties on the condition that the rent is used as a form of security payment. This lease is one of the best ways to finance the real estate development on which you’ve had your eye for a long time, so it’s a great place to start if you’ve been wondering how to fund this venture.

  1. Marketing is key, because you’re letting and not selling the property permanently.

Once you have the ideal property and the funding to get it going, it seems like you’ve got everything figured out. Right? Well, not quite. Renting a property to a tenant is not a permanent deal. Once one or a group of tenants leaves, you have to be ready to fill the property with the next viable candidates; especially if you’ve got a lease which depends on the rent from tenants acting as a form of security payment.

Marketing your property properly will ensure that you’ve always got potential tenants interested in renting, should a tenant ever decide to move out. The key is to ensure that you have enough time during your notice period to find the next tenant; or, if it’s a new property, to find your very FIRST tenant. Whether you use a site like Rightmove or a letting agent, ensure that your property is getting viewed in some way or another.

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