Small Business Blog

There are primarily 3 elements that constitute supply chain management, and any individual or organization looking to follow the best practices of supply chain management should keep these elements in mind. Focusing on each of these elements, in order to combine them and deliver the best possible customer service, is the ultimate aim of this process.

Product
This channel of management implies that the product must be in demand. To create a product and not generate demand for it is a useless venture, as it is the demand for a product that ultimately, starts the entire manufacturing process. Ensuring that the product reaches the customer in a timely, accessible and quick manner is one of the key elements of supply chain management. Any delays, in this process, will lead to a loss of business.

Information
For a customer to demand a product, information about the product must reach to him first. Demand can only be generated in a customer if he is aware of the existence of the product in the first place. The information flow, that goes on in supply chain management, also involves the different channel partners communicating various needs and data amongst themselves, so as to enhance the ultimate goal of customer satisfaction.

Finance
The finances involved in the supply chain also play a major role. As the product passes from one subsequent stage to another, the mode and terms of payment must be clear. There are a lot of credit terms and conditions that can be applied in order to get the best possible deals from suppliers, and these can only be increased further by building up strong relationships with the suppliers. “What is supply chain management system?” is a question that finds its answer in a blend of these three elemental functions of supply chain management.

Look at the Profitability
The answer to the question how to value a small business is by looking at its profitability. The best way to find profitability of the business is to calculate the percentage of net profits earned by the business over the total turnover done in the particular period. The profitability can be calculated by taking a ratio of the net profit and the total income. Remember that net profit is calculated after deducting all sorts of expenses, taxes, depreciation and losses from the total turnover. You need to understand that all businesses cannot be profitable and it is not possible to increase the profit margins all of a sudden. The profitability calculation will help you in valuing your business and determining how sound it is.

Growth in Profits and Sales
In order to know how to value a small business, you need to find out how much growth in profits and revenues you registered over the years. If the trend is positive, then the business can be sold off at a premium to the current valuation whereas if it is negative, then the overall business valuation will automatically go down.

Find Out the Liquidation Value
Another way of valuing a business is to find out the liquidation value. This means we need to calculate how much money will be generated by the sale of various assets owned by the company after paying off any debts and liabilities on the business. This method of business valuation is used in all parts of the world.

Comparison with Other Firms
Comparing the situation of the business with other competitor firms is also one of the main ways to value a business. You can find out how much valuation the competitor firm is getting for the sale and net profit generated by them and accordingly decide how much you should get for your business by looking at your financial performance.

Strength of the Balance Sheet
A way to know how to value a small business is from the strength of the balance sheet. The balance sheet is a financial statement prepared by taking into consideration the assets and liabilities of a firm in the whole financial year. So, what you need to look at is whether the company has assets of high present value and whether it has sufficient cash in the books of accounts. High debt component leads to high interest payments and reduced net profit margins. Valuations will be more if the debt is less or nil.

Looking at the return on investment and asset value is also essential to know how to value a small business. By taking into consideration these important things, you will be able to know the status of your small business correctly. So, think over it and take the right decisions. All the best!

Franchise is nothing but an agreement, a license, or an authorization to sell a company’s goods or services in a specific geographical area. An existing business organization enters into a business agreement or a contractual relationship with another individual or business in order to push the sales and profit margins of the company. The company that offers an authorization to sell its products and services is known as the franchiser whereas the company that signs the agreement to operate its business under the trade name of the franchiser is known as the franchisee. This is the most common form of franchise business where the franchisee gets a fee along with a certain portion of the sales revenue in exchange of selling the products or services of the trade name. The franchiser is most often a leading brand name in the industry and apart from its name it also shares its business idea, marketing tools, promotional techniques, and business policies with the franchisee.

 Apart from this there are other types of franchise as well that are commonly known as distribution, dealership, and agency. In case of a distributor and dealer, the owner of the business does not need to trade under the franchiser name. The business is solely owned by the individual who holds all the right to control and modify the company’s policies. When a person takes an agency, then he or she directly supplies all the services on behalf of the actual supplier.In the present era there are business owners and organizations that prefer a franchise business. It is considered to be one of the most lucrative business opportunities in this high competitive world. There are many companies and organizations in different fields around the world that have gained good name and fame in the market.

Franchise of such leading names is attracting many individuals and businesses nowadays. Presently, this type of business offers a wide spectrum of opportunities including bakery, food outlets, preschool, beauty, computers, school, fitness, and travel.Whichever type and kind any individual goes for; it offers a host of advantages. The most significant advantage is the low failure rate. This is because the business runs under the name of an already recognized and popular brand name that provides the required support and innovative ideas to measure the progress.The franchiser also provides training to help set up the complete operation and even supports gently in the ongoing venture. Another great advantage is that a franchisee doesn’t have to worry about the marketing and promotional aspects of the business. This is because the franchiser already has a name and it continues to promote the brand name in association with the entire network of professionals, business associates, agencies, distributors, and franchisees. Read the rest of this entry »

Have you always wanted to go into business for yourself? If so, it’s possible that you’ve considered whether buying a business franchise is the right choice for you. Starting a business in any field is a significant life and professional decision, and, as with any major decision, it is important to weigh all of the pros and cons before taking the leap into a business franchise opportunity.There was a time when someone wanting to start a business would follow the traditional route of selecting an industry, researching and establishing financing, and then hanging a shingle on the doorpost. These “mom-and-pop” businesses in many ways became the backbone of economic growth and development. Yet, as many entrepreneurs will readily tell you, independent businesses, even with their allure, often carry great risk, and the vast majority of small businesses fail within the first few years of operation.

Enter the franchise business opportunity. Although franchising is a relatively new business concept as measured against the scope of history, it is a business option that carries a much higher success rate than traditional independent businesses, and this is particularly true if you are a first-time business owner. According to AllBusiness.com, a leading business information and resource portal, among the advantages of purchasing a franchise over launching a traditional independent company are “instant brand awareness and credibility, administrative and/or technical support, franchisor-provided training, quicker return on investment, strong management, and a network of other franchisees and associations dedicated to supporting franchisees.”While as an independent business owner, you are solely responsible for costly promotion and marketing of your product or service, as a franchisee, you usually have the benefit of national media marketing and advertising done by the parent franchise company.

In addition, independent local businesses often find themselves in direct competition with well-backed franchises that simply have more resources to promote and operate their businesses. That said, however, the very ordered nature of franchise business opportunities may come as a disadvantage to some, as by an established franchise system the creativity of the entrepreneur is often curbed. Yet, given the support available to franchise buyers and the numerous low-cost franchise opportunities, for many, purchasing a franchise still holds noticeable advantages over starting a traditional business.Thus far, we have focused on the benefits and drawbacks of purchasing a franchise opportunity as opposed to opening a traditional business. But perhaps your choice is between buying a franchise and remaining at your traditional job or, if you are just entering the workforce, between purchasing a franchise opportunity and getting a traditional job.There are unquestionably distinct advantages and disadvantages of buying a franchise business opportunity, and if you are considering taking the leap from employee to entrepreneur, it is important to carefully weigh both the pros and the cons of purchasing a business franchise. Read the rest of this entry »

When contemplating starting up in business under your own steam it is critical that you choose an option that is suited to your skills and interests. Its also important to check that the target market is stable and is not just a current craze.Many who are interested in taking up a business as first timers are drawn to the idea of franchise business as a route to self employment. Why is this and how can you best tell if a franchise business might be right for you?So lets look at what personal qualities work most effectively for franchising and which don’t. Profile definition for business format franchisingThe following elements are normally present in a business format franchise, It will be:-

• A business system that has been proven
• Copyable
• Has national and local support in place
• Has a franchise contract to govern it
• Owned and secured intellectual property, branding and logos that provide value for the system

The Ideal FranchiseeThe brand owner is called the franchisor. The operator of the franchise in a local area is called the franchise owner or franchisee. Each thriving franchise owner needs to have at least the following qualities for the franchise they are running to succeed. They are:- Read the rest of this entry »