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As you launch or expand a business, keeping track of the money, preparing tax returns and performing other financial tasks can quickly become a burden. If you need more time to do other things, it might make sense to turn over tax, accounting and other financial chores to outside specialists.

Choosing the right type of tax, accounting, bookkeeping or other financial help is an important decision. An outside accountant can be one of your most trusted business advisors and a key to your success. Although many business owners work with big national firms, most prefer to work with small independent firms or solo accounting professionals.

Accounting services differ from bookkeeping services, however. An accounting firm prepares financial statements and tax returns based on the numbers that you give them via your own in-house books. Bookkeeping services, if offered, will be extra. If you plan to hire your own bookkeeper, make sure the person you choose is qualified. One way is to use the “Bookkeepers Hiring Test” available free from the American Institute of Professional Bookkeepers at their Web site, www.aipb.org.

Before selecting a certified public accountant (CPA) or other financial pro, list the services you think you need, such as tax preparation, financial reports, balance sheets, invoicing, payroll services, general bookkeeping or someone to set up your books. Some firms may handle it all, or you may need to split the tasks. CPA Directory is a huge online listing of CPAs nationwide and can help you find an accountant in your area. The Web site also offers helpful advice on hiring and working effectively with a CPA. Visit www.cpadirectory.com.

And don’t forget about Enrolled Agents. EAs are licensed by the Federal government to prepare tax returns. They have either worked for the IRS or have passed a rigorous IRS exam. They are savvy tax experts, but generally don’t have the degrees of CPAs and tend to charge less. Visit the National Association of Enrolled Agents Web site at www.naea.org.

Fees vary greatly among accountants, from $50 per hour to $300 or more. Some firms will provide a specified list of services for a flat monthly fee, and may provide less costly help for bookkeeping and other tasks that don’t require CPA-level training. If you are considering a larger accounting firm, find out which people you will be working with directly. Also try to match your general philosophy with a firm that is as conservative — or aggressive — as you are on tax matters.

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Improve Cash Flow with These Simple Steps

Without a steady flow of cash to cover expenses, your company can quickly stumble.

Cash flow troubles can develop even when sales seem strong. Facing a continuous cash crunch makes it difficult to conduct your business properly. And while it may be tempting to seek out fancy financial formulas for predicting and tracking business cash flow, the basics tend to be plain common sense for most small businesses.

The object is to make certain that more cash enters your business than exits your bank account. First you need to translate sales into real money as quickly as possible. Once you’ve collected the cash, your business needs to guard it. Surprises, such as slow or non-paying customers and unexpected expenses, are your worst cash flow enemies.

One way to shift cash your way is to ask for all or a portion of payment up front. Asking for at least a deposit in advance is a great way to jump-start your cash flow. And if you establish the policy fairly and properly, it shouldn’t alienate good customers.

Accepting credit card payments also can help, so you may want to sign up for a merchant account that allows you to do this. Or, if you already have one, encourage customers to use this option more often. You do pay a fee for this. But credit cards are a great way to speed cash into your account, and the cost is generally small.

You may need to manage “receivables” more closely. This is the money that customers owe to you for products or services you’ve delivered. Create a detailed “aging” schedule of what you are owed, by whom and for how long. Place phone calls to overdue accounts, focusing first on the largest amounts due. Offering a discount can bring some quick cash in the door, but play this card only after you’ve called the customer to ask for full payment.

Finally, don’t overlook the power of an operating budget. Note specific due dates for payables as well as receivables. Although the balance between the two won’t always be predictable, the budget can give you a snapshot of where your business stands in cash flow.

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Find the Right Financing for Your Business

Finding the right type of financing, or finding ANY financing for that matter, is often one of the most difficult parts of starting and building a solid small business. You may have a terrific plan and be a talented workaholic, but finding funding is another matter.

Business owners often start with too little money. It’s one of the most common reasons that new businesses don’t make it. Adequate financing and the know-how to use it wisely are crucial ingredients for your business to grow and thrive. Inadequate funding limits what you can do.

Sources and types of small business financing fall into a few broad categories. It will either be debt or equity financing from institutional or informal sources. Debt financing is a loan you pay back. Common sources include: family and friends, personal credit cards, home equity lines of credit, commercial bank loans and bank loans backed by the U.S. Small Business Administration (SBA).

Some small businesses also receive a type of funding from suppliers and vendors in the form of special payment terms, discounts or even direct loans. Suppliers want you to succeed, so they are sometimes willing to help.

With equity financing, you offer investors shares of your business in return for cash. Unlike loans, you are not required to pay the money back, but these investors now own part of your business and will want a return on their investment. Venture capitalists work this way, and stock offerings are a type of equity financing.

Other funding or cost-sharing options include partnerships, joint ventures, alliances, co-branding arrangements and business incubators. Incubators rarely offer cash, but they provide crucial support in the form of free or reduced rent and business services.

The SBA 7(a) Loan Guarantee Program is the main small business financing tool. It helps secure loans up to $1 million for small businesses that are unable to find financing on reasonable terms through conventional lending channels. The SBA Web site has an excellent section on financing that includes helpful advice on funding basics, estimating costs, personal vs. business loans, equity financing, eligibility standards, steps to successful borrowing and lists of small business lenders. For details on all SBA programs, visit www.sba.gov/financing.

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Find More Freelance Work

Freelancer, sole operator, independent contractor and free agent are all terms for a similar type of small business operator with a key trait in common—all are constantly looking for new gigs to fill their time and pay the bills. For these business owners, the Internet has become a boon to finding work . Web sites that play matchmaker between employers and freelancers have taken the art of project hunting to new levels.

To be successful as a free agent operator, you need to hone your project-finding skills and improve your marketing, just like any small business. Two keys to being successful at this are consistency and dedication. Most independent contractors already know that the search for work is constant, so you’ll enjoy it more if you develop a passion for finding the next big project.

To build repeat business, you also need to be a stickler for client satisfaction. Always stand behind your work and try to gauge client expectations at every step, and then exceed them.

Also recognize that building your personal brand is important. As a sole operator, your brand is you, so focus on leveraging your special knowledge, style or expertise. But don’t lock yourself in to tightly. The most successful independent contractors try to build new skills and leverage existing ones to higher price levels.

Project sites for freelancers vary in their approach. Some work on a bid system where employers post projects and freelancers bid on the work. These sites will likely take a cut of your proceeds. Others are more like a job board where projects are posted and you respond with a pitch letter and resume directly to the employer. Some sites to visit include Guru.com, Sologig.com and Elance.com, which cover all industries and areas, as well as Aquent.com, which specializes in the fields of marketing and creative services.

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Give Your Business a Makeover

Is your small business stuck in a rut? Perhaps your customers no longer seem excited and your staff has stopped offering fresh new ideas. Or maybe the competition has been giving you fits.

Now could be a good time to give your business a makeover. It could be a major makeover or a minor makeover. What’s most important is that you find a way to breathe new life into your profits and get the business back on the fast track. Small, agile businesses have a big advantage in this area over the big and slow ones. You can move quickly to spot changing conditions and put changes into operation.

Stand back and take a top-to-bottom look at your business. In order to identify where changes are most needed, you’ll have to dig for details about your products or services, your marketing and sales efforts, customer service, competition and more. Has your customer base changed since you first started? If so, this could be one area where you need to make changes. Is it broader or narrower? Older or younger? More upscale or less? You may need a new image, revved-up branding or perhaps just a rewrite of your marketing materials to address the needs of this changing customer base.

Take a hard look at whether your products or services are performing to customer expectations. Remember that your goal should be to exceed expectations, not simply meet them. If customers are luke warm on your business, find out why. Perhaps competitors are doing a better job, or maybe they’ve created add-on products and services that you haven’t. Your own customers can help with your makeover if you ask them for feedback.

If your marketing message has never changed, perhaps it’s time to reevaluate and devise a new one. Try revisiting your original business plan. You might be able to recapture some of the insight and enthusiasm you originally had from that document. Think back to your most successful promotions, presentations or sales efforts. Rather than reinventing the wheel, you might be able to update and expand an approach that has already worked for your business.

Some old-fashioned brainstorming sessions can help rekindle your managerial flame. Meet with your most trusted advisors, partners, employees, friends and outside consultants. Ask for their view on what your business can do to improve itself.

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Improve Your Collection Techniques

The term “receivables” is one that small business owners quickly become familiar. This is money owed to your business. It’s a good thing, since receivables represent sales you have made. But receivables also can become a problem if clients are slow to pay—or worse, if they are not paying at all.

The process of collecting money from customers is a fact of life for many types of small or home-based businesses. But if your receivables are getting out of hand, it might be time to come up with a strategy for improving your collections. There are several things you can do to prevent slow payments before they become a problem, and also to shake some money lose once invoices have aged.

Your aim is to create a step-by-step collections process that starts by making smart credit-granting decisions. And make no mistake: granting credit is exactly what your business is doing whenever you deliver a product or service without first collecting payment.

Customers are more likely to pay quickly if your invoice arrives in a timely fashion and is clear and simple. It should state explicitly, in itemized fashion, what it covers. Make it look clean and professional, and include your company logo. Cute designs may only get in the way.

Design it like a real invoice, not just a piece of paper with “amount due” typed in, and be sure it is clear how the check should be made out and where it should be sent. Including a return envelope can help. Also include a phone number and contact name for questions. Small business accounting programs such as QuickBooks can easily create your invoices. Or a dedicated low-cost software package such as MyInvoices & Estimates for $39.95 from Avanquest can help. Visit www.avanquestusa.com.

Mail your invoices quickly and send a reminder immediately if payment is not received by the stated due date. On long-term projects, consider progress billings.

If you do need to press for collections, send a customized, personal letter, not a lifeless form letter. Remind the debtor of his or her original promise to pay. And ask for immediate and full payment. By all means, get on the phone. Most businesses wait too long to call. But collection experts say a phone call is ten times more effective than writing or e-mailing.

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Learn Franchise Pros and Cons

During the past several decades, franchising has become not only a uniquely American institution, but also one of the leading doorways into small business ownership in America. Every year, thousands of individuals choose to get into business ownership via the franchise route.

But is going the franchise route really a better choice that starting your own business? That’s something you’ll need to answer for yourself. But it’s worth the time and effort to find out. To make the right choice for your own situation between starting a business and buying a franchise, as well as which franchise to buy, requires careful research. It’s a big investment on your part, and you must investigate before you put up the money.

 According to the International Finance Association (IFA), franchised businesses are growing at a rapid pace. Some 400,000 franchised businesses now employ now employ nearly 10 million people with a payroll of $230 billion. There’s always a hot new franchise on the scene. Curves, for example, a network of franchised women-only fitness centers, grew nearly 38 percent in a single recent year.

If your appetite for risk is low, a franchise may be your best choice. A franchise lowers the risk because someone else has already pioneered the concept, tested the ideas and found out what works and what doesn’t. If you want to do all of those things with your own idea, then start a business yourself. If not, choose a franchise.

As you research franchises, ask about the required experience, if any, as well as the expected hours and personal commitment necessary to run the business. You also should learn about the franchisor’s background. For example, what is the company’s track record and how are other franchisees in the system doing? The upfront cost of buying the franchise is crucial, of course, but also how much you’ll pay for the continuing right to operate the business and what products or services you will be required to buy from the franchisor.

You’ll also need to know about options for financing your investment. The U.S. Small business Administration (SBA) can help. If you are considering a franchise purchase and you may want an SBA-backed loan, check the SBA-sponsored Franchise Registry. If the franchise is enrolled in this program, you could receive expedited loan processing through the SBA. Visit www.franchiseregistry.com.

The International Franchise Association (IFA) offers information on how franchising works and has a searchable database of over 800 franchise opportunities. Visit www.franchise.org.

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Learn the Essentials of Equipment Leasing

If you plan to invest in new equipment for your business sometime soon, and were considering a loan to finance the purchase, you might also want to look into leasing as an option. If cash is in short supply, and the equipment you need may become quickly obsolete, leasing rather than buying can be a good option.

 No matter what type of business you are in, almost any equipment you’d need to buy also can be leased. Companies of all sizes, from sole operators to Fortune 500 firms, use leasing. According to the Equipment Leasing Association (ELA), about $218 billion worth of equipment is leased by U.S. businesses each year.

Leasing can conserve cash. While a loan usually requires that you invest a down payment in the equipment, a lease generally needs no down payment and finances only the value of the equipment expected to be used during the lease term. And when you buy the equipment outright, you assume any risk of it becoming obsolete. Leasing transfers the risk of obsolescence to the leasing company, for a price, since there’s no obligation to buy the equipment once the lease expires.

Leases are not loans, so their costs are calculated differently. Payments on an operating lease are considered an overhead expense that you can deduct from your business income. Generally, however, the cost of leasing is similar to the cost of other financing options when you consider the entire transaction.

Flexibility is another leasing hallmark. You can tailor a lease to fit your month-to-month, seasonal or annual cash flow needs. And if customers or the competition demand that you always have the latest technology, a short-term lease can help you get what you need and keep your cash.

The ELA, a trade group of leasing companies,has created a special Web site called Choose Leasing that explains leasing basics. Areas covered include how to lease equipment, leasing benefits, loan/lease differences and leasing terminology. The site also has a handy search feature to help you find a leasing company. Visit www.chooseleasing.org

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Structure Loans from Family and Friends the Right Way

For many small businesses, bank loans, venture capital and money from angel investors are financing long shots at best. It is far more common for a small business to secure funds from family members or even friends.

In fact, more businesses are started with loans from friends and family than from any other single source. The money comes from aunts and uncles, brothers and sisters, moms and dads, grandparents, in-laws, roommates, mentors, personal lawyers and many others.

Availability is the big draw. The downside is that business loans from family and friends also can be a disaster is they are not done right. Unstructured or loosely structured financing and payback terms can haunt both sides later on. Research shows that 14 percent of business loans from family and friends go into default, compared to about one percent for bank loans.

To increase the odds of success, approach family and friends with a detailed loan proposal, including financials from your business, just as you would a bank or venture capitalist. Be frank about the risks. If things go badly, they could lose all or some of their money. Consider the consequences of a soured business deal to your relationships.

Pick a financing structure that works best for your business and make certain everyone understands it. Specifically, be clear on whether the deal involves an ownership stake in your business, or whether it is a simple debt you plan to repay. And be clear about repayment terms.

To legally seal the deal, use a document such as a “Promissory Note.” Putting the terms of your borrowing agreement into proper legal form is crucial. You can find the downloadable legal documents you need, including many different Promissory Note variations, at www.findforms.com. Self-help legal publisher Nolo also offers loan forms and related information at www.nolo.com.

Another helpful resource is CircleLending.com, a company that provides loan administration, record keeping, payment processing and structural support for these types of loans. CircleLending takes verbal deals and turns them into legitimate business transactions. Check the small business section of their Web site for information.

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Set the Right Pricing Strategies for Your Business

Setting the proper prices for your small business products and services can be very tricky. Some business owners think they have it down. But after reviewing costs, expected profit, what competitors charge and what they think customers will pay, it becomes more complex.

 Pricing too low can cut into your profits, while overpricing also can hurt your business. Finding just the right balance between all of the factors involved is more art than science.

A common misstep—especially in the early stages of a business—is pricing too low in order to attract customers. While special deals can work in some cases to start the ball rolling, going low is not always the best path. Low prices can draw customers interested only in price. They are the ones most likely to abandon you the moment they find something even lower elsewhere.

Selecting excessively low pricing levels to attract clients is even more dangerous for service businesses. You only have so many hours to sell. Your business can’t make it up in volume like a retailer who still profits from lower prices if volume is high enough.

Pricing is partly psychological. You will want to set your levels according to the perception of your product or service “brand.” If you want to be in the premium neighborhood, your pricing can be higher to match an upscale image. Pay attention to price points. They differ widely by product and industry.

Pricing is an ongoing process, so test your pricing periodically. You may need to adapt to changing conditions. Competitor prices, your own costs, customer perceptions and your profit expectations can all change. Or you may want to simply test different pricing levels to see what works best for your business.

 Research the norms for your industry, including price ranges across the country if you sell nationwide. You may want to charge more or less, depending on your brand positioning.

 No pricing strategy is complete unless you know with as much precision as possible what your own costs are to deliver the product or service. Don’t guess. Price it out to the penny and include all of your overhead costs, both direct and indirect. You should know exactly what you have to do in order to earn the profit you want.

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Save Money on Routine Costs

Many small businesses waste money on routine expenditures simply because they don’t pay attention. And while money spent on shipping, office supplies, service contracts, travel, phone and Internet services might fall into the category of “small stuff” for some businesses, these routine items can quickly bleed needed cash from your coffers in the blink of an eye.

Stiff competition and thin profit margins have made running lean a necessity for most small businesses, so it’s important to establish smart buying habits to protect your profits. The steps you can take are not complicated and do not require fancy financial formulas. When it comes to cutting costs, common sense prevails. A successful approach to saving money on a regular basis relies on small, sustainable steps.

Here are five ways to save your small business money on the simple things:

• Avoid buying only name-brand items in small quantities. Shop for bargains online. Superstores like Office Depot, Staples and Office Max offer “store brands” at reduced prices. And when you establish an online account, they’ll often send coupons worth $10 or $20 off orders of $100 or more.

• Don’t photocopy high-volume items that you can print for less. Copies typically cost five to 15 cents each, even if you do them yourself, including paper, toner, labor and maintenance. Printing can lower costs to three cents or less. The biggest cost items are forms, flyers and form letters that you think you use in small quantities. But if you photocopy a few dozen per week, that can be thousands per year and you could save by having it printed.

• Think of your inventory as company cash sitting on a shelf or in a warehouse doing nothing. Costs include storage, insurance and taxes, among others. Keep good records and regularly root out dead items.

• Express shipments for next morning delivery are costly. Consider next afternoon or maybe two- or three-day service.

review vendor relationships at least annually for Internet services, phone, wireless, DSL, shipping, legal, printing and other day to day expenses. Prices and package deals change and you may be overpaying.

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Put a Value on Your Business

There are many reasons why you might want to place a value on your business. Perhaps you’re thinking about taking on a partner who will buy into the business. Before that can happen, you both need to know what the business is worth.

And you’ll certainly need a valuation or appraisal if you want to sell the business. Other reasons you might need a valuation include divorce, spin-offs, business disputes and liquidation. Or how about this: you might simply want know.

Accurately valuing a small business, however, can be complicated. Most entrepreneurs are capable of boosting the value of their businesses by 40 percent simply by paying attention to the things that make a business valuable.

Too often, business owners brush aside valuations, believing them necessary only if they decide to sell. As a result, only about one in 20 small businesses have done a formal valuation, according to the National Association of Certified Valuation Analysts.

You can determine the value of a business in many different ways, from quick and cheap software-based calculations you do yourself, to full-scale, certified valuations by professionals. The price range is enormous, from as little as $15 for the simplest software, to thousands for a detailed analysis performed by certified pros. Business brokers, hoping to sell your business, may even do them for free.

Try to match the person or method you use for a valuation with the reason you are doing it. If the valuation is for loan purposes, for example, look for someone who’s done small business valuations for that purpose.

The National Association of Certified Valuation Analysts (NACVA) offers a free service online to help you find a business valuation expert in your area. NACVA provides training, certification and support for professional valuators in cities and towns nationwide. Look for the “Find a Valuator Directory” at the Web site, www.nacva.com.

PriceYourBusiness.com offers simple small business valuation software you can access online 24/7. Results are quick and available anytime.

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