Money making ideas for a home-based business

A home-based business can be either product-oriented or service-oriented. Product-oriented businesses are usually two types: a) selling products made by you, family members and/or employees (like raw materials such as fabrics or tanned leather, kits like yarn/pattern and knitting needles, partially finished items like unpainted bird houses or completed articles such as jewelry and belt buckles) or b)selling products manufactured by others and either purchased by you for resale or sold on an order basis. Services may involve performing a service at the place of business (word processing, tutoring, bookkeeping or child care) or at another location (house painting, carpet cleaning or consulting). To determine or confirm your business idea(s), examine your interests, skills and abilities, education/training, and experiences.

You must enjoy doing the work involved. Just because you make super apple pies or wooden toys doesn't mean that you would want to create them six days a week. Perhaps you would rather teach others to make pies or toys! Teaching requires a totally different set of skills and interests than doing the actual work yourself.

Ideas you can try are as follows:

Antique appraisal
Antique dealing
Appliance repair
Automobile tuneup and repair
Basketry
Batik
Bed and Breakfast
Bicycle repair
Bookkeeping
Breadmaking
Cakemaking and decorating
Candlemaking
Car, boat and mobile home waxing
Catering
Ceramics
Chair caning
Chimney sweeping
Clerical assistance
Clock repairing
Closet organizing
Clothes designing
Cookiemaking
Day care service
Delivery service
Doll and toy repairing
Dollmaking and toymaking
Dollhouse and miniature making
Fruit and vegetable growing
Furniture making and refinishing
Furniture upholstering
Genealogical service
Graphic design service
Hairstyling
Hand lettering
Herb growing and drying
Home canning
Home repair
House cleaning
House painting
House sitting
Interior decorating
Inventory service
Jewelry making
Lawnmower blade sharpening
Leathercraft
Library research service
Mail order business
Messenger service
Metalworking
Mimeograph printing
Modeling
Music teaching
Needlepoint and embroidery
Party planning
Pet sitting
Photography
Picture framing
Picture painting
Plant decorating
Printing and silk screening
Pool cleaning and maintenance
Quilt and applique
Rug making
Scale-model making
Scrimshaw
Sewing
Shopping service
Stained glass
Tax service
Teaching*
Telephone answering service
Tour planning
Tutoring
Tourist home
Typing
Wallpaper hanging
Weaving
Window washing
Writing
Woodworking and wood carving

Considerations when starting a home-based business

While being in any kind of business has certain basic requirements, a home-based business has additional ones. Self-discipline is very important. Working for others means that many responsibilities are shared with other employees. Being in business for yourself means you carry the whole load. Some people don't want all of the responsibility of licenses, regulations, taxes, insurance, keeping records, advertising and pricing, etc. Are you willing to take on these responsibilities?

Depending on the business, you may find it very confining, stressful, expensive and physically exhausting. On the other hand, being on your own can be very stimulating, financially rewarding and satisfying.

A home-based business may cause problems within the family. You need the full support of spouse, children and others. They need to take you and your business seriously. What help can you expect or do you need from family members? Use of their money, skills and time often make the difference between success and failure.

Will you have adequate time to spend with your family? Doing work part-time or postponing starting a business a few years may enable you to better prepare for starting a business and allow you more time with your family when they particularly need you.

Lack of planning and insufficient financial backing join poor management as the main reasons why businesses fail. Improve your odds of success by moving slowly and carefully in starting a business and you can join the 95 percent of those who succeeded in their first year and the 85 percent who are still in business and doing very well after three years.

Advantages and disadvantages of a home-based business

Advantages of a home-based business include

• having a flexible schedule;
• integration of family and work responsibilities;
• less involvement with others in a regular work environment, such as power struggles and red tape;
• no commuting time (unless you travel to a customer's home or place of business);
  
• control of your own personal environment (temperature, light, work breaks, etc);
• self-determination and independence; increasing personal fulfillment;
• seeking and setting personal goals; enhancing creativity;
  
• and remaining in a community or moving with a spouse to a new community even when jobs are scarce or not available.

Disadvantages of a home-based business include

• needing to know a lot of information to operate a business successfully;
  
• the risk involved in operating a business;
  
• conflict in ownership of time (When is it my "own" time and when is "business" time?);
  
• lack of guaranteed employee fringe benefits;
  
• many competing roles and responsibilities (producer, promoter, bill collector, customer service representative);
• lack of job security; loss of home space use by family;
  
• interruptions; lack of self-discipline;
  
• little opportunity to delegate tasks to others;
  
• long hard hours, and legal requirements including zoning regulations. Being committed to a business may mean lack of freedom to do other things and to go as you please.

Steps in Starting a Business

Business Ideas
To start a business you will need to choose or create a business idea. While this is an obvious step many people who want their own business don't have an idea, just the desire to be an entrepreneur. For the budding entrepreneur, there are many options; buying a franchise or an existing business, or looking to others for ideas for a start-up business. Once you have decided on the business you wish to start, then the real work begins.

Business Plan
Writing a business plan is your next and most important step, this is how you and others will evaluate your business. When seeking financing the investors or lenders will want to read your plan before they supply you with funding. If you're financing the business yourself, you will still want to have a written plan to develop business strategies and financial projections. A key element within the business plan is the marketing plan, which explains marketing strategies that will be used to advertise and promote the products or services. The goal setting steps of the plan will help you to analyze the success of the business in future years and clearly illustrate the capital needed to operate the company to break-even.

Financing
With your business plan in hand, you are ready to go find yourself some capital. Most small businesses have three options for financing: friends & family, investors or bank loans. Each of these options has different considerations for the business. Investors and even friends & family usually want ownership and control of their portion of the business. Bank loans burden the business with an additional expense of the loan payment, which can erode the business profits.

Getting started
You've got the plan, the money and the enthusiasm; you're ready, right? Not yet, as with everything you need to take the legal issues into consideration. First you should choose a legal structure: Sole Proprietorship, Partnership, or Corporation. Your financing decisions will have an effect on what legal structure you choose. Now you can file with the state to incorporate and obtain a federal Identification number.

Opening the Doors
Okay, it's time to get on the road to making some money; this of course means spending money. Where are you going to run your business? Will a home office do or is commercial space needed to service your customers? Do you need to hire employees to help you run the business? What are your bookkeeping needs, do you need an accountant? Finally, who could forget taxes, what taxes do you have to pay and collect? Now that your business is through the start-up phase, you can now look forward to the issues of managing a small business.

Financing by Going Public

Going public, that is, selling stock or debt to the general public, is an extremely complex and massive undertaking. You should not consider going public unless your business is earning well over a million dollars in after-tax profits, has steady profitability, excellent growth prospects, and a tremendous thirst for funding that other sources can not provide.

Entrepreneurs who have taken their firms public are generally shocked by the amount of energy and anxiety that goes into the initial public offering. And, later, they are frustrated by the added demands placed on them as a CEO of a public as opposed to a private firm.

Financing by Venture Capital

Despite all of the attention venture capital firms get in the business press, they actually finance very few businesses. The better venture capital firms are deluged with proposals from budding entrepreneurs. But most of these entrepreneurial proposals are inappropriate to the goals of venture capitalists.

Most venture capitalists concentrate their financing efforts on later-stage business funding. Some venture capital firms will, however, consider financing a start-up. What they want to see from any entrepreneur seeking funding is a history of start-up successes under the applicant's belt. They are best known for financing high-tech firms, but they do finance other types of businesses over 50 percent non-high-tech businesses for some venture capitalists.

Venture capital firms prefer to cut deals that provide an exit path within five years. They view the probability, or not, that a firm will be successful enough to go public or be purchased by a larger company. They also expect very high returns for their investment risk that only the fast pace of highly profitable growth will bring. They want to see a management team in place that can handle rapid growth. And they want that management team to be well balanced with all types of experience and skill represented creative, engineering, financial, marketing, and management.

Lease Financing

Leasing is a super financing alternative if you are seeking funding to obtain business equipment. Finance companies, banks, and many firms that sell high-priced equipment will lease to you.

When you lease an item, the lessor retains ownership of it. You use the equipment by virtue of the monthly payments you will be required to make. You can often purchase the equipment at the end of the lease term for its market value or less.

A great advantage to leasing is that it may be allowed to be "off the balance sheet." This means that leases can be disclosed as balance sheet footnotes. They do not appear as debt even though they represent an ongoing company liability. This may sound like financial doublespeak, but it's not. Let's say a supplier is considering whether or not to extend credit to you, or a bank is weighing a loan proposal you have submitted. The lease commitment will play a relatively minor role in evaluating your debt burden.

Banks also tend to consider their total exposure when lending to small businesses. If you have obtained lease financing through a third party, they are more likely to lend you funds than if all of your borrowing needs have been met through them. This is very important if you have a relatively small business, because most banks expect you to use them exclusively for traditional lending but may not care if you use a nonbank source for lease financing. In any case, though, do keep your bank informed regarding any significant lease commitments you are considering prior to actually signing any agreements.

How to Get Loans from Friends and Relatives

You, like most of us, are probably reluctant to ask friends and relatives for money. But a lot of people do, at one stage or another, when they are running their own businesses. If you are really serious about starting and/or staying in business, swallow your pride and go beg for those funds.

If your friends and family express an interest in assisting you with your business financing, pitch them professionally. Make a sound, cohesive loan request presentation just as you would to a bank or other lending source. Don't be embarrassed to show financial statements, tax returns, or whatever else they want to see. Do anything to get that money!

You will want to prepare a written agreement about any loans. If you don't, bitter arguments are bound to sour the relationship eventually. Even some minor detail, such as the timing of interest payments, can cause great friction if arrangements aren't backed up in writing.

Don't be surprised when your friends and relatives suddenly turn into business tycoons once they have agreed to lend you funding. They may insist on terms that are more stringent than those you might get through a commercial bank!

Personal Loan

Personal loans are a great back-door alternative when seeking financing for a small business venture.

One of the most common means for attaining funds for use in operating a small business is through a home equity loan. If you have been paying your mortgage for a few years, you have probably built up some sizable equity in your property. Banks loans taken against a person's primary residence are low-risk no matter what the funds are going to be used for. You can take the proceeds garnered from a home equity loan and use them to operate your business. Then, technically, you are financing your business, not the bank.

If you use the proceeds from a personal loan to finance your business you do, however, need to make this clear on your loan application. If you lie on a loan application you have committed fraud a serious criminal offense.

Getting a Bank Loan

Banks are the primary financing vehicle, other than owner's savings, for small businesses.

Banks like to use hard assets such as buildings, motor vehicles, or equipment as collateral against loans. They will loan against receivables and inventory, but, especially in the case of smaller businesses, tend to heavily discount the protection these assets offer. They are afraid the inventory and receivables will be converted to cash in order to cover operating losses if the business experiences any financial difficulties.

While banks like the ultimate protection of hard assets, they also want to feel that there is little chance that the business, or the bank, will have to call upon these assets to pay off the loan. Banks don't care whether or not your business has sky-high profit potential. They are only interested in the business' ability to cover the principal and interest payments.

In making a proposal for a loan, the bank will want to see all of your recent tax returns, financial statements, and cash flow projections. They will also want to know how much you would like to borrow. And, if yours is a small business, it will expect you to conduct all of your business banking activities through its institution.

Banks are reluctant to loan to businesses that cannot show at least two years of profitable operation. They want to see that the owner of the business is heavily invested in the enterprise. And, typically, they won't make loans in amounts that exceed 50 percent of the firm's capitalization.

Many bankers feel they are extending a loan not only to the small business, but to the owner-operator as well. They will feel more comfortable loaning business funds to someone with community ties, who has experience related to the business he or she is conducting, and who has made a complete and total commitment to that business.

Small business loan criteria vary greatly from one bank to another. It can even vary from one loan officer to another. If you have been turned down by nine out of ten banks in your region go ahead and try the tenth. While all banks and loan officers consider the same factors when weighing a loan request, they will place different emphasis on those factors. Some bankers place great store in hard asset collateral, some in the profitability or continuity of the business, and yet others will go with their impression of the owner as the deciding factor.

Loan Accounting Terms

Accounts Receivable Financing - A loan gained by borrowing against receivables. Loans are paid down as receivables are collected.

Annual Fee - The amount charged by the lender each year to cover the administrative costs of the loan.

Business Credit Card - An amount of money, which a business can borrow against at times it needs capital. Using a card accesses the money.

Commercial Real Estate Loans - Similar to residential mortgages, but collateral is business property. Interest rates are usually fixed, the length of the loan can range from 5 - 20 years and payments due monthly.

Commercial Term Loans - Loans made to businesses that can be either secured and unsecured. Usually made to mid-size and large businesses.

Credit Rating - A predictor of the ability to pay back a loan. The credit rating is a result of credit scoring

Credit Report - Financial history supplied by a credit information company like Dun and Bradstreet, Equifax, Experian or TransUnion. Contains credit information on a business or an individual, including payment history of bank cards, store cards, mortgages, student loans, and trade payments.

Credit Scoring - The evaluation system used by lending institutions to determine relative credit riskiness of a business or consumer. When evaluating businesses, it generally considers factors such as credit payment history, new credit sought by owner of business, and financial strength and longevity of business.

Debt Financing - A loan with pre-agreed terms, including payback schedule and interest.

Dun & Bradstreet - Leading provider of business credit information.

Equifax - One of three leading providers of personal credit information.

Equipment Leases - Leases allowing companies to purchase new equipment.

Experian - One of three leading providers of personal and business credit information.

Fixed Interest Rate - An interest rate that is the same throughout the life of a loan.

Interest Rate - The amount charged by a lender for the money borrowed. It can be fixed or variable.

Inventory Financing - Money borrowed on the basis of finished inventory. The loan is paid as inventory is sold.

Line of Credit - An amount of money, which a business can borrow against at times it needs capital. Often accessed by check, ATM, or business card.

LiveCapital.com - A web site for small business loan offers from a variety of lenders instantly.

Loan Term - The length of time the borrower has to repay debt.

Long Term Debt - Financing used to purchase or improve assets such as plant, facilities, large equipment and real estate.

Maturity - A loan's maturity is the life of the loan; that is, how long you have to repay the loan. It usually applies to term loans and not lines of credit.

Multi-Lender Environment - Numerous lending institution sharing the same site and information to provide instant financing to small businesses.

Personal Guarantee -A guarantee that the primary owner will assume personal responsibility for repayment of the loan, should the company not repay the loan.

Prime Rate - The rate a lender charges its best customers. The rate is calculated differently by each lender.

Revolving Credit - It is the same thing as a line of credit: an amount of money, which a business can borrow against at times it needs capital. Often accessed by check, ATM, or business card.

SBA Loan - Loans to small businesses unable to secure financing on reasonable terms through normal lending channels. The program operates through private-sector lenders that provide loans, which are guaranteed by the Small Business Administration (SBA) -- the SBA has no funds for direct lending or grants.

Secured Loan - A loan secured by specific collateral. Creditor may foreclose and seize the specific property that is collateral to satisfy an unpaid secure loan.

Small Business Administration -Established by Congress, the SBA provides financial, technical and management assistance to help Americans start, run, and grow their businesses.

Short Term Debt - Financing used to secure cash for accounts payable and inventory.

Subsequent Draw Fee - It's a fee that the financial institution may charge each time you use the line of credit after the initial use.

Term Loan - A loan for a specific amount of money. It has either have a fixed or variable interest rate, matures in between one and ten years and has a set repayment schedule.

TransUnion Corporation - One of three leading providers of personal credit information.

Unsecured Loan - A loan granted upon the good credit of the borrower. No collateral involved.

Variable Interest Rate - An interest rate that changes during the life of a loan.

Accounting Software: Advantage Route Systems

Package: Advantage Route Systems
License: Proprietary
Windows: Yes
Mac OS X: No
Linux: NO
Market focus: Small & Large Size Enterprise
Type: Route Accounting, Paperless Handheld Solution, CRM, Reporting & Analysis services, Multicurrency, Multi-language, e-Commerce
Structure: Stand Alone and Network Based

A Route Accounting System is a business software system or ERP system that captures, records, and costs sales transactions for distributors with mobile warehouses, usually trucks, operating as Direct Store Distributors, Van Sales, Pre-Sell, Delivery Confirmation. To be a full Route Accounting system, the mobile systems will function under the direct or indirect control of a central accounting system. In essence it is a mobile point of sale system. A Route Accounting system will usually include specialized functions and reports for mobile inventory control & management, mobile device management, remote settlement systems, and management reporting.

In Route Accounting, the tracking is of transactions and inventory in trucks usually connected with convenience store distribution, restaurant supply, and similar business situations.

Watch the video below for more explanation.



For more information about Route accounting, visit this Wikipedia page.

Accounting Software: ACCPAC

Package: ACCPAC
License: Proprietary
Windows: Yes
Mac OS X: Yes
Linux: Yes
Market focus: Mid-Market
Type: ERP
Structure: Stand Alone and Web Based

Accpac is a vendor of accounting, customer relationship management and business management software. There are three main product lines:

* Sage Accpac ERP, a Windows based range of accounting software, available with a variety of database backends. This can run under a Windows or Linux environment and has an option of being hosted by Sage. It is multi-user, multi-currency and multi-language.
* Sage Pro ERP (which used to be known as SBT Pro Series), written using Microsoft Visual FoxPro, with an available MS SQL Server backend. This product is available with source code to allow user modification.
* Sage Business Vision, an entry level accounting system sold primarily in Canada and Africa.

On the there website: “Sage Accpac Extended Enterprise Suite is award-winning Business Management software that helps small- and medium-sized businesses manage their accounting, operations, and customer relationships.”

Below is a video of Sage Accpac ERP 5.5 Demonstration:



For more information, visit the website at www.sageaccpac.com

The Success Formula in Business

Every year, hundreds of thousands of businesses are started. Most will fail, some will muddle along, and a few will thrive. Which ones thrive, and why? The reason some businesses experience spectacular sales and profit growth from the start isn't because they had a lot of money at the beginning. Their fast growth can be attributed to the fact that they were put together the right way.

In every instance, the founders either had or acquired the experience and knowledge they needed to startup and run the business. They recognized what their weak points were, subsequently nurtured alliances, and acquired the skills they needed to start their company off right. They also understood how the various parts of the business fit together to form a total structure and knew that if one part was missing, the total structure would break. For example, they knew that a successful sales plan is directly dependent upon support from the marketing and promotional plans, and that the strategic business plan acts as the glue that holds all the subplans together so that they work in concert.

DEVELOPING IDEAS
Clever product and service ideas are a dime a dozen. Everybody has one, and most of them never get implemented. The successful entrepreneur starts with a basic idea. This idea is first tested to staying power. Can it be used to grow a customer base, and will it be profitable? The pseudo-entrepreneurial itch often ends before the basic idea gets tested. Studies show that a high percentage of people who open new businesses do so because they are frustrated with their current job. They'll jump into any business venture that comes along without first checking it out. Ninety percent of this group will go out of business in their first year.

Those that make it are smart enough to recognize the symptoms of their emotional state. They are acutely aware that they may be in a vulnerable position. As a result, they may hang on to the security of their current job and start a business on the side. They'll make the move to become a full-time entrepreneur when the time is right for them and after they have thoroughly checked out their business venture ideas. There are three basic concepts to keep in mind as you develop and refine your business start-up ideas.

Be Creative
The opposite of creativity is rigidity. Entrepreneurs are not rigid in their thinking. If you cling to the old ways of doing things because "that's the way we have always done it," you'll never come up with the new solutions that are demanded by today's small businesses. To test your creative ability, practice finding ways to tie together seemingly unrelated ideas.

Understand Every Problem
You must have a clear understanding of what it is you are trying to achieve and be able to identify the obstacles that stand in your way. Break each problem down so that you understand it and know what you need to do to eliminate it. For example, the problem may be that you need more space. Why do you need more space, and what are the alternatives? An alternative may pose a new set of problems, but if they reduce the magnitude of the original problem, the alternative may be a more viable option.

Brainstorming
When you come up with a solution to a problem, brainstorm the solution with as many qualified people as you can find to avoid judging your own answer. Accept modifications that make sense, and be prepared to replace the solution with a totally new and better alternative. The key to the brainstorming process is to be objective. Brainstorming is an excellent way to come up with a new set of ideas for new products, services, or improvements that could accelerate the growth of your business.

Entrepreneurial Self-Analysis

If you work for a company, you probably have a steady job and income. You probably enjoy the usual fringe benefits, such as paid vacations and life and medical insurance. If work runs out, it is up to somebody else to find something for you to do. When work piles up, somebody else can be brought in to help. If you get sick, it's up to your boss to cover you. You may have some flexibility in deciding where you want to live if you work for a company with many locations.

You may even have a career path established with your company. If you follow this career path, you can probably enjoy a comfortable retirement through the company pension plan. Are you sure you want to abandon the corporate life to start your own business? Before you answer this question, let's explore the reasons people become self-employed.

Controlling Their Destiny
Many people find regular employment unsatisfying because it forces them to accept and respond to decisions others make on their behalf. They may not like the people they work for, their work location, their working hours, or their possibilities for advancement. The company may be poorly managed or in poor financial condition, or there may be frequent layoffs. Whatever the trigger, the ability to control one's destiny can be a major motivation for opening a personal business.

The Creative Urge
If you have truly developed a better mousetrap or discovered a better way of doing something, starting your own business may be the simplest and most direct way to get your idea into the market. If you succeed, there is a great deal of personal gratification in being able to say, "I did it with my idea, my way."

The creative urge can be a powerful driver that gives people the incentive to start their own business. It can also prove to be one of your worst enemies if you lose your objectivity along the way. If your unique idea proves to be not so unique after all, will you recognize the facts when you see them, and adjust your strategies accordingly?

Financial Rewards
Most people who start their own business expect financial rewards for their endeavor. They have every right to this expectation. In the business world, financial rewards increase in direct proportion to the level of risk a company is willing to take.

The banking industry provides a classic illustration of this simple concept. If you ask for an unsecured loan, what happens? The bank charges you a higher interest rate to compensate it for the higher risk of loans that are not secured by collateral.

The same principles apply if you open a business. The failure rates for personal businesses are very high. As a business owner, you have a right to expect a high rate of return to compensate you for the risk you are taking on, just as the bank does. Entrepreneurs are driven to achieve high financial rewards. They know that if they do not achieve acceptable profit levels, their business venture will not survive. Since they are in it for the long term, they reject one of the most common start-up scenarios: "I'll try it for a while to see if it works. If it doesn't work, I can always go back to my old job."

If this is your scenario, you'll probably end up back at your old job. Entrepreneurs know exactly how much money they need to make to stay in business. They are committed to the achievement of specific financial goals and do not consider their old job as a viable option.

Chrysler's Lee Iacocca was once asked, "After you joined Chrysler and discovered how much trouble the company was in, did you ever consider throwing in the towel and going back to Ford?" Iacocca responded by saying, "Never! Once I made the commitment, I never lost my determination to do everything I could to make sure the company achieved reasonable financial rewards."

Myths about Entrepreneurs

Challenges and Risks
Entrepreneurs are often thought of in terms of the risk they assume. Even the dictionary describes an entrepreneur as one who assumes business risks. However, like all prudent businesspeople, entrepreneurs know that taking high risks is a gamble. Entrepreneurs are neither high nor low risk takers. They prefer situations in which they can influence the outcome, and they like challenges if they believe the odds are in their favor.

They seldom act until they have assessed all the risks associated with an endeavor, and they have an innate ability to make sense out of complexity. These are traits that carry them on to success where others fail.

Entrepreneurs Are Born
Many people believe that entrepreneurs possess innate, genetic talents. However, experts generally agree that most entrepreneurs were not born; they learned to become entrepreneurs. The recent proliferation of college and university courses on the subject supports this point. Entrepreneurship is currently being successfully taught.

Money Motivation
Any successful entrepreneur will tell you that starting a business is not a get-rich-quick alternative. New businesses usually take from one to three years to turn a profit. In the meantime, you will do well to break even. During the business start-up stage, entrepreneurs do not buy anything they do not need, such as fancy cars. Most drive junk cars and use their surplus money to pay off debt or reinvest it in the business. Their focus is on creating a company with a strong financial base for future expansion.

Personal Life
All successful entrepreneurs work long hours, which cuts into their personal life. However, long working hours are not unique to entrepreneurs. Many corporate managers and executives work well beyond the average forty-hour work week. The primary difference between the entrepreneur and his or her corporate counterpart is schedule control. In the corporate world, you may not have control over your schedule. If some higher-level manager calls a Saturday meeting, you've got no choice but to be there. Entrepreneurs don't mind working sixty- to seventy-hour weeks, but they will do everything they can to preserve their private time. They schedule important meetings, during the week so that they can have weekends off for their personal life, which is very important to them.

High-Tech Wizards
We are all aware of a few "high-tech" entrepreneur wizards, such as Microsoft's Bill Gates, who have made it. Media attention overplays the success of these few high-tech entrepreneurs. Only a small percentage of today's personal businesses are considered high tech, and what was considered high tech just a few years ago is not considered high tech by today's standards.

It takes high profit margins, not high tech, to make it as an entrepreneur. One has only to look at the recent problems that have plagued the computer industry to understand this basic principle. High-tech personal computers did very well when they made high profit margins. The industry went into a nose dive when profits fell.

Loners and Introverts
Initially, entrepreneurs might work alone on a business idea by tinkering in the solitude of their garage or den. However, the astute entrepreneur knows that he or she must draw on the experience and ideas of others in order to succeed. Entrepreneurs will actively seek the advice of others and will make many business contacts to validate their business ideas. The entrepreneur who is a loner and will not talk to anybody will never start a successful business.

Job Hoppers
A recent study of successful entrepreneurs showed that most of them worked for a large corporation for a number of years before they started their own business. In every instance, they used the corporate structure to learn everything they could about the business they intended to establish, before they started. Entrepreneurs are not job hoppers.

Venture Capital Users
Entrepreneurs know that venture capital money is one of the most expensive forms of funding they can get. Consequently, they will avoid venture capitalists, using them only as a last resort. Most entrepreneurs fund their business from personal savings or by borrowing from friends or lending institutions.

Deceptive Individuals
Some believe that to make it as an entrepreneur, you have to be deceptive and step on anybody who gets in your way. On the contrary, this mode of operation doesn't work for the entrepreneur. The truly deceptive entrepreneur will not be able to seek help from others or retain suppliers or customers. He or she will ultimately fail.

Limited Dedication
That entrepreneurs are not dedicated to any one thing is a myth. Dedication is an attribute that all successful entrepreneurs exhibit. They are dedicated to becoming their own boss. To this end, they'll conduct extensive research campaigns into the advantages and disadvantages of their business ideas in their dedicated drive to start a business.

Profile of an Entrepreneur

DO YOU HAVE WHAT IT TAKES?
If you think you want to be your own boss and run your own business, but are not sure you have the right qualifications to be an entrepreneur, read on. What are the characteristics of an entrepreneur? How does an entrepreneur think? Is your personal profile similar to that of a successful entrepreneur?

Until recently, entrepreneurs were not widely studied. There was a general lack of knowledge and information about what made them tick. The recent interest in revitalizing America's dormant productivity has changed all that. Most business universities now offer courses in entrepreneurship. As a result, business professionals have learned a lot about what it takes to become a successful entrepreneur. Although no one has found the perfect entrepreneurial profile, there are many characteristics that show up repeatedly. In the sections that follow, we'll cover several important characteristics of entrepreneurs for you to consider and dispel the entrepreneurial myths.

ENTREPRENEURIAL CHARACTERISTICS
A series of interviews were conducted with distinguished entrepreneurs. They were asked what characteristics they felt were essential to success as an entrepreneur. Good health was a characteristic mentioned by every entrepreneur interviewed. Entrepreneurs are physically resilient and in good health. They can work for extended periods of time, and while they are in the process of building their business, they refuse to get sick.

In small businesses, where there is no depth of management, the leader must be there. You may not be able to afford a support staff to cover all business functions, and therefore you will need to work long hours. We all know people who use part of their sick leave each year when they are not sick. Entrepreneurs are not found in this group. At the end of the eight-hour day, when everyone else leaves for home, the entrepreneur will often continue to work into the evening, developing new business ideas.

Self-Control
Entrepreneurs do not function well in structured organizations and do not like someone having authority over them. Most believe they can do the job better than anyone else and will strive for maximum responsibility and accountability. They enjoy creating business strategies and thrive on the process of achieving their goals. Once they achieve a goal, they quickly replace it with a greater goal. They strive to exert whatever influence they can over future events.

In large, structured organizations, entrepreneurs are easy to recognize by the statements they make: "If they wanted that job done right, they should have given it to me." A dominant characteristic of entrepreneurs is their belief that they are smarter than their peers and superiors. They have a compelling need to do their own thing in their own way. They need the freedom to choose and to act according to their own perception of what actions will result in success.

Self-Confidence
Entrepreneurs are self-confident when they are in control of what they're doing and working alone. They tackle problems immediately with confidence and are persistent in their pursuit of their objectives. Most are at their best in the face of adversity, since they thrive on their own self-confidence.

Sense of Urgency
Entrepreneurs have a never-ending sense of urgency to develop their ideas. Inactivity makes them impatient, tense, and uneasy. They thrive on activity and are not likely to be found sitting on a bank fishing unless the fish are biting. When they are in the entrepreneurial mode, they are more likely to be found getting things done instead of fishing.

Entrepreneurs prefer individual sports, such as golf, skiing, or tennis, over team sports. They prefer games in which their own brawn and brain directly influence the outcome and pace of the game. They have drive and high energy levels, they are achievement-oriented, and they are tireless in the pursuit of their goals.

Comprehensive Awareness
Successful entrepreneurs can comprehend complex situations that may include planning, making strategic decisions, and working on multiple business ideas simultaneously. They are farsighted and aware of important details, and they will continuously review all possibilities to achieve their business objectives. At the same time, they devote their energy to completing the tasks immediately before them.

Accounting reports illustrate this characteristic. Accountants spend hours balancing the accounts and closing them out. For them, the achievement is to have balanced books. The entrepreneur only wants to know the magnitude of the numbers and their significance for the operation of the business.

Realism
Entrepreneurs accept things as they are and deal with them accordingly. They may or may not be idealistic, but they are seldom unrealistic. They will change their direction when they see that change will improve their prospects for achieving their goals. They want to know the status of a given situation at all times. News interests them if it is timely, and factual, and provides them with information they need. They will verify any information they receive before they use it in making a decision. Entrepreneurs say what they mean and assume that everyone else does too. They tend to be too trusting and may not be sufficiently suspicious in their business dealings with other people.

Conceptual Ability
Entrepreneurs possess the ability to identify relationships quickly in the midst of complex situations. They identify problems and begin working on their solution faster than other people. They are not troubled by ambiguity and uncertainty because they are used to solving problems. Entrepreneurs are natural leaders and are usually the first to identify a problem to be overcome. If it is pointed out to them that their solution to a problem will not work for some valid reason, they will quickly identify an alternative problem-solving approach.

Status Requirements
Entrepreneurs find satisfaction in symbols of success that are external to themselves. They like the business they have built to be praised, but they are often embarrassed by praise directed at them personally. Their egos do not prevent them from seeking facts, data, and guidance. When they need help, they will not hesitate to admit it especially in areas that are outside of their expertise. During tough business periods, entrepreneurs will concentrate their resources and energies on essential business operations. They want to be where the action is and will not stay in the office for extended periods of time.

Symbols of achievement such as position have little relevance to them. Successful entrepreneurs find their satisfaction of status needs in the performance of their business, not in the appearance they present to their peers and to the public. They will postpone acquiring status items like a luxury car until they are certain that their business is stable.

Interpersonal Relationships
Entrepreneurs are more concerned with people's accomplishments than with their feelings. They generally avoid becoming personally involved and will not hesitate to sever relationships that could hinder the progress of their business. During the business-building period, when resources are scarce, they seldom devote time to dealing with satisfying people's feelings beyond what is essential to achieving their goals.

Their lack of sensitivity to people's feelings can cause turmoil and turnover in their organization. Entrepreneurs are impatient and drive themselves and everyone around them. They don't have the tolerance or empathy necessary for team building unless it's their team, and they will delegate very few key decisions.

As the business grows and assumes an organizational structure, entrepreneurs go through a classic management crisis. For many of them, their need for control makes it difficult for them to delegate authority in the way that a structured organization demands. Their strong direct approach induces them to seek information directly from its source, bypassing the structured chains of authority and responsibility. Their moderate interpersonal skills, which were adequate during the start-up phases, will cause them problems as they try to adjust to the structured or corporate organization. Entrepreneurs with good interpersonal skills will be able to adjust and survive as their organization grows and becomes more structured. The rest won't make it.

Emotional Stability
Entrepreneurs have a considerable amount of self-control and can handle business pressures. They are comfortable in stress situations and are challenged rather than discouraged by setbacks or failures. Entrepreneurs are uncomfortable when things are going well. They'll frequently find some new activity on which to vent their pent-up energy. They are not content to leave well enough alone. Entrepreneurs tend to handle people problems with action plans without empathy. Their moderate interpersonal skills are often inadequate to provide for stable relationships. However, the divorce rate among entrepreneurs is about average.

Consulting-Sample Success Criteria

To help you with this process here's an example:

What are your success criteria? What has to be present for you to know your consulting practice is a success? List your success criteria below:

1. A net income before taxes of $150,000 per year
2. A wide variety of challenging assignments
3. Working with top executives in the companies I serve
4. The ability to make a difference in the results of the companies I work with
5. National prominence in the field of consulting
6. Travel to the major cities of the world

Test these criteria. For each one listed, what's important to you.

1. Net income of $150K means a great lifestyle'homes in Florida and the Northeast. The ability to help out our children when they need it and to have fantastic vacations for my wife and myself.

2. Challenging assignments mean that I stay abreast of the latest that's happening in business and that I develop my mental capacities to the utmost. It also means I'll take prudent risks. Based on my background I know I can do things I haven't done before. This means personal growth and the satisfaction of accomplishment.

3. Working with top executives: Although I'm an "outsider" now, this is the group I came from. I enjoy associating with those who used to be my peers. As a consultant serving high levels, I'm still part of the "club".

4. Making a difference means I add value to the companies I serve, which gives me a strong sense of satisfaction.

5. National prominence: I like to be recognized for the good things I do. I am driven to achieve, and being known at a national level is recognition of that achievement.

6. I like the excitement of travel and going to new places, seeing new people, and experiencing new things.

Consulting - Challenges and Obstacles

Here are some challenges and obstacles you may encounter in launching your own consulting practice:

# Getting your first assignment
# Financial uncertainty
# Gaps between assignments
# Timing
# Lack of control
# New skills sets are required
# Developing a resource base for project assignments
# Developing strategic alliances
# Developing relationships that lead to business success

GETTING YOUR FIRST ASSIGNMENT
Unless you are able to connect your knowledge and experience to the needs of a contact you currently have, it may be awhile before you get your first assignment. I was fortunate to have an in-depth knowledge of computers used for real-time applications. As a result, I landed my first assignment for conducting a competitive analysis study for a computer corporation within 33 days of starting my business. You can do this too.

FINANCIAL UNCERTAINTY
There's something about a corporate paycheck that can be addicting. Perhaps this is no big deal to you, but if you're supporting a family they can get really nervous when that paycheck disappears. The only way to solve this issue is to continually hustle for business. You must be confident of the value of what you have to offer, and possess the materials and skills to help you put your best foot forward. This book will show you how to do that.

GAPS BETWEEN ASSIGNMENTS
The biggest trap consultants get into (and that includes me) is that we get comfortable with the work and income flow from our existing client base. But they can dry up in a hurry. All it takes is a change in top management, financial belt-tightening--even the successful completion of a long-term project--and that income flow disappears. But we haven't taken the time to find and sell new opportunities because we're too busy. We often get so caught up in the tasks at hand, we drop the ball that is our future.

If we haven't done our homework, when a major project is over, it's like starting the business up all over again until we get a new contract. There's no need for this to occur. Once you learn this lesson (hopefully with this book) it won't happen again. It's no fun in the 'tween times.

TIMING AND CONTROL
In a consulting practice, timing and control are quite different from what we learned to expect in corporate life. There, everything was relatively simple. It was a cause-effect environment. We issued a directive and things got done, sometimes on schedule. There was a predictability and rhythm to the culture of the company. Our actions as corporate manager or executive made things happen. Running a consulting business will give you a whole new perspective on timing and control.

First, any time-related issues are those of your client. Wait a minute, you say. I've got an unbeatable selling proposition, my promotional materials are excellent, and I've got great references. I can really help this company, and they just are not responding right now. What's up?

You may have a great story to tell to a prospective client, but they may not be ready for your services yet. It's not time--other issues are more important. In corporate life you were part of the mainstream, but here you're an outsider. That's why a successful consulting business is a relationship business. When it's time to use the services you can provide, you want to make sure they'll call you instead of someone else.

Second, let's talk about control. In corporate life, you may have believed that through the application of appropriate management techniques you were able to control the actions of the people who worked for you. In a consulting practice, you only influence, you don't control. One of the temptations to overcome is attempting to take control of a situation where you are contracted to be an advisor. I once blew a consulting contract with a major workstation supplier by attempting to run a project that was going south instead of acting as a advisor. Old corporate habits, especially management ones, die hard.

NEW SKILLS SETS ARE REQUIRED
Remember when you used to be to able dictate a letter or send an outline to the marketing department to create some visual aids? With a consulting practice, those days are gone, unless you want to spend a lot of money using outside service firms. Some of the new skill sets you'll need to develop are:

# Computer literacy--this means learning word processing, spreadsheets, presentation graphics, database manager (for direct mail campaigns), and desktop publishing
# Positioning your services--becoming a streetwise marketing guru
# Sales skills--even if you've been a VP of Sales, it's back to square one. Most likely, you're like I was and will have to relearn the basics.
# Writing winning proposals--it's all up to you
# Handling money--why is it so easy to spend?
# Time management and discipline--this means being at your desk on time and putting in a full day--every day

DEVELOPING RESOURCE BASES FOR PROJECT ASSIGNMENTS
By now you've figured out that you can't do everything supremely well. Other people are more gifted than you are in some areas. Don't hesitate to use them if they'll add to the success of a project. Outsourcing some of the fees you receive may be one of the best investments you'll ever make. One client contracted me to develop a new-hire training course from scratch. I immediately sought out the best I know in the business and achieved an unbelievably high 4.75 out of 5.0 rating for a pilot training course.

Here are some of the areas where you may need to have outside resources help you:

# Graphics design for preparation of marketing and promotional material
# Technical, marketing, or financial functions
# Letter writing
# Telemarketing
# Telephone answering
# Dictating and typing
# Printing
# Any other services you may need that you do not have the skills to provide

DEVELOPING STRATEGIC ALLIANCES
Yes, there are others out there in the consulting world--the 'no man is an island' truism applies here in spades. Developing mutually beneficial business relationships with your peers in the consulting world can help you to:

# Add value to an assignment where others may require your services
# Provide referrals where and when they can't handle an assignment
# Offer reciprocity with finders fees to provide financial incentive

DEVELOPING RELATIONSHIPS THAT LEAD TO BUSINESS SUCCESS
You probably realize that your success in corporate life was not solely because of your knowledge and skills--much of it had to do with the relationships you had with your superiors, peers, and subordinates within the company or companies. Now that you've left the corporate scene, those relationships are gone (unless you get your initial consulting contract from your existing employer).

Success in the business world depends on relationships. You've heard, "It's not so much what you know, it's who you know." There's more to it than just knowing--a relationship--a mutually respectful connection must exist. And you're going to have to develop a lot of new relationships quickly! We'll share how to do this later.

What You Should Consider When Buying A Small Business Accounting Software

The world of small business accounting software can be a great help to any business owner. It can also be a minefield. So, choosing the right package is one of the most critical business decisions you will make. Automation of your accounting system, nowadays, is a must. But there is nothing to worry, just follow our guide on what you must consider before making a purchase of a Business Accounting Software that will help you achieve your businesses goals in due time. Buying a small business accounting software can help you make the best decisions, quickly and when necessary; smarter business decisions that will save you plenty of trouble and money in the future.

1. Scalability. Businesses change over time so it's critical that the small business accounting software you choose can change too. Some things that often change are the number of products and services offered and the number of employees. When you choose your package try imaging the business in 5 years or 10 years time and how different it will be. Use this information to guide your purchase decision. It may well be better to pay a little more now for the software knowing that it can be easily up-graded when needed with minimum disruption and cost to your business.


2. Support. It is important that most software has great support for when something goes wrong (and it always does). All major companies offer support but you also need to think about support in your local area. It's often much easier to have someone locally come in and do things you need done with your software than have someone trying to help you over the phone. Make some inquiries with other small businesses about the package they use and who helps them.


3. Accountant Interface. It's most unlikely you will handle every aspect of your small businesses accounting. Your accountant is an important factor in making the right decision. What software are they used to working with and what do they prefer? Can you easily supply them data and reports from your package without the need for any extra work (which you'll have to pay for)? Don't be afraid to ask their opinion because they live and breathe this stuff.


4. Best Value for Money. Let’s understand that a low price and high quality equals the best value. Shop around as the price can vary greatly and the product is exactly the same. However price is only one part of the equation, so if there is a great merchant locally with support or installation assistance this may be far more valuable.


5. Major Brands. There are two major players in the small business accounting software market. They are QuickBooks and Peachtree. Microsoft is expected to enter the market soon. I recommend choosing a major brand so that you can get regular updates and you know the company will be around as long as your business needs them.


6. Ease of Use. Ease of use is a personal thing but it is worth trying the software before you buy it if you can. Remember to get the person who will be the main user to test the software as well. Also consider how well the package can interact with other software you use. This is an advantage the Microsoft package may have when it's available.


7. Features Needed. I touched on this earlier when talking about thinking ahead as to where you business will be in 5 or 10 years time. Most accounting software packages come in several different versions. If you don't need certain features now and can't see a need for them in the future then don't buy them. The major differences are usually - number of users allowed, inventory management capability and number of reports available.

Source: Joe Coffee of www.AccountingAndYou.com

Accounting Software Product Review: Access Accounting

Package: Access Accounting
License: Proprietary
Windows: Yes
Mac OS X: No
Linux: No
Market focus: Mid-Market
Type: Financials, Customer Relationship Management, Manufacturing, Job Costing, POS, Stock, ERP, Business Intelligence, CIS, Payroll
Structure: Stand Alone

Access Accounting Ltd is a UK-based, independently owned computer software house with 140 employees. It develops and supports a range of integrated solutions for the UK and Irish mid-market which are sold through its network of Access Specialist Centers.

Other products of the company are as follows:

* Access Dimensions is a modular accounting and financial management suite built on Microsoft’s SQL Server database. Dimensions offers organizations 38 fully integrated modules including financials, e-commerce, job costing, CRM, and Business Intelligence.
* Access Dimensions Lite provides a cost-effective entry into Client/Server accounting technology by providing a modular accounting and financial management suite that is run on Microsoft's free version of SQL Server.
* Access Horizons and Access Foundations are entry-level accounting systems providing core financial functionality and a range of commercial tools for small to mid-sized businesses.
* Access Payroll is a HM Revenue & Customs-approved payroll solution that is provided both as a stand-alone module and as a fully integrated part of any Access Accounting solution.
* Access Supply Chain extends the functionality provided by Access Dimensions out to a full ERP solution, featuring specialized functionality for manufacturing, distribution and warehousing organizations.
* Access Dimensions online is a Saas Software as a Service offering, providing the functionality offered by Access Dimensions through a standard internet connection

For more information, visit their website at www.access-accounts.com

Product Review: 24SevenOffice

Package: 24SevenOffice
License: Software as a Service
Windows: Yes
Mac OS X: Yes
Linux: Yes
Market focus: Low to Mid-Market
Type:
Structure: Web based

24SevenOffice is an Enterprise resource planning (ERP) and Customer relationship management (CRM) system for small and medium sized businesses, delivered on demand through an Ajax-powered web-based interface. The system includes modules for:

CRM

* Contact register at both an individual and personal level and at a higher and common corporate level
* Sales opportunities with overview of all potential sales in the pipeline
* Administration of notes, meeting and tasks
* File storing and management of documents connected to customers / contacts
* Registering and logging in customer or project-specific Timesheets for invoicing
* Overview of all incoming and outgoing e-mails at both customer and contact levels
* Send e-mails and SMS
* Automatic updates of your contacts with 24SevenOffice Sync
* Template merging with MS Office
* Report generator with options to print or export to Excel, XML or CSV

Communication

* Full feature Email system – integrated completely with CRM and projects
* Pop up messages for internal communication with other users.
* Company internal chat room
* Company internal discussion forum

Scheduling

* Administration of meetings and tasks
* Automatic meeting invitations and confirmations with other employees and colleagues
* Automatic e-mail meeting confirmations to external contacts
* Distribution of tasks to other employees
* Groupware calendar with optional access to other employees, resources and projects

The company has offices in Oslo and Skien (Norway), Stockholm (Sweden) and London (UK). Main competitors to 24SevenOffice are NetSuite, a similar web-based suite of business applications. Other web-based competitors include Salesforce.com, SugarCRM and QuickBooks Online. Traditional software competitors include SAP Business One and Siebel.

24SevenOffice is part of the OpenAjax Alliance, the main industry group devoted to technologies and Web programming techniques known as Ajax.

For more information, visit www.24sevenoffice.com.

Sources: www.sellmorenow.com, www.24sevenoffice.com, Wikipedia.

Making the Accounting Software Decision

Use this checklist to choose the best accounting software for your needs.

Accounting systems fall into two basic categories: commercial (or for-profit) and fund (or nonprofit). Despite having many aspects in common, there are significant differences in the accounting procedures, management objectives, and reporting requirements between the two. Here’s the generally accepted definition of fund accounting: “A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts recording cash and other financial resources, together with all related liabilities and residual equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions or limitations.” More simply stated, a nonprofit organization is required to track its funds based on regulations, restrictions, and limitations. Each fund must be treated as a separate entity with its own general ledger, and individual revenue, expense, income, and balance sheet reports. Some organizations must also report on their funds in aggregate. Attempting to use a commercial system for fund accounting is akin to using a wrench rather than a hammer to drive nails. The wrench will work, but it will be a slow, painful process.

Choosing a Fund Accounting Software Package

Choosing the right fund accounting software system requires careful matching of your organization’s financial operations with the appropriate set of software capabilities at a price that makes sense. For example, multi-user accounting software packages typically cost more than single-user systems. If only one person needs access at a time, get the single user version. To simplify the process, we’ve created the following list of questions to help you evaluate key product features before you make your purchase decision.

1. Is it a true fund accounting software system or is it a modified commercial application? A good fund accounting software system needs to have been developed from the ground up. If you’re considering a commercial system with fund accounting “overlays,” be leery of its capabilities. It may never quite accomplish what you need it to.

2. Are you searching for graphical-based software such as Microsoft’s Windows? If yes, be sure to verify that the product is a true Windows design. Some products are offered as Windows-based, but merely have a few graphical features. These accounting software packages defeat the consistency goals of the Windows design.

3. Is it a batch system or real time? Real-time processing is necessary to check budgets, spending limits, etc. Nonprofits benefit from real-time processing, because it is generally much faster, saving time and money by eliminating processing steps.

4. Do you need a relational database to store the information? Be sure the need is real. Many products are sold based on hype rather than need. Databases add considerable cost and processing overhead. Today, you can get many of the advantages of database connectivity by using ODBC (Open Data Base Connectivity) compliant software. It is much less expensive and usually faster.

5. Does it have a large free-form account number? Most fund accounting software applications require additional groupings and breakdowns. It is not unusual for nonprofit account codes to exceed 20 positions. They often have a mixture of numbers, letters, and special characters. Examine your account code needs carefully and make the account structure part of your specifications.

6. Can it handle both cash and accrual basis funds concurrently? Many operations require this ability. For example, a museum gift shop needs to be on an accrual basis, but the general fund may need to be on a cash or modified accrual basis.

7. How large can the amounts be? Some low-end products cannot handle the large figures required for fund accounting. The system should be able to handle numbers up to $1,000,000,000.

8. Can the system handle the number of funds required? A good fund accounting system should not have a limit on the number of funds.

9. Does the accounting software offer security? Application access should be regulated by program and user.

10. Can invoices be paid from multiple funds using a single check? Many commercial and low-end fund accounting systems fail this test. It is a very important feature, and can drastically reduce the number of checks being written and subsequent balancing time.

11. Can multiple checking accounts be used, if necessary? Some organizations need to be able to maintain multiple checking accounts.

12. Is grant and project tracking available? Grants and projects often have different reporting requirements, and they must be reported for different periods. They also require reporting on a to-date basis for the life of the grant.

13. Does the system process encumbrances? This is an absolute must for many government operations. And, if you encumber, the system should definitely have real-time processing.

14. Does the budget planning allow for global changes? Fund accounting operations tend to have a very large number of accounts. Global change capabilities allow the user to quickly create and change budgets with a minimum of input.

15. Do the available reports meet the needs of a fund accounting operation? Fund operations need revenue and expense reports in addition to the standard reports offered by commercial systems. They depict comparisons between actual revenues and expenses versus budgets.

16. What is the pricing model? Products are generally priced in one of three ways: one price, regardless of the number of users; a price based on the number of users concurrently accessing the system; or a price based on the number of users that will access the system. Large software systems may be broken down into modules so that you can purchase only the required modules.

Choosing the Fund Accounting Software Provider

Now that you’ve got some sense of whether the accounting software meets your accounting needs, take a moment to check out the vendor:

1. How long has the vendor been providing fund accounting solutions? Is fund accounting their primary product or is it a secondary application?
2. How often do they update the product? Are the upgrades offered as part of the service agreement or is there an additional charge?
3. Does their support meet your needs? What about response time, 800 numbers, qualified technicians?
4. Is the documentation high quality? Is it available on-line?
5. Can the vendor provide you with a list of customer references to check?

Is This Software Right For You?

Before you make your selection, you’ll need to see a product demonstration and, of course, check references. Product demonstrations come in many forms. Many are nothing more than slide presentations or pared down versions of the software. These demos may convey a list of features, but they won’t demonstrate how the product actually works. A better alternative is to visit the software firm. You’ll get a highly interactive demo and meet directly with sales, support, technical, and administrative personnel.

Then, double-check your impression of the firm with reference calls to organizations similar to yours. Are customers happy with both the product and service?

Finally, consider whether you feel comfortable doing business with the software provider. Does the company seem competent, sincere, and have a real desire to meet your needs? Are they in this business for the long run?

Take a Close Look

To make the right decision on a fund accounting software system for your organization, you need to look closely at both the products and the vendors in this market. Understand what’s available, and what meets the needs of your organization. Good luck!

How to choose a business accounting software

Choose the right accounting software package and you will save time and money, make fewer mistakes, and obtain useful management information. The most recent breakthrough has been in making the software easier to use — you no longer have to understand book-keeping.

This briefing explains some of the key issues to consider before you make a purchase:

• The benefits of computerizing your accounts.
• How to establish the basic accounting needs of your business.
• What level of software to choose?
• What costs are involved?

Using accounting software which explains how you use accounting software to run a business.

Why computerize?

A computerized system can automate routine tasks. Book-keeping is simplified and automated. For example, you can enter an order and the software updates the stock and customer records and allows you to translate the order into a sales invoice.

• Bank reconciliations, VAT returns, monthly management accounts and other accounting tasks can be completed quickly and accurately.
• Some software supports electronic banking, and could save you a lot of time.
• Most packages let you add a payroll module to automate the calculation and payment of wages.

Accounting software provides a wide range of up-to-the-minute management reports at the touch of a button. For example, aged debtor and creditor lists, the bank account balance, tax and VAT owed, balance sheet, profit and loss, stock values and performance against budget. Other useful calculations, such as project profitability assessments, can be produced by linking into specialized job costing software. The software makes it easy to prepare for your annual accounts, or your audit. You can make further improvements by integrating different processes. For example, you could use the information contained in your ledgers to generate debt-chasing letters or customer mail shots automatically.

Identify your needs

Taking a ‘top-down’ approach to selecting accounting software minimizes the risk of needing to make costly changes later. Start by outlining your ideal system. This allows you to decide your priorities and gives your software suppliers a basis from which to prepare a proposal.

What are your business objectives?

For example, you may aim to capture ten per cent of a given market within five years, or to open ten new shops across the UK. Can your current accounting system meet these needs? For example, can you keep track of stock at different locations?

Who is going to use the accounting software?

Involve the employees who are going to be directly affected by changes you make. What would different employees like to see in a future accounting system? Fully involve your accountants. Check that they will be able to use the information generated by the software to produce your end-of-year accounts and to satisfy the requirements of the annual audit.

What management information is crucial to the running of your business?

You may need to involve an accountant or outside consultant to help you determine what information you will need to extract from the system. For example, a retailer needs instant access to stock information, while a hotel will want to know about room occupancy rates. Can the software handle all the book-keeping tasks you need it to perform?

These might include:

• Sales, invoicing and receipts.
• Purchases and payments.
• Banking and cash management.
• VAT, tax and accounts.
• Stock control and payroll.

What special needs does your business have?

For example, do you have more than one business, or buy and sell in different countries? If you deal with different countries, check that the software can cope with the euro.

Ease of use

When purchasing software, the main trade-off is between ease of use and functionality. Take the task of generating an invoice. If all you need is a standard invoice, the simplest and most user-friendly software may be ideal. But you will need something more flexible, and initially more difficult to use, if you need to customize the invoice. Can the software interface be tailored to suit your needs?

Features to look for include:

• The ability to add new fields and controls. Do you want your sales ledger to contain additional information, such as the name of the individual who placed the order?
• The option to set defaults for fields. Do you want your payroll software to add a list of standard benefits automatically each time a new employee’s details are entered?
• The option to define a range of values. Can you minimize data entry errors by defining all possible entries in advance?
• The option to customize screens. Do you want the screen layout to look more like your working documents? The best systems allow you to customize the look of the software to suit the needs of your business. Can you ‘cut and paste’ information from other programs? This saves time and allows you to make the best use of all your software.
• Make sure you can import and export information between the accounting package and any word processing packages, spreadsheets and databases you use.

Flexible information

Start by looking at how the software handles sales and purchase transactions. Most software provides these functions in the form of a sales and purchase ledger. Can you input sufficiently detailed information on your customers and suppliers? How flexible is the structure of the nominal ledger? Most accounting software is constructed around the nominal ledger, which brings together all your assets, liabilities, income and expenses. A ledger with a flexible structure allows you to define the best accounts structure for your business. Can you categorize different items according to departments or cost centers? More flexible systems allow you to define how your accounts are allocated. Simpler systems may not allow you sufficient room to do this. Can you structure the order in which your asset, liability, income and expense accounts appear? Simple systems require items to appear in the order in which they would appear on the balance sheet or profit and loss account. Does the software allow you to input a full range of transactions? What budgeting facilities does the ledger allow for? Can you generate separate ledgers to track specific pieces of information? The more flexible the software is, the more you can tailor it to your business. This can make a major difference when you generate reports. Will your accountant be able to use the reports to prepare year-end information?

The costs

Your greatest costs are likely to be incurred in setting up the system and training your employees to use the software. Sole traders with simple book-keeping needs may be able to use ‘money management’ software to control their business. Well-known packages include Microsoft ‘Money’ and Simply Books. Accounting packages have been developed to meet the needs of most small businesses. Well-known packages include Sage ‘Instant Accounting’ and ‘Line 50’, Intuit ‘QuickBooks Basic’ and ‘QuickBooks Pro’, Pegasus ‘Capital Gold’, and Mind Your Own Business 'MYOB Accounting'. More advanced accounting packages come in modules, with each module handling one aspect of financial management (eg sales ledger). Well-known packages include Sage ‘Line 100’ and Pegasus ‘Opera’. Most businesses use at least three modules (sales, purchase and nominal ledger). ‘Multi-user’ networked systems demand more computing power than ‘single-user’ systems. Check your existing hardware can run the packages you are considering. Updating your IT and accounts systems at the same time will be expensive. Most Windows packages need at least 32Mb of RAM and 100Mb of free disk space on at least a Pentium PC. Different users will need different amounts of training. The person responsible for managing your accounts will need a more detailed understanding of how the system works. Employees responsible for specific functions need to be able to perform those tasks only. For example, a sales person may only need to know how to raise an invoice. Thorough training can be a major cost, but it is far less expensive than learning by trial and error.

Maintenance and support are key aspects to consider when purchasing your software. You may need to pay an annual fee to receive ongoing technical support. You may need to update the software itself from time to time. Ask about the vendor’s track record in providing support for older systems. You may need to upgrade your computer system periodically.

Making a purchase

You may need to shop around for advice. Find someone who understands the needs of your business and also understands what the different software packages can and cannot do. Most accountants can advise businesses on what software to choose. But some are far more experienced than others. Your own accountant may not have experience of a sufficiently large number of software packages. Accountants may be primarily interested in how well the software tracks transactions, which makes auditing easier. You will also be interested in the possibility of obtaining management information that will help you run your business more effectively. Some firms of accountants are software resellers. They will have IT departments dedicated to accounting and other software. Most software is purchased through resellers, which can provide expert advice on the products they sell. Does the reseller you are talking to supply businesses similar to yours? For example, an advertising agency with specialized billing requirements may prefer a supplier with experience in dealing with such needs. What is the reseller’s track record in providing support and training?

Ask if you may call businesses it has supplied and question them about their experiences. Many resellers are also software developers. They can customize the accounting software to meet the exact needs of your business. Check that the benefits of having a system customized will outweigh the costs. Resellers can also give you advice about your IT requirements. For example, they can advise you if your network needs upgrading. Be wary of any software which does not already have a large ‘installed user base’. A large user base removes a significant element of risk for you. It usually indicates better support for users, and more investment in upgraded versions of the software. A brand new software product could flop. Support and development thereafter would probably be minimal, if it happened at all.

How Do I Know If I'm Credit-Worthy?

Need working capital for your business? First, make sure you're a creditworthy borrower.

Q: Since starting my small restaurant and catering business five years ago, I have managed to run on cash basis. I have avoided loans like the plague. However, I am currently having cash flow problems and might need to borrow some working capital.

I've always thought that banks are like people who lend an umbrella when the sun is shining and withdraw it when rain pours. I want to be wrong when I say that a bank's bottom line is the borrower's capacity to pay. But am I?

— WILMA, Lipa City

A: Let me put it this way. A bank, any bank, will want to lend to you if you are creditworthy, a good person or company to deal with, and if you offer good growth potential.

So from here, it is clear that capacity to repay a loan is an important criterion. But consider this: The capacity to repay a loan normally stems from one's ability to conduct a business efficiently and profitably. Thus, your skills and proficiency as well as reputation as owner-manager will count a lot in credit appraisal.

You must have heard about the 5 C's of credit — character, capacity, capital, collateral, and conditions. These are five key factors scrutinized by banks in making lending decisions to a particular loan applicant.

Character is of foremost importance and relates to a borrower's commitment to his personal and business obligations. Honesty, integrity, and commitment make a person a good credit risk.

Capacity relates to ability to repay a loan. And this is tied up to one's managerial and entrepreneurial abilities. Expect bank officers to ask you questions relating to the management and operations of the project for which a loan is being applied.

Capital refers to how much an entrepreneur owns, which is analyzed relative to how much he wants to borrow. This is obviously related to capacity to pay.

Collateral is, of course, security to the bank in case of loan defaults.

Conditions relate to the current economic and business climate affecting the economy in general. During periods of prosperity, creditors are more liberal in lending since businesses are presumed to be doing well, with plenty to spare to pay their obligations. On the other hand, economic depression makes creditors more cautious as more and more businesses are cash-strapped and become poor credit risks.

Source: UP ISSI

Independent Consulting Practice

Congratulations! After all those years in corporate life, you've decided to start a consulting practice. This is a new era--and that means corporations are continually downsizing and rightsizing. Whatever you want to call it--things are not the same. The opportunities that used be present in corporate life--the security, the path to advancement, and the ability to build a future are just not what they used to be. Perhaps you're at a place where you've had it with corporate life. Maybe your company has merged with another, and you've been reengineered out of the new organization. Perhaps you've been asked to move to one of the worst cities in the U.S. at a lesser position. It could be that you don't believe in the company you work for--or your boss is a total turkey. You know there has to a better way--and consulting seems like the answer.

THE GOOD NEWS
A consulting practice can be all that you dream it can be. Just some of the things that it will provide you are:

# The opportunity to put to work the knowledge that you've accumulated in your years of industry experience
# The ability to enjoy the freedom and independence of doing your own thing
# The possibility of achieving excellent financial rewards
# The flexibility of living wherever you want
# The freedom to take on those assignments you feel are stimulating and rewarding--and the option of walking away from opportunities you don't intrinsically enjoy
# The chance to meet new people in other companies and industries
# The satisfaction of working with the best resources you can find to get the job done

YOUR SERVICES ARE IN DEMAND
# The career opportunity you've chosen is one of the most rapidly expanding areas in business today. As reported in Management Constant International, published by Lafferty Publications, Ltd., "Combined revenues [in 1995] at the top 30 firms grew by 21 percent to $23.2 billion in 1995." Because of downsizing, companies are increasingly outsourcing for services and expertise no longer available from their own staff. Consultants bring their time and expertise to help fill in the gaps. You are needed because you have skills, experience, or knowledge not perceived to be available in-house. Companies or individuals may need your help to: Oversee or conduct special projects because an organizational overload requires a knowledgeable outside resource
# Analyze existing organizational functions, operations, and results to recommend specific areas and actions for improvement

# Be the outside resource that acts as an 'agent for change'
# Develop and conduct training courses specific to a company's needs
# Provide an objective third-party viewpoint on strategic planning, marketing, and other operational issues to help companies avoid pitfalls and wasted effort
# Troubleshoot tactical issues, such as sales performance, to help improve a company's quarterly results
# Provide technical advice in product development or manufacturing areas
# Write articles, white papers, and technical product bulletins and manuals
# Create marketing and promotional materials
# Conduct computer consultations to help resolve MIS issues, including software, networking, and client-server applications and to assist in computer system hardware and software selection
# Bring financial background and industry resources to bear to help a company resolve financial issues
# Act as the outside resource used to provide product evaluations-including competitive analysis

This list is not all-inclusive. What's important is that you can take the skills you've developed and the experiences you've gained to add value to the companies you've worked for directly in corporate life--and now add value to the firms you consult with.

ARE YOU COMMITTED?
This all sounds great--so why aren't there more consultants? One reason is that in order to be successful at consulting, you must be totally committed. In fact, the four keys to consulting success are:

# Total commitment to making a success of your practice
# Meaningful differentiation of the services you have to offer
# The ability to sell yourself
# The deserved reputation for providing more value than expected

What about total commitment? If it's not there--forget it. You're better off getting another job in a corporation. Don't use consulting as a way to run away from the problems in a corporation. You'll be running from one set of problems to another--with a lot more surprises! Consulting is a lifestyle you choose for your future because of what it gives you.

I've had my own consulting and training business for six years. I'm convinced that the number one reason I've been successful (and success to me is having my net worth increase every year) is that I've chosen this career lifestyle for the rest of my working life. It's so good I don't even think of retiring--I'm allergic to leisure. When I left corporate life as a Vice President of Sales for a Computer Systems Division, I vowed I would never work for another corporation again. This isn't an indictment of the corporation--it was the best job of my corporate career. I worked for a General Manager who was the best boss I've ever had. But I was committed to making my own consulting business a 'go.'

Here's how not to succeed. Don't just dabble in consulting or use it as a 'holding pattern' until something better turns up in a corporation. It's okay to do this if you recognize that this is your real purpose. But if you're just not sure--if you haven't made up your mind to stick with it--a divided purpose is a recipe for disaster. Someone once said, "A man without a purpose is like a ship without a rudder�" This is especially true in beginning a consulting business.

As an example, a good friend of mind was a corporate casualty and believed that companies would use him for consulting assignments because of his vast experience in the process control industry. This sounded good to me until I called him a few times and found he was watching TV or taking a nap! Thankfully, he's now out of his 'dabbling in consulting' business.

Source: Streetwise Independent Consulting