Small Business Accounting Explained

Below we give you some tips on how to make small business accounting more bearable for you.

First, you should make a list of all accounting tasks to perform in your business. Once you have your list, small business accounting is less stressful and takes less time. You will only have to perform one or more tasks at regular intervals (daily, weekly, monthly …).

We also recommend that if do not know a lot about small business accounting, learn the basics.

Small business accounting is a specific jargon and all sorts of words and concepts reserved for the experts. Do not be discouraged if you do not understand them all. Get used to the most basic concepts directly related to successfully improving your small business accounting. Ultimately, the goal is that you increase profit. It is the primary goal of any business. Request help from a professional if you want, but do not miss the basic concepts.

In contrast, it is a mistake to become a super fan of small business accounting. The company does not come down to accounting. There are firms and professionals who do this very well. This is not the job of an entrepreneur to be a know-it-all of Management or Accounting.

The third golden advice is to separate your personal finances from your business finances.

It is a bad idea to mix your personal account and your business account. Separate them completely: even if you’re the sole shareholder in the company, even if only your money is put into the pot. This separation enables you to plan, predict, without confusing personal cash and professional cash. This allows a lucid view of the true accounts of the company.

Finally, you must be consistent.

It may be hard to get used to at first but we recommend that once you create an accounting system for you, you should stick to it no matter what. Remember to register everything, forget nothing, and be consistent. If you are not consistent you will start doubting your own system later which will not help you when you want to evaluate your business performance at the end of the year. It is a good idea to meet with your accountant to have him or her verify the information. 

How to Write a Food Industry or Catering Business Proposal

Do you need to write a proposal to promote your food-related business to a prospective client or to get funding? It doesn’t have to be an intimidating process. The goals for any business proposal are: introduce yourself, highlight your products and/or services, describe the costs, and convince the client that you are the right choice for the job or you are worth investing in. To speed up the proposal writing process, you can use pre-designed templates and get ideas from sample proposals.

Whether you are describing a catering service, pitching a food service (deli) to be installed within another company, buying or selling a food franchise or food vending business, requesting that a grocery store of specialty store chain carry your food product, or even asking for funding to start up or expand a restaurant, the proposal structure will be similar. Here’s the basic structure to follow: introduce yourself, then summarize the prospective client’s needs, describe your services and costs, and finally, provide information about your organization, your credentials, and your capabilities.

For a food-related business, you will also need to include some detailed information about your services, menus, or products that are of interest to the specific client. For example, a catering service might need to include menus and décor themes from which the client can select, and a food vending operation might need to explain how machines will be operate and which items will be stocked.

Always keep in mind that the purpose of a proposal is to persuade your potential clients to give you their business or loan you their money. You must prove that you can deliver the products or services they need. A simple price list can never substitute for a real proposal.

Proposals should be targeted to a specific client. This means you need to gather information about your client so that you can present a proposal tailored to that individual client’s needs. It’s never a good idea to send all prospective clients the same sales letter. Clients are much more likely to accept a proposal tailored just for them.

So, let’s get back to the order described above. Start your proposal with a Cover Letter and a Title Page. The Cover Letter should deliver a brief personal introduction and contain your company contact information. The Title Page is just what it sounds like: the name of your specific proposal (for example, “Proposed Catering Plan for Your Awards Banquet”, “Proposal to Place Food Vending Machines in Community College Buildings” or “Business Plan Funding for Hot Stuff Bakery”).

After this introduction section, add topics that describe the needs of your client. If you are presenting a proposal for a complex project, you may need to write a summary to precede the detail pages. In a proposal for a corporate client, this is normally called an Executive Summary. For a less formal but still complex proposal, it’s more often called a Client Summary. In this summary and the following detail pages, you should demonstrate your understanding of the client’s requirements, goals, and desires, as well as discussing any restrictions or limitations you are aware of. This section should be all about the client.

Next is your chance to advertise yourself. Follow your introduction section and the client section with pages that describe what you are offering. These pages might have general headings like Services Provided, Samples (offering the client to pre-sample selections from your menu or food products), Benefits, and Services Cost Summary, Product Cost Summary, Entertainment (if provided with food service) as well as more specific pages that detail the products and/or services you can provide and explain the associated costs, the number of people that will be served and so on.

Your specific business will determine the specialized topics and pages you need to include in your proposal.

A catering service might need to include topics like Specialization (to highlight a specific niche you excel in) Services Provided, Options, Cost Summary, Events, Entertainment, Rentals, Special Needs, Policies and a Contract and Terms.

A deli or fast food franchise might want pages such as a Location Analysis, Future Potential, Financial Information, Income Project, Feasibility Study and other business opportunity templates describing the business opportunity.

A company selling a product to a store might include Product Cost Summary or Price List, Distribution, Market and Audience, Marketing Plan, Ingredients, Packaging, Footprint, Cost/Benefit Analysis, Quality Control and Benefits.

Specialty businesses such as event planners, party planners and wedding planners typically have to incorporate catering services as just one component of a larger proposal and will deal with additional topics such as the Venue, Performers, Products, Logistics, Packages and so on.

A business proposing to provide school lunches for students would need to provide additional details to show they can handle the volume and safety requirements. You can add topics for Requirements, Facilities, Safety Plan, Training Plan (for how your employees are trained), Certifications, Insurance, Quality Control, Experience, Capabilities, Capacity and so forth.

If you’re asking for funding to start a food business (anything from a coffee shop or bakery to a full size restaurant), you’ll want to add pages such as a Competitive Analysis, Industry Trends, Market and Audience, Marketing Plan, Insurance, Liability, Time Line, Funding Request, Services Provided, Products, Company Operations, Balance Sheet, Income Projection, Sources of Funds, Uses of Funds, Personnel, Legal Structure and any other topics required by the lender.

In your last proposal section, provide your company details, including pages such as Company History or About Us, Capabilities, Testimonials, Our Clients, or References. Your goal in this section is to convince the prospective client that you can be trusted to deliver the goods and/or services they need and want.

Those are the basic steps for organizing and writing the proposal. But you’re not quite finished yet. After you have all the information down on the pages, focus on ensuring that your proposal is visually appealing. Incorporate your company logo, use colored page borders, and/or select interesting fonts and custom bullets to add color and flair. Just be sure to match your company style when making these selections.

To finalize your proposal, it’s essential to proofread and spell-check every page. It’s always a good idea to get someone other than the proposal writer to do a final proof, because it’s very common to overlook mistakes in your own work.

When the final touches have been completed, print it or save it as a PDF file, and then deliver it to the client. The delivery method you should use will depend on your relationship with your potential client. While it’s common to email PDF files to clients, a nicely printed, personally signed, and hand-delivered proposal may make more of an impression and demonstrate that you’re willing to make an extra effort for the client.

So, to sum up, a food-business proposal can vary widely in content depending on the business and the project. Each company’s proposal contents will need to be a bit different. But all these proposals will have a similar format and follow a similar structure.

If you’d like to get a jump start using pre-designed templates with simple instructions and tons of suggestions for content, you can use Proposal Pack which includes all of the material mentioned above. The product also includes many sample food business proposals that will give you great ideas and help you easily create your own successful proposal.

You Can Buy a Business Without Bank Financing

People wishing to buy a business are often put off by concerns about financing. They don’t have the bucks to pay cash, SBA loans are no longer as available as water at their favorite restaurant, the banks aren’t too friendly in the lending department, the equity in their home has evaporated, and there no rich uncles around to bankroll their dream purchase.

Guess what? People who want to sell their businesses understand that. In fact, a good business broker will explain that very common buyer’s limitation upfront to his seller, before he even lists that business. The business broker will encourage the seller to offer terms-in short, to carry a note for part of the purchase.

And most of them will. I am a business broker in Las Vegas and the thumping majority of my listings have sellers willing to lug some paper on the back end of a sale.

The key to a successful deal is often the nature of the agreement–more particularly, the downpayment and the terms–rather than the selling price. Most people looking to buy a business want to get their downpayment back out of the first year’s profits. Conversely, most people selling their businesses want a downpayment large enough (often around 50%) that the buyer has sunk sufficient cash into the sale to insure that he will do everything possible to keep the business successful enough to pay off the balance. Most deals in which paper is carried accomplish that.

Let’s use an example. Say a service business does a gross of a $140K a year, with a net profit at around $70K. And the seller of the business wants $135K for it. Often the published terms (those stated by the seller in the listing) will go like this: $70K down, remaining over 24 months at 8% interest. Get it? The buyer of the business gets his downpayment back in profits that first year and can then spread out the balance for the next two years.

Read my lips: You don’t have to offer either the price or the terms the seller of the business requests. You maybe want to offer $120K for this enterprise, at $60K down and the rest over 36 months. All things being equal, it is likely a motivated buyer would accept that offer to buy her business.

But what if the buyer wants all cash? If the price is low-under $100k-it may not be much of a problem for most buyers. But even here, you will find business sellers willing to carry small notes.

Whatever you do when buying a business, do not be put off by an all-cash request. If that business has been perched on the listing system for awhile getting limited interest, the seller of the business may well swallow hard and accept a sale with terms.

Business buyers listen up: Don’t be put off by selling prices and fears over rustling up the money. That is not the place to start. First, find a business that you find attractive-financially and otherwise. Just look for something that catches your eye. Once you hit it, then look at price and terms. It may be affordable right there. In any case, if you have a broker of any value representing you, talk it over with him as frankly as you would present a matter to your lawyer. He may well be able to help you put together a reasonable offer. It might be conventional or even rather creative. It doesn’t matter. After perhaps a little dickering back and forth, you may get a deal.

And if you do, that’s all that matters. You have taken the first step toward realizing the dream of owning your own business.