Business Information for Entrepreneurs by an Entrepreneur

Like any small business owner, you want to get the best value for every dollar spent - and this includes your communication services. Many businesses are exploring the options of switching from a landline service to a voice-over-internet-protocol (VoIP) phone system. The trusty landline has been meeting business needs for years, but the VoIP comes with a luxurious list of features. Let's examine the pros and cons of the VoIP.

VoIPs are much cheaper than most landline telephone services and they offer more features. Most VoIP line systems include the following:

• Voicemail

• Call waiting

• Call forwarding

• Caller ID

• Unlimited local calling

• Unlimited long-distance calling (domestic)

Along with all of these great features, VoIP users can keep their existing phone number or choose a new one with an area code from the provider's list. It would seem that with all these great features, VoIP is a very logical solution for small business owners. However, there are several challenges associated with using VoIP for telephone services:

• Internet problems - VoIP requires a high-speed internet connection. If you don't have a solid, lightening quick connection, then there is a great possibility that you will experience outages and frequent disconnections.

• Limited 911 capabilities - In an emergency situation, a dispatcher may not be able to determine your physical address. This can be especially dangerous if you are incapable of talking or if you get cut off from the call.

• Jack troubles - VoIP is not always compatible with every phone jack on your property. Sometimes it will only work well with one or two jacks. Extension jacks throughout your building may need to be replaced to make it work well.

When you balance the features of a VoIP against the challenges, it becomes clear that a VoIP isn't necessarily the best solution for all small business owners. The costs associated with beefing up your high-speed internet connection may outweigh that of keeping your traditional landline.

Ultimately, you use phones to meet customer needs and those needs are your number one priority as a small business owner. Before making the decision to move from landline to VoIP, conduct research to see exactly how much money you might be able to save and whether or not a VoIP will allow you to meet customer needs effectively.

A new legislative bill has slapped a host of constraints on the credit card industry. Within the next nine months, credit card companies will be forced to change their ways. Some key stipulations of the new bill include:

• Credit card companies must give 45 days notice before increasing interest rates.

• Late fees will be prohibited until a payment is at least 30 days overdue.

• Over-the-limit charges will be significantly reduced across the board.

So what do all of these nuances mean for small business owners?

Welcome Relief

Small business owners are often forced to rely on credit cards to manage a variety of responsibilities, ranging from paying utility bills to stocking their shelves with inventory. Continual increases in interest rates and late fees often impact small business owners negatively. With these new stipulations, small business owners will experience a significant loosening of the credit card belt.

A Leveler Playing Field

Small business owners do not have the luxury of relying on corporate structure to back their credit. Because small business owners often put their personal credit on the line to keep their companies alive, the new credit card regulations will make it easier for them to get ahead.

Shorter Credit Lines

One negative factor that small business owners might want to weigh is that with the regulation of credit card companies, it will become more difficult to secure a line of credit. Credit card issuers will be less likely to extend generous lines of credit to small business owners. Small business owners should be prepared to see shrinking credit lines and less frequent increases as time progresses.

This new legislation is just one manner in which the government is trying to combat the effects of the economic recession. It is obvious that the new credit card bill will change the way that big credit card companies do business, as well as the way that small business owners use their lines of credit. Overall, the new legislation should have a positive impact on small business owners. Keeping up with monthly credit card bills should become more realistic in the near future.

Have you ever wondered just how much money your business is worth? This might be a question you ponder out of plain curiosity or because you have an interest in selling your business. Whatever the case, there is no simple formula for determining the value of your business, but you can use the following questions to guide you in determining the value of your business.

What does the business own?

Take a look at the assets, inventory and equipment that are part of the business. These are important entities that contribute significant value to your business. At bare minimum, the amount invested in office supplies, special equipment, property, and inventory makes up a core percentage of the value of your business. Make sure to factor in depreciation for items like computers and company vehicles that need to be updated or replaced regularly. Also consider practical items like shelving units and displays, which are integral to business functions, but not necessarily high dollar items. In total, all of the little pieces of equipment and inventory that your business has may add up to much more than you could imagine.

What are the yearly revenue stream and profits?

In addition to the physical property of the business, the yearly revenue stream is the next factor in determining its value. While revenue is only a crude approximation of how much a business is worth, it is an important indicator of the viability of the business. The other critical number is how much profit the business generates yearly. Comparing the revenue stream against the profits often generates a more realistic projection of what your business is worth in terms of dollars and cents. Generally speaking, an average business is "worth" three to six times its annual cash flow.

What is the outlook for the future?

The final factor to consider when determining how much your business is worth is the outlook for the future. In the event that declining revenues and profits have left your business flailing, your business clearly will not have the same kind of value as one that is thriving and growing. By examining records for the past five years, as well as economic predictions for the future, you can develop a better understanding of how much your business is worth.