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Small Business Expert Janet Attard

Turn your small budget into big profits with these helpful hints.

Opinions expressed by Entrepreneur contributors are their own.

Coming up with the idea for your business was the easy part-now you're finding that number-crunching is more difficult than you thought. You want to spend more money on advertising, but you need a new computer, and of course there's the issue of paying your employees. Putting together a budget you can work with can be frustrating. So just how do you do it?

From Patent to Profit Janet Attard has a few tips up her sleeve, and she shares them in her book Business Know-How, which is based on AOL's Business Know-How Forum. You'll find out just how to take those numbers and make your small business bloom on a limited budget. For a taste of what you'll find in her helpful guide, here's a look at a few things you can do to cut corners and see those profits rise: What's the first thing you need to know when you're budgeting? What things do you have to take into consideration?

Janet Attard: Try tracking what you're spending your money on and [determining] whether or not it's producing the results you expect. One big area is advertising, and I've seen many small businesses, particularly business-to-business service companies, spend a lot of money on advertising in the wrong places. You have to stop and look at where your sales come from when deciding how you're going to advertise and promote your business. First figure out where your business comes from, and then decide what it's going to cost you to reach that particular market.

"Growing a business is really hard because you're kind of stuck between what you have coming in and the resources you need to increase business."

Another way people often go wrong is by sending direct mail-they simply decide they're going to get a lot of customers by sending out a mass mailing. You have to look for your target market-the niche that's going to be interested in your product-if you're going to do a direct mailing. What other budgeting mistakes do you think small-business owners make, and what should they be doing instead?

Attard: Business owners, particularly newer ones, don't allow enough time for cash to come in. You have to estimate how long money is going to take to reach you and then have a way to cover your expenses during that time. If you're expanding your business, you might have to get a loan before you take that big contract on or hire 30 people. You'd better make sure you have financing behind you so you can cover your bills and not run into a cash flow problem.

Growing a business is really hard because you're kind of stuck between what you have coming in and the resources you need to increase business. Either look for a line of credit at your bank when you don't need the money or use your credit cards-but be careful when you're doing that. You should get credit cards with a tremendous line of credit. Those are very handy if you're going to be growing, you know the money is coming in, and you just need the money to tide you over until you start receiving payments. There's also a place where you can get a loan on the Web-Loanwise. This site features online loans for up to $50,000, and you can find out immediately [if you've been approved]. For a business that's growing, the best thing I can suggest is get a loan when you don't need it because it's much easier to get money when you don't need it than when you can't make your bills.

The other mistake people make is overbuying equipment or not buying equipment when it's really needed. A lot of times, you'll see people deciding they're going to start a business, and they buy every piece of equipment under the sun to start their business. They've spent $10,000 to $20,000 before they have a single customer. They're going to have to do a lot of business to cover those costs, and they probably didn't need half of what they bought. Going slowly and not overbuying is another way to keep your budget in tune and not go broke. How should business owners allocate their funds to be most efficient? What areas should they put money into? In what areas should they make cuts?

Attard: That depends on the business. Some businesses have to spend a lot on advertising. If you're selling to consumers in a mass market kind of situation, you have to budget a lot for advertising. If you're selling business-to-business, you probably don't have to spend much. You have to look at the nature of your business and then set realistic estimates for what it's going to cost. If you've been in business for a while, look at your past records to see what you've been spending and if there are places where you can trim costs without harming your business. You talk about advertising taking up a huge part of the budget. What are some cost-saving tips small-business owners could use to stay within their budgets?

Attard: One is to be sure you're advertising to the right market. Don't advertise in a regional newspaper because those are very local. Don't go out and buy huge full-page ads and commit to long-term ad campaigns until you know you're in the right media and that your ads work. Test first and start small. Build up until you have some guidelines to go by. If you're in a service business, look at joining networking groups because so much business comes your way from who you know and who knows you and what they know about you. Your best investment often is to become active in these networking groups and have some attractive product literature so when somebody says, "Send me something," you've got something professional to send out. Another tip is to focus on a particular market and saturate it with advertising and promotional materials. What things can a business do to make it look like it's working on a big budget?

Attard: If you're self-employed and want to look bigger, hire an answering service rather than using an answering machine so people get a live voice. Have professional-looking literature made for your business. If you can't afford to hire an ad agency, look at some of the better preprinted brochures from Paper Direct. I suggest using them rather than the office supplies stores because [the literature from them] just isn't as heavy and doesn't look as good. And never use preprinted business cards-they always look as if they were done at home.

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