Category Archives: Business

Know More About Model Viable

You have a great business idea, and even got started on a business plan. But now you wonder: is my upstart business model really viable? Here is an eight-point test to tell you if you should forge ahead with your business idea.
Uniqueness
Before you worry about upstart financing, marketing or business location, you should begin with an idea – not just any idea, but one that’s unique. What makes your business stand out from the rest? (Although they probably have better hair, the business world doesn’t go easy on celebrities. Check out Celebrity Business Busts.)
Uniqueness doesn’t necessarily mean you have to invent something (though that’s never bad – just look at Snuggie’s success), it just means that you have to set yourself apart from the competition. If you’re starting a catering company, say, what will make your catering service different from the rest? These are tough questions, but important ones. The most successful businesses have a strong, unique concept, and a clear identity. Take the time to define yours.
Upstart Funds
What will your start-up cost be? Every business has some expenses at the start, whether you’re paying for equipment, rent or just basic marketing materials. Make a realistic estimation; you’ll need these figures to obtain a loan or simply to budget if you’re paying these expenses out of pocket.

Customer
Who’s your customer? Knowing who will be buying your product or service is vital to your business success – how else will you find your customers if you don’t know who they are? Are you catering to busy professionals, stay-at-home moms, college students, retirees? Define your customer, even if you have to be broad at first. If you’ll be renting a space, make sure the local demographic fits this profile; the real estate agent will be able to provide you with that data. (Don’t let these myths stop you from reaching your entrepreneurial dreams. Check out Top 7 Myths About Starting A Business.)

Competition
Unless you’re lucky enough to find a hole in the market, your business will have competitors. Check them out, because your future customers surely will. Competitors can be a great resource to you as an upstart; you can see how much they charge, what marketing strategy they use and the location they chose.
Ask yourself: how can I do better than the competition? Use your uniqueness identified in step one to find ways to outdo your competitors.
Economic Mood
Your business’ success can greatly depend on economic mood: imagine starting a luxury real estate business at the start of the housing crisis. Gauge the state of the economy, and think of how it relates to your upstart: where are consumers’ mind right now? Are they cutting back, spending more time at home, concerned about the environment?
Even an economic downturn can be an opportunity if you can meet the mood of the consumer. If your business idea doesn’t fit the current trends in spending, think of ways you can tweak it to tap into today’s needs.
Timing
Timing is crucial, especially for an upstart. Opening an ice-cream shop in January is a bad idea; opening Memorial Day can make it the place to be that summer. Do you expect your business to be seasonal? If so, time your opening to the strongest consumer demand. You’ll come out of the gates with a flood of new customers, customers who will come back for more.

Marketing
Remember step three, where you identified your customer? Now you have to develop a marketing strategy to make sure these potential buyers know about your great new business. With today’s internet capacity, marketing can be relatively low-cost, using online coupons and mailing lists. Brainstorm ideas with friends and family, and look at what your competitors do to get new business.
Your local SCORE chapter, which consists of business counselors for startups, is a great free resource with counseling, classes and networking opportunities. (If you’re going into business, you must have a plan. Find out how to put this important document together in 4 Steps To Creating A Stellar Business Plan.)
Continuing Cash Flow
Imagine this: business is booming, you’re on a roll and getting in more orders than you ever imagined. But you have to front the money for supplies and other costs, and you’re out of cash – just like that, your business stumbles because you can’t meet demand. This is a classic cash flow problem many new businesses face, and one that can be prevented with proper financial planning.
Before you open up shop, prepare a detailed financial plan; there are many guides available in places like the Small Business Administration. Now is the time to plan for your business’ first year, to make sure you can face any obstacle thrown your way – especially financial ones. (Don’t overlook the details when starting up a business. It’s the small expenses that have the potential to make or break a great idea. Don’t miss Business Startup Costs: It’s In The Details.)

Tips For Start Your Own Small Business

Wouldn’t it be great to be able to quit your job, be your own boss and earn a paycheck from the comfort of your own home? The good news is that with a little planning and some startup money, it is possible.

Let’s delve a little deeper into how to start a small business from home and help you decide how much planning and money you’ll need to be your own boss.

Creating the Concept
Before quitting your job, you must first think of a concept, product or service to generate a steady income. And while that may sound easy, it’s not. You need to conceive of a plan that puts your knowledge, experience and expertise to use in a way that allows you to make the most money.

As you’re brainstorming ideas, start with industries or kinds of businesses you already have a strong interest in. Consider what equipment and materials you already have access to or can get access to inexpensively. This will help you cut down on startup costs and also let you hit the ground running when you do hang out your shingle. Next, take into consideration what businesses already populate your neighborhood. Are there businesses that are similar to yours? How can you distinguish yours? Is there a business area that is lacking? Does that absence represent an opportunity for you?

Next, you need to get an idea of the prospects for the potential business. What is the market for it? Can you make money at it? Is it a business that needs a physical location or can it function entirely online? All of this requires research as well as how other similar businesses have fared.

Doing Your Research
Some books on forming a small business suggest that after hatching an idea, an entrepreneur should just “go for it.” A smarter approach is to ask family and friends what they think about your idea. Ask specific questions such as:

Would you purchase this particular product and/or service?
What do you think its worth?
What is the best way to market the idea?
Is this something that you think is a fad, or do you feel it could be a viable business for the long term?
Is there anything you can think of to improve this idea?
What other businesses in this field have you heard of or do you currently use for this product/service?
If you’re married and/or have kids, you should also be asking your family how they feel about you quitting your job and working from home. This will affect them on a psychological and financial level and those concerns need to be addressed.

After obtaining all of this feedback, go back to the drawing board and see if the idea can be improved upon so that your product or service can be differentiated from the competition. Remember, you want to hit the ground running and turn as many heads as possible when first starting off!

Developing a Work Space
Your home’s primary function is to serve as a dwelling for you and your family – not as a warehouse or meeting place for your business and its clients. Make certain that if you are considering entering the manufacturing business (for example) that your garage or shed is large enough to handle your work – without forcing your family and your vehicles into stormy weather.
Similarly, if your work will be computer-based, make sure that you have the technology necessary to give your idea a fighting chance. Also, designate a dedicated area or room in your home for your office. This is important for privacy and for tax purposes.

Outsourcing Partners/Employees
While it would be great to be the sole owner of your company and have complete control of every aspect, sometimes a lack of funds or experience makes it necessary to have a partner. In this case, consider someone that has expertise in the business you are developing and will represent the company well.

Define the tasks that you and your partner(s) will be responsible for before opening up shop so as to minimize conflicts later. Make sure that all partners are legally cared for by the company and that the proper forms are filed with the regulatory authorities; this may mean filing twice and paying for title changes if you need to find a new partner, but it will protect both of you in the long run.

Next, decide if you’ll need employees and how soon you’ll need them. Put some thought into how you will hire them and what you will pay them. Explore ways of doing payroll,. Also consider where you want them to work, whether it’s in your home or elsewhere. Consider what having them work elsewhere would cost.

Finding Funding
Once you have an idea and the approval of your family, you need to decide how you are going to finance the business. Most businesses will need at least a little startup income. The hope is to break even after a year, but keep in mind that even successful businesses can remain in deficit for the first few years. Because of this, you will want to tap into a few different sources of funding, including:

A small-business loan
Savings
Money generated from other investments
Family/friends who will act as investors
Personal loan from the bank
Home equity loan
Credit cards (as a last resort)
Source capital that won’t hamper your longer-term security. In other words, try to avoid racking up credit card debt that could cost 20% or more in yearly interest fees. Also, try to avoid borrowing against your 401(k) or other similar plans as this may adversely affect your retirement.

Finally, one of the best things you can do before you take the entrepreneurial leap is to build an emergency fund to fall back on in the early months. Three months of living expenses is a minimum goal for a new business owner, but even more will help take the stress off of you and let you spend your energy on your company.

Covering Your Bases
All business owners should think about what would happen to the company if health or other issues were to prevent them from running the business. In other words, if the entrepreneur were to become disabled, who would take over? Could the business survive?

Consider these issues beforehand and determine whether disability income insurance makes sense, or if a partner could fill the void caused by your absence.

Foreseeing the Future
It’s great to own a business, but ultimately the entrepreneur will probably want to retire or move on to other challenges. With that in mind, you should create a business plan that discusses how you will transfer, sell or close your company. If your business depends on your unique knowledge and contacts, it may not be able to be assumed by another party.

Best Tips For Growing A Successful Business

To succeed in business today, you need to be flexible and have good planning and organizational skills. Many people start a business thinking that they’ll turn on their computers or open their doors and start making money, only to find that making money in a business is much more difficult than they thought. You can avoid this in your business ventures by taking your time and planning out all the necessary steps you need to reach to achieve success.

1. Get Organized

To be successful in business you need to be organized. Organization will help you complete tasks and stay on top of things to be done. A good way to do this is to create a to-do list each day. As you complete each item, check it off your list. This will ensure that you’re not forgetting anything and you’re completing all the tasks that are essential to the survival of your business.

2. Keep Detailed Records

All successful businesses keep detailed records. By keeping detailed records, you’ll know where the business stands financially and what potential challenges you could be facing. Just knowing this gives you time to create strategies to overcome those challenges.

3. Analyze Your Competition

Competition breeds the best results. To be successful, you can’t be afraid to study and learn from your competitors. After all, they may be doing something right that you can implement in your business to make more money.

4. Understand the Risks and Rewards

The key to being successful is taking calculated risks to help your business grow. A good question to ask is “What’s the downside?” If you can answer this question, then you know what the worst-case scenario is. This knowledge will allow you to take the kinds of calculated risks that can generate tremendous rewards.

5. Be Creative

Always be looking for ways to improve your business and to make it stand out from the competition. Recognize that you don’t know everything and be open to new ideas and new approaches to your business.

6. Stay Focused

The old saying that “Rome was not built in a day” applies here. Just because you open a business doesn’t mean that you’re going to immediately start making money. It takes time to let people know who you are, so stay focused on achieving your short-term goals.

7. Prepare to Make Sacrifices

The lead-up to starting a business is hard work, but after you open your doors, your work has just begun. In many cases, you have to put in more time than you would if you were working for someone else. In turn, you have to make sacrifices, such as spending less time with family and friends in order to be successful.

8. Provide Great Service

There are many successful businesses that forget that providing great customer service is important. If you provide better service for your customers, they’ll be more inclined to come to you the next time they need something instead of going to your competition.

9. Be Consistent

Consistency is key component to making money in business. You have to consistently keep doing the things necessary to be successful day in and day out. This will create long-term positive habits that will help you make money over the long term

More Information About Busting the 6 Myths of Entrepreneurship

In Real Leaders Don’t Follow, author Steve Tobak explains how real entrepreneurs can start, build, and run successful companies in highly competitive global markets. He provides unique insights from an insider perspective to help you make better-informed business and leadership decisions. In this edited excerpt, Tobak reveals the truth behind six popular myths to help you decide if entrepreneurship is the right road for you.

The entrepreneurial world has always been about challenging the status quo and questioning conventional wisdom in search of new and better ways of doing things. That’s what gave rise, in one way or another, to every great American company. After all, if you’re just going to follow the pack and do what everyone else is doing, you may as well just go out and get a job working for someone else.

Today, however, there’s a pervasive and nearly deafening mantra insisting that each and every one of you should quit your job and become an entrepreneur. The social collective says that every day you wait brings you closer to a life of poverty and regret.

But that’s simply not true. The idea that you can’t have a fulfilling career, be remarkably happy, and even get rich working for someone else is perhaps the most ludicrous, disingenuous, and irresponsible myth I’ve ever heard.

Don’t get me wrong: Entrepreneurship can be incredibly rewarding. Starting your own business may be the best decision you ever make—but it’s not for everyone. There’s a lot to consider before you take the plunge, starting with a few myths that are very much in need of exposure.

Myth 1: Entrepreneurship is the only way to get rich.
This is a complete fabrication. Granted, the richest people in America are mostly entrepreneurs or members of entrepreneurial families, and half of America’s millionaires are self-employed. But that doesn’t mean they were always self-employed. Many of them worked for companies before striking out on their own.

Then there’s the other half of America’s millionaires who are not self-employed. Hundreds of companies such as Microsoft, Intel, Google, Apple, and Facebook created hundreds of thousands of millionaires. The truth is, there’s no data or logic to support the premise that any given person has a better chance of making more money or getting rich by being self-employed. And the notion that it’s a simple either-or proposition is a fallacy. You can do both.

Myth 2: Follow your passion or a cause, not the money.
This is another myth born of oversimplification. Some people discover what they love to do, make a living at it, and find fulfillment. Others do what they’re good at and achieve financial success, and that frees them to pursue their passion. Still others pursue a passion or a cause with no market, go broke, and wind up having to do work they don’t enjoy to make ends meet.

While you’ll probably have a better chance of being happy and successful if you enjoy what you do for a living, there are lots of other factors that determine whether you can pull it off. Passion alone won’t pay the bills. Passion and money are both important. You shouldn’t choose one or the other.

Myth 3: Entrepreneurship is more fulfilling and will make you happier.
Just about everyone enjoys doing great work they can be proud of. And you can do that working for a big company, a small company, or your own company. Fulfillment has absolutely nothing to do with business ownership. If you want to manage, lead, or run a business, you’re better off learning the ropes in a good company before starting your own.

And the last time I checked, the question of what makes a person happy is pretty subjective. Most people are actually happier without the headaches, risks, burdens, hurdles, and uncertainty of having their own company. A lot of people worry too much about what the popular crowd says they should be doing. I think that’s what’s making everyone feel guilty and less happy … but it shouldn’t.

Myth 4: Entrepreneurs have more freedom, less stress, and no bosses.
If you run your own business, there’s a good chance you work 24/7 and wear all sorts of hats you’re not necessarily comfortable with. Work often becomes your life, and the financial burden can be enormous. There’s nothing wrong with that, but not everyone feels more freedom and control and less stress that way. Many have the opposite response.

Besides, everyone has bosses. Depending on the size and type of company, entrepreneurs may have to answer to a board of directors, customers, and investors, not to mention federal, state, and municipal regulators and bureaucrats. Trust me, they can all be pretty bossy.

Myth 5: Corporate America is evil.
Every corporation — even giants like Apple and Walmart — began as somebody’s startup or small business. That’s right, a ginormous corporate behemoth is really just a small business that did really well. So why is entrepreneurship cool, while corporate America is evil?

I remember one of the mantras of the Occupy Wall Street movement was, “Corporations are not people.” Oh, yes, they are. They are run and staffed entirely by people. Every action they take and decision they make is by and for people. Their investors and customers are all people or companies that are themselves made up entirely of people. There is no distinction. Period.

As for companies, organizations, and governments that behave badly, it’s their leadership that’s the problem—the people running the show. So if you want to blame someone, blame the people not “corporate America.”

Myth 6: Technology destroyed all the jobs.
Ever since the Industrial Revolution we’ve worried about machines taking our jobs and technology taking over our lives. While outsourcing, offshoring, and technology have without a doubt changed the job market — particularly with respect to manufacturing — the popular mantra that there are no jobs is simply untrue.

If technology is destroying jobs, how do we explain the most lucrative and fastest-growing industry on the planet, technology? If people can’t find a job, chances are they lack in-demand skills and education. If anything, I think our families and educational system have done a poor job of keeping up with the changing market.

There’s also little doubt that the two big post-millennial recessions had a major impact on a growing gap between productivity and employment and the decline of median household income in the U.S. But that time frame also coincides with the advent of Web 2.0 and the distressingly low labor participation rate among Millennials.

Contrary to popular belief, technology is not destroying jobs. That’s a convenient excuse for a sluggish economy and a government that’s anything but business-friendly. But the more we behave like drones in a digital hive, the poorer we become. And that’s entirely by individual choice.

Don’t buy into popular myths. What you do with your career is your own business. Do what’s right for you, when it’s right for you. Follow your own path. Everything will work out fine.

Best Business Tips Every Entrepreneur

The biggest problem founders and small business owners have is that they’re experts in their field and novices in what it really takes to effectively run a business. That’s what usually trips them up, sooner or later.

Don’t let that happen to you. Admit that you don’t know what you don’t know about business, starting with these 15 tips guaranteed to help keep you and your company out of hot water. Some are straightforward, others are counterintuitive, but they’re all true. And some day they’ll save your butt.

Always make sure there is and will be enough cash in the bank.
Period. The most common business-failure mode, hands down, is running out of cash. If you know you’ve got a cash flow or liquidity problem coming up, fix it now.

You can’t fire bad employees fast enough.
You just can’t. Just make sure you know they’re the problem, not you (see next tip).

The problem is probably you.
When I was a young manager, my company sent us all to a week of quality training where the most important concept we learned was that 90 percent of all problems are management problems. When things aren’t going well, the first place to look for answers is in the mirror.

Take care of your stars.
This goes for every company, big and small. The cost of losing a star employee is enormous, yet business leaders rarely take the time to ensure their top performers are properly motivated, challenged, and compensated.

Your people are not your kids, your personal assistants, or your shrink.
If you use and abuse them that way, you will come to regret it. Capiche?

Learn to say “yes” and “no” a lot.
The two most important words business owners and founders have at their disposal are “yes” and “no.” Learn to say them a lot. And that means being decisive. The most important reason to focus – to be clear on what your company does – is to be clear on all the things it doesn’t do.

Listen to your customers.
It boggles my mind how little most entrepreneurs value their customers when, not only are their feedback and input among the most critical information they will ever learn, but their repeat business is the easiest business to get.

Learn two words: meritocracy and nepotism.
The first is how you run an organization – by recognizing, rewarding, and compensating based solely on ability and achievement. The second is how you don’t run an organization – by playing favorites and being biased.
Know when and when not to be transparent.
Transparency is as detrimental at some times as it is beneficial at others. There are times to share openly and times to zip it. You need to know when and with whom to do one versus the other. It comes with experience.

Trust your gut.
This phrase is often repeated but rarely understood. It means that your own instincts are an extremely valuable decision-making tool. Too often we end up saying in retrospect and with regret, “Damn, I knew that was a bad idea.” But the key is to know how to access your instincts. Just sit, be quiet, and listen to yourself.

Protect and defend your intellectual property.
Most of you don’t know the difference between a copyright, trademark, trade secret, and patent. That’s not acceptable. If you don’t protect and defend your IP, you will lose your only competitive advantage.

Learn to read and write effective agreements.
You know the expression “good fences make good neighbors?” It’s the same in business. The more effective your agreements are, the better your business relationships will be.

Run your business like a business.
Far too many entrepreneurs run their business like an extension of their personal finances. Bad idea. Very bad idea. Construct the right business entity and keep it separate from your personal life.

Know your finances inside and out.
If you don’t know your revenues, expenses, capital requirements, profits (gross and net), debt, cash flow, and effective tax rate – among other things – you’re asking for trouble. Big trouble.

You don’t know what you don’t know.
Humility is a powerful trait for leaders, and that goes for new business owners, veteran CEOs of Fortune 500 companies, and everyone in between. More times than not, you will come to regret thinking you knew all the answers.

Behind every failed company are dysfunctional, delusional, or incompetent business leaders. The irony is, none of them had the slightest idea that was true at the time. Even sadder, most of them still don’t. Don’t end up like one of them.