Your business plan is going to be useful in a number of ways. Here are some of the reasons not to skip this valuable tool.
First and foremost, it will define and focus your objective using appropriate information and analysis.
You can use it as a selling tool in dealing with important relationships including your lenders, investors and banks.
You can use the plan to solicit opinions and advice from people, including those in your intended field of business, who will freely give you invaluable advice. Too often, entrepreneurs forge ahead ("My Way!") without the benefit of input from experts who could save them a great deal of wear and tear. "My Way" is a great song, but in practice can result in unnecessary hardships.
Your business plan can uncover omissions and/or weaknesses in your planning process.
What to Avoid in Your Business Plan Place some reasonable limits on long-term, future projections. (Long-term means over one year.) Better to stick with short-term objectives and modify the plan as your business progresses. Too often, long-range planning becomes meaningless because the reality of your business can be different from your initial concept.
Avoid optimism. In fact, to offset optimism, be extremely conservative in predicting capital requirements, timelines, sales and profits. Few business plans correctly anticipate how much money and time will be required.
Do not ignore spelling out what your strategies will be in the event of business adversities.
Use simple language in explaining the issues. Make it easy to read and understand.
Don't depend entirely on the uniqueness of your business or even a patented invention. Success comes to those who start businesses with great economics and not necessarily great inventions.
Showing posts with label basics of business. Show all posts
Showing posts with label basics of business. Show all posts
Thursday, December 13, 2007
What is a Business Plan?
The primary value of your business plan will be to create a written outline that evaluates all aspects of the economic viability of your business venture including a description and analysis of your business prospects.
Since this course is broken down into twelve of the most important aspects to consider in starting a business, your business plan can follow this same format. Included in this session and in each of the following sessions there is a sample business plan outline covering each subject. When you put these all together, you will have a starting model for your overall plan.
A business plan is an essential step for any prudent entrepreneur to take, regardless of the size of the business. This step is too often skipped, but we make it easy for you by providing a format to build your plan as you progress through this course.
Business plans can vary enormously. Libraries and bookstores have books devoted to business plan formats. But this course is a place to start. You can then go on from here to design one that would be ideal for your particular enterprise
Since this course is broken down into twelve of the most important aspects to consider in starting a business, your business plan can follow this same format. Included in this session and in each of the following sessions there is a sample business plan outline covering each subject. When you put these all together, you will have a starting model for your overall plan.
A business plan is an essential step for any prudent entrepreneur to take, regardless of the size of the business. This step is too often skipped, but we make it easy for you by providing a format to build your plan as you progress through this course.
Business plans can vary enormously. Libraries and bookstores have books devoted to business plan formats. But this course is a place to start. You can then go on from here to design one that would be ideal for your particular enterprise
Wednesday, November 28, 2007
basics V Required Activities
It is worth repeating again: The most common mistake and the most costly one is not picking the right business to begin with. This is the time for soul searching.
IF YOU HAVE NOT DECIDED ON A BUSINESS, DO THIS:
On the top of a blank sheet of paper, write an activity you like to do (make this the heading). Do a separate page for each activity or interest you have.
On those same sheets list as many businesses you can think of that are related to that activity.
On the same sheets list all the products or services you can think of that are related to that activity. Use your imagination and think of every possible product or service you could do.
Make a list of businesses that do better in bad times (one may be appropriate for you). Some examples might be pawnshops, auto repairs and fabric stores.
EXAMPLE
Let's assume you end up with three potential businesses: towing service, selling used cars and auto repairs. You can now make a comparative evaluation using the following check-list (or better still your own checklist) with a 1-10 scoring system:
Objective Towing
Service Selling
Used Cars Auto
Repair
--------------------------------------------------------------------------------
Can I do what I love to do? 6 3 10
Will I fill an expanding need? 8 5 10
Can I specialize? 7 8 10
Can I learn it and test it first? 9 8 9
This kind of analysis can help you gain objectivity in selecting your business.
How to Evaluate a Specific Business you have in mind.
Here are some questions to help clarify your thoughts:
Is it something I will enjoy doing?
My favorite activities are: __________________________
I like to serve people by: ________________________________
Will it serve an expanding need for which there is no close substitute?
Can I be so good at a specialized, targeted need that customers will think there is no close substitute?
Can I handle the capital requirements?
Can I learn the business by working for someone else first?
Could I operate as a hollow corporation, without a factory and with a minimum number of employees? ("Hollow corporation" refers to a business where everything is "outsourced," meaning you would subcontract manufacturing and packaging to outside sources. )
Is this a product or service that I can test first?
Should I consider a partner who has complementary skills to mine or who could help finance the business?
Once you have decided what business you want to start, do this:
Make a "for" and "against" list regarding characteristics of the business. On a blank piece of paper, draw a vertical line down the middle of the page and list on one side all the "for's" and on the other all the "against's." Sometimes this will help clarify your thinking.
Write down the names of at least five successful businesses in your chosen field. Analyze what these five businesses have in common and make a list of reasons that make them successful.
Talk to several people in your intended business. Don't be afraid of the negative aspects of your intended business. Instead, seek out the pitfalls: better now than after you open your doors. Take notes if possible. Write down the information as soon as you can.
Analyze the competition that are not doing well and write down the reasons.
Get Completely Qualified
Before you start, get completely qualified:
The best way to become qualified is to go to work for someone in the same business.
Attend all classes you can on the subjects you need, for example: accounting, computer and selling.
Read all the appropriate "how-to" books you can.
Don't be afraid to ask questions or seek help from the most successful people in your intended business
IF YOU HAVE NOT DECIDED ON A BUSINESS, DO THIS:
On the top of a blank sheet of paper, write an activity you like to do (make this the heading). Do a separate page for each activity or interest you have.
On those same sheets list as many businesses you can think of that are related to that activity.
On the same sheets list all the products or services you can think of that are related to that activity. Use your imagination and think of every possible product or service you could do.
Make a list of businesses that do better in bad times (one may be appropriate for you). Some examples might be pawnshops, auto repairs and fabric stores.
EXAMPLE
Let's assume you end up with three potential businesses: towing service, selling used cars and auto repairs. You can now make a comparative evaluation using the following check-list (or better still your own checklist) with a 1-10 scoring system:
Objective Towing
Service Selling
Used Cars Auto
Repair
--------------------------------------------------------------------------------
Can I do what I love to do? 6 3 10
Will I fill an expanding need? 8 5 10
Can I specialize? 7 8 10
Can I learn it and test it first? 9 8 9
This kind of analysis can help you gain objectivity in selecting your business.
How to Evaluate a Specific Business you have in mind.
Here are some questions to help clarify your thoughts:
Is it something I will enjoy doing?
My favorite activities are: __________________________
I like to serve people by: ________________________________
Will it serve an expanding need for which there is no close substitute?
Can I be so good at a specialized, targeted need that customers will think there is no close substitute?
Can I handle the capital requirements?
Can I learn the business by working for someone else first?
Could I operate as a hollow corporation, without a factory and with a minimum number of employees? ("Hollow corporation" refers to a business where everything is "outsourced," meaning you would subcontract manufacturing and packaging to outside sources. )
Is this a product or service that I can test first?
Should I consider a partner who has complementary skills to mine or who could help finance the business?
Once you have decided what business you want to start, do this:
Make a "for" and "against" list regarding characteristics of the business. On a blank piece of paper, draw a vertical line down the middle of the page and list on one side all the "for's" and on the other all the "against's." Sometimes this will help clarify your thinking.
Write down the names of at least five successful businesses in your chosen field. Analyze what these five businesses have in common and make a list of reasons that make them successful.
Talk to several people in your intended business. Don't be afraid of the negative aspects of your intended business. Instead, seek out the pitfalls: better now than after you open your doors. Take notes if possible. Write down the information as soon as you can.
Analyze the competition that are not doing well and write down the reasons.
Get Completely Qualified
Before you start, get completely qualified:
The best way to become qualified is to go to work for someone in the same business.
Attend all classes you can on the subjects you need, for example: accounting, computer and selling.
Read all the appropriate "how-to" books you can.
Don't be afraid to ask questions or seek help from the most successful people in your intended business
basics IV Things to Watch Out For
Impatience
Do not let overconfidence short-circuit you from analyzing your selection of businesses carefully. You must not fear of hearing the negative aspects; it is much better to be aware of them and face them early on.
Be realistic. Do not become lured by high rewards. They will come if you choose the right business and if you understand every aspect of the business before you open its doors.
Do not let overconfidence short-circuit you from analyzing your selection of businesses carefully. You must not fear of hearing the negative aspects; it is much better to be aware of them and face them early on.
Be realistic. Do not become lured by high rewards. They will come if you choose the right business and if you understand every aspect of the business before you open its doors.
basics IIISelection Strategy
Selecting the wrong business is the most frequent mistake that start-up entrepreneurs make. Here is a checklist to help you select a successful one:
Take your time and wait for the business that is just right for you. You will not be penalized for missing opportunities. The selection process takes a lot of planning and your experience and complete knowledge is vital for your success.
Don't tackle businesses that may be too challenging. It is better to identify a one-foot hurdle than try to jump a seven-footer.
Try to identify a business that has long-term economic potential. Follow Wayne Gretzky's advice, "Go to where the puck is going, not to where it is."
A big mistake can be an error of omission. This means you may fail to see an opportunity that is right in front of you.
Look for a business that will grow in today's and tomorrow's markets. Many small retail stores are no longer in business because huge stores such as Wal-Mart and Home Depot provide more choices to the customer and often at a cheaper price.
Follow the advice of Warren Buffett, Chairman of Berkshire-Hathaway Inc. and the most successful business picker in American history: Mr. Buffett looks for businesses that focus on a "consumer monopoly" with pricing power and long-term predictable growth prospects. Examples include: See's Candy's, Coca-Cola and Gillette Razors. Can you copycat this philosophy in a small way?
Businesses to avoid are "commodity" businesses where you must compete entirely on price and in which you must have the lowest cost to survive. As Mr. Buffett has said, "In a commodity type business you're only as smart as your dumbest competitor."
Most service businesses have pricing power.
Should you bet on a business you don't know when you can bet on a business you do know?
If you intend to manufacture a product, consider the pros and cons of contracting out production to a low-cost supplier. In other words, operate a "hollow corporation." A "hollow corporation" is a company that subcontracts manufacturing and packaging.
Take your time and wait for the business that is just right for you. You will not be penalized for missing opportunities. The selection process takes a lot of planning and your experience and complete knowledge is vital for your success.
Don't tackle businesses that may be too challenging. It is better to identify a one-foot hurdle than try to jump a seven-footer.
Try to identify a business that has long-term economic potential. Follow Wayne Gretzky's advice, "Go to where the puck is going, not to where it is."
A big mistake can be an error of omission. This means you may fail to see an opportunity that is right in front of you.
Look for a business that will grow in today's and tomorrow's markets. Many small retail stores are no longer in business because huge stores such as Wal-Mart and Home Depot provide more choices to the customer and often at a cheaper price.
Follow the advice of Warren Buffett, Chairman of Berkshire-Hathaway Inc. and the most successful business picker in American history: Mr. Buffett looks for businesses that focus on a "consumer monopoly" with pricing power and long-term predictable growth prospects. Examples include: See's Candy's, Coca-Cola and Gillette Razors. Can you copycat this philosophy in a small way?
Businesses to avoid are "commodity" businesses where you must compete entirely on price and in which you must have the lowest cost to survive. As Mr. Buffett has said, "In a commodity type business you're only as smart as your dumbest competitor."
Most service businesses have pricing power.
Should you bet on a business you don't know when you can bet on a business you do know?
If you intend to manufacture a product, consider the pros and cons of contracting out production to a low-cost supplier. In other words, operate a "hollow corporation." A "hollow corporation" is a company that subcontracts manufacturing and packaging.
basics IIStep-by-Step Approach
Decide if you really want to be in business:
You will be putting some (not all, hopefully) of your net worth at risk. You will run the risk of becoming eccentric, meaning creating a life that is out of balance, with working hours taking away from other family or pleasurable activities. There may be levels of stress you have not experienced as an employee.
Decide what business and where:
Once you have decided you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business is best for you and where to locate that business. Selection strategy is covered later on in this Session.
Decide whether to start full-time or moonlight:
There are some interesting advantages and some pitfalls in starting as a moonlight business. (That is, a business you start in your off hours while still working at your current job.) More often than not, the advantages of starting as a moonlighter outweigh the risks:
You avoid burning your bridges of earnings, including retirement, health and fringe benefits and vacations.
Your full-time job won't suffer if you maintain certain conflict of interest disciplines, including compartmentalizing your job and business into completely separate worlds.
You can avoid conflict of interest with your job by choosing a business that is appropriate for moonlighting, such as: single products, real estate, specialized food, e-commerce, direct marketing or family-run operations.
There are great advantages for operating a family business. The family can run the business while you are at work. You have a built-in organizational structure. You can teach your kids the benefits of being in business.
But there are also some pitfalls to consider in starting a moonlight business:
There is a temptation to spend time at your job working on your moonlight business. That is unfair to your employer and should not be done under any circumstances. (You may need a family member or some trusted person to cover emergencies when you are at your job.)
Another problem may be competing with your employer, which, again, is not right. Think of how you would feel or handle this employee if you were the boss.
Any kind of conflict with your regular work can jeopardize your job and your moonlight business.
Overwork and mental and physical exhaustion can also become a very real problem for moonlight entrepreneurs.
You will be putting some (not all, hopefully) of your net worth at risk. You will run the risk of becoming eccentric, meaning creating a life that is out of balance, with working hours taking away from other family or pleasurable activities. There may be levels of stress you have not experienced as an employee.
Decide what business and where:
Once you have decided you have the characteristics of a successful entrepreneur and that you definitely want to be in business, then you must decide which business is best for you and where to locate that business. Selection strategy is covered later on in this Session.
Decide whether to start full-time or moonlight:
There are some interesting advantages and some pitfalls in starting as a moonlight business. (That is, a business you start in your off hours while still working at your current job.) More often than not, the advantages of starting as a moonlighter outweigh the risks:
You avoid burning your bridges of earnings, including retirement, health and fringe benefits and vacations.
Your full-time job won't suffer if you maintain certain conflict of interest disciplines, including compartmentalizing your job and business into completely separate worlds.
You can avoid conflict of interest with your job by choosing a business that is appropriate for moonlighting, such as: single products, real estate, specialized food, e-commerce, direct marketing or family-run operations.
There are great advantages for operating a family business. The family can run the business while you are at work. You have a built-in organizational structure. You can teach your kids the benefits of being in business.
But there are also some pitfalls to consider in starting a moonlight business:
There is a temptation to spend time at your job working on your moonlight business. That is unfair to your employer and should not be done under any circumstances. (You may need a family member or some trusted person to cover emergencies when you are at your job.)
Another problem may be competing with your employer, which, again, is not right. Think of how you would feel or handle this employee if you were the boss.
Any kind of conflict with your regular work can jeopardize your job and your moonlight business.
Overwork and mental and physical exhaustion can also become a very real problem for moonlight entrepreneurs.
Basics I Characteristics of a Successful Entrepreneur
Guts: Guts means you must have an entrepreneurial instinct, which is an overwhelming desire to have your own business. You must have the guts and dedication to be completely devoted to your goal. Incidentally, devotion to your goal is much more likely if you have a love for your intended business. Life is too short to start a business that doesn't give you satisfaction and joy. And, through good times and bad times, you will stick with something you love.
Brains: While appropriate educational credentials are important, entrepreneurial "brains" means more than scholastic achievements. To become a successful entrepreneur, you must have a working knowledge about the business you plan to start before you start it. Common sense combined with appropriate experience is the necessary brainpower. Prudence, follow through and attention to detail are very important.
Capital: You will need seed money of your own plus sufficient cash to maintain a positive cash flow for at least the first year. In a future session you will learn how to forecast future cash requirements through cash flow control. Many businesses can be started on a very small scale with a small investment. Then, as the business grows and you gain experience, cash flow from your business can be used for growth. In some cases you don't need starting capital to hire other people because you might start by doing everything yourself. The "do it yourself" start is a good way to learn everything about your business and also makes you better qualified to delegate work to others later on. You can control your risk by placing a limit on how much you invest in your business.
Brains: While appropriate educational credentials are important, entrepreneurial "brains" means more than scholastic achievements. To become a successful entrepreneur, you must have a working knowledge about the business you plan to start before you start it. Common sense combined with appropriate experience is the necessary brainpower. Prudence, follow through and attention to detail are very important.
Capital: You will need seed money of your own plus sufficient cash to maintain a positive cash flow for at least the first year. In a future session you will learn how to forecast future cash requirements through cash flow control. Many businesses can be started on a very small scale with a small investment. Then, as the business grows and you gain experience, cash flow from your business can be used for growth. In some cases you don't need starting capital to hire other people because you might start by doing everything yourself. The "do it yourself" start is a good way to learn everything about your business and also makes you better qualified to delegate work to others later on. You can control your risk by placing a limit on how much you invest in your business.
Saturday, November 17, 2007
Tips For Your Business
Advertising plays a vital role in the success of
a business, product or service. Various forms of
advertisement have different impacts on different
kinds of niche and market. Choosing the best and
suited mode of advertisement for your product, or
service is a smart move.
Although advertising, like pay per clicks, can be
effective in promoting your website, it can
quickly become expensive. By focusing on creating
quality content for website, and then promoting
that content, you can continue to drive traffic
to your website for years to come.
Writing an Ebook or creating Articles can be
done easily. These lessen expenses that may be
incurred. There are five strategies that you can
implement in your business that will not only
create a content strategy for you but will also
create a very effective marketing strategy. These
strategies will only require a few hours of your
time each week. It also helps generate traffic to
your site.
Articles
Articles do not only brand you as an expert but
are also a way to create quality content for your
site, and search engines love content.
Blogs/RSS
Blogging is another way to create content for
your website, and by using RSS, you can easily
distribute your content.
Press Releases
Press releases are news about your business.
Press releases are also an excellent way to get
high rankings for your site because you can
create content rich press releases and submit
them to press release directories.
Search Engine Optimization
Optimizing your site for the search engines means
creating keyword rich content, exchanging links
with other sites, submitting your site to
directories, that creates back links pointing to
your site.
Free Ebooks and Reports
By writing and giving away free Ebooks and
reports, you give visitors an incentive to visit
your website.
These five strategies have been used by Internet
marketers to achieved high returns for their
products or services presented. Moreover, another
way of promoting your business or site is by
using Pay per Click (PPC), though it may require
expensive transactions.
What is PPC anyway? Pay per click search engines
also known as Pay per Ranking, Pay per Placement
or Pay per Position provides web site owners the
opportunity to buy their way to better positions
on search results pages.
Pay per click
advertising on search engines allows you to
choose keywords you would like your site to
appear for when a search is performed.
A very important point to keep in mind with Pay
per Click (PPC) is you must test, test, and test
some more. Don't start off with a major
investment. Start with the minimum and see how
the search engine performs in terms of the
traffic it delivers and how well that traffic
converts into paying customers.
The Pay per Click Guide provides an overview of
several pay per click programs on offer. Each
program is reviewed using the following four
criteria:
o Price
o Traffic
o Interface
o Extras
One of the main appeals of PPC is the level of
targeting available to advertisers. PPC evolved
as a better option to CPM (cost per thousand
impressions) advertising that was the original
metric used to sell advertising on websites.
From the user point of view PPC advertising is
not easy to come to grips with initially but will
reward those marketers that spend the time
learning to use the system and optimize their
campaigns.
a business, product or service. Various forms of
advertisement have different impacts on different
kinds of niche and market. Choosing the best and
suited mode of advertisement for your product, or
service is a smart move.
Although advertising, like pay per clicks, can be
effective in promoting your website, it can
quickly become expensive. By focusing on creating
quality content for website, and then promoting
that content, you can continue to drive traffic
to your website for years to come.
Writing an Ebook or creating Articles can be
done easily. These lessen expenses that may be
incurred. There are five strategies that you can
implement in your business that will not only
create a content strategy for you but will also
create a very effective marketing strategy. These
strategies will only require a few hours of your
time each week. It also helps generate traffic to
your site.
Articles
Articles do not only brand you as an expert but
are also a way to create quality content for your
site, and search engines love content.
Blogs/RSS
Blogging is another way to create content for
your website, and by using RSS, you can easily
distribute your content.
Press Releases
Press releases are news about your business.
Press releases are also an excellent way to get
high rankings for your site because you can
create content rich press releases and submit
them to press release directories.
Search Engine Optimization
Optimizing your site for the search engines means
creating keyword rich content, exchanging links
with other sites, submitting your site to
directories, that creates back links pointing to
your site.
Free Ebooks and Reports
By writing and giving away free Ebooks and
reports, you give visitors an incentive to visit
your website.
These five strategies have been used by Internet
marketers to achieved high returns for their
products or services presented. Moreover, another
way of promoting your business or site is by
using Pay per Click (PPC), though it may require
expensive transactions.
What is PPC anyway? Pay per click search engines
also known as Pay per Ranking, Pay per Placement
or Pay per Position provides web site owners the
opportunity to buy their way to better positions
on search results pages.
Pay per click
advertising on search engines allows you to
choose keywords you would like your site to
appear for when a search is performed.
A very important point to keep in mind with Pay
per Click (PPC) is you must test, test, and test
some more. Don't start off with a major
investment. Start with the minimum and see how
the search engine performs in terms of the
traffic it delivers and how well that traffic
converts into paying customers.
The Pay per Click Guide provides an overview of
several pay per click programs on offer. Each
program is reviewed using the following four
criteria:
o Price
o Traffic
o Interface
o Extras
One of the main appeals of PPC is the level of
targeting available to advertisers. PPC evolved
as a better option to CPM (cost per thousand
impressions) advertising that was the original
metric used to sell advertising on websites.
From the user point of view PPC advertising is
not easy to come to grips with initially but will
reward those marketers that spend the time
learning to use the system and optimize their
campaigns.
Friday, November 16, 2007
5 common denominators for business success
So many wannabe networkers have the drive and desire to build a business – but have no idea how to accomplish it – they set themselves up for failure right from the start. Imagine inquiring about a business – meeting a self described leader – being sold or convinced that you have found the absolute business for you and then being left on your own to figure out how to “get it done”. Realizing that you have no real:
Leadership
Guidance
Systemization or,
Duplication
These “leaders” will point you in the direction of purchasing contacts, websites that will show you how to generate “traffic” to your business, scripts on what to say and answers to frequently asked questions. Unless you start to generate income for them right away – it’ll become see ya later. All of the personal development gurus tell people what to do to make things right but very few if any tell them how or provide them with the tools to accomplish it.
Our objective is to turn the success ratio numbers of network marketing upside down. The principles of personal development will allow every networker to apply themselves in a positive fashion by understanding how to control their thoughts through their feelings which will ensure they take positive action and ultimately attract positive results.
Here are 5 common denominators for success in the networking industry:
Income producing activities need to be done daily.
Brainstorm with the leaders in your organization daily.
Visualize and meditate on your goals several times a day.
Become a student of Personal Development and practice it daily.
Carry an expectation of leadership in yourself and in others.
By exercising these simple tasks consistently and with persistence you will be successful in your venture, as long as you are doing it for the right reasons. You see in any business we are only there for one reason – to solve other peoples problems. The bi-product of our efforts is the income we generate.
Leadership
Guidance
Systemization or,
Duplication
These “leaders” will point you in the direction of purchasing contacts, websites that will show you how to generate “traffic” to your business, scripts on what to say and answers to frequently asked questions. Unless you start to generate income for them right away – it’ll become see ya later. All of the personal development gurus tell people what to do to make things right but very few if any tell them how or provide them with the tools to accomplish it.
Our objective is to turn the success ratio numbers of network marketing upside down. The principles of personal development will allow every networker to apply themselves in a positive fashion by understanding how to control their thoughts through their feelings which will ensure they take positive action and ultimately attract positive results.
Here are 5 common denominators for success in the networking industry:
Income producing activities need to be done daily.
Brainstorm with the leaders in your organization daily.
Visualize and meditate on your goals several times a day.
Become a student of Personal Development and practice it daily.
Carry an expectation of leadership in yourself and in others.
By exercising these simple tasks consistently and with persistence you will be successful in your venture, as long as you are doing it for the right reasons. You see in any business we are only there for one reason – to solve other peoples problems. The bi-product of our efforts is the income we generate.
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