Best Way to Start Your Business
Your decision to start a new business has been made. Now what do you do? Sometimes it's a bit overwhelming to look at where to really start the process. Do you look for the location first? What about an estimate on how much it will cost? Should I secure the product agreements before I find the markets? Should I pre-advertise or just make an announcement? Who should I hire first, if anyone at all? There are hundreds of similar questions which confront the new business start-up.
After 30+ years of opening new businesses and analyzing existing businesses, I've put together a practical guide for the beginning steps to starting a small business. Whether you, as an new entrepreneur, buy an existing business, or buy a franchise or perhaps start a home based business, the business planning resources are the same. What is different are the business strategies, upfront costs, business opportunities and step by step instruction available to start a small business venture.
So lets get right to it. Everybody tells you to start the steps with a business plan. Well that's all very nice, and you will need it for sure, but let's get organized first.
*Step 1. Get some file folders and label them as follows:
- Product - Anything having to do with what your going to sell or service.
- Finance - Where's the seed money coming from, cost estimates, where's the money going.
- Receipts - Any money you spent thus far.
- Organization - Exactly what form is this new enterprise going to take.
- Ads & Marketing - Anything new ideas with generating revenue for the company.
- Government - Permits, license, new business tax info etc.
- Strategy - What is this new company all about and how are you going to do it.
- Locations - Are you leasing space, Realtor information - or DNS if Internet based.
- People - Who all is involved and what is their participation, partners, joint venture.
Use these folders to file every bit of information you've collected on starting your new business. If you need other categories, then make them up as needed. But try to think in terms of less files and not more. It's easier to find and your mind will quickly adapt to the organization.
Step 2.
Once you've assembled the information the next step in starting a new business is due diligence - a legal term used to determine if everything that was offered is in fact, real. But the same practical approach taken when buying a business can be used when starting a new business. Use the information you've already gathered to lay out the realistic size of your market and the revenue you expect to receive on a monthly basis. If your income is sufficient to cover whatever costs you expect from running the business operation then you can continue to the next step. If not, then you need to expand your market, change your product, reduce your costs or start over. Let's get real here. Be Smart.
Step 3.
Now you can put together a complete business plan which will include the following:
a. Statement of Purpose (some call this an Executive Summary)
b. Market Analysis - Expand this further using the information in step 2 and really get into the details of how you plan to approach the market for you new product or new service. You should also really get into primary and secondary competitive markets.
c. Business Description - What exactly are you trying to do and how do you plan to make money from your new start-up business? Layout a few paragraphs about the overall concept of your new venture.
d. Organizational Setup - what type of business are you going to do. Will it be a sole proprietorship, a corporation, a partnership? Who is involved, what are they going to contribute, and how much will they own? What will the management structure be like? Who answers to who? You need to get this stuff addressed in the beginning or else it will be a complicated factor later.
e. Sales and Marketing. The details here cover all areas, even those that are not practical the first year or two. You need a variety of methods to execute and sustain your sales. Make sure you know everything your competition sells and how they sell it as well.
f. Products. Layout all of the products or services that you are going to sell for your new business.The details (actual products names and sizes etc.) can be put into an addendum at the back of your new business plan. But the overall package of what your are selling should be justified.
g. Capital requirements - How much money is it going to take to start and operate your new venture less the amount of money you currently have available to put into the business. How do you plan on getting the rest of the money - if you need it? Don't forget to include your living expenses for at least six months.
h. Financials. This is where all of the accounting and cost analysis for the new business is located. A break-even analysis, cost analysis and projections for the first 3 years should give you a performance standard to judge whether or not you are meeting your goals.
i. Addendum: This covers everything else that may be important for your business operation. Include lists, phone numbers, mentors, useful web addresses, accounting details etc.
Final Step
Evaluate all of the information you've assembled. If the business venture looks viable, then give it to someone with experience in business or someone you trust, or perhaps your banker, accountant or attorney, and get a second and third opinion. Consider their suggestions and correct any errors. Use their expertise right from the beginning.
This is the just the beginning steps to starting a new business. There is a lot more to do, but once you get through this, I'll have a lot more for you to do.
Now, should you decide to buy an existing business from someone, then you still need to go through all the beginning steps. The information will come a lot easier since there should be financials, trade secrets etc. readily available.
If on the other hand you decide to purchase a new franchise, the franchiser will provide almost all of the information in general terms. You will still need to get specific about your particular market.
The easiest and last option is to start business online. The costs are so inexpensive and the market so large, that the four step process will be shortened by about 70%. You still need to do all the steps, but because of the costs involved, the time frame is much quicker.
Refer to your business plan often to make sure that you stay on course. If done correctly, there is no reason for you not to be successful in your business operation.
* If you are starting an Internet business than create folders both on your computer under "name of the business". The same goes for your email program. Any receipts, for instance, from purchases online can and should be kept together rather than scattered all over your hard drive. If you're doing different projects, keep each in the same XL file, label and add "sheets" as needed.
The author writes articles on various subjects that interests him. Information on business planning or starting a new business venture can be found at Pro Business Help. The subject matter in other articles is varied but almost always presented in a useful manner.
Friday, June 6, 2008
ENTERPRENEURSHIP
Why Own Your Own Business?
Many people work in jobs that pay you just enough so you come back on Monday morning. That means you're working in someone else's business, helping them grow revenues and adding to their net worth rather than your own.
By contrast, owning your own company is the most direct way to control your economic future. Whether you are a business entrepreneur or a real estate investor, working for yourself and focusing on financial goals that are personal to you and your family gives you several advantages. This article is a short course on doing just that.
Is Owning a Business in Your Future?
Look at your financial situation. Are you satisfied with it? Does it provide you the financial freedom to control your own time and financial choices? What are your talents and strengths? If you have the desire to be more in control of your financial future, then you may very well possess the necessary attributes to have your own business.
Many small business owners start part-time. That is, they keep their 'day jobs' and begin developing their own business on the side, on their own time. That might be having an eBay® business - as do some 1.5 million others. Or it might be investing in real estate. It might be providing a local service to your neighbors and community. Either way, you have lots of resources - from both the federal and state departments of commerce, to the national and local chamber of commerce, and the Small Business Administration.
What's the SCORE?
Your community probably has access to a local chapter of SCORE - the Service Corps of Retired Executives. This is a volunteer-based service initiative of the Small Business Administration. Retired business executives who still want to contribute voluntarily join together to serve as mentors and consultants to new business owners starting out in their local community. They hold monthly seminars for new business, review and make suggestions for business plans, and often help open doors by using contacts and resources you may not know about.
Where Do You Start?
The start-up phase of any business can at first seem daunting, yet exciting. Choose a name for your business and check the website of your secretary of state to see if that name is available. Get a business license in your city or county in that name, and follow any local requirements such as filing a Fictitious Business Name statement in the local legal newspaper.
You're going to need a business plan - one that helps you get focused and get financing. Though many business minimize the importance of a dynamic business plan, those willing to devote the time and attention it takes often see longer term success. Many of my clients over the years have come to see the wisdom of updating their business plans and financing arrangements so as to make their business as attractive as possible to potential business lenders.
What's the Best Form of Business Entity?
The vast majority of business owners operate as a 'Sole Proprietor' - meaning that they do not choose to form either a corporation or LLC but rather operate solely in their own name. That is certainly the least expensive way to start a business. It requires little in the way of capital. It has only the most minimal of legal requirements. Yet though it is inexpensive, it is also potentially the most financially unstable due to the fact that if you and your business are legally one-and-the-same, then any liability arising from the business can result in complete financial devastation to you - since all of your personal assets are 100% at risk and can potentially be taken away from you.
It makes much more sense to use a company to start with. Having a company of your own provides a separate identity - that is, you are not the company and the company is not you. Plus, a company gives you a better way to control your taxes. There are approximately 4 times the number of tax deductions available to a company than are available to a sole proprietor. In addition, you can do so much more for yourself financially in retirement planning through a company than you can on your own as a sole proprietor.
There is clearly a national trend today towards the formation and registration of more Limited Liability Companies ('LLC') than corporations. This is primarily due to the fact that corporations require far more formalities and have far less flexibility than do LLCs. See my article: 'The S Corporation is a Dinosaur'.
Using a corporation is still a viable option for many. It is perpetual in nature and can be an effective and tax-efficient way to do business for many. Corporations are used by many business owners and if you plan to take your company public for shares to be sold on a stock exchange, you'll want to use a corporation rather than an LLC.
However, there is no denying that the number of LLCs formed every year now exceeds the number of corporations being formed on a national basis. With an LLC, the Operating Agreement drafted by the attorney will be a key element to the management of your business. It will set forth who is responsible for management, the sharing of profits and losses, the contributions of additional capital to the business, the nature of the business investments and holdings, and much more.
You cannot overlook the wisdom of having a solid business plan, however. It should set forth a clear mission statement and set of goals, as well as a description of how you and your business will achieve those goals. It should set forth a financial picture, including what you need in the way of financing so that your loan application to a small business lending source will have credibility and can be funded. It would make sense to attend live-training events that show you step-by-step exactly how to prepare a dynamic business plan and how to build a small business loan application that a lender will find credible enough to fund.
Bottom Line: You and not your current employer is responsible for your financial future. Your employer sees you as a means to an end - their own, and not you. The lifestyle you enjoy, the money to pay your bills and make purchases, and the way you spend your work time and time away from work can be within your control but you must act. The tax laws favor small business owners, and you should be one of them.
ABOUT THE AUTHOR: Michael Potter, Esq. is an attorney, business coach and popular speaker who's a familiar face at business and investor workshops around the country. Also known as the One-Minute Tax Coach, his multi-media presentations on Tax-Advantaged Planning, Accelerated Retirement Planning, Asset Protection, Business and Estate Planning, Identity Theft and Multi-Generation Legacy Planning are an inter-active mix of humor, imagination, inspiration and practical knowledge that every business owner and investor needs. Michael is on a mission to help 100,000 entrepreneurs achieve their dreams while protecting themselves and their loved ones. For more information, see http://www.wealthadvisors.net
Many people work in jobs that pay you just enough so you come back on Monday morning. That means you're working in someone else's business, helping them grow revenues and adding to their net worth rather than your own.
By contrast, owning your own company is the most direct way to control your economic future. Whether you are a business entrepreneur or a real estate investor, working for yourself and focusing on financial goals that are personal to you and your family gives you several advantages. This article is a short course on doing just that.
Is Owning a Business in Your Future?
Look at your financial situation. Are you satisfied with it? Does it provide you the financial freedom to control your own time and financial choices? What are your talents and strengths? If you have the desire to be more in control of your financial future, then you may very well possess the necessary attributes to have your own business.
Many small business owners start part-time. That is, they keep their 'day jobs' and begin developing their own business on the side, on their own time. That might be having an eBay® business - as do some 1.5 million others. Or it might be investing in real estate. It might be providing a local service to your neighbors and community. Either way, you have lots of resources - from both the federal and state departments of commerce, to the national and local chamber of commerce, and the Small Business Administration.
What's the SCORE?
Your community probably has access to a local chapter of SCORE - the Service Corps of Retired Executives. This is a volunteer-based service initiative of the Small Business Administration. Retired business executives who still want to contribute voluntarily join together to serve as mentors and consultants to new business owners starting out in their local community. They hold monthly seminars for new business, review and make suggestions for business plans, and often help open doors by using contacts and resources you may not know about.
Where Do You Start?
The start-up phase of any business can at first seem daunting, yet exciting. Choose a name for your business and check the website of your secretary of state to see if that name is available. Get a business license in your city or county in that name, and follow any local requirements such as filing a Fictitious Business Name statement in the local legal newspaper.
You're going to need a business plan - one that helps you get focused and get financing. Though many business minimize the importance of a dynamic business plan, those willing to devote the time and attention it takes often see longer term success. Many of my clients over the years have come to see the wisdom of updating their business plans and financing arrangements so as to make their business as attractive as possible to potential business lenders.
What's the Best Form of Business Entity?
The vast majority of business owners operate as a 'Sole Proprietor' - meaning that they do not choose to form either a corporation or LLC but rather operate solely in their own name. That is certainly the least expensive way to start a business. It requires little in the way of capital. It has only the most minimal of legal requirements. Yet though it is inexpensive, it is also potentially the most financially unstable due to the fact that if you and your business are legally one-and-the-same, then any liability arising from the business can result in complete financial devastation to you - since all of your personal assets are 100% at risk and can potentially be taken away from you.
It makes much more sense to use a company to start with. Having a company of your own provides a separate identity - that is, you are not the company and the company is not you. Plus, a company gives you a better way to control your taxes. There are approximately 4 times the number of tax deductions available to a company than are available to a sole proprietor. In addition, you can do so much more for yourself financially in retirement planning through a company than you can on your own as a sole proprietor.
There is clearly a national trend today towards the formation and registration of more Limited Liability Companies ('LLC') than corporations. This is primarily due to the fact that corporations require far more formalities and have far less flexibility than do LLCs. See my article: 'The S Corporation is a Dinosaur'.
Using a corporation is still a viable option for many. It is perpetual in nature and can be an effective and tax-efficient way to do business for many. Corporations are used by many business owners and if you plan to take your company public for shares to be sold on a stock exchange, you'll want to use a corporation rather than an LLC.
However, there is no denying that the number of LLCs formed every year now exceeds the number of corporations being formed on a national basis. With an LLC, the Operating Agreement drafted by the attorney will be a key element to the management of your business. It will set forth who is responsible for management, the sharing of profits and losses, the contributions of additional capital to the business, the nature of the business investments and holdings, and much more.
You cannot overlook the wisdom of having a solid business plan, however. It should set forth a clear mission statement and set of goals, as well as a description of how you and your business will achieve those goals. It should set forth a financial picture, including what you need in the way of financing so that your loan application to a small business lending source will have credibility and can be funded. It would make sense to attend live-training events that show you step-by-step exactly how to prepare a dynamic business plan and how to build a small business loan application that a lender will find credible enough to fund.
Bottom Line: You and not your current employer is responsible for your financial future. Your employer sees you as a means to an end - their own, and not you. The lifestyle you enjoy, the money to pay your bills and make purchases, and the way you spend your work time and time away from work can be within your control but you must act. The tax laws favor small business owners, and you should be one of them.
ABOUT THE AUTHOR: Michael Potter, Esq. is an attorney, business coach and popular speaker who's a familiar face at business and investor workshops around the country. Also known as the One-Minute Tax Coach, his multi-media presentations on Tax-Advantaged Planning, Accelerated Retirement Planning, Asset Protection, Business and Estate Planning, Identity Theft and Multi-Generation Legacy Planning are an inter-active mix of humor, imagination, inspiration and practical knowledge that every business owner and investor needs. Michael is on a mission to help 100,000 entrepreneurs achieve their dreams while protecting themselves and their loved ones. For more information, see http://www.wealthadvisors.net
Tuesday, May 13, 2008
Destroying De-motivators and Fostering Ambition
Brian Tracy University: Destroying De-motivators and Fostering Ambition
May 06, 2008
By Brian Tracy
Other than a poor relationship with his manager, nothing derails a salesman's drive as effectively as the various forms of de-motivation a company can inadvertently create. These are the institutional problems that undermine a salesperson's motivation and sabotage their sales activities. As such, they must be nipped in the bud immediately.
1. Lack of direction. This occurs when the salesperson is not completely clear about what is expected of him day in and day out, what his specific sales goals and quotas are, how he will be measured and in what time period. If clarity is 95% of success, then lack of clarity is 95% of failure.
2. Lack of feedback. As Ken Blanchard says, "Feedback is the breakfast of champions." Whether weekly, daily or even hourly, the best people need to know exactly how they are doing relative to their goals and quotas to assure maximum performance.
The simplest way to give feedback is to pick up the phone or personally congratulate a salesperson who has just made a sale. You can also hold weekly sales meetings to tell everybody what is going on and how well each of the reps are doing. Summarize sales results from the highest to the lowest, then distribute them each week either by e-mail or in written reports.
3. Lack of recognition. When a person works hard, overcomes obstacles and finally achieves (or exceeds) their sales quota, yet nothing is said about it, the individual can easily become discouraged. Recognition can take many forms. Praise the top performer in front of the others. Take the salesperson who has just made a sale to a senior executive and "brag on him" to the executive.
4. Lack of rewards. This occurs when a person works extremely hard to achieve a sales result … and then receives no special reward or benefit from it. This is easily fixable, and often inexpensive to do. One company I worked with would treat the top salesperson of the month to lunch with a senior person. The best salespeople competed vigorously with each other for this privilege.
5. Role overlap. Sometimes companies get into trouble by assigning more than one salesperson to the same account or customer. Role overlap leads to confusion, inefficiency and often resentment. The cure is to make sure that each job is assigned to only one person who is completely responsible for its success or completion.
6. Role underlap. This occurs when an essential part of the job—such as following up on delivery or customer service—is not assigned to anyone in particular, but everyone is expected to be concerned about it. Whenever role underlap takes place, parts of the job will simply not be done, accompanied by the expected finger-pointing. The solution is to make sure every part of every job is assigned to a particular person who can then be held responsible.
7. Role contradiction. Last but not least, salespeople are often asked to spend the entire day prospecting and developing new accounts. They're then required to fill out detailed customer and sales reports that require them to spend half of the day in the office. But they can't do both.
The best way to solve this is to have a single person focus on the most important part of the job that he can do, then assign the rest to a separate person. As it grows, every successful company creates the position of sales assistant or sales secretary for this very reason.
Brian Tracy is one of the top sales and management trainers in the world. He is president of Brian Tracy University online (www.briantracyu.com), which offers certificates in superior sales management and high performance selling.
May 06, 2008
By Brian Tracy
Other than a poor relationship with his manager, nothing derails a salesman's drive as effectively as the various forms of de-motivation a company can inadvertently create. These are the institutional problems that undermine a salesperson's motivation and sabotage their sales activities. As such, they must be nipped in the bud immediately.
1. Lack of direction. This occurs when the salesperson is not completely clear about what is expected of him day in and day out, what his specific sales goals and quotas are, how he will be measured and in what time period. If clarity is 95% of success, then lack of clarity is 95% of failure.
2. Lack of feedback. As Ken Blanchard says, "Feedback is the breakfast of champions." Whether weekly, daily or even hourly, the best people need to know exactly how they are doing relative to their goals and quotas to assure maximum performance.
The simplest way to give feedback is to pick up the phone or personally congratulate a salesperson who has just made a sale. You can also hold weekly sales meetings to tell everybody what is going on and how well each of the reps are doing. Summarize sales results from the highest to the lowest, then distribute them each week either by e-mail or in written reports.
3. Lack of recognition. When a person works hard, overcomes obstacles and finally achieves (or exceeds) their sales quota, yet nothing is said about it, the individual can easily become discouraged. Recognition can take many forms. Praise the top performer in front of the others. Take the salesperson who has just made a sale to a senior executive and "brag on him" to the executive.
4. Lack of rewards. This occurs when a person works extremely hard to achieve a sales result … and then receives no special reward or benefit from it. This is easily fixable, and often inexpensive to do. One company I worked with would treat the top salesperson of the month to lunch with a senior person. The best salespeople competed vigorously with each other for this privilege.
5. Role overlap. Sometimes companies get into trouble by assigning more than one salesperson to the same account or customer. Role overlap leads to confusion, inefficiency and often resentment. The cure is to make sure that each job is assigned to only one person who is completely responsible for its success or completion.
6. Role underlap. This occurs when an essential part of the job—such as following up on delivery or customer service—is not assigned to anyone in particular, but everyone is expected to be concerned about it. Whenever role underlap takes place, parts of the job will simply not be done, accompanied by the expected finger-pointing. The solution is to make sure every part of every job is assigned to a particular person who can then be held responsible.
7. Role contradiction. Last but not least, salespeople are often asked to spend the entire day prospecting and developing new accounts. They're then required to fill out detailed customer and sales reports that require them to spend half of the day in the office. But they can't do both.
The best way to solve this is to have a single person focus on the most important part of the job that he can do, then assign the rest to a separate person. As it grows, every successful company creates the position of sales assistant or sales secretary for this very reason.
Brian Tracy is one of the top sales and management trainers in the world. He is president of Brian Tracy University online (www.briantracyu.com), which offers certificates in superior sales management and high performance selling.
Friday, May 2, 2008
Time Mangement
time-mangement is coming up.You m ust always stay connected!It is going to be powerful.
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