Bankaholic: Entrepreneurs are the brave souls who make our economy go, or at least they were when our economy was actually going anywhere. Especially in this currently questionable financial climate, starting your own business is undeniably a dicey proposition. Start-ups go out of business all the time, often before they even have a chance to even really star up at all. The main culprit in the savage slaughter of these young establishments is the same perpetrator behind the bulk of our fiscal difficulties: Debt.
As an emerging entrepreneur, it is very easy to quickly accumulate debts that are substantial enough to kill your burgeoning business before it even gets off the ground. But it does not have to be that way. Take the time to examine your business workflow and you will likely discover a number of extraneous costs that can be eliminated to improve the health of your bottom line.
Here are eight common practices that lead to common results; learn to avoid them and you will be uncommonly successful.
1. Not sticking to the necessities.
As good a place to start as any, this is an all-encompassing, catch-all principle. Be a good bootstrapper by spending money only on what is absolutely necessary to operate your business.
2. Trying to do too much too soon.
If you jump the gun and attempt to launch too many projects at the same time, your limited capital will severely limit the time and budget that can be devoted to each distinct venture.
3. Not designing for scalability.
There is little worse than achieving initial success only to be undermined by your initial lack of vision and poor preparation. If your business design cannot be scaled up when you hit it big then you may be forced to absorb all sorts of unexpected expenses as you are attempting to redesign from scratch.
4. Failing to delegate.
Always remember, you’re the big idea man; don’t spend your time performing tasks that could be done just as well by a cheap hired hand.
5. Buying in bulk.
If you are starting a small business, don’t worry about having a year’s supply of copy paper on hand the first day that you hang up your shingle. You will have all sorts of expenses in the early stages of your start-up and you will need all of the ready cash you can keep your hands on.
6. Paying your bills late.
Whenever possible, meet your expenses with the cash that you have one hand. Rack up big bills on that shiny new business credit card and you could end up putting as much money towards accumulated interest and late fees as you are towards growing your business.
7. Throwing away your receipts.
It is difficult for many entrepreneurs to learn to separate their business expenses from their personal expenses, and this can end up costing a new business owner thousands of dollars in lost tax deductions. Be fastidious about saving your receipts and you will be in much better shape come tax time.
8. Failing to collect accounts receivable.
Sure you want to be the nice guy as you are starting your new business, but you need to make sure that you get paid as well. With the available tools for notifying clients of payments that are due, there is no excuse for not being on top of your accounts.
8 Easily Avoidable Causes of Business Debt [Bankaholic]
Author: Ethan Theo
Abe WalkingBear Sanchez is an International Speaker / Trainer / Consultant on the subject of cash flow / sales enhancement and business knowledge organization and use. Founder and President of www.armg-usa.com, WalkingBear has authored hundreds of business articles, has worked with numerous companies in a wide range of industries since 1982 and has spoken at many venues including the Shakespeare Globe Theater in London.
The Closet Entrepreneur:
Writing a business plan…
As mentioned before, there are no hard and fast rules for writing a business plan. Do you really need an executive summary, 3-Year pro forma, and sales forecasts for the next five years? Only if you’re going to find a benefit from these things.
The example below is the structure I used to get started, so feel free to mix it up, reorder, and modify it to suit your needs:
– The Vision –
What exactly is my business?
What problem does it solve and why is my solution the best/most unique?
What benefit does it provide to my customers?
– Branding –
What is my story and/or message?
What is my product’s personality, soul, and voice?
How will I translate the above into an identity, logo, website, business card, et cetera?
– The Numbers –
What does it cost to build my product and/or provide my service?
What are my expenses and are there any hidden costs?
What profit can I expect to make per item and is it acceptable/realistic?
What is my budget and what will I do if I go over?
– Beta Testing –
What existing resources/products can I use to help create my product?
Do I have someone in mind to try out my product/service?
How will I collect and utilize feedback?
How will I turn my beta users into paying customers?
– Sales and Marketing –
How will I get my initial customers?
How will I provide customer service and collect/utilize feedback?
What marketing channels should I explore – web, radio, print, et cetera?
As I mentioned before, this is what I used to get started and there are other pieces to the puzzle that can be incorporated such as funding, an exit strategy, employees, management structure, break-even analysis, profit and loss, et cetera. Ultimately, utilize items that will help your business grow and succeed now, and…
Writing the Dreaded Business Plan [The Closet Entrepreneur]
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How To Go Easy On Filing Tax
Business Pundit: As tax season approaches, I thought it would be useful to offer some advice on taxes for those who make most of their money as online entrepreneurs. Here are five tips that I’ve found to be priceless in the long run. Hopefully, you can save time and stress with these 5 easy suggestions:
1. Send in quarterly payments so that you don’t get stuck with a massive tax bill at the end of the year.
2. Keep all receipts (not just ones that were obvious business purchases), determine “business expense” later. You might be surprised at what you can deduct.
3. File receipts. File your receipts by the end of the day (trust me on this) in a folder penciled with the current month. If the ink is unclear, make a notation in dark ink somewhere on the receipt.
4. Log business activities in a day planner. Record the occurrence of any business-related meetings in a day planner in ink, as well as in a digital file. These will help you or your accountant decide whether a particular expense is tax deductible or not.
5. Keep a spreadsheet. In addition to daily filing of receipts, enter the information in a spreadsheet. If you don’t like or have Microsoft Excel, use OpenOffice. You could also use web-based spreadsheets like Zoho Sheet or Google Docs.
Bonus Tip: If you work out of your home, remember that you can deduct a nice amount for utilities (you are heating your home during the day in the winter *so that* you can work).
Bonus Tip 2: Try to keep all of your purchases on a single business credit card (not your personal card). This gives you a backup record in case the IRS comes knocking.
5 Tax Tips For Digital Entrepreneurs [Business Pundit]
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The Switch Pattern
Our brain is by far one of the most powerful tools in the world. Habitual performance is created on the fly. We hardly have to sit down and design our experiences. However, this short cut comes at aridiculous price. Most people form habits and then think that they cannot change them anymore.
I think it is from my own experience that I say that habitual performance can make or break you. But, if it is at breaking point,it would be a smart choice to decide to create a new and empowering habit instead, do not you think? How do habits form? Let us take a peek into our brain for the moment. We know that we have got brain cells known as neurons.
Habits are formed when neurons begin to branch out to other neurons through a communication mode called an action potential. This is a small electrical impulse that runs through our brain cells that help to form neuro-connections.
The closest visual representation is much like what might happen if an octopus were to extend on of its tentacles to touch another octopus. When a connection is formed, we have a neuro pathway. The more this neuro pathway is used, the more solidified it becomes.
So, when do we get these electrical impulses in our head? All the time! Think about it this way: Every time you wake up, you wake upin a particular way and move in a particular fashion, and carry outa particular sequence or steps in order for you to get out of bed, and off to work. And this is a pattern of habit for you everysingle day, is not it? Likewise, is not it true that sometimes when you see someone, you might just feel lousy? Think, boss! The key issue is some of these habitual patterns take place when you least expect or want it to happen.
In such a situation, you will have to use a technique to get a new pattern installed and let the old pattern die away. This techniqueis known as The Switch Pattern, developed by Dr. Richard Bandler. The Switch Pattern uses distance as a driver because distance tends to control other sub modalities. For instance, if you made an image go further into the distance, the picture tend to become smaller, less focused, and tends to lose color along the way. In order for us to do The Switch Pattern effectively, we need to identify the characteristics of effective change processes using The Switch Pattern.
Creating behavioral change processes, not imaginary static outcomes. It is important to focus on the outcome of the changethat you want to create. For instance, if your problem situation isovereating, you cannot simply imagine yourself being thin. You have to think of behaviors you will be exhibiting in order for you to eat less. For instance, you could deliberately choose to see yourself, or imagine yourself eating half of what you normally eat. You could deliberately choose to eat only up to seventy percent of your stomach’s capacity and drink more water.
For instance, clearly imagining the feeling of what it is like when you eat up to seventypercent of your stomach’s capacity.
Likewise, if you are procrastinating, just visualizing yourself doing work is not going to cut it. What do you want to feel instead? How would you help yourself to get there? You will have to see yourself do something to change your state. For instance, if you procrastinate, you might have to visualize the image ofyourself feeling the fear of the consequences if you did not do it. Some of you already do this. You think about how bad the consequences will be if you did not get it done right now. Alternatively, you might choose to do something else that changes your state, such as doing a set of fifty push ups to suck yourself up. Once you know of a behavior that you can do to change your state, see yourself doing the desired behavior clearly.
To your success!
Not long ago I took a trip to Tuscany and spent a week in a cooking class. Before the trip I spent time researching my options. I wanted to know who would be teaching the class, what courses and dishes would be covered, how hand-on the class was, if wine-pairings with the dishes would be addressed and if the class included trips to the local farmer’s markets to select fresh produce. Finding just the right cooking school was important to me because I would be spending a significant amount of money traveling to Italy and I wanted my experience to be well worth my time and effort.
For a woman interested in buying a franchise, evaluating the training a franchise business offers should involve even greater research – after all, this is about your future – not a vacation.
As part of your due diligence when researching a franchise opportunity, find out everything about the training a franchise system provides. A good training program should cover not only the product or service but also setting up the business, marketing, employee management, business procedures, reporting, etc.
The best way to find out about the scope of the training program is to ask existing franchisees. Find out what stood out about the training they received and what they feel could have been covered more completely. Ask them how prepared they felt when they opened their business and what ongoing training they have been provided.
Keep in mind that the franchisees you talk with may have been through various versions of the training program. Problems that existed at one time may have been fixed. Or, you may find that a training program that was fine in a company’s early days is now out-of-date. Be sure to include in your research franchisees who have had the same training you will receive to get an accurate assessment of its value.
Ask current franchisee if they received a training manual and if the information is updated periodically. Also ask if the franchisor offers other training resources such as conference calls, webinars or intranet sites. Ongoing training is important for many companies who adjust their business with changes in the marketplace. If this applies to the business you are reviewing, find out what they do to keep each franchisee up to speed.
An addition source of training may come from periodic conferences held by the franchisor. Besides providing additional education about the product or service, conferences offer franchisees an excellent opportunity to connect and network with other franchisees in the system. A network of peers is one of franchising’s invaluable resources so be sure to ask if this is an opportunity the franchisor provides.
Although this is less of a problem today than in the past, some industries may have an “old boy’s club” mentality among franchisees. You will be able to tell by reading the UFOC if there are other woman franchisees. Include some women in your due diligence calls so you can get an idea of the business culture and the prevailing attitude towards woman franchisees.
Many franchisors will have field support personnel who are available to be at your site during your grand opening and at periodic intervals during your first year in business or longer. Having someone right there to answer your questions may help calm your first-day jitters so find out if this a serviced provided by the franchisor.
If, after your franchise investigation process is completed, you don’t feel the offered training will adequately prepare you to run your new business, it’s time to step back and look at other opportunities. As reported in the August 2006 Franchising World magazine, a recent study by FRANdata found nearly 2500 franchise concepts in 18 different industries and almost 900 of these concepts were started over the past three years. You don’t have to compromise – if one company does not have the training you are looking for, there are sure to be many other companies who can meet your needs.
I’m happy to report that the cooking school in Tuscany exceeded my expectations and I left there able to prepare a number of authentic and delicious Italian dishes. Had I not researched the available schools so thoroughly, I might have been very disappointed with my choice.
To get full value for your investment in a franchise business, the training should answer all your questions and set you up as a confident and successful owner.
Franchisee training should include:
• Everything you need to know about the product or service
• Everything about using/protecting the brand
• How to find your business location
• How to negotiate a lease
• How you complete the permits and buildout
• How to find, hire and manage employees
• How to market your product or service
• How to keep books and records for the business
• The reporting requirements and processes
• Where to get the equipment needed for the business
• How or where to buy supplies and inventory
• How to get help when you have a problem
Kimberley Ellis is the President of Bison.com, a leading online resource for franchise and business opportunities. She has been quoted as an industry expert in USA Today, Wall Street Journal and a variety of local and regional publications regarding trends in business and franchising. Kim combines her entrepreneurial spirit with a diverse background in marketing and operation to help others succeed in franchising.