Entrepreneurs have a knack for seeing opportunities where others don’t. If you see 2010 as a good time to start a business despite the recession, then you may have an entrepreneurial perspective. Now you need to know if you have some of the other characteristics of successful entrepreneurs.
What helps entrepreneurs these days is that virtual business models put more emphasis on talent and less on administration and infrastructure. After all, e-commerce solutions can give you an instant storefront presence and credit card processing services can handle your receivables, and SEO can give you access to online customers with a minimal up front investment.
So now all you need is the right set of skills and characteristics. Consider whether you have the following ingredients of successful entrepreneurship:
1. Talent.
You should be able to identify at least one area of ability that makes you stand out from the crowd. This can be anything: technical expertise, sales skill, marketing insight, or logistical know-how. Since small businesses are talent-driven, you have to start out with the belief that you have the raw material with which to compete and succeed. It helps if your skills happen to be in areas with growing demand, such as health care or computer technology. If you have medical knowledge or a skill such as Web design, you may have a little wind at your back.
2. A new or different perspective.
“Me-too” businesses have a tough time making a mark, especially during a weak economy. Your business should be founded on the idea that there is a better way to do things. Ideally, you should have enough experience in your chosen industry to be familiar with the normal way business is done, and to have developed some unique insights as to how that can be improved. Being able to clearly articulate a differing perspective should be central to your business plan. In turn, it should also become the vision you communicate to everyone you hire, and the selling proposition you use to pitch potential customers.
3. A business network of connections and affiliations
Experience is valuable not only for knowing how other companies do things, but also for helping you form a business network that will get your new company up and running more quickly. Remember, people–especially business-to-business customers–can be reluctant to do business with a start-up. You should have some contacts who respect you enough personally to take a chance on your new business. Of course a network of contacts can also help you identify potential investors, suppliers, and talented employees. If you need to build your network think about joining a business community of interest.
4. A war chest.
Don’t start your business venture unless you have identified sufficient funding to not only get started, but to keep your business running through the inevitable lean months at the beginning. Many businesses are forced to go under just as they would be starting to gain some momentum, simply because they underestimated the amount of time it would take for profits to start rolling in. Funding can be from your own savings, outside investors, or loans. Of course, external sources of funding are harder to come by in a recession, but you can use techniques such as virtual offices to reduce the need for this type of funding.
5. Ability to take risk.
You should start any new business with a commitment to succeed, but an acceptance of the risk involved. Entrepreneurs are often people who are willing to trade a sure thing working for someone else for even a risky chance at running their own show.
6. An eye for complementary talent.
Once you start hiring people, you should think in terms of rounding out the team rather than looking for people just like yourself. It can be a mistake to have too many would-be leaders in one organization. If you have an independent and visionary outlook, you might do well to complement that with a strong administrator who can take care of the details.
7. Persistence.
Not only does it take a long time for a new business to gain traction, but entrepreneurs often don’t succeed on their first try. As long as you have confidence in the first two items on this list–your talent and your unique perspective on the business–you should be willing to keep trying.
Tag: credit card processing
Even with the ongoing recession, building a business online remains a viable approach for any new start-up. Why? Well, while even online retailers are feeling the pinch of a tight economy, they are also expected to pick up market share at the expense of traditional retailers during this downturn. So, an online approach is both more sustainable during a slowdown and a way to get more out of the next economic recovery.
According to a recent study of 151 online retailers, most expect growth to slow over the next year, and most are seeing the recession impact their bottom lines. However, 80 percent of the survey respondents see online retailing as better equipped than traditional retailing for countering the effects of the recession. This is why online retailers should continue to take market share from more traditional competitors.
However, that does not mean that all online businesses will succeed. There are some fundamental steps that will help an online business get off the ground more smoothly.
1. Research Online Demand For Your Products and Services. Online Research should help you determine several quantitative facts about your potential market, including overall size, demographic makeup, growth rate, and income level. These facts can serve as an initial reality check on your business plan, as well as help you make initial projections about the scope of your business. Beyond the quantitative benefits though, some fundamental market research should help you form a mental picture of your typical customer. This mental picture can subsequently inform a variety of other business choices, from web site design and development elements, to where to promote your site, to what range of related products or services to offer.
2. Understand Who Is Your Competition. Your market may look attractive in isolation, but next you need to assess the competition. Who are the market leaders, and what are their strengths and vulnerabilities? Who are the new entrants into the market, and which ones are picking up market share? Knowing your competition will help you determine where you fit into the marketplace, and this in turn will influence your product, promotion, and pricing strategies.
3. Back-Office Infrastructure Payment Processing. For one thing, an online business relies on a technology infrastructure that is affordable and yet will stand up to spikes in volume due to seasonality or successful promotions. Then there are key details such as credit card processing -and a merchant account– things that make the buying process as seamless as possible. For most start-up businesses, basic infrastructure issues such as the technology platform and credit card processing are outside their primary areas of expertise, so outsourcing solutions should be considered. Always compare credit card processing prices and merchant account prices before you select the one that best fits your business needs.
4. Attractive Website Design to Increase Traffic and Conversions. Now you can think about setting up shop. That’s precisely how you want to think about web site design–it is your place of business. The look and navigation of that Web site help you project an image to your customers. Are you hip, or are you traditional? Are you complex, or easy to access? Different positioning calls for different images, but there are two universal rules to website design: don’t look amateurish, and don’t make it difficult for visitors to make a purchase. This is another area where outside, specialized help can make a big difference, as opposed to spending time on something beyond your reason for being in business.Compare Web Site Design Prices to select the one that best meets your needs.
5. Use Internet Marketing and SEO to Promote Products On Your Web Site. An online business should focus its promotional strategies on capturing an online audience. This means some non-traditional promotional strategies, such as search engine optimization (SEO) and internet marketing. SEO helps associate your product or service with Internet searches on related topics. Internet Marketing allows you to pay for Internet advertising according to the amount of activity it generates, and to monitor the results of that activity. Because the Internet is still a relatively new business medium, promotional techniques and consumer behaviors are changing rapidly. Fortunately, there are internet marketing specialists who can help you stay abreast of evolving strategies in Internet marketing. Use an online service to find and compare SEO prices and internet marketing price quotes.
Summary
Overall, there are two important principles to apply when starting an online business:
1. Your business plan should represent a combination of traditional business methods and techniques specific to the online medium
2. You should identify the tasks where your organization can add value, and outsource functions outside your primary expertise.
Applying these principles using the steps described above, should help you get your online business off to a successful start.
Merchant cash advance transactions are big business. In the past few years, the industry has grown from a few providers to what some predict will be an almost 10 billion dollar industry. Search engine results for “merchant cash advance” produce literally thousands of provider results. How do you wade through all of these providers to find the right one for your business? How do you get the best deal? Here’s a quick guide to a successful merchant cash advance transaction.
Only “merchants” can apply. A merchant is someone that owns and operates a business that performs credit card processing functions as a way to accept customer payments. Providers have different requirements regarding the length of time you need to be in business- many also require a certain sales volume for approval. Generally, you’ll need to have at least a few thousand dollars in credit card sales to qualify for a cash advance transaction.
You have to qualify. Cash advances have become a popular method of financing because the approval process is fast and easy. But be careful- just because you’re “approved” doesn’t mean you’ll be able to repay the advance according to the agreement. Many unscrupulous providers have been known to approve businesses they know won’t be able make repayments as scheduled in order to collect the fees and penalties associated with defaulting.
Service agreements set the terms. Once you’re approved for a business cash advance, the provider will send you a service agreement with all of the important information- your advance amount, the “safe” retrieval rate (based on your daily credit card sales volume), and advance fees should all be included in this agreement. Since a merchant advance isn’t a loan, it isn’t subject to lending or usury laws- providers can basically charge whatever they want for services, up to 50% or more of the advance amount in some cases. Be extremely wary of agreements with fees that kick in if sales volume drops below a certain amount (called daily minimum fees) or “balloon” repayment clauses that require payment in full if certain conditions are or are not met.
Repayment is taken from daily sales revenue. You begin repayment the day you receive your advance check, much like a traditional loan. Before you take out an advance, you need to make sure that your current sales volume is able to support the repayment structure specified in the agreement.
What happens next? If you repay your advance according to the agreement, everything is fine. Repayment is usually quick- you should have the advance balance paid off within several months of initiating the transaction. The service agreement governs potential defaults- most agreements contain some kind of a “balloon” repayment clause (see above) or give the provider the authority to place a lien on business equipment or property if you can’t pay back the advance. Providers have also been known withdraw money straight from a business checking account. Before you sign the service agreement, you need to make sure that you know exactly what will happen if you can’t repay the advance according to the terms.
According to Forbes Magazine, businesses that don’t accept credit cards lose as much as 70% of sales to competitors who do allow this method of payment. With the number of Americans that use credit cards to make purchases increasing every day, you can’t afford to lose this many potential customers or clients. Here’s a quick and easy, real-world tested guide to accepting credit cards:
Merchant Accounts: The Basics
The merchant account is the “middle man” between a credit card account and a business’ bank account. Businesses that only process cards online usually use gateway software that collects credit card information, where retail businesses typically use credit card swipe machines. Whichever method you use, it’s necessary to have a merchant account to collect the information, verify it with the customer’s credit card provider, and make the transfer of funds from their account to yours. Merchant account providers often “bundle” the costs of online processing software into the account service costs.
Billing
Generally, merchant account providers will assess a fee for each transaction, whether a sale or a return (a “chargeback”). These fees are a portion of the transaction amount or a specified dollar amount. Many companies require monthly minimums, and will charge your business the remaining amount if this minimum is not met. Billing occurs automatically, as each “batch” of transactions is processed, typically at the close of each business day. Vendors provide reports detailing transactions, charges, and payments made at specified intervals.
Transaction Types
The fee assessed for each transaction typically depends on the way the sale or return is recorded. Swipe machines or those with signature capture devices carry the lowest risk of fraud, and thus transactions are less expensive to process. Online transaction s or those that are “keyed in” are typically more expensive, depending on the security measures taken to record the transaction. Vendors assess higher fees for “chargeback” or return transactions.
Service Contracts
Most businesses sign a service agreement that covers a specified period of time. Canceling your account before the service term expires generally carries penalties and fees, much like breaking a lease. Your per-transaction and monthly minimum rates are set when you apply for an account and sign the service agreement. The best rates are reserved for those businesses with a stable financial history and high credit card sales volume- many vendors offer “tiered” rate structures, where the per-transaction rate decreases the higher your sales volume rises. Though newer businesses just starting out might not be eligible for the best rates right away, they can negotiate for better terms as the business becomes more profitable.
Equipment and Software
Credit card processing equipment and software costs are often included in the service contract you sign with a provider. If you own or manage a retail store, chances are you’ll only need hardware, such as a swipe terminal or a signature capture device. Businesses that sell products online can puchase “gateway” software that is billed along with the merchant account service bill. Credit card terminals can be purchased, financed, or leased. It’s always a good idea to ask if there are any discounted models, or if a certain model is included with an account agreement.
Choosing an Account Provider: Where to Start
The most popular places to find a merchant services provider are through referral or using a vendor match service. You can consult businesses similar to yours in terms of size and sales volume: Ask who they use as a provider, if they are satisfied with the service they receive, and if they have any particular recommendations. A vendor search service allows you to compare several different companies, ask for quotes, and choose a vendor based on your requirements. Make sure you compare several different merchant account providers before signing a contract for services.
Merrin Muxlow is a writer, yoga instructor, and law student based in San Diego, California. She writes extensively for Resource Nation, a company that provides resources for business owners, and is a frequent contributor to several sites and programs that offer tools for entrepreneurs, including Dell and BizEquity.