If you’re thinking about starting a business, you will need to ensure your basic living expenses are paid while the fledgling business takes root and grows to where it can support you.
In a perfect world, your business would support you while you work to make it successful. Unfortunately, most start-up businesses do not earn enough for the owners to pay themselves. For most, this means planning to pay your personal expenses some other way until your business can afford you.
The first step toward solving this dilemma is to determine your basic personal financial needs. Make a list of all personal and household expenses that need to be paid each month for the first year the business will operate.
Next, scan your financial horizon to determine how the personal expenses will be paid for at least the first year in the life of your business. Here are some possible sources of funding for your personal expenses:
1. A part or full-time job. Many businesses are started while the owner works for someone else.
2. Support by a spouse or parent. The perfect time to start a business might be while someone is paying all or part of your . . .Continue reading Are You Starving Your New Business?
There’s an aged saying in the business world, “There are three rules of marketing—location, location, location.” If you want to catch fish, you need to position yourself where there’s fish. If the fish can’t find your bait, if customers can’t find your shop, you’re out of luck and probably out of business. No customers, no sales, no go.
Selecting the right location means different things to different businesses. Here are a few things to consider when choosing the right location for your business.
Clarify Your Business Vision. Determine what you see for your business in 1, 3 and 5 years. Envision what size it will be, what sort of traffic you want and who you want for neighbours. Identify Your Target Customer. You need to know who your customers are in order to pinpoint your business location. High foot traffic doesn’t automatically convert to lots of customers. Ensure the foot traffic is comprised of folks who match your customer profile and who will stop by to throw money into your cash drawer. Determine Where The Customer Traffic Is. And then place your business there. This is as true for physical locations as it is for virtual positioning. Whether you’re hoping for . . .Continue reading Ten Points to Consider When Choosing a Business Location
After reading an avalanche of articles on what a business plan should be, I’ve decided it might be helpful to write one about what a business plan should not be. The topic of business planning is sure to incite a lot of rhetoric and passion, whether or not you believe it to be a useful endeavor.
Even with all the hype there are misconceptions about what a business plan should or shouldn’t be. The poor old business plan is expected to do a lot for business owners. It’s little wonder that some people doubt the validity of the exercise. Here is what a business plan is not:
1. A Business Plan is Not a Tome. I’ve seen business plans ranging from a couple pages to over 200. Rarely should a business plan be more than 20 pages plus attachments; shorter is even better. If lifting the printed version of your business plan leads to a herniated disc in your lower lumbar region, or if it takes any more than 4 guys to carry it into your banker’s office, you’re probably overachieving. Wordy tomes are never read. The people who have to read the plans and make decisions are usually . . .Continue reading What Business Planning Is Not
Businesses with just one revenue stream, sometimes called one-legged ponies, tend to drop off the radar when the single revenue source dries up.
The one-legged pony business killer seems like a kind stranger when starting out. For example, after you’ve driven Uncle Joe’s truck for a couple years, he offers you a contract and helps get you set up to buy your own equipment. Who in their right mind would turn down a lucrative, long-term bread and butter contract offered by a friend or family member? These special deals sometimes work very well, but the dependence on a lone client can become more of a problem than an asset.
The time to deal with the one-legged pony issue is long before it becomes a problem, as early as the first business plan. Here are a few actions to help diversify your business to avoid falling prey to the one-legged pony.
If A Good Deal Falls On Your Desk, Take It. By all means, take advantage of the amazing evergreen contract when the opportunity comes along. A bread-and-butter contract gives any business a solid base from which to build a great business. Plan from the start to use the stability as . . .Continue reading Ways to Put the Spurs To Your One-Legged Pony
Once an entrepreneur makes a success of one business, there’s a dangerous tendency to think he can duplicate his efforts in another business, and then another, and another. Spreading yourself and your resources over a number of ventures can impair your ability to deal with financial and other challenges. Aside from stretching finances, getting pulled in too many directions can deplete a business owner’s time and energy, making it difficult to maintain the core business that brought about the initial success.
The key to avoiding this killer is to know your abilities and be sure to keep enough energy, cash and focus to maintain your core business. When you’re tempted to spread your wings and become a raving capitalist, the first question to ask yourself is how much time, energy and money you can afford to invest.
Assess Your Current Situation. The time to consider branching out to own different ventures is after you’ve made your core business successful and honed your time management to the point that you have time to invest in other things. A starting point to investing is to take a close look at where you’re at with regard to the core business. Is it running . . .Continue reading Beyond the First Small Business