9 Tips to Change Business Direction

In my last article we looked at the 8 Signs Your Company Can’t Change Direction. Now that you know what they are, let’s look at the opposite view on how to change direction.

Changes of business direction can happen as a reaction to economic conditions or a decision to change your business goals. Change is difficult and we all react to change with varying degrees of resistance. So, if change is something you want to do, or have to do, here’s how you can make the process easier.

  1. Stop selling products and services. That’s what most of your competitors are doing. Start selling desired results or solutions to problems. No one pays a fee to a copy writer to write copy–they pay a fee for the results of the copy he/she writes.
  2. Stop thinking your customers, clients or patients are different. Dan Kennedy says, “there are no Yogi’s in the forest. There’s no such thing as being smarter than the average bear.” Unless you sell to aliens or different life forms, you sell to people.
  3. Listen to your clients, customers and patients. If you don’t have the time, survey the top 30 to 35% of your customers. Find out what they think and why they do business with you. You might end up being very surprised.
  4. Get out more. As a minimum join your local association and one group of multiple business owners. Maybe it’s the local Chamber or Service Club, a venture forum or some networking group.
  5. Start an idea and swipe file. Great ideas are all around us. The best ones are impossible to hide and someone else as already paid to test they work! Great marketing arrives in you mailbox and in the publications you read every day. Start becoming a collector of the ideas and ads. Write them down but don’t file them away-start using those ideas.
  6. Fire up Google. Find other great companies in your field outside of your market and see what they’re doing. Pick up the phone call the owner, introduce yourself and start a dialog. Try it with a non-competing company in your own town!
  7. Read. Read the trades in your own field or industry, read the trades in any target market and read to expand your overall knowledge. Hint–throw a novel of two into the mix, there are ideas in them too. Caution–don’t start reading all day and think you’re getting something done. Just one hour a day. One dose, 2 thirty min. sessions, or 3 twenty min. sessions. It goes directly to investing in yourself.
  8. Get Accountability. Family, friends and associates are not good advisers. They have their own agendas and opinions on what’s right for you–and how what you do may affect them. Get a business coach, not to advise but to hold you accountable to your plans to do things differently and set new goals.
  9. Keep–or get–the habit of taking action. Without action, deliberate action, nothing happens. Of course you know this so keep up the good work.

The ability to change directions comes directly from your determination to remain flexible. When something’s not working you have to make changes to get the results you want. When you find yourself resisting change remember:

Anything else has a higher probability of success than what’s not working right now.

Learning To Pack Your 4×4

There are many different types of vehicles out there that could take advantage of extra storage space. When looking at your vehicle you can see that you have a lot of space that you should be able to use, however, once you start packing, everything seems to change. Where did all that extra space go?

This is why learning to pack your 4×4, ute or other vehicle is very important. Of course having 4wd storage drawers installed in your ute or SUV makes a big difference in the amount of stuff you can store. But even without drawers, by using these tricks you’ll be able to fit more in your vehicle.

The least used items

You want to start with your least used items. These are the items that you won’t use that much or will be used at the end of your trip. Placing these items at the back will give you more room to play with and keep the items you need first more accessible.

Heavy items

The heavy items should go more towards the bottom of your vehicle floor. These heavy items will shift and move if placed off the ground level. Also, if you place them higher up they may break items below them.

Match shapes

Lots of items that we take with us on trips may have odd shapes. You may have square or rectangular suitcases and you may have round or odd shaped bags. If you can, try to coordinate all of these shapes into piles outside of the vehicle. When you do this, you can start to grab and stack them as you see spaces form in your vehicle.

Numbering your items

A great trick that some people don’t even realise is possible is to number your items that you put into your vehicle. Taking a sticker or placing a tag on the item will help you keep items straight. Starting from one side of your vehicle you just put in bag one then two then three. This way you can find the perfect combination for your vehicle which can then be repeated over and over again.

Preload your items

Packing your vehicle can take a long time or can be a real chore. A great way to relieve the stress of packing is to preload your items. What this generally means is that you want to take the always used items and keep them in your vehicle. These are items that you use on a daily basis, have no need to keep in your home and just take up space. When you keep these items in your vehicle you don’t have to worry about them, and you will always have them as needed.

Create a system

So far you have been given some details, ideas and tips to load your 4×4 and other vehicles. From here you can start to experiment and see what works for you. In your experimentation, don’t discount the idea of adding 4wd storage drawers to your vehicle. They’re a great way to expand capacity.

What Is the Definition of a Lifestyle Entrepreneur?

A lifestyle entrepreneur is someone who is tired of living the template lifestyle that most people have accepted and has decided to create a lifestyle by design. This person has a passion to do something and wants to make a living at it even if that means they are not going to make a fortune doing it. You can live the lifestyle of a millionaire without actually being a millionaire. To accomplish this you will have to make a paradigm shift in how you think about money, career, lifestyle, and what is really important to you in life.

Deciding to pursue your passion in life and make money from doing it gives a person the freedom and feeling of being alive that rarely comes from working a job just to earn money to pay for things that you hardly ever use anyway. Take some time to reflect on what is really important in your life, this will give you the motivation to start your new journey toward a new beginning. A lifestyle entrepreneur might want to travel the world or just be able to spend more time with their family instead of spending 8 – 12 hours a day at work and a couple of hours in traffic everyday.

Anyone can become a lifestyle entrepreneur all they have to do is have a passion for something that they are willing to put some work into to develop and share with others. You can still keep your job while working on your ideas and make the transition to full-time “whatever” when the time is right.

To get started on your passion do some research on what you love by coming up with keywords and start “Googling”. Read as many blogs and articles about your subject as you can then figure out where you can fit yourself in to offer value to people. There is plenty of information on the web about how to set up a blog and market your product or service.

The definition of a lifestyle entrepreneur is whatever you create it to be as long as you are following your passion and living life on your own terms to the degree that you feel comfortable with. Just take the first step towards your dreams, the path will open as you go along. I will be offering tips and strategies on setting up a lifestyle business on my blog in the near future

How to Make Big Money With Your Start-Up Business

Starting a small business should involve marketing strategies that are proven to make money. You are taking a calculated risk to make money, so there is a high risk of failure but not if you have the right focus and the right type of business. Making money will come naturally if you remain passionate about your business.

It is difficult to think this way initially about your new start-up up business because most entrepreneurs generally think of making the extra money they need or making fast money to pay off bills first. After all, that is the reasoning for being in business in the first place. If you have been laid off in this tough economy and need to pay bills it is easy to fall into this trap. To avoid these pitfalls, focus on helping your customer and solving a problem for them.

For a small business to be successful there is usually some upfront expense. Especially in retail and getting your money back is not as fast as most retail shops only net 5-10% profits yearly. You pay for space, fixtures inventory and personnel. There are generally large out of pocket expenses associated with retail. I don’t recommend this method.

Service businesses can be the easiest to start and the least cost to you out of pocket and you help solve problems. You generally can incorporate easily, get business cards and be out on the road speaking to potential customers the same day. For example, an office cleaning service. Just go to a local business park and introduce yourself, shake hands and give them your business card and a quick “elevator pitch” about your business service. You can easily pick up 3-5 customers a day and bill $35-$70 per month per customer using this simple method. Add employees as you need to and do the work yourself, initially.

The internet also offers some low cost approaches similar to the example above. You can develop an information product to solve a problem and make you money quickly. There are effective ways to sell services and information products online while focusing on solving a problem and make money more quickly with a click of the mouse. It has never been easier to start a small business and make a substantial income stream that will continue to make you money, than now.

Who Can Become the Rich?

I have a habit of not loving to read the book that is highly recommended and appreciated with comments such as “this book has a good content” or “many people have liked it”, especially the book of teaching life skills or getting rich. I simply think that millions of people have read it. However, among those who have read the book and become wealthy, no one acknowledges that this book itself has just taught him how to be a billionaire.

When I was 16-years-old, I wondered “Do the rich also come from the same circumstances as mine?”. Therefore, I often paid much attention to the biographies of famous names such as Andrew Carnegie – The King of Steel, Henry Ford – The King of Cars, John Davison Rockefeller – King of Standard Oil or President Theodore Roosevelt,… to compare the similarities between me and them.

My family has been living in a peaceful countryside. My parents did not have any reserve assets. At the age of 22, after graduating from a university, I applied for a job in a private company. Although I had much spare time, I had difficulty in money at that time. I used to wander and buy the books that made me feel curious. By chance, I read Think and Grow Rich by Napoleon Hill. Amazingly, this book itself created the most admirable turning point in my life.

Firstly, I was so amazed to know that my previous concept of “riches” was wrong. If I continued to keep this concept, it could decrease my motivation and spirit of striving. Certainly, I would never get close to success and toward “riches” because “Both poverty and riches are the offspring of thought” and “Success requires no explanations, failure permits no alibis”.

The second value is that I found out a true answer to the question “Is it possible or impossible to get rich from a low starting point?”. I realized that the difference between me and the rich was in thought.

Obviously, family condition is not a factor to make you wealthy. Anyone can become rich whoever you are, and wherever you are starting from. The only difference is, if there is a better family condition in combination with your own effort, you will be rich quicker.

Thanks to its motivation and detailed instructions, I began to change myself. Up to now, I have reached the goal to get a monthly income of 30 million dong before I’m 30; meanwhile, my friends have just earned 5 – 10 million dong per month.

That is also the reasons why I do not like to read the books that other people recommend, but I have decided to share with you about Think and Grow Rich. Instead of searching keywords “How to get rich quick”, let’s perform steps toward riches by formula of self-confidence and success: Think and Grow Rich

Why 90 Percent of Entrepreneurs’ Businesses Fail

Entrepreneurship has become the general dream work for both the employed and unemployable. Business opportunities are springing up everywhere, enticing and calling you to make the leap of destiny into the wealth and affluence you’ve often dreamt about. It is also notable that 9 out of every 10 businesses collapse within 2 years of starting. Even the best of well-read gurus collapse in the face of numerous tests that would have heralded the enthronement of a celebrated business idea.

Despite the numerous complaints about the challenges of building businesses in Nigeria, some are still transforming themselves into formidable forces of repute. It is therefore important to know the necessary factors that affect the entrepreneur, his idea, and his growing business.

Not considering pests!

Pests are crazy little creatures that cause immense damage to food and materials in a house, shop or office. Ok, I am not talking about local pests, but in business parlance means Political, Economic, Socio-Cultural and Technological environment; factors which are not necessarily within your control. Some other standard business books give their own academic variations.

PESTLE/PESTEL: Political, Economic, Sociological, Technological, Legal, and Environmental.

PESTLIED: Political, Economic, Social, Technological, Legal, International, Environmental and Demographic.

STEEPLE: Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical; and

SLEPT: Social, Legal, Economic, Political, and Technological.

This considers external factors, which if not well considered, can suck life out of any aspiring business. I remember Sokoa Chair Center (Nigeria)’s story for which they explained how the National Government’s ban on importation almost ran them out of business. Her ability to navigate her business out of the murky waters of challenges became the foundation for the world class enterprise she manages today.

Political: political stability, security, freedom of press, regulation and Tax policy, and trade and tariff controls

Economic: Stage of business cycle, economic growth, inflation and interest rates, unemployment and employee turn-over, impact of globalization (Global Financial Crises)

Socio-Cultural: education and social mobility, market demand, public opinion, social attitudes trends,

Technological Environment: Impact of emerging technologies, (automation, internet, e-commerce e.t.c.). Compaq recently launched a 24hr laptop battery, while DELL was busy putting finishing touches to launch their 16hr laptop battery, if DELL were a run off the mill company, they are grounded!

Eating your investment, and not profit

No sooner than a small business begins to level up in terms of income, our wonderful entrepreneur begins to think of changing levels and status. He buys a new car, wardrobe, changes office space, all from the proceeds of the business which is actually the capital and not profits. When spending, it pays to separate personal funds from the business. The business pays you your money, and you must learn to live within that means. Problems occur when initial deposit is given for business only for our aspiring business man goes to celebrate the huge success of his business.

An entrepreneur seeking to build a business must understand the separation and marriage between business and personal life.

Mismanaging reality

When entrepreneurs venture out, they are usually motivated by a deep passion-either for themselves, their idea, getting rich, an opportunity or some other object of enthusiasm. Armed with such passion, they take risks and set sail against unexpected signs of reality.

Yet passion tends to distort reality. The ability to succeed in business depends on the skill of adjusting the plans and dreams to the prevailing conditions. The idea that the challenges will bow to your plans and dreams will burn the drain the entrepreneur’s time, energy, and money pursuing an ill-defined endgame without a realistic path. And when the issues start pouring in… expenses not turning into expected results , potential customers are not that crazy about the product, missed deadlines, shortfalls in sales,- objectivity and reason become even further blurred by the mind-bending distractions of doubt, fear and disappointing replies to investors. Entrepreneurs are found to cave in under these kinds of pressures not knowing it is a bend towards the shining light of achievement.

When personal failures affect business

The personal faults, habits and failures of an entrepreneur are usually obvious especially when he has a lot of people under him. Inability to manage funds, not being detailed and bad people management skills are some indirect factors responsible for the high rate of business failures. Entrepreneurs, like any pioneer, have their own lapses, but must be able to manage them extensively. I know an entrepreneur who does not negotiate price but leaves it to his financial manager because he never succeeds in negotiating a beneficial deal. Many entrepreneurs are successful in spite of themselves. The key is in working well, and enjoying, full understanding of their weaknesses and mitigating the likely risks.

Good at starting business, bad at running them.

This is very true of many entrepreneurs, since most of them are powerful initiators, but terrible managers. Most are more interested in making money than it is to build a business. Most technicians think because they understand their product or skill, they will automatically transform those ideas into business. Most of them have this great obligation to run their businesses and become a great manager. Working on a business and working in a business are two different worlds. While the entrepreneur works on his business, the technician works in the business. He feels if he gave in more, worked harder, profit will come. How untrue!

These are some of the factors I have considered and will love if you ponder on them while thinking, planning, starting and managing your business. Don’t forget also, out of the first 20 richest men in America, only 4 are employees.

MLM Home Based Business Work From Home Opportunity

There are various work at home business options; one of which is the mlm model or network marketing. In spite of the industry being a $31 billion dollar industry, mlm is dogged by an image problem. Let’s look at a mlm home based business work from home opportunity to see it is a viable option for you to make money from home, which I’m guessing is the main reason you are reading this article.

About MLM

Direct selling or MLM or network marketing (you pick the name you prefer) is a business model that offers entrepreneurial opportunities to individuals as independent contractors to market and/or sell products and services, typically outside of a fixed retail establishment, through one-to-one selling, in-home product demonstrations or online. Compensation is ultimately based on sales and may be earned based on personal sales and/or the sales of others in their sales organizations.

Direct sellers may be called distributors, representatives, consultants or various other titles. They may participate in various ways, including selling the products themselves or through their sales organizations, providing training and leadership to their sales organizations, referring customers to the company, and purchasing products and services for personal use.

MLM Companies

There a thousands of companies operating under this model. Some are country specific (eg Malaysia only) whereas others undertake global expansion and stretch into many countries (eg Herbalife is in 80+ countries).

In choosing a MLM home based business work from home opportunity, size might be one criteria that you would want to look at. The DSA (Direct Selling Association) recently release the Top 20 Companies in the US (alphabetic order)

  • AdvoCare International, LP
  • Ambit Energy
  • Amway
  • Arbonne International, LLC
  • Avon Products, Inc.
  • CUTCO/Vector Marketing Corp.
  • Herbalife
  • Isagenix
  • LifeVantage Corporation
  • Mary Kay Inc.
  • Melaleuca, Inc.
  • Nu Skin Enterprises
  • The Pampered Chef
  • Scentsy, Inc.
  • Stampin’ Up!
  • Stream Energy
  • Take Shape for Life – Medifast
  • Team Beachbody
  • Thirty-One Gifts
  • USANA Health Sciences, Inc.

As well as size these companies have longevity especially Amway starting back in 1959.

MLM Products

MLM companies offer an array of products from health, technology, beauty, legal services, energy and much more. There is a product here for everybody to market. While I believe it’s preferable to market a product that is consumable, there are success stories in every company. You choose what product you prefer to market.

MLM Compensation Plans

There are numerous ways a distributor is compensated in a network marketing company. These plans include unilever, breakaway, matrix, binary and a hybrid of some of these plans. To get a better understanding of these plans, have a look at this post http://mlminsider.com/main.php?/compensation_plans

Can You Make Money?

Most people will not. That’s not the fault of the company or the products because with inside every company there are thousands of success stories; both income and product testimonials. To improve your chances of mlm home based business work from home success, here’s 3 simple rules to improve your chances:

  1. Pick A Company And Stay. Choose a company based on your own preferences of product, size, locality etc and decide to stay with that company until you become a success. Too many people are lured by a new option and leave only to find that their new business isn’t firing and perhaps they are the reason for their failure and not the company or it’s products. If you look at the top industry earners you’ll find a majority have been with their company for a long time. Remember the story of the tortoise and the hare. MLM success is the same.
  2. Talk To People. While there are many ways to connect with people ( email, social media, advertising etc) those who are the most successful in the industry speak to their prospects. There’s no getting away from it. The rest is just avoidance behaviour.
  3. Be A Company Advocate; Use The Products. You need to believe 110% in your company and the industry. You will be bombarded with words like ‘scam’, ‘pyramid scheme’ and ‘is this Amway’. If you don’t have 100% conviction, you’ll falter and you won’t be a success. A personal way to get conviction or belief is to use your company’s products and get a result. Nobody can take that success away from you. If your belief in the network marketing industry needs boosting watch the Evolution of Network Marketing on YouTube.

A MLM home based business work from home opportunity can be a viable option to have you quit your job and to make money from home. The success of which relies 100% on you.

How to Research an Ecommerce Business Idea

Ecommerce is well known as being a low overhead route to market but that doesn’t mean that you can be complacent about your business model.

I’m going to give you some ways in which you can test out your ecommerce business idea before you get in too deep.

A common way to set up an ecommerce site is to start with your business idea, talk to a design or web agency who will provide you with a project proposal to design and build your website. Once built and paid for you then begin to wrestle with ways to generate traffic to your new website, given that the site is new and has few (if any) inbound links you’ll soon be setting up your Google AdWords account and paying for visitors on a Pay Per Click (PPC) basis.

Given that you’ve just paid to design and build the site and are now paying for your traffic, this isn’t a good time to find out that there simply isn’t the demand you thought there would be for your products, or that given the cost of traffic and overheads you can’t make a profit on what you sell.

Let’s look at some ways of avoiding a situation like this. By taking a range of steps using existing online tools and services you can get some real world research to find out a bit more about your potential market, and then with a minimal investment test how receptive that market is to your proposed products and price point.

Step 1. Where is the search?

Your first step should be to write down a list of the phrases you believe potential customers would use to find your products, once you have these phrases use some online keyword research tools to find out how much traffic there is for each term, as well as the level of competition each phrase has.

You need to bear in mind that the figures for search volume will vary dependent upon where you go for the figures and the marketplace you are looking at. Google’s keyword research tool is geared towards AdWords and by default will give you figures based upon their ‘Broadmatch’ setting which includes similar searches, and as such by default gives unusually high traffic figures.

I prefer to use Yahoo! or Wordtracker for this kind of information as the figures are more realistic, if you do use Google’s keyword tool then make sure you enclose the search term in speech marks as this will match the phrase directly.

Step 2. How many competitors are there?

You might find that you have a healthy search volume, but then if this is an already well mined niche with many existing competitors you will be at an immediate disadvantage as your competitors will be trading with an established website and you will be starting from scratch.

There are 2 pieces of information we will need for each phrase to give us a complete picture of the situation. One is the number of direct competitors who are already in Google’s index for the phrases we are interested in and the next is a keywords effectiveness index (KEI) which combines search volume with competitors volume to derive an index figure which highlights the potential of each phrase in our list.

Step 3. Get to grips with the competition

Not all search phrases are created equal as some will have more sites competing for them than others.

Imagine you have a search phrase in your list with 100 searches per month, are you competing with 10 other sites for that traffic or 10,000,000 other sites? By using an effectiveness index you will see at a glance where there are gaps in the competition and if you decide to go ahead with your new ecommerce site you can use this information to help optimise your website for these phrases.

In order to find the number of competing sites for a search phrase, do a search in Google with the search phrase in speech marks and take a look at the “Results 1 to 10 of about xxx” the xxx figure is the amount of websites that are in Google’s index for that exact phrase.

The KEI equation is searches x searches / competition = effectiveness for example 100 x 100 / 10 = 1000 KEI which is a great opportunity as ultimately you have 100 searches with only 10 direct competitors for that phrase. Whereas 100 x 100 / 10,000,000 = 0.001 KEI which is dreadful!

If you know a bit about search engine optimisation you will recognise these techniques as they are often used in the keyphrase selection process when optimising an existing site, but given that this research can easily be completed before any website has been built it makes sense to employ these techniques to get a feel for the nature of the opportunity presented online for your particular business idea at the outset.

Step 4. Test your business idea with PPC

This technique requires more of an investment but rewards you with some more tangible results.

You will need to set up a few web pages for your key products with a click to purchase button that sends you an email. Tell your prospective customers that you are out of stock and ask if they would like to be informed when the product is back in.

Now set up a PPC account with Google and spend a couple of hundred pounds/dollars on getting traffic to the page, you’ll soon get a feel for the cost of traffic and the kind of conversion rate you’d be starting with.

Step 5. Prototype your ecommerce website with SaaS

These days there are many low overhead software as a service (SaaS) web applications for ecommerce that are ready to use with nothing more than an online sign-up.

This kind of service utilises existing functionality that runs on a webserver and has no design/build overhead so you can simply start trading and pay as you go for the service.

Pick an ecommerce service provider that you like the look of, upload your products and set it up with a low cost payment system such as PayPal and off you go.

If you did the phrase research you’ll also have a good starting point to set up an AdWords account and a strong lead on the phrases you should include in you site content to attract search traffic.

Essentially in this last step we are setting up a fully functioning ecommerce website, however as we are only paying for the service monthly and there is no design/build overhead we can quickly get to grips with the nature of the business and see if it has legs or not without sacrificing all of our capital, which if things go well we are then in a position to spend on improving an ecommerce site we know works rather than simply gambling on a hunch.

Ways to Finance Your Dream Business: Different Capital Mix to Start Your Business

If you have a business idea, or you think your true calling is to walk an entrepreneurial path, but you are more than broke to start your own business, the only way to make that dream come true is to loan a capital to finance your dream business. Yes, you may have different sources to ask for a business loan. But all are different. Some may not even allow you to loan.

Here, we list down some sources you may ask a loan from and their qualifications so you can trim down your prospect.

Equity Investment

Equity means ownership. Hence, those who have built their businesses are the ones only allowed in this form of loan. If you opt for equity investment, you should be ready to let part of your start up go. Because, once you sell 51 percent of your shares, you lose control of the company. This kind of loan is the same putting a ‘business for sale’ sign on your business.

However, if you’re the kind of owner who likes full command on your business, you may just take a loan from other companies in your business-if you happen to have one. Or loan from your friends, business partners, stockholders or other people you trust and create an agreement with them instead. That would be legal as long as you have mutual agreement with these people. Also, before you indulge in this kind of loan, be sure to know the law to protect yourself.

Personal Savings

Personal Savings is the most common form of equity investment. This means that the fund that you’ll likely get to start your business is through personal savings, inheritance, friends and family. This kind of investment is what most of the people resort to when starting their own business. And it is actually a good thing for investors and money lenders as it signifies that you’re highly committed to the business because you’re willing to risk your personal savings.

In the course of your business, it is advisable to keep your personal investment to at least 25% to increase an equity position and leverage. Remember, the more equity your business has, the more attractive your business is to banks that can loan you as much as three times your business’ equity.

Commercial Loans

This accounts for the second most used form of business owners to finance their companies. According to Business Week, small business loans are declined by 18 percent due to financial crisis. Although this doesn’t mean that your loan would be disapproved because commercial loans are case to case basis. And the only way for your loan to be approved is to abide to the 4 C’s of Lending. Here they are:

Cash Flow: It is the amount of money going around your business or your liquid assets. When applying for a loan, you need to strengthen your cash flow as this signals that you’re able to repay the cash you’re borrowing.

Collateral: It is the value of asset you’re willing to pledge as security for repayment of your loan. This is to assure the lender of your commitment to pay because if nay, the collateral will be forfeited in the event of a default.

Commitment: This is the amount of money that you’re committing to your business. However, this is not as important as the other two aforementioned as your loan can still be approved without disclosing your share.

Character: This covers your personal credit score and history with the financial institution as a whole. This is the very thing that you need to look at if you’re planning to loan. All your debts no matter how small it is should be cleared and you should maintain a good credit rating to increase your chances significantly.

Indeed, there are different institutions to which you can apply for a loan. It all depends on how creative you are on designing your capital mix to get started with your dream business.

Write a Bankable Business Plan – Ten Action Steps

Action Step # 1

Define Your Company: What will you accomplish for others?

Write down all the specific needs your company will satisfy. Potential investors need to know that your business will be meaningful and marketable to people who can use your product or service. So concentrate on the external needs your company will meet. What will your product or service enable people to do better, more cheaply, more safely, or more efficiently? Will your restaurant make people’s palates delirious with new taste sensations? Will your new mouse trap help people capture mice without feeling sick to their stomachs? Will your new bubble gum scented bubble bath revolutionize the way children agree to take nightly baths?

Think of all the positive benefits your company will provide. Write them down. Admire them. Absorb them into your consciousness. Believe in them. These are the primary motivators that readers of your business plan will respect and value.

Action Step # 2

Identify Your Company’s Initial Needs: What will you require to get started?

Whether you want to buy an existing company with 300 employees or you can start your business by only adding an extra phone line to your home office desk, you need to make a list of the materials you’ll need. Some may be tangible, such as five hundred file folders and a large cabinet in which to store them all. Other requirements may be intangible, such as time to create a product design or to do market research on potential customers. You may need to hire an assistant to develop a retrievable filing system for the five hundred folders, or hire a consultant to set up a computer system that’s beyond your technical skills.

If you’re going to build a better mousetrap, you may have constructed a prototype out of used toothpaste tubes and bent paperclips at home, but you’ll need a sturdier, more attractive model to show potential investors. What exactly will your mousetrap look like? What materials will you need? Do you require money for research and development to improve on your original toothpaste tube and paper clip construction? Do you need to hire an engineer to draw up accurate manufacturing designs? Should you patent your invention? Will you need to investigate federal safety standards for mousetraps?

Next, do your homework. Call a real estate broker and look at actual retail spaces in the neighborhood where you’d like to open your restaurant. Make a chart of the most expensive and least expensive sites by location and square footage. Then estimate how much space you require and how much money you’ll need to allow for rent.

Make a list of all the tangible and intangible resources you need to get your business going. The total estimated price of all of these items will become your start-up cost whether you’re buying highly sophisticated computers or simply installing a new telephone line on your desk. If there’s any item in your estimates that seems unreasonably high, research other alternatives. But keep in mind that it’s better to include every element you truly need along with a reasonable estimate of the cost of each item, so you don’t run out of money or default on your loans. Be honest and conservative in your estimates, but also be optimistic.

Action Step # 3

Choose A Winning Strategy: How will you distinguish your product or service from others?

Although there are millions of types of businesses, there are actually only a few basic strategies that can be applied to make any enterprise successful. The first step in selecting an effective strategy is to identify a competitive advantage for your product or service. How will you establish that your product or service is better, cheaper, more delicious, or more convenient? How can you make your company more noticeable than your competitors? What restraints in your business or its industry might determine which strategy you choose?

Your competitive advantage may include designing special features not found in rival products. It may entail superior service characteristics such as speedier delivery, a lower price, or more attentive sales people. Perhaps you’re establishing an image or brand of exceptional quality or reputation. Does your product or service bestow a certain status on its users? Does it create more profits or other benefits for your customers’ own endeavors?

Perhaps you want to position your mousetrap for a primarily upscale market because the best design requires titanium and manufacturing costs will be so expensive only rich people will be able to afford your product. But maybe the mousetrap is so fantastically effective that wealthy people will want hundreds of them around their vast country homes and polo pony barns.

You must have a reason why your business will succeed. This is the competitive advantage your product or service will deliver. Once you’ve established the competitive advantage, you will be able to select the best strategy to reach your goal.

Action Step # 4

Analyze Your Potential Markets: Who will want your product or service?

To determine your targeted market, write down the demographics of the people who will use your product or service. How old are they? What do they do for a living? Will mostly women use your service? Is your product or service attractive to a particular ethnic or economic group of people? Will only wealthy people be able to afford it? Does your ideal customer live in a certain type of neighborhood, such as a suburb with grass lawns, in order to use your lawn mower? Answering these questions about the demographics of your prime market will help you establish the clear characteristics of the people you need to reach.

If you’re selling soap, you may believe that every dirty body needs your product, but you can’t start with the entire world as your initial market. Even if you’ve developed such a ubiquitous item as soap, you need to identify a smaller, more targeted customer group first, such as children under eight for the bubble gum scented bubble bath. If your soap only works with pumped well water without fluoride, you must acknowledge that your intended market has geographical limits as well.

Establishing the size of your potential market is important, too. This will be easier once you’ve completed the demographic analysis. Then you’ll be able to research the numbers: How many car mechanics, house painters or bathroom contractors are there in any given community? How many children in the United States are currently under the age of eight? How much soap will they use in a month or a year? How many other soap manufacturers already have a share of the market? How big are your potential competitors? And where do you find the answers to all of these questions?

Identifying your market is one of the great satisfactions of starting your own business. You’re thinking about the actual people who will use your product or service and how pleased they will be buying it as you are selling it.

Action Step # 5

Develop a Strong Marketing Campaign: How will you reach your customers and what will you say?

Entrepreneurs, especially inventors, often believe that their business concept is so spectacular that promoting their product or service won’t be necessary. Sort of a “build it and they will come” attitude, especially if what you’re building is the proverbial better mousetrap. One of the most common flaws I see in plans is the entrepreneur’s failure to describe exactly how customers will be reached and how products will be presented to them. Potential investors, staff, and partners won’t be convinced that your idea can succeed until you’ve established well-researched and effective methods of contacting your customers – and the assurance that once you’ve reached them, you can convince them to buy your product or service.

Marketing describes the way you will position your product or service within your target market and how you will let your potential customers know about your company. Positioning your company means concentrating on the competitive advantages you have identified: will your product or service distinguish itself by its superior quality, its revolutionary features or its ability to make your customers happier than they’ve ever been in their lives? Marketing helps you focus on identifying your competitive advantage so you can position your product or service. It also establishes the best ways to reach your potential customers and what to say to them.

When you have the right marketing campaign in place, you have an operating plan to gain market share, generate revenue, and bring your financial projections into reality.

Action Step # 6

Build A Dynamic Sales Effort: How will you attract customers?

The word “sales” covers all the issues related to making contact with your actual customers once you’ve established how to reach them through your marketing campaign. How will you train your sales staff to approach potential customers? Will you divide up your sales staff so some become experts in selling your bubble gum scented bubble bath to small, independent retail toy stores? Will other salespeople concentrate on developing relationships with major manufacturers so your product could be sold in tandem through their national distribution outlets? Will you have a sales force expert in buying television slots on Saturday morning cartoon shows or placing ads on the backs of kid-oriented cereal boxes?

What advertising and promotional efforts will you employ – two for the price of one specials or free coupons inside those same kid-oriented cereal boxes? Where can you locate lists of the greatest concentrations of children under the age of eight or whatever group constitutes your market?

In planning your sales activities, you will also need to answer questions such as: Is it ethical to contact your colleagues and clients from your former job as a door-to-door soap salesperson to tell them about your new business. Will you be the only salesperson in the beginning stages of your company? When will you know it’s time to hire more sales staff? How do you convince your clients that your sales staff will take care of them as well as you did? What will your basic sales philosophy be – building long-term relationships with a few major clients or developing a clientele of many short-term customers?

You will also need to consider how you will compensate your sales staff – with a base salary plus a commission? Will you hire full time staff with full benefits, or part time staff without benefits. How will you motivate your staff to do the best sales job possible?

Knowledge of your competitive advantage is just as important in designing a dynamic sales effort as it is in developing an effective marketing campaign. You’ll need to think about what product or service qualities will be the most compelling to your prospective customers. Then you’ll have to devise convincing language that clearly communicates this competitive advantage to your sales staff who will in turn use it when talking to your customers. In my experience, the most important element of an effective sales effort is having a sales staff that thoroughly understands your business and the needs or your potential customers. Therefore, your sales plan must address the issue of how you will create a sales staff that is as knowledgeable about your business as it is about your potential customers.

Action Step # 7

Design Your Company: How will you hire and organize your workforce?

By the time you’ve reached this stage of thinking about your potential business concept, you’ll probably have a good idea of the number of people you’ll need and the skills they’ll require to get your enterprise up and running. Keep in mind that your initial plans will undoubtedly change as your business grows. You may need to hire more managers to supervise your expanding staff or to set up new departments to meet new customer demands. Projected growth and expansion for your company should be mentioned in your business plan, but it’s not the primary focus. For now you want to secure help in getting started and convince your funding sources that you will become profitable.

Investors will want to know if you’re capable of running the business. Do you need to bring in experienced managers right away? Will you keep some of the existing employees or hire all new people? And where do you find these potential employees?

Funding sources will also want to know if any of your partners expect to work along side of you or if their obligations are only financial.

Your plan will need to specify the key management jobs and roles. Positions such as president, vice presidents, chief financial officer, and managers of departments will need to be defined along with stating who reports to whom. You may hope to run your company as one big happy family – and it may work out that way – but organizations require formal structure and investors will expect to see these issues addressed in your plan.

And as soon as you have employees, you need to consider how you will handle their salaries and wages, their insurance and retirement benefits, as well as analyzing the extent of your knowledge of tax related issues. As you think about hiring personnel and organizing your workforce, you must also confront your desire and ability to be a good boss. If you haven’t contemplated this aspect of your commitment to owning your own business, now is the time to give it serious consideration.

Action Step # 8

Target Your Funding Sources: Where will you find your financing?

As your business concept begins to take shape, you can begin to home in on the most likely financing sources. Issues such as the size of your business, the industry it is in, whether you are starting a new business or buying an existing one, and whether you can provide collateral to a lender are among the issues that must be considered in creating a target list of funding sources. Banks and other funding sources don’t lend money because people with interesting business ideas are nice. They follow specific guidelines, such as the RMA database, which are designed to insure that they will make money by investing in or lending to your business.

For the vast majority of entrepreneurs, the well-known, high profile means of raising money, such as through venture capital companies or by going public, are not viable options. Your own credit, credit rating, and business history are key factors in obtaining financing for your venture through Small Business Administration (SBA) guaranteed loans and other bank credit. Your ability to tap into your personal network of friends, family, and professional contacts is crucial to raising money beyond what your own personal funds or credit can provide. In all of these cases, there are important considerations such as the potential impact on relationships when family and friends become investors.

When you have completed this process of identifying the likely potential funding sources and writing a bankable business plan that addresses their needs and answers their questions (even before they ask them!), you will have greatly increased the likelihood of obtaining the financing you need.

Action Step # 9

Explain Your Financial Data: How will you convince others to invest in your endeavor?

The accuracy of your financial figures and projections is absolutely critical in convincing investors, loan sources and partners that your business concept is worthy of support. The data must also be scrupulously honest and extremely clear. Since banks and many other funding sources will compare your projections to industry averages in the Risk Management Association (RMA) data, I’ve stressed throughout my book how you can use the RMA figures to test your projections before the bank does. Your numbers will be more credible if they compare reasonably to the industry averages.

The actual number crunching portion of your business plan is the place to discuss how and why you need certain equipment, time or talent, how much these items will cost, when you expect to turn a profit, and how much return and other benefits your investors will receive.

More new businesses fail because they simply run out of cash reserves than for any other reason. Investors lose confidence in the entrepreneur and the business and become reluctant to invest more when projections are not met. Had the projections been less optimistic and the investors asked to invest more in the beginning, they probably would have done so. In most cases, proper planning and more accurate projections could have avoided this problem completely.

Your business plan should clearly state the amount of funds you need, how soon you require them, and how long before you start repaying investors. You should also explain what type of financing you hope to acquire, either equity (such as through the sale of ownership shares in your company) or debt (such as loans to the company).

If you’re planning to buy an existing business or already own a business you would like to improve or expand, you will also need to provide a detailed historical financial summary of how well – or poorly – the business has done in the past. This analysis should also include a comparison of this venture’s financial performance compared to the industry standards.

Action Step # 10

Present Yourself in the Best Light: What are your qualifications for bringing your plan to fruition?

The talents, experience and enthusiasm you bring to your enterprise are unique. They provide some of the most compelling reasons for others to finance your concept. Keep in mind that investors invest in people more than ideas. Even if your potential business has many competitors or is not on the cutting edge of an industry, the qualifications and commitment you demonstrate in your plan can convince others to proffer their support.

Your resume will be included in the separate appendix of exhibits at the end of the plan, so this is not the place to list every job you’ve ever had or the fact that you were an art history major in college, especially if these experiences have no direct bearing on your ability to start your own business. But it is the place to emphasize qualifying skills that may not be readily apparent from your resume.

But don’t overlook the impact being some part of your background that might even seem unrelated to your new venture. For example, having been a pilot may demonstrate that you know how to supervise a crew of people working together to make a group experience if not comfortable, at least safe. You have undoubtedly handled dissatisfied or enraged customers. Even that BA degree in art history may enable you to make your products or store more appealing to the eye.

Your unique qualifications will separate you from all the other people who have sought venture capital for similar ideas. Boasting about these skills is not hubris; it indicates that you have a highly honed business savvy.

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