The best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support is to show them that you have written a great business plan. Make sure that your business plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen. Your written business plan is like your calling card; it will get you in the door where you’ll have to convince investors and loan officers that you can put your plan into action.

Once you have raised the money to start or expand your business, your plan will serve as a road map for your business. It is not a static document that you write once and put away. You will reference it often, making sure you stay focused and on track, and meet milestones. It will change and develop as your business evolves.

Purpose of a Written Business Plan

Writing business plans for your startup business has several purposes in addition to the fact that you are building the road map for every facet of your startup business.

• The planning process for a new business (thinking, exploring, researching and discussing) is a crucial step in starting your own business. A business plan ensures that you actually do the necessary preparation.
• There will be interested parties who are going to want to see your business plan. Among them will be potential partners, providers of equity capital and lenders. You must answer for yourself the difficult questions they will ask. The business plan is your way of doing that.
• A business plan should make obvious any weaknesses you may encounter once you start your business. The act of researching, thinking about, and writing business plans will force you to look at all your facts, your assumptions, and all your projections in a methodological and thorough manner. It’s better to anticipate and plan for these weaknesses before you actually encounter them and are managing the crises.
• You will show your business plan or parts of it to consultants, others in the industry, potential suppliers, and other experts. Your plan can be a basis for further ideas and new options you or they may come up with.

Do you Need to Write Business Plans?

Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. If you are seeking funding support from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and contains sound business reasoning.

If you are approaching a banker for a loan for a start-up business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan. If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.

Back when you were “Evaluating the Potential” on Step 3 of this “How to Start a Business Guide”, on the page entitled Independent, Franchisee, or Associated with a Large Company, you decided whether you wanted your business to be completely independent, a franchisee, or associated with a large company. The decision you made at that point will determine whether you need to write business plans.

• If your business is completely independent, then you need to go through the process of writing business plans. You will benefit greatly from the exercise. If you are going to approach angel investors, bankers or venture capitalists you need to have a professional plan. Find our more from this article.
• If your business is a franchisee, then the franchiser should give you a complete business plan. Your task is to evaluate that business plan. Have your accountant and your attorney review your business plan and any contracts the franchiser wants you to sign.
• If you are associated with a large company, review carefully the business plan provided by the company or your sponsor. Follow the instructions below for a guide to how detailed your plan should be.

The detail of your business plan will vary with the financial commitment and the time commitment you will give to your business. The larger the commitment, the more detailed you will want your plan to be.

The most efficient and effective way to write business plans is to use a business plan template. There are free business plan templates available but they don’t compare to business plan templates you can buy for very little money. The gold standard for business plan templates are those written by a company called Palo Alto Software. They offer two low-cost options depending on the complexity of your business.

Elements of a Business Plan

There is no one fixed way to write a business plan. The nature of the business, its state of development, the need for outside capital and other factors will determine the exact outline of the plan and will also determine how specific the plan must be.

However, there are elements of a plan that are universal:

• Your business concept. This is the concept you came up with in the Small Business Ideas section. Go back to it if you aren’t entirely sure that you have picked well.
• Supply and demand for your product or service. What is the niche you are filling? How large is it? How will your customers find you? What about competition, today and in the future? What is your competitive advantage?
• The management structure you anticipate. Who are the key players? What is their experience in business? What is their experience in the industry? Will you have employees who complement your strengths and make up for your weaknesses?
• The financing for your startup. What is your overhead? What are your fixed costs and your variable costs? Where is your break-even point? What will be your cash burn rate? If these concepts are foreign to you now, you should be an expert by the time the business plan is written.

As you write your business plan, you will rework your plan again and again. Give yourself several weeks to formulate your business plan.

Business Plan Outline

The following outline can be used to write a plan for most small businesses:

I) Executive Summary

A) Objectives
B) Mission
C) Keys to Success

II) Company Summary

A) Company Ownership
B) Start-up Summary
C) Company Locations

III) Products or Services

A) Product/Service Description
B) Competitive Comparison
C) Sales Literature
D) Fulfillment and Delivery
E) Technology to Support Sales
F) Future Products/Services

IV) Marketing Plan

A) Market Segmentation
B) Target Market Segment Strategy
C) Target Market Analysis
D) Competition and Buying Patterns
E) Main Competitors
F) Distribution
G) Business Participants, Partners, Affiliates

V) Strategy and Implementation Summary

A) Pricing Strategy
B) Sales Strategy and Sales Forecasts
C) Milestones
D) Strategic Alliances

VI) Management Summary

A) Organizational Structure
B) Management Team
C) Personnel Plan including Planned Pay Structure

VII) Financial Plan

A) Funding
B) Key Financial Indicators
C) Important Assumptions
D) Starting Costs
E) Break-Even Analysis
F) Projected Profit and Loss
G) Projected Cash Flow
H) Projected Balance Sheet
I) Business Ratios

VIII) Appendices (as appropriate)

Specialized Business Plans

There are a myriad of related plans, projections and forecasts that are appropriate as companies grow. These days there are sophisticated computer programs that serve to:

• Save time
  Get expertise
  Improve results
  Achieve goals

These programs include:

• Financial projection software—Excel templates for comprehensive financial projections (profit and loss statements(P&L), cash flows, balance sheets, ratios and charts) for 3-5-7 years ahead.
• Cashflow forecasting software—Excel templates for projecting cash flows and improving cash management. With rolling 12-month and 12-week forecasts (cash flows plus P&Ls, balance sheets, ratios and charts).
• Business Plan Software—Software for writing comprehensive business plans with optional expert systems to assess strategies prior to drafting the plan.
• Marketing Plan Software—Software for preparing marketing and sales plans and expert tools for determining strategies, penetrating hi-tech markets, setting prices and improving sales conversion rates.
• Strategic Plan Software—Expert software for assessing new business ideas and evaluating and enhancing business and marketing strategies and tactics.

This more sophisticated business software can be purchased from an excellent company with many years of experience, a true leader in the field; visit Palo Alto Software.

Free Sample Business Plans

There are also sophisticated free sample business plans available. You can customize and copy these plans. Read some strategies on getting help for customized plans including where to get free sample business plans.

You Now Know…

A business plan is the crucial roadmap you will follow in creating your business. You now know:

• The purpose of a business plan.
• The need for a written business plan increases as your business is more independent.
• The elements of a business plan. You now have an outline of a business plan.
• Where you can find business plan templates written specifically for your industry.
• Where you can find help in writing a sophisticated business plan.

The post Writing Business Plan appeared first on How To Start a Business Guide.

It is very common to have two full-time incomes in a household. If your spouse has a secure full-time job, evaluate your living expenses to see whether you can afford to quit your job to devote all your energies to your new business. If you can afford not to work for somebody else, you can devote yourself to creating positive cash flow in your new business as quickly as possible.

If you stay at your job while starting to work part time at home, do not compete with your employer. On the one hand make sure your employer continues to be happy; on the other hand, be as demanding of yourself in your own business as your boss is of you at your job. Remember that your business is your future. It is easy to let life get in the way of what you have to do in your business, especially if you work from home. You must have the ability to set your priorities and stick to them. On the other hand, pace yourself. You will be physically exhausted so schedule time off to fight stress.

Time Management is Critical

In either case, whether full time or part time, time management is of the essence. Change your views about time! We often get caught up in the mindset that “There just isn’t enough time in the day.” There is enough time–and it is up to you to choose how to use it! One good technique is to write a to-do list each week and each day. These are the critical things you need to do to advance your business. It’s so easy to be in “emergency mode”, constantly putting out fires. Your critical to-do list will keep you on track. Whatever is not done in a given day automatically goes to the top of the list the next day. For more ideas about time management skills, and a step-by-step guide to beating procrastination, click here.

The post Work Part Time At Home or Start a Full Time Business? appeared first on How To Start a Business Guide.

This page is dedicated to teaching time management principles to those who have no problem with procrastination; they just have too much to do given the amount of time they have. If that describes you, this page is dedicated to you.

The Principle of the Lever

In physics, a lever is a rigid object that is used with an appropriate fulcrum or pivot point to multiply the mechanical force that can be applied to another object. This leverage is also termed mechanical advantage.

Archimedes once stated: If I had a lever long enough I could move the world.

In finance, leverage is borrowing money to supplement existing funds for investment in such a way that the potential positive outcome is magnified. It generally refers to using borrowed funds, or debt, so as to attempt to increase the returns to equity.

Time Leverage in Business

When we refer to time leverage in business we talk about freeing ourselves from trading dollars for hours worked. Since a lever is a device that multiplies the effort applied, if we leverage our time worked, we can achieve productivity to magnify our work effort a thousand fold or more.

Of the powerful time management principles, then, the most powerful one is the lever, which means “DELEGATE THAT WHICH OTHERS CAN DO”

How much time can we save in a day? It’s important to use time management techniques to be as productive as possible. But time management only saves us time to the extent we work more efficiently. However, no matter how productive we are and how much time we can save, we are all still given only 24 hours in a day. So how can we use those hours given to us to get so much more output than the average person? How can we use the time management principle of the lever?

No Time Leverage

In the situation where you are an employee you have no time leverage. You are selling your time for dollars; only the employer has time leverage, based on the number of employees your employer has.

Three Ways to Use Time Leverage

Time leveraging allows us to multiply the effort applied. There are three ways business owners can leverage their time:

1. By hiring employees and paying them less than their value to you. In other words, you earn money for each hour your employees work. The amount you earn is the difference between their total pay (including benefits, taxes, etc.) and their value to you multiplied by the number of hours they work.
   • (employees’ productivity per hour – employee pay and benefits) x number of hours employees’ worked = your earnings
2. By engaging an agent, perhaps training him, and eventually receiving a portion of the profits the agent earns. This can easily be seen in the real estate industry where the real estate broker has a number of agents, each of whom sells houses and shares the commission with the broker.
3. By working synergistically with other people so that the value created when two or more people work together results in greater output. If you assemble an entire team of like-minded individuals, each bringing their particular talents to the table, a large amount of value can be created, thus multiplying the effort of each individual person.

All three of these methods are legitimate ways to leverage your time. Personally I like the third method because it sets up a win-win situation. I look for win-win situations because they are more stable over a long period of time. When each person participates because it is in his best interest then you have established a long-term business plan that allows each person to leverage time.

The post Time Management Principles appeared first on How To Start a Business Guide.

Furthermore, those who master time management skills are able to take control of their lives and function well even under intense pressure and stress.

The central tenet of our time management advice is this: concentrate on results, not on being busy.

The Pareto Principle

The Pareto principle (also known as the 80-20 rule) states that, for many events, roughly 80% of the effects come from 20% of the causes. In time management that means that 20% of the time spent will cause 80% of the results. By using the tips on time management and mastering time management skills, you can optimize the amount of time you spend on effective action.

Beating Procrastination

If you have problems managing your time, chances are that you may be a procrastinator. You procrastinate when you don’t do the most important things. The key to beating procrastination problems is to understand why you procrastinate. There are various reasons for procrastinating. It’s important to determine which fits you. Here are some most frequent reasons why procrastinators procrastinate:

• You are doing the more pleasurable or comfortable tasks rather than the more important ones
• You are doing the tasks that present themselves as emergencies but aren’t really as important as others
• You may feel overwhelmed by the more important tasks so you don’t start them
• You may be a perfectionist who feels you are not going to be able to do the task “perfectly” so you don’t do it at all
• Fear of failure or even fear of success may be freezing you
• You love the rush you get by doing things in the last minute

Here’s how you can beat procrastination:

Step 1: Figure out exactly when and how you procrastinate. Recognize self-defeating behaviors such as fear and anxiety, difficulty concentrating, poor time management, indecisiveness, and perfectionism. Work on yourself. You may need help in the form of a coach or a therapist.

Step 2: Discipline yourself to use time wisely—set priorities. Develop good time management skills, as described below.

• Write an activity log to help you analyze how you are actually spending your time. Write the start time, the end time, the activity description and the value you place on the activity (high, medium or low). After a week, take a look at your log and identify how much time you are spending on low value activities. Identify also when during the day you are spending your time less wisely so you can improve your performance during that time of day. Finally, identify the time of day you have the greatest energy and get the most done. These are the times you will want to do your most critical and most complex tasks.
• Start a “To-Do-List”. Every evening prioritize the tasks that need to be carried out the next day. Put the most important tasks at the top of the list and the least important at the bottom. If something doesn’t get done one day, it gets pushed to the next day. These “to-do” items should be your priority each day. Do them first or do them during the most productive time of your day. In either case, do the highest priority tasks first. Each item on your to-do list should be relatively short. If you’ve got a large task break it down into its component parts.
• For large projects set up the following Goal Fulfillment Program. Set goals—a goal is the decision to get something, to do something, to be something. Your goals should be quantified so they can be measured. Make plans—plans, if completed, should cause you to get your goal. Decide on projects that must be completed to accomplish the plan—each plan should have several projects, the sum of which is the entire plan. Tasks are things you do to complete each project. The sum total of the tasks should complete the project. Put the tasks on your to-do list when the time is appropriate.

Step 3: Scheduling is the process by which you plan your use of time. Use effective scheduling techniques, as follows:

1. Get a Day Planner and use it. Identify the time you want to be working and the time you want to dedicate to your personal life.
2. Block off the time it takes for you to do what you need to do on a daily basis.
3. Schedule your to-do list and the tasks you need to do each day to move you towards your goals, as established in your “Goal Fulfillment Program”.
4. Block in Contingency Time. Very few things appear to get done in the time you think you will need. If you block off some extra time, you will get them done.

As you master the skill of time management, you will find yourself to be more effective. You will also find that your stress level goes down as you take control of your time.

Now you Know…

• People who make good use of time management advice are among the most effective people, the highest of achievers.
• Use the Pareto Principle to your advantage.
• The key to beating procrastination is to figure out the source of your procrastination and then use the tips on time management given to beat procrastination.

The post Time Management Advice appeared first on How To Start a Business Guide.

A SWOT analysis starts with a definition of a desired end state or objective. In an initial marketing plan of a business startup that desired end state or objective will probably involve the attainment of the marketing objectives after a year of business.
Identification of SWOTs is essential because the steps in the process of planning for achievement of the selected objective may be derived from the SWOT analysis.

The four different factors in the SWOT analysis are defined as:

• Strengths: attributes of the organization that are helpful to achieving the objective
• Weaknesses: attributes of the organization that are harmful to achieving the objective
• Opportunities: external conditions that are helpful to achieving the objective
• Threats: external conditions that could do damage to the business’s performance

Examples of strength attributes which can be used to gain the business a competitive advantage could be factors such as:

• Patents
• Strong brand names
• Good reputation among customers
• Cost advantages from proprietary know-how
• Advantageous manufacturing capabilities
• Superior personnel
• Favorable access to distribution networks
• Superior product
• A superior location where the product can be purchased
• Advantages in promotion, such as advertising, public relations, word of mouth and point of sale

Your business will capitalize on its strengths

A weakness can be defined as the absence of competitive strength such as:

• Lack of patent protection
• A weak brand name
• Poor reputation among customers
• High cost structure
• Lack of access to good raw materials or natural resources
• Lack of access to key distribution channels

Your business will shore up its weaknesses

Analysis of the external environment may reveal opportunities for profit and growth for the startup business. Some of these include:

• An unfilled customer need
• Loosening of regulations
• A growing market segment
• Technological change
• Socio-cultural changes

Your business will use its strengths to invest in its opportunities

External environmental threats can be the flip side of opportunities. These can include:

• Negative socio-cultural changes
• Technological changes that threaten to make a product obsolete
• Threats of changes in laws and regulations
• Shifts in consumer tastes away from the business’s products
• Increased trade barriers

External threats can’t be controlled but they need to be identified and may be able to be impacted.

The results of the SWOT analysis are often presented in the form of a matrix:  add image

Once a SWOT analysis has been done, the results should generate a list of ideas that can then be turned into Goal Statements.

The post SWOT Analysis for Your Startup Business appeared first on How To Start a Business Guide.

If it’s to be, it’s up to me.

That doesn’t mean you are your only success maker. It does mean that you must take personal responsibility for making your own success.

Soar to Success – Characteristics of Successful People

Most successful people have similar characteristics. Success can come in many forms—business success is only one area. These are some of the attributes of successful businesspeople, people who have been their own success makers:

1. Successful people have a purpose in life.

Living a meaningful life starts with a sense of purpose. Successful and happy people have usually spent time considering their unique purpose in life and have taken steps to fulfill that purpose.

Each person has a purpose in life. If people do not have it at the beginning, they find their purpose and then devote themselves to it. Successful people follow their purpose with a passion which resonates in their hearts. These people not only have ideas to build on but they believe in themselves and their ideas. They do not worry about what other people believe. If you have a purpose in life, it’s easier to give that purpose your commitment. Commitment provides the fuel – the energy – to keep moving forward. Successful people know what they care about and have committed themselves, on a deep level, to getting it.

2.  Successful people get started

Take a look again at the right approach to business startups and making real money. So many people convince themselves that the present is not the best time to start, and the best time to start never comes around. Like the amazing compounding effect of interest, those who start young have the most time to become rich. However, there are others, like Ray Kroc, who was actually 52 years old and a multi-mixer milkshake salesman when he took over the McDonald’s Corporation in 1954 and built it into the most successful fast food operation in the world. He ended up amassing a $500 million fortune during his lifetime. The bottom line is this: the best time to start is today. Don’t put it off. If you are a procrastinator see the article on procrastination in this website.

Another quote on success, this one by the British Prime Minister Benjamin Disraeli:

The secret of success is to be ready when your opportunity comes.

Being ready to me means that a success maker actually takes the opportunity and doesn’t let it pass by.

3. Successful people are financially literate

Being financially literate helps you to make the right decisions about the lifestyle your business will support. Go through this website, part of which is designed to help you become financially literate. Being financially literate helps you decide where to spend your money. Here’s an eleven minute video explaining why the rich get richer and why the poor stay poor.

Part of being financially literate and one’s own success maker is to invest in oneself. Have you ever seen a successful person’s personal library? It’s usually packed full! Successful people are willing to invest in themselves, either through reading, attending seminars or workshops. They know they don’t have all the answers so they seek people that have the answers they’re looking for.

For entrepreneurship books, websites and other resources I have especially enjoyed, see the Business Resources page.

4. Successful people are open to new ideas and at the same time they are decisive.

They don’t close themselves off from information that might help them. It is said that the most expensive thing you can own is a closed mind! It will cost you a fortune and you won’t ever know it!
Part of being open to new ideas is being courageous. Often, successful people are risk-takers, but more importantly they’re courageous. They tap into the courage that lives deep inside themselves and use it to break ground, try new things and put themselves out in front.

There’s an old adage that says a person should be quick to make a decision and slow to change it. Successful people do just that. They don’t vacillate or sit on the fence. They decide and move forward. Indecisiveness will kill momentum.

5. Successful people don’t trade hours for dollars. Instead they find a system that works and then repeat it over and over again.

When you get a job you trade your hours for dollars. If you have a skill that’s particularly in demand you might become well off by doing that. However, you will not become rich. To become rich, you have to leverage the hours you spend.

Work towards long mutually rewarding relationships that will sustain what is called a “successful system” or a successful, recession proof business plan. Once you have found what is successful for you, do it over and over again. Ray Kroc, a success maker, figured out a successful system for McDonald’s and then he franchised thousands of them.

Sam Walton, another success maker, figured out how to run a successful discount department store and then kept building more stores until today Wal-Mart is the largest public corporation by revenue in the world. Invariably, successful people learn that part of that system, or plan, involves the value of building a team. Together, they find, the mountains are less challenging to climb. A person with an unstoppable spirit will always look for creative answers or solutions to whatever arises. There will be times when a simple solution will not fill the bill.

6. Successful people are persistent, consistent and patient. They are also willing to work hard

Neither Ray Kroc nor Sam Walton became rich overnight. Success takes time to build. Successful people, who are also happy, have learned to allow the things they want to arrive in their own perfect timing. They honor the natural flow of life and seldom push to get what they want. Both Ray Kroc and Sam Walton were persistent and patient. It’s not enough to get started and follow through. You have to give it the time it takes to become successful.

There is no substitute for hard work—it always looks easier to others—but hard work is not enough. Thomas Edison tried 10,000 (or 700 or 1,000 depending on your source) different filaments before he was able to design the first commercially practical incandescent light. He then used mass production techniques to replicate that success over and over again. However many failures Thomas Edison had before finding the successful model, the principle remains the same: he exhibited all of the success traits in becoming very rich manufacturing and selling light bulbs. No such thing as “giving up” in a successful person’s mind. Just like the Energizer Bunny, the successful person keep going and going. As they say, success is 98% showing up, 2% talent.

Thomas Watson, who built IBM into the greatest company of his day said:
“Would you like me to give you a formula for success? It’s quite simple, really. Double your rate of failure. You are thinking of failure as the enemy of success. But it isn’t at all. You can be discouraged by failure or you can learn from it. So go ahead and make mistakes. Make all you can. Because remember that’s where you will find success.”

President Calvin Coolidge in a quote on success famously said:
“Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination are omnipotent.”

The post Success Maker – How You Can Make Yourself Successful appeared first on How To Start a Business Guide.

The approach we are taking is the same as a shopper deciding what he wants to buy and then going to the mall to get it, as opposed to wandering the mall aimlessly wondering what present he could possibly get for his wife this year.

If you are still looking for inspiration for your small business ideas, read about and then watch a video giving you four business principles to look for when deciding on a business idea.

Here are some more ways of thinking about the personal and business goals you thought about in Step 3, “Your Goals”. Go through them carefully to come up with a list of small business ideas. As you come up with your list of small business ideas remember this philosophy which bears repeating:

  …Business is not about tricks, win-lose deals, and dishonesty.  It’s about action, persistence, patience, honesty, faith and hard work.  Business is about creating long-term relationships; it’s about making those relationships WIN-WIN.  Business is about creating value in the world and being compensated because you have made people’s lives better.  Business is about getting what you want by giving people what they want or need.

Follow your passion

What do you enjoy doing in life? What are your hobbies and interests? Do you enjoy dealing with people or are you happier working on your computer? Don’t be afraid of sales. Every person has to sell, even if they are selling themselves. What’s important in your life?

Follow the money

What large need can you fill? What niche can you occupy? Be a specialist, not a generalist. Consider what people will still want or need during a recession. In fact, think of what people need more of during a recession. How about helping people create larger incomes or helping people save money?

Don’t try to fight big companies unless you have a big competitive advantage they won’t be able to overcome with lower prices

You will never be able to compete with the big companies on the issue of price. You will be able to win on the issue of service.

Consider the trends

Can you fill a growing need? Remember that business is about making people’s lives better in some way. Think of solving a problem for people, filling a need, or satisfying a want. Determine your unique value proposition.

Establish repeatable business systems

The more predictable, repeatable and reliable your business activities are, the more efficient you become. By studying, streamlining and then documenting a systemized approach to customer service, financial management, team communication, marketing, etc., you’ll be able to free your mind of the procedural aspects of your business and focus more time on creative and innovative ways to be valuable to your customers.

Special for the Work at Home Mom

If you are a stay-at-home mom looking for a business, there’s a great business resource full of small business ideas just for you. Go to the Work At Home Mom page now.

List of Small Business Ideas that May Work for You

If you are still looking for a business, there are lists of low-cost business ideas that may spark an interest. Here are some resources I like:

If You Still Don’t Have Your Small Business Idea

If you still haven’t come up with your list of small business ideas, buy a blank book. Start out by writing out what you want in your life and how your business can be in harmony with that. Carry your book around with you and write your thoughts, aspirations and insights. Reflect on journal entries to learn from the past. Use your journal to slow down your thinking and gain a new perspective. The best collecting place for all of the ideas and information that come your way is your journal.

Your First Financial Tool — Break-Even Analysis

If you have your idea, it’s time to use your first financial tool to test whether the idea will produce an acceptable profit.

Use the Break-Even Analysis tool to see whether you project your business idea to produce a profit.

You Now Know…

Many people who want to start their own businesses have difficulty coming up with a viable list of small business ideas. You now know:

That the best ideas are those that meet your goals.

• How to establish a framework of goals to test your list of small business ideas. You have a list of goals I used to help you come up with a goal sheet.
• That you can look at my business model and how that model achieves my goals.
• Lists of various sources to help you find your idea.
• A financial tool–the break-even analysis–which can help you determine whether your idea is viable.

The post Small Business Ideas appeared first on How To Start a Business Guide.

or

Look first at criteria to use when looking for professionals who can give you solid advice.

You Now Know…

Small business advice in the form of professional advisers is an invaluable resource for the entrepreneur. You now know:

• You will depend greatly on the advisers you choose. Choose wisely.
• Criteria set out in the “Advice on Starting a Business” page of this website sets out what to look for and how to choose your professional business advisers.

The post Small Business Advice appeared first on How To Start a Business Guide.

Company Analysis includes:

• Goals
• Focus
• Culture
• Strengths
• Weaknesses
• Market share

Customer Analysis includes topics such as:

• Number
• Type
• Value drivers
• Decision process
• Concentration of customer base for particular products

Competitor Analysis covers such topics as:

• Market position
• Strengths
• Weaknesses
• Market shares

Collaborators are players such as subsidiaries, joint ventures, and distributors, etc.

Together with the SWOT analysis and the PEST analysis, these factors make up the Situation Analysis, or how things stand today before you start your business.

The post Situation Analysis appeared first on How To Start a Business Guide.

The most common and most costly mistake is choosing the wrong business. Choosing the wrong business most often comes from failing to set goals. This page gives you a framework for setting and achieving goals–both personal and business goals.

Read the entire page to learn how to set and achieve your goals; then determine what your personal and business goals will be (try the goal sheet here)and whether a business that you may be considering will achieve those goals.

The Correct Decisions in the Correct Order

Whether or not you already have your business idea, go through this page to determine whether the business you are getting ready to start is a good business for you.

Whose Advice to Take
It’s also important to determine whose advice to take in evaluating the potential of your business idea to achieve your personal and business goals. There will be people with your best interest in mind who just aren’t in a position to give you good advice. Others will have their own agenda. Still others will be in a good position to give you good advice and will not have their own agenda. Watch the short video below to determine how to distinguish among the different advice givers. This advice is true for any industry. And remember, you are setting and achieving your goals.

Make the Most Important Decisions First

Now that you’ve made the critical first decision of taking your future into your hands and starting your own business, you need to make decisions on the basis of the answers to three more questions, each in its correct order. They are:

1. What are my personal and business goals?
2. What are the correct strategies to achieve my goals?
3. How can I execute the strategies I have set to achieve my goals?

The first question you need to answer is this:

I. What are my personal and business goals?

You will have both personal and business goals. Make sure you’ve got those goals clearly in your mind.
It is critical that you go through this process now. These are going to be the factors you will use to evaluate your business ideas.

Setting Personal Goals

For a list of my personal goals, a list that will give you ideas for listing your personal goals, look at the Goal Setting Forms. You can download and copy the list of goals in pdf format and use the list to evaluate your business ideas.

In considering your personal goals remember the following:

• People who go into business for the money only will be paying for it the rest of their lives. Will I ENJOY doing this business? Am I following my PASSION
  

  The biggest mistake people make in life is NOT making a living at doing what they most enjoy. – Malcolm S. Forbes

• Start your business with the end in mind. Will this business give me the LIFESTYLE I want?
• When deciding on the financing of a business, take into account your living expenses for the first year. Do I have ENOUGH MONEY to start this business and enough income from other sources to live before I start making money?

Whatever personal goals you have remember this about business:

…Business is not about tricks, win-lose deals, and dishonesty.  It’s about action, persistence, patience, honesty, faith and hard work.  Business is about creating long-term relationships; it’s about making those relationships WIN-WIN.  Business is about creating value in the world and being compensated because you have made people’s lives better.  Business is about getting what you want by giving people what they want or need.

Setting Business Goals

Once you have decided your idea achieves your personal goals consider whether your idea achieves your business goals. Consider each of the following factors when thinking about your business goals.

• Business is ultimately about giving people what they need or want. Are you making people’s lives better by giving them what they NEED or WANT?
• Be a specialist, offer something others don’t. Don’t rely on a lower price as your only advantage. Do you have a CLEAR ADVANTAGE over others in giving people what they need or want?
• Follow your passion but make sure you will make money. On the one hand, you should do what you love; on the other hand most hobbies will not make you money. Make sure it’s a good business vehicle.
• Follow the money. Make sure your product or service is not a commodity. A commodity is characterized by there being no (or little) difference between different suppliers. If you are in a commodity business you compete on price alone. Chances are that you will not be able to survive if you cannot show a unique value proposition.
  • If you market an invention, be sure you have a patent which you can get at the United States Patent and Trademark Office.
  • Look for a unique and consumable product or service. If it unique, customers must come to you. If it is consumable, you are not dependent on continually finding new customers.
• Don’t try to fight big business unless you know you are going to win. Many long-standing small businesses have closed when large competitors have entered their market. Make sure you have an advantage that large businesses can never overcome. You will never be able to compete against the likes of Wal-Mart or Home Depot unless you offer something unique they cannot offer. Any business model that puts you in direct competition with Wal-Mart, Amazon, Dell, or eBay should be a non-starter for you. These larger companies can do it better, they can buy products cheaper, they have deeper pockets, and can sell at a loss longer than you can. The only way to win – don’t compete with them.
• Follow the rule of good business timing. Look for trends. Consider the demographics. As an example, there are 78 million baby boomers. When they were born, the baby food business boomed; as they grew to school age schools were built; when they bought their first houses the real estate industry exploded. Today, as they start turning 60, the wellness industry is in great demand. Look for a large and expanding market. For more on business timing, look at the video accessed at the bottom of the page on starting a recession proof business.
• Look to establish a business system. Figure out what will be successful, perfect it and then be able to do it again and again. This is the essence of a successful business. You can follow the link at the bottom of the Goal Setting forms to see how my business model does this.

Now that you have set your personal and business goals, you are ready to start evaluating your answers to the second critical question:

II. What are the correct strategies to achieve my goals?

Determine whether you Want to be Completely Independent, a Franchisee or Whether you Want to be Associated with a Large Company
To determine the correct strategies to achieve your goals determine at this point whether you want to be completely independent, a franchisee, or associated with a large company.

Now that you have your Business Idea, How do you get the Knowledge you Need to Set the Correct Strategies?

Take the idea or ideas you have come up with and do your research. The more research you do, the more you realize how little you know. However, if you do enough research you will get to the point where things start to become clearer again. When that happens, you know you are on the right path. There are four techniques for skill acquisition, which is the ability to know what you are doing:

1. Work for somebody else in the industry and learn on their dime. Just be sure not to compete with them while you are still employed.
2. Get a mentor, but be sure it’s a win/win situation. The most stable relationships are win/win situations. You will ultimately gain the most both in the short run and in the long run if you can make sure that both parties gain. Give the mentor an incentive to help you; ideally you will not have to pay that incentive from your profits. Consider three types of relationships:
   • Employer/employee—the more the employer has to pay, the smaller his profits. If he pays the employee everything the employee is worth to him, he will not benefit from having hired the employee.
   • Broker/agent—in this relationship the broker will train the agent and provide a business within which the agent can work. Each sale results in a commission which is split between the broker and the agent. If the agent is good and ambitious, he will leave the agency arrangement and become a broker. The broker will then have trained his competition.
   • Mentor/mentee—in this relationship, as in the others, the mentor trains the mentee and helps him reach his goals. The mentor and the mentee both make money from the mentee’s work. The mentor will have earned his money by training the mentee. A unique characteristic of this relationship, however, is that the money the mentor makes does not come from the mentee’s profits. There are many ways to set up a mentor/mentee relationship, depending on the industry.
3. Learn from experts/consultants—this is a great way because this is what they know how to do. While the win/win isn’t as exact as mentor/mentee, there are many good business coaches and consultants both online and offline who can help get your business started right.
4. Take business classes and specialized classes in your industry, research and talk to a lot of people in the industry—people like to talk about themselves. They will give you lots of information. One note, talk to the people who have been successful in your industry and be careful whom you believe. The video below gives a great lesson on this. It starts with one industry and then gives examples taken from other industries.

If you have your idea and you want to go forward with it, it’s time to choose a name and get your business licenses.

Where to Go from Here – If You Still Haven’t Decided on a Business

If you still don’t have an idea for your business, the following may help you:

• Go to the principles of a recession proof business page. After reading the page fill out the information requested and watch a 25 minute video which gives a business model that may speak to you.
• Go through the working from home step, paying particular attention to the section on starting your website and the section written for stay at home moms. Working from home can be advantageous in accomplishing many of the goals found in the Goal Setting forms.
• Go through Step 5 and determine whether a franchise is right for you. This page will take you through the process of choosing and evaluating a good franchise for you.
• Go through Step 6, ideas for a small business, which contains other resources to help you.

The rest of this website is dedicated to answering the third critical question:

III. How can I execute the strategies I have set to achieve my goals?

You Now Know…

You have determined what goals to take into consideration, both personal and business, in coming up with and evaluating your personal and business ideas. You have taken your ideas and determined what is really right for you. You now know:

• The most common and costly mistake is choosing the wrong business
• How to take into consideration your personal and business goals when coming up with or evaluating a business idea
• The advantages and disadvantages of starting a business where you are completely independent, where you are a franchisee, and where you are associated with a large company
• The benefits of mentor/mentee relationships
• How to get the knowledge you will need to be successful in your business
• Whom to believe when looking for information

The post Setting and Achieving Goals appeared first on How To Start a Business Guide.