How is it that some companies are successfully growing faster than others in the same industry? Fast Track companies handle new projects or target markets like a general might plan a battle. But before you declare you’re a commanding officer, realize that the secret is:
Having a complete “beginning to ending” plan will help take the [Read More]
If you are thinking “Gee, I’ll make 2014 great with a masterful business plan” — take a couple deep breathes and get real. For years I’ve been an advocate of a One Page Business Plan by Jim Horan, which is simply Vision–Mission–Core Values–Goals–Projects and helps people get the “must do work” on to [Read More]
Every so often when I tell people I own a business they look at me in amazement. I’m asked all sort of questions like how did I start? Where did I get the money to start? How many hours a week do I work? Just to name a few. They often walk away is disbelief at my answers. So let’s take a moment to bust some myths.
- You need to have money to make money: I started my business for less than $200. I bought a domain, a years worth of hosting and business cards. Grant it my business is a virtual business and I didn’t need to buy products or create a store. But I didn’t get my first clients because of that $200. I started my business and got clients because I went out and found clients. None of them even looked at my website and I didn’t even give them a business card. The point is if you want it you will find a way. Isn’t that what being an entrepreneur is all about? Creating opportunities.
- You will work 60-80hrs a week: There will be times you will work long hours. But that shouldn’t be a weekly thing. Most of the time we try to do too much or take on too much. Coupled with not charging enough can force you into working long hours. Before I realized my worth I had to bill 40 hours a week just to pay bills/overhead. Then to work on my business I was putting in another 15-20hrs a week. That got old real fast. I wanted to work 40-45hrs a week in total for my business. So I raised my rates to what I was worth, found clients that would pay, focused on what made me money, cut out the time wasters, and outsource the rest when necessary. Now I need to bill roughly 20 hours a week to pay bills/overhead. However I still work about 30-35 hours a week for clients and about 5-10hours a week building my business. It is about finding that balance.
- You need to make millions of dollars to be considered successful: Businesses come in all shapes and sizes. Maybe you just want a business that you work on 5 hours a week and make $500 a month. Maybe you want a full time business that brings in $100,000/yr. It is all about settings realistic goals and outcomes. Success is meeting and exceeding those goals. My business will never be as big Intel or Microsoft. Does that mean my business isn’t successful? Nope. Being a big company like Intel isn’t my goal. My goal is to provide quality web design and development services to small to mid size businesses which will garner me money for a comfortable life.
- You need a very detailed business plan: Don’t get me wrong, you need a business plan. But it doesn’t have to spell out your entire business life. At the least it should be enough to start your business voyage. From there you can work on it, just don’t forget about it. Sometimes it takes just getting out there and starting your business to understand what exactly your business plan should be about.
- If you build it, you will get business: This couldn’t be more wrong. I’ve watched many of businesses fail just because they think having a business will automatically get them clients. You need to build your customer base by building relationships, marketing, and selling your product/services. This takes time and a lot of effort.
- Big competitors will destroy you: For a lot of people there is something about small businesses that people just love. Maybe its not dealing with a faceless corporation. Maybe its supporting local businesses. But really, it is about you as a business being able to provide a quality product or service. Who cares if you founded your company yesterday. Be totally kick-ass at what you do and provide a product or service that people want and you will be successful no matter how big your competition is.
“You gotta get a niche” is heard over and over and what I’ve seen is just finding the right micro market can be hard. Realize that most of us have some selected information or knowledge we can share. Using the word NICHE, this is a simple way to start thinking as discussed in Susan Friedmann’s [Read More]
Remember; there is a limit to the amount of revenue you can produce all by yourself. If you charge an hourly rate and you work for clients you can multiply the hours you will work times your hourly rate and this is the maximum income you can produce in a year. How much time you [Read More]
Have you been down the rabbit hole lately? Maybe this happens to you, too. You look for information on one topic or fact on the internet and it leads to . . .
Well, I was reading local news article called the Last Straw at Maumee Bay State Park. Susan Pollock talked about the resort no longer providing a straw with your drink because of the actions of Milo Cress. He is working one straw at a time to make a better world because in the USA we use 46,400 large school busses of straws each year!
Thinking about waste, I go straight to how can we Lean Up what we are doing. Often, as a consultant at a small businesses when we start talking about getting the business lean, the employees often think “Well, there goes my job” but true lean has been defined by Mark Graban as
- Elimination of waste – waste is the opposite of value-added.
- The Practice of respecting people – beyond being nice.
Back to young Milo Cress, [More]
Dreaming about the value of your business? Especially when Instagram sold for $1 Billion in 2012 to Facebook and Tumblr being sold in May 2013 to Yahoo for A$1.1 Billion with $13 Million in revenue. These were both still very much start-ups Instagram with 13 employees and Tumbler with 178. These two businesses have won the business start-up lottery.
Sometimes, serendipity will knock at your door as it did with Paypal when the elegant software made for the Palm and was being used by 12,000 users was discovered by 1.2 million users selling crafts and beanie babies to each other on Ebay. More often than not, businesses are sold based on real financial data that proves the business is profitable and has a teachable and repeatable process to drive revenue.
We all would love to win the business lottery, but most of us will do it the old fashioned way, creating a cash flow machine. Getting to HOW your business will do this is key - for more ideas go here.
Even if your business is still young – less than 2 years old, knowing the answers to this questions will help you grow a profitable asset for your future. One of the most intimidating aspects of selling a business can be facing the barrage of questions during the various management presentations to potential acquirers. Start thinking about these now – you never know when opportunity will come knocking.
- Why do you want to sell your business?
- What is your cost per new customer acquired?
- What is your market penetration rate?
- Who are the critical members of your team?
- Who buys what you sell?
- How do you make what you sell?
- What makes your product truly unique?
- Can you describe your back-office setup?
Building your business knowing these answers, will help create an Asset for Your Future. Of course this is not an exhaustive list, but it’s a good start when you’re preparing to represent your company to your potential buyers. You can check you “sellability status” for your business with this 15 minute questionnaire at Get My Score
If your business is getting a little too much for you to handle on your own, you may need to make the decision on whether or not to hire a full time staff member or an independent contractor.
Before making your decision make sure you understand the differences between the two. Here is just a few items to consider:
- Control over work
- Ability to sub-contract/delegate
- Basis of payment
- Equipment, tools and other assets
Whatever decision your business decides to make, be sure to understand the laws and regulations before you hire. Mis-classifications of an individual as an independent contractor may have a number of costly legal consequences.
If you were to draw a picture that visually represents your role in your business, what would it look like? Are you at the top of a traditional Christmas-tree-like organizational chart, or are you stuck in the middle of your business, like a hub in a bicycle wheel?
As anyone who has tried to fly United [Read More]