Small Business Blog

Posts Tagged ‘Right’

Online Business Tips For Success…

Thinking in terms of your typical “how to” approach to online business opportunity, those immortal words branded as the “boy scout motto” come to mind. Namely; “Be Prepared.” Just as many a weather beaten “the sea is a harsh mistress” sea fairing captain will tell you (not that I know any, Just speculating here), preparation is the key to weathering any storm.

Online Business Tips #1:

By preparation, I don’t mean to imply that by completing a few tasks here and tying up a few loose ends there, that the job of preparing is something that you can forever leave in your wake.

If anything, the steps you’ll take to prepare to launch your business will be much more like a routine that you’ll maintain to be certain you’ve battened down all your hatches so to speak.

Online Business Tips#2:

Steps like market research to determine income generating potential, financial planning and promotion budgeting, mission statement and company vision; these are all constantly changing values which need to be assessed on a periodic basis.

Much like checking a compass every so often, just to make sure you’re still on course.

These types of measures will make sure that your operation stays afloat and avoids running aground.

Online Business Tips #3:

One of the best pieces of advice I or anyone else can offer to those preparing to embark upon their maiden voyage in online business is this; learn as much as you can from as many different sources as you can before you decide to commit to a particular course of action.

Take a lap around the harbor before you set off around the globe…

Online Business Tips #4:

What I mean quite simple. Take every given opportunity to minimize your risk as well as increase you knowledge base.

I you intend to develop the most incredible product the world has ever seen and completely revolutionize life as we know it. Good for you.

However, you may want to reduce you initial risk by trying your hand at several affiliate programs first. This way, you gain the experience of marketing products without having to invest as much time and money in product research and development.

Taking the same piece of advice a step further, you should definitely invest time and perhaps a few bucks to learn more about how to market a product before you spend any cash on an advertising campaign.

If you stick to these basic guide lines, you’ll quickly find yourself in the favorable position of knowing what to market, how to market it, and how to leverage all the information you’ve gathered to create the greatest return on your investment.

So, don’t just take any one persons word for anything, not even mine (I think), see for yourself. That’s the real beauty of the working online and this new age of information as many call it.

Online Business Tips #5:

A literal fountain of knowledge is constantly available to you, just at your finger tips. All of the information you find may not be as accurate as it could be. But, such is the nature of any medium that allows so many to voice their thoughts and opinions.

It’s really up to you to decide for yourself what pieces of information are useful to you and therefore worth keeping.

I hope that this little blurb has helped to inspire those of you who are still on the fence about taking the plunge and perhaps provided some useful tips for those who are already sailing off into the horizon.

Information’s pretty thin stuff unless mixed with experience.

-Clarence Day

A business letter is not an ordinary communication.

A business letter is one in which some information is passed that should be important enough to put into writing, and more, should evoke some kind of a response.

Write your business letter right and you will succeed.

The Business Letter Form

Remember the business letter is NOT a report. It is a letter.

In today’ world you will be lucky to hold attention to three paragraphs, let alone a whole page.

Decide what it is you wish to say, and be prepared to say it in three short paragraphs.

If you have a long letter to write, do not write it as a letter, but as a report.

A letter is a letter. Be brief, succinct, avoid value judgments, make every word count, write nothing banal, and most of all, keep in mind what kind of a response you wish to invoke.

The Business Letter Format

The Subject.

Always begin your business letter with a subject reference. Do not mix subjects, or include more than one.

The Introduction.

Here in one paragraph you introduce your subject, as well as any crucial information about it.

Imply in the introduction what response you wish to evoke.

The Body.

The body of the business letter is the longest paragraph.

In this paragraph get down to details, but keep them brief and to the point.

Do not give value judgments and do not introduce new material.

The Summary Conclusion.

Here you sell your point and summarize all the points you have made before.

The Salutation.

Develop you own signature salutation.

You can you standard ones like Best Regards or Kind Regards, or find something new that suits you.

Let this be your signature salutation, and stick to it in all your business letters and communications.

The Business Letter vs. Email Letter.

In today’s world the formal business letter is fast becoming a rarity, and is taking the new form of the email letter. However, remember its only a different form or delivery. Follow the same rules as above.

Some business like to write the business letter now on company stationary in electronic form and include them as attachments to an email. This is not a bad idea, and still retains some form privacy.

Business Letter Language Guide

Here are a few tips from communication experts that may help you frame your use of language in your business letter or email.

Speak in the present tense. Avoid a lot of “I will; it should be, and …”

Use simple words. Do not show off your superior vocabulary.

There are very effective words that are commonplace. There are power words, and all of them are simple and impossible to misinterpret

Be direct.

Go to your point, and do not speak in ambiguous terms

Avoid homilies

Remember who it is you are talking to.

If you are speaking to a superior, maintain your distance of respect, while still selling your points across.

Avoid value judgments. Leave these for the letter recipient to decide for themselves.

What does Amazon.com and Walt Disney Company have in common? Believe it or not, both of them started out as small businesses right at home! And you too can be as successful as these two giants if you know the tricks to starting up a small business at home.

Before anything else, don’t get too excited and quit your day job just yet. Consider your business as a “part-time” endeavor at first. It would be a great way to spend your weekends, but never let it interfere with your current work. You would need that steady stream of income to finance your business. Even if you have enough savings just for this purpose, the latent period from the moment you launch your business and until it becomes profitable can take longer than what you expect. And problems are bound to arise anytime. The last thing that you want is to be left with no money in your pockets to sustain your daily needs.

Start with small investments. If you plan on selling a product, produce just the right amount for a test run. The exact quantity depends on you. What you really aim here is to see how your potential customers would react to your product. Sure, you have a really innovative idea that is just what the world needs. But would people want to buy it? Doing a test run with your family and friends would give you a good instant feedback about your product or service, and the potential problems that they can see from a customer’s point-of-view. And if your product proves to be unprofitable, then it wouldn’t be as much of a big deal if you decide to just give up the idea since you only invested a little amount of money into it.

Make a business plan that covers everything. This is important when starting up a small business as it would also help you give a factual data on the profitability of your product against the cost for its production. Your business plan would also be a way to advertise your product to your potential financers. This would help convince them that they aren’t throwing away their money for something that would not prove to be profitable. You can get all the necessary information by research or by asking the business owners or experts in your chosen field of industry.

Financing can come in all forms. It can be from your savings, or from the joint effort of family and friends. There are also banks and other lending companies that provide business loans. Just make sure that you are getting money from a reliable source.

Lastly, before starting up a small business, make sure that whatever type of business you set up, it would be something that you certainly would enjoy doing every single day of your life. Have fun with it! If you are doing something you love, or pursuing a lifelong dream, you are sure to do everything you can to lead it to success.

Business failure happens for a number of reasons that include lack of focus and poorly developed small business plans. New hopefuls often jump into the world of online business with just an idea. They do not have a full grasp of what is involved in starting an online business.

They see what appears to be a great money-maker and without doing any preparation, begin their marketing. Often, they buy pay per click advertising which can quickly drain their bank accounts if they don’t know what they are doing.

When the money doesn’t come as they had hoped, they move onto another idea and repeat the same process, only to fail again.

A lot of planning must go into a business before you start spending money on marketing and advertising, and even before you build that first web site.

The main reasons people fail include:

- trying too many things

- feeling overwhelmed by all the technology

- making wrong choices

- analysis paralysis

- lack of expertise

- driving the wrong kind of traffic

Serious entrepreneurs who do succeed know how important it is to have effective small business plans from the start that ensure all bases are covered.

A good business plan outlines the overall focus of the business, your million dollar market, the audience that it serves, and the steps needed to gain their confidence, get them to your web site and buy from you.

And this is just the beginning. There are many other details that must be considered if you are to succeed. This is what so many would-be millionaires miss.

Take your product or service. If you do not study the market and your competitors, you will have little idea how to build your own customer base. By doing diligent market research, you will know before you invest a penny whether or not your idea is worth pursuing.

Determining factors include the size of your competition. Is your niche already swamped with other marketers going after a relatively small market share? Are people buying what they are offering and at what capacity?

Once you decide that you have a winning, profitable idea you have to know what your competition is doing so that you can do them one better. If you do not know how to do that, your business will fail before it gets off the ground.

Finding your hungry buyers is another challenge that eludes many new marketers. While they succeed at driving large numbers of traffic to their offers, they do not make sales… because it is not targeted traffic.

Do not underestimate the importance of doing strategic business planning before you go after that first sale.

All these issues and more will be resolved if you have a small business plan that outlines how you will proceed. The first step, then, is to take the time to prepare for success, otherwise you might not make it.

A business startup is a risk but it always provides a new opportunity too. It has been seen often that startups companies that have their domain as ‘new technology’ comes out with huge returns. These companies are typically research driven and bring out something new that has a big demand, or comes out with a new way of doing something old. It is also often the case that these companies are owned by people who have been working as senior executives themselves, and so have adequate experience in running a show. So investing in a business startup offers a golden opportunity for venture capitalists (VC’s) and bankers. But sadly, there are many who think twice before doing so, simply because the entity is a startup.

Business Startup and VC

Venture capitalists usually come in at two stages. In the first phase they come in when the new business just has an idea and nothing much. For a new business, financing is always a problem, and so if the VC is happy with the prospect of the new business proposal and what it has the potential to achieve, then it can finance the business startup. In the next phase in which the VC comes in is where the startup already has been in business for a few years and has a few Case Studies and Testimonials to show. In such a case the business startup needs the additional funding because it now needs to spread its wings and grow.

Business Startup: Where Do We Come Across The Most?

The truth is, business startups can be found almost everywhere. It can be a restaurant or a boutique shop where a previous employee or a group of them come out and open their own business. Or it can be a new transport or a travel company where the new entrepreneurs think that they have adequate knowledge and experience and can sustain on their own.

But in technology and the Internet it has been seen that the number of startups are usually much more. And today IT startups are to be seen everywhere, the maximum number of them being in the Silicon Valley in California. Some of these business startups have been hugely successful and today have become big businesses themselves. Many of these companies have gone public and today have a large customer base with clients from across the world. Their example is inspiring others to come out and open their own startup ventures.

Business Startup and Failures

When it works it looks really great. But often it doesn’t and this is what worries most people and makes them stay where they are and not go in for it themselves. In fact according to statistics, the failure rate of business startups is much higher. Startups’ failing is one reason why the dotcom bubble burst at the end of the last century. So this is one reason new entrepreneurs should constantly worry about.

But that is no reason why they should not open business startups. After all, ‘failures are the pillars of success’. If you have the confidence and have a practical plan, then it is more likely that you will be successful.

Financing a small business can be most time consuming activity for a business owner. It can be the most important part of growing a business, but one must be careful not to allow it to consume the business.  Finance is the relationship between cash, risk and value.  Manage each well and you will have healthy finance mix for your business.

Develop a business plan and loan package that has a well developed strategic plan, which in turn relates to realistic and believable financials.  Before you can finance a business, a project, an expansion or an acquisition, you must develop precisely what your finance needs are.
Finance your business from a position of strength.  As a business owner you show your confidence in the business by investing up to ten percent of your finance needs from your own coffers.  The remaining twenty to thirty percent of your cash needs can come from private investors or venture capital.  Remember, sweat equity is expected, but it is not a replacement for cash.

Depending on the valuation of your business and the risk involved, the private equity component will want on average a thirty to forty percent equity stake in your company for three to five years.  Giving up this equity position in your company, yet maintaining clear majority ownership, will give you leverage in the remaining sixty percent of your finance needs.               
The remaining finance can come in the form of long term debt, short term working capital, equipment finance and inventory finance.  By having a strong cash position in your company, a variety of lenders will be available to you.  It is advisable to hire an experienced commercial loan broker to do the finance “shopping” for you and present you with a variety of options.  It is important at this juncture that you obtain finance that fits your business needs and structures, instead of trying to force your structure into a financial instrument not ideally suited for your operations.     

Having a strong cash position in your company, the additional debt financing will not put an undue strain on your cash flow.  Sixty percent debt is a healthy. Debt finance can come in the form of unsecured finance, such as short-term debt, line of credit financing and long term debt.  Unsecured debt is typically called cash flow finance and requires credit worthiness.  Debt finance can also come in the form of secured or asset based finance, which can include accounts receivable, inventory, equipment, real estate, personal assets, letter of credit, and government guaranteed finance.  A customized mix of unsecured and secured debt, designed specifically around your company’s financial needs, is the advantage of having a strong cash position.
The cash flow statement is an important financial in tracking the effects of certain types of finance.  It is critical to have a firm handle on your monthly cash flow, along with the control and planning structure of a financial budget, to successfully plan and monitor your company’s finance.

Your finance plan is a result and part of your strategic planning process.  You need to be careful in matching your cash needs with your cash goals.  Using short term capital for long term growth and vice versa is a no-no.  Violating the matching rule can bring about high risk levels in the interest rate, re-finance possibilities and operational independence. Some deviation from this age old rule is permissible. For instance, if you have a long term need for working capital, then a permanent capital need may be warranted.  Another good finance strategy is having contingency capital on hand for freeing up your working capital needs and providing maximum flexibility.  For example, you can use a line of credit to get  into an opportunity that quickly arises and then arrange for cheaper, better suited, long term finance subsequently, planning all of this upfront with a lender.

Unfortunately finance is not typically addressed until a company is in crisis.  Plan ahead with an effective business plan and loan package.  Equity finance does not stress cash flow as debt can and gives lenders confidence to do business with your company.  Good financial structuring reduces the costs of capital and the finance risks. Consider using a business consultant, finance professional or loan broker to help you with your finance plan.