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Five Things You Need To Remember Before Starting a Small Business

Posted on May 24, 2019 in Uncategorized

Everyone knows someone who has decided to go into small business but did you know that 70% of all small businesses fail within the first 12 months of operation. In some countries that failure rate is as high as 85 to 90%. Small Business is one of the toughest industries you can ever decide to take on and most people who go into small business go into it for the wrong reason.

I have started 4 small businesses over the last 10 years and every single one of them has been started from scratch and survived into a thriving business. Just recently I have decided to sell one of the businesses off cause it had done what I expected it to do which is the first issue you need to think about.

Issue 1. Have a Clear Understanding of What You Want To Achieve In Your Business

The majority of people, who actually go into business, go into it for the wrong reasons. Even I have been guilty of that. So what is this wrong reason, most people start a small business because they believe they can do a better job then their current boss. Maybe this is true, maybe it is not but what most people really want is better working conditions and better pay. No one can blame you for wanting that. If that is all you want, then I strongly suggest you stay away from small business.

One of the key issues you must remember before evening thinking about starting a small business is this. Do you know what your business will look like? If you were walking down the street, how would you want to be found? What impression do you want to give to your clients? What clearly do you what to achieve in this business?

The second clear understanding you must have of your business is, when will you know when it is finished? When you have built what you want to achieve and more importantly, how will you get out?

See most people when they go into business have no exit strategy and that is one of the worst things you can do. Before you ever start a business, the first thing you must work out is how you are going to get out of the business.

Two years ago, I started a small car cleaning business. My wife and I both started it because she wanted to see if she could build a business. Our exit strategy was to sell the business once it was done. How we would sell it was something we were not sure of?

See we could have taken a number of approaches to this. Our exit strategy could have been to franchise the business, sell it to a single owner or to float it on the stock market. We chose that we only wanted to sell it to another owner, but we still built the business in such a way that there was still plenty of growth and opportunity in the business for the new owner, but we had removed the risk for them on how to run the business by clearly documenting everything they needed to do to run that business.

Before ever starting a business, always think about how you will exit the business, when you have achieved your objective for that business. If you do not have an exit strategy in mind, then you will never get out of the business.

Issue 2. Keep a Strict Schedule

Small business is consuming. Unlike in large corporations where you can hire many people to do a range of tasks, small business requires the small business owner to do many of the tasks themselves. Some of the tasks include doing your books, lodging trademarks, doing the ordering etc. Often when you start in small business, you can not afford to hire people to do these tasks.

What I have personally found is that if you do not keep a tight schedule and document your meetings and tasks you have to do then it will not take very long before you will be swamped by all the things you have to do in the business every day. It is this phenomenon that often leads small business owners to quit and fail in the first twelve months. Let me tell you this, the warning signs that this is starting is when you say to your wife on a Saturday or Sunday afternoon that you are going down to the office to catch up on paperwork for a few hours. Once you get into this habit, you will never stop doing it and the business will consume you really quickly.

I strongly recommend all small business owners keep a diary. My preference is to use Microsoft Outlook, simply because it includes a calendar and you can make sure that each day you schedule your work plus your appointments to make sure you do not forget anything. If you do this, then you will find over time you can get through this plus you will learn how long it should take to do the various jobs that make up your business and whether it is worthwhile in getting someone to actually do those tasks for you.

Issue 3. Build Your Own Mastermind Group

I read a book a little while ago called Think and Grow Rich and is written by a gentleman called Napoleon Hill and he talks about the thirteen secrets to success and obscene wealth. One of the things that I learned both from this book and being a small business owner was that I needed a Mastermind Group.

The Mastermind Group is simply a group of professionals who can help me achieve my objectives for my business. Literally anyone can be part of your mastermind group and some of those would be people like a lawyer, an accountant and other people like your peers who can help you in building your business but it may also include people who are not in business as well to help you keep that balance. The Mastermind Group are really those people you turn to for advice and direction. You do not necessarily have to take their advice but a good mastermind group will allow you run through scenarios on what is happening and the potential outcomes.

Issue 4. Have one night when you do something on your own for you!

One of the big issues that I have had over the last ten years is that I have not been doing every single week is something on my own but I say that I am in the process of changing that. Often when you start in business, with the excitement of building your own business you get so consumed that you forget about a life outside of your business and your business becomes your life.

This is really not a good thing nor is it healthy. Even multi-billionaires do things for themselves outside of business. Look do not get me wrong, business is fantastic and fun and can be both enjoyable and a nightmare however there are other things out there outside of business.

When you start a small business, do not neglect your sports, do not neglect doing something social, if you do, in the long run you will find that you business suffers. Plus, in small business it is very easy to become bitter and twisted but by maintaining those none business activities it will help you to balance your life.

Issue 5. Don’t neglect Your Partner or your Family

I would love to see the divorce statistics for small business owner’s because I am quite sure that the divorce rate in small business would have to be about 70 or 80%. The majority of married couples (and I am talking about 90% of the small business people I Know) that I know who have gone into small business in their 30’s have actually been divorced within 18 months of them starting the business.

Look there are lots of reasons why this happens, but in a lot of the cases, the partner who has gone into business neglects their family and money gets tight. In the partners case it is not their fault it is simply because the person gets consumed into the business and they forget they have a life outside of the business.

If you have a family, make sure that you do at least one activity a week as a family. Whether it is having a family night at home such as a video night or games night, or even just going to the park to play once a week, make sure that you do it. PLUS, you must ensure that at least one night a week must be for just you and your partner. If you do not do that your marriage or relationship will suffer.

One thing I share with all the people who come through our training business is that if you want to go into business that is cool but you must be prepared to accept two things –

1. You must be prepared to start from scratch if your business does not work
that is you must be prepared to start with just the shirt on your back.

2. You must have 100% support of your partner and family

If you cannot accept these two things, then do not go into business because too many people who I see that start on this journey fail and end up miserable and have such a downward spiral which leads them to doing something silly, like take up drinking, drugs or try to commit suicide. Remember, 70% of all small businesses fail within the first 12 months. If you were a betting man would you back something that only had a 30% chance of winning, not likely, yet people still go into small business.

The bottom line is this, small business can be the most awesome ride of your life, but it can be also the most difficult and when you choose to go into small business, take your time and plan what you want to achieve. Remember the old saying if your Fail to Plan, you Plan to Fail.

Starting a Small Business! Avoid these Four Major Entrepreneurial Mistakes

Posted on May 23, 2019 in Uncategorized

It is with much hope that every entrepreneur sets off starting a Small Business. Making money was his main objective. Failure was never in his mind but things don’t seem to happen the way he had planned for. Even the hope for Survival seems to have disappeared and Failure haunts him at every turn. Why does this happen and happen so often to numerous small business entrepreneurs?
The four major mistakes often made by new small business entrepreneurs are:

1. Improper or No Research:

The most fundamental thing to do before starting a small business is to do a market research to find out whether there is sufficient demand for the product or products you have to offer.
Perhaps the reason for the failure to generate the funds is that there is no market for your product or the market is saturated. The need for your product in your area of business activity should be your prime consideration before starting a small business. Only if there is sufficient demand for your products, you will be able to generate the funds necessary to help you run your small business, survive and succeed.

2. Improper or Under Funding:

Quite often the urge to start a small business is so great that the very vital aspect of funding is not given due importance. Businesses are started on a shoe string budget and shops open with very little stock and offices with insufficient equipment. To ensure the purchase of stock and equipment it is absolutely essential to have proper funding in place before commencing your business. Furthermore your business might take several months to start making a profit and hence funds are necessary to help your small business survive and keep your morale up during these early months.

If you don’t have sufficient funds of your own, it will be wise and proper to obtain a loan before starting your business. This could be obtained from your bank or you can seek the assistance of the Small Business Administration which offers numerous loan programs to assist Small Businesses.
It is important to note that the SBA acts primarily as a guarantor of loans made by private and other institutions.

Taking huge loans out of proportion to your needs can also be detrimental to your small business since provision has to be made for higher interest payments.

3. Insufficient Advertisement and Promotion:

No Business can be successful unless the public is made aware of the existence of your small business and its products. The best of equipment and stocks cannot generate sales unless the public is made aware of it. Hence advertising your small business and the products before the commencement of your business and thereafter should be a major consideration. Failure to do so has been the cause of failure of several small businesses.

4. Unnecessary expenditure:

One of the major causes for the failure of a small business is the improper handling of the funds. Extravagant expenditure at the initial stages such as the purchase of expensive cars, equipment and expensive business lunches completely out of proportion to your needs can eat into the capital and leave your small business with very limited working capital. Hence proper and wise handling of funds especially at the early stages can make all the difference between success and failure.

Conclusion:

Failure to avoid the above mentioned mistakes for one reason or the other can be detrimental to the progress and success of your small business.
Securing the services of a consultant to help you plan out your small business before starting will be a wise move to ensure success.

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Government Grants for Small Business: Finding Them and Getting Them

Posted on May 21, 2019 in Uncategorized

Starting or expanding any kind of small business is difficult, but it can be especially difficult if you don’t have enough capital. Raising capital for start-up or expansion is often your biggest challenge. If a loan is not possible for you right now, and if you haven’t been able to line up any investors, don’t give up hope. There may be a chance that you qualify for government grants for small business from the U.S. federal government.

Small businesses have historically played a significant role in the U.S. economy. That’s why the government has an interest in facilitating the growth of small business with government grants for small business. Even though small business is central to our economic health, the bureaucrats in Washington are not necessarily just waiting to give out government grants for small business. The government normally uses grant money to encourage business development in certain fields or specific locations, or to level the playing field for everyone. But there are quite a few bona fide government grants for small business and they can be substantial.

Government grants for small business are available to new business start-ups and existing businesses. As you might suspect, you’re probably not the only small businessman looking for help in the form of government grants for small business. Be prepared for competition if you qualify and apply for a small business grant. Attention to detail in the application process can often make the difference between winning and losing government grants for small business.

Depending on the amount of money involved, application procedures and forms for government grants for small business can be long and complex. The trick is to break the application into manageable pieces. If you don’t already have an existing team of business partners to help you, consider outsourcing some of the application work to a consultant or freelance writer. When it comes to government grants for small business, application deadlines are firm and turning your application in late is not an option.

You can do some basic research on the availability of government grants for small business at the Small Business Administration’s website. The SBA is mandated with helping small businesses succeed, but they normally don’t give grants directly. Government grants for small business are usually provided by other agencies, depending on what the grant is meant to accomplish.

If you’re interested in starting a small business or expanding your existing business, then you should start finding out all you can about government grants for small business. You may want to opt for an online directory service to help you figure out which government grants for small business you might qualify for. The structure of government can be mystifying sometimes, and you wouldn’t want to miss out on a grant you’re qualified for just because you couldn’t find it. You’ll soon learn that the secret to your small business success is to concentrate on doing what you do best, and outsource the rest.

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