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The Dynamics of Business Success

From the time you first decided to go into business for yourself, the only choice you had was to be successful. No one goes into business desiring failure, that would be self-defeating. Can you be as successful as you want? Can a person succeed on desire alone? Of course you can’t. No matter what the nature of your business, desire and passion only serve for motivation not hard core statistics. If you have not investigated the possibilities and learned the dynamics of running a business, then you are flirting with disaster. No amount of desire in the world will pay start-up cost and day-to-day expenses of a business. The cold hard facts are you must know your product and its’ market. You must know the dynamics of running a business.

How do you handle the bookwork, satisfy the IRS, schedule workers, where to locate, attend to restocking, marketing, sales, etc. Then there is the public relations side of being a business owner. Projecting the right image to your customers, vendors and employees is an all important task assigned to – guess who – that’s right, the business owner. Large businesses have departments to handle each challenge, but the small business owner in on his/her own. It would seem then, desire is only a small part of going into business. Preparing is as or more important than desire. There are many people across the country who have little desire for their business but succeed because they were well prepared and have the fortitude to keep on going. They did the things necessary to make their business succeed.

Then there is the competition. Beating out the competition comes from knowing your business and executing it with precision. No brick and mortar business can run on autopilot. Someone has to be at the wheel, steering, stepping on the gas, putting on the brake, someone has to be in control. Like a giant truck charging down the highway needs someone to keep it in control, a business can quickly become a wreck without proper guidance. Your business may be a franchise or it may be independent. It may be a product or service, in any case I cannot overemphasize the importance of preparing for the venture.

Franchise businesses have taken a lot of the guess work out of the equation. They present their business as a time proven package with all the necessary ingredients for success. They have been successful and offer a copy-cat version of the outcome. A business plan and marketing strategy is included right down to uniforms for the employees. They have already promoted the brand name and gained market recognition. They are what is called, “branded”. The brand is already recognized and accepted by the customer. The dynamics of this kind of business is in getting the momentum going and maintaining it.

A business opportunity is a cross between a franchise and new start-up. It’s sometimes referred to as a “turn-key” business start-up. Everything needed for success is supplied in a start-up package, except a business plan. The business owner must formulate his/her own business plan. The difference between a business opportunity and franchise is; in a business opportunity the business owner is free to put his/her own personality into the business.

The dynamics of new start-ups are conceptual. They are derived from the individual’s desires, mixed with background and abilities. This type of business venture is the most vulnerable and has the highest failure rate. A concept must become a marketable reality. Acceptance is paramount for this type of enterprise to survive. A person may think they have great idea but in reality it is not acceptable to the public.

Transfer businesses are those that have been established and then sold or transferred to another person. In many cases the transfer is between family members. Some times the transfer is to employees or another person altogether. This type of business is sensitive to change. If too much change takes place too fast the business may fail, unless change is warranted. Here you’re riding on the coattails of the previous owners. If they had a good customer base then chances are the new owner will succeed. If the new owner has to start up under a “new owner” banner, then the previous owner’s reputation has to be overcome. This is a very difficult type of business to be involved in.

All of these traditional brick and mortar establishments are dependent on correct location for visibility and accessibility. This type of business depends upon physical appearance, ease of stocking and maintenance. Because it is a physical entity, it requires physical support. The bigger it gets the more support it requires.

The Internet on the other hand provides a portal, a doorway if you will, for an individual to present a product to the customer and the customer to respond. Although physical location is not required, it is advised. How do you succeed in cyberspace? It’s basically the same as a brick and mortar business, you have to be visual to be found. You have to build brand recognition, confidence, and reliability for customers to respond. There are literally millions of business on the Internet and the customer will not go to great lengths to find you. If your not in front of their nose they will overlook you. The customer also tends to view everything with a measure distrust. These are the two most difficult obstacles to overcome when affiliate marketing on the Internet. You must be seen and trusted in order to be successful in an Internet business.

In Conclusion
Internet affiliate marketing is not about having the best product or how much desire you have. It’s not about passion or family values or anything other than marketing. Success depends on how many prospects you can drive to your website and how well your sales copy coverts them into customers. The Internet is a marketing medium and social gathering place only. It doesn’t produce a product or change anything on a physical level. Internet sales are liken to phone sales. The prospect is contacted, given a sales pitch and converted to a customer, or the prospect contacts the seller from advertising media and the same process is preformed. On the Internet, in most cases, the prospect is never verbally or physically contacted. All transactions are by form.

The success rate in Internet businesses are very low. The glamor or promises of making huge incomes is thwarted by time constraints. Success comes from hard work over a long period of time. Overnight success is not possible or a reality unless a person has a large bankroll to start with.

The thing is, success comes to those who take the time to learn the dynamics of the business they are getting into. Develop a passion, learn and stay the course.

Four Easy First Steps to Small Business Accounting

When starting a new business one of the most daunting tasks the entrepreneur will face is that of accounting. Many small business owners neglect this important area of business, particularly during start up. Making this mistake can be fatal and many companies fail because of a lack of knowledge of the business’ finances. Keeping good records and having good accounting practices from day one is paramount. There are many simple, yet effective techniques that can help the small business owner get their finances on track.

The first, and most important thing, you can do is to set your business up as a legal entity separate from yourself. This means setting up some type of corporation, or LLC. This simple step is overlooked by too many entrepreneurs. Keeping your personal and business finances and taxes separate is the main reason for this, but there are other benefits as well. Which of the different entities is right for you will depend on many factors of your business, and you should consult a CPA and an attorney to help you with the process.

Once you have decided on which entity you will use and have followed your state’s guidelines to set it up you will need to file form SS-4 with the IRS to obtain your EIN, which will be your business’ federal tax ID number. As soon as you have set up your business entity your next step will be to visit your bank (be sure to check out the competition’s offers as well) to open your business checking account. Most banks offer free small business checking accounts with no minimum balances. If the bank is going to charge you for small business checking, or a debit card, find another bank.

When choosing a bank be sure to ask the sales representative if the statements are cut on the last business day of the month, so that each statement represents an individual month. If the statement is cut on a floating 30 cycle, or if the cycle begins on the day of the month on which you opened the account find another bank. This simple thing can save hours when settling your account each month.

It is also a smart idea to have multiple accounts dedicated to different portions of your business as well. This may include a payroll account, an account that receives payment deposits and an operating account to name a few. If the bank only allows one free account per business find another bank. You may find that you need multiple accounts and keeping up with them all is starting to get confusing. If this happens ask your banker about the Cash Management services they offer. These services will normally include fees, but can help save you time, energy and headaches.

Once you have your new business set up and you are starting to see some cash flow you must make sure to keep your business and personal finances completely separated. This means that only revenue from the business should be going through the business checking accounts, and more importantly that no personal purchases be made through the business.

It is crucial that you take a salary from your business, rather than spending the business’ money on yourself. There are several different ways to take a salary including taking a fixed amount and/or a percentage amount based on the business’ performance.

My last point is also on the list of things often overlooked by the small business owner. Make sure you hire a bookkeeper. This point bears repeating – Make sure that you hire a bookkeeper. Even if your business is small it will be a tremendous benefit to hire someone to keep the books. Most new businesses fail to do this because they are trying to save money, but the fact of the matter is that you can get a bookkeeper for around $25 per hour depending on where you do business. Your time can be better spent on other aspects of the business that are your specialty and others can’t do. Make sure you are leveraging your time properly. There are thousands of bookkeepers out there but only one you! These types of services will usually save you a lot of money in the long run.

These are just a few points that all new business owners should make sure to focus on during start up. This was by no means an exhaustive list of accounting procedures, but only a few of the most important first steps. Finance and accounting are some of the most important aspects of business, but are so often overlooked by the new business owner.

How to Write a Business Plan

Your business plan is an essentially part of your small business success strategy. It is a vital document that lays out all of your professional goals and the means by which you intend to achieve them. It is what brings your business out of the concept phase and turns it into an actionable reality.

It is very important that you write a business plan for your own small business. With it, you can focus your ideas into realistic techniques and goals, with a proper plan, and achievable – but not too unchallenging – goals. It is what will keep you on track and motivated throughout the growth of your business.

Furthermore, business plans are commonly required by investors, banks, the government, and other lending institutions from whom you will be requesting financing to help to get things off the ground.

There are certain steps that you will need to take in order to prepare to write your business plan. These are:

o Identification and narrowing down of all of your business objectives

o Thoroughly researching all of the different points within the business plan

o Write out a rough first draft of the business plan

o Go over the rough draft and divide it into key sections

o Apply realistic financial projections to the plan

o Obtain feedback regarding all of the elements of the business plan.

The elements of your business plan should consist of the following:

o Vision – answer the question “why am I creating this company?”

o Mission – answer the question “what benefits will my products or services provide to my customers?”

o Goals – answer the question “what are the short-term and long-term goals of the company?”

o Introduction to your business – examine and discuss the following points:

(1) An overview of the industry of your business, your business history, and its operations strategy.

(2) An introduction of the key people in your team.

(3) Your current market, including its size, the opportunities you have, the challenges you face, and the growth pattern.

(4) Competition and alliances, including strengths and weaknesses, and strategies.

(5) Target market.

(6) Identification of your clients in terms of their needs, demographics, and purchasing habits.

(7) Your products and services as well as their revenue streams.

(8) The image, experience, or lifestyle you’re selling

(9) Placement

(10) Where your product or service will be available for purchase

(11) Pricing

(12) Your promotional strategy

Operations – including its functioning involving the following points:

o What the business will accomplish everyday.

o Current and future projects in the works.

o Successes and challenges faced so far.

o Overall strengths and weaknesses of the business

o Internal operations issues

The Team – including the people who will be working together in your business, covering the following points:

o Who is responsible for what?

o Is there the right number of people in your business for getting the job done?

o Strengths and weaknesses

o Internal successes and challenges

STEP – also known as the external analysis. This includes:

o What trends are affecting your business in the following areas: social, technological, economical, political.

Opportunities – what is available to your business regarding the following points:

o The size of your prospective market

o How much growth opportunity your business has

o Your market niche

o Changes in operations

o The structure that would be required in order to allow for growth

Concise statements of opportunities for your business

Plan of action and strategy – including:

o What does your business require for achieving its long-term goals?

o What challenges does your business face before reaching its long-term goals?

o What actions will you take in order to achieve your business goals?

o Why have those actions been chosen? How do they complement your vision?

Assumptions – examine these points:

o List all of the assumptions that have been made within the writing of your business plan.

o List soft assumptions – that is, those that have been made but which are not quantifiable.

o List hard assumptions – those that are quantifiable.

Financial projections – including:

o Cash flow statements from the past two years through until the next two years.

o Income statements from the past two years through until the next two years.

o Balance sheet from the past two years through until the next two years.

o Create each of these statements with a high, medium, and low sales estimate.

Executive summary – this section should be written as following:

o A summary of your business plan

o This section’s size should consist of approximately 10 to 15 percent of your entire business plan.

o This section should always appear at the end of the document

o Key points should be highlighted

o Consider this section the most important of the entire document.

As you can see, a business plan requires a great deal of work and planning, however, it is likely to be the most important document that you will create throughout the entire life of your business. Therefore, it is well worth doing, and doing well.