This is the first of a 5 part ezine series that have been developed to help people understand the elements (business and personal) that should be in place to drive the maximum success out of the opportunity that they want to pursue – straightforward, jargon free how tos from setup to taxes. There are no guarantees but what's clear is that those people that are more prepared, have a plan and then take action are more likely to win by a WIDE margin.
START A BUSINESS NOW? – ARE YOU ON DRUGS?
If you are looking at a home based / internet business or really any sole proprietorship- the very first thing you need to do is spend some time determining "why". I know you've probably heard other people say this but I do not mean dreamy, spacey or "anything like you" or anything like that. First, I do not know what that means – I love mowing the grass to be honest, it's therapeutic, I do not have to think and when I'm done I get this feeling of accomplishment but is there a market and can I make $ 10,000 a month at it? Do not think so.
So – why do you want to own a business? Certainly being "realistic" says that we're in an extremely challenging economic climate and this may not be the best time to "rock the boat". But check a little history – Ford, Carnegie, Roosevelt, Kennedy, Bush and even Google Founder Brin, made their money in times of economic weakness or depression – they saw an opportunity. Conventional wisdom keeps poor people poor, middle class people constantly stressed and squeezed and rich people richer. So follow the principles outlined in these sections one by one and get the attitude that change is possible for you.
This may sound simple but when the winds blow, as they will in any business, if you've built a house of cards, your business will be less than the success you wanted. Start with the BIG picture and work your way down – do not start small and work your way up. Reason – you will let your preconceptions / assumptions about your capabilities shrink your abilities at EXACTLY the time when you need to be open. Your "why" is the capstone or the umbrella under which everything you do operates. Whatever it is for you is great because it is yours – that's why you can not compare it to your neighbors and vice versa.
Quick note – simple things NOT complex things are the hardest. EVERYTHING is part of or connected to something else and you can go into a serious meltdown if you let it get to you. Like one of those Russian dolls inside dolls or the internet where you can click from one site to another forever and find nothing or even like one of my more nightmarish dreams. People make things complex in their brains, get overwhelmed and shut down. Complexity means that you have not taken the time to break the thing down into manageable pieces, sort them out and decide how to take action. Simplicity on the other hand is tougher because it often deals with basics. So people shy away from simple questions because they require thought or commitment or personal risk. So the simplicity of "why do you want to own a business now?" actually makes you delve into what you value, what your goals, priorities are, etc. BUT by going through this process I can help you get the business side sorted out.
To find out if something is right for you – take some time – listen and learn the basics and be alert for anything that sounds too good to be true (ie, guaranteed 15% on some hedge fund or Nigerian money). Do not be misled by "internet research" – where you read, usually the garbage, of other people's opinions. Are they you? Do they have your goals, your life circumstances, your drive and determination? When doing any research always go to fact based sources. Take the time you need, use the principles here BUT make sure you do not suffer from "the paralysis of analysis" and never do anything!
WHY DO I WANT TO OWN A BUSINESS?
When determining your "Why"? Do not go through a big philosophical debate – keep it simple. Maybe it's as simple as "I want to stay home with my kids" or "I need pay off the car loan" but it's clear – no ambiguity and it has a value that can be measured. It will change and grow over time but it becomes the basis for driving your attitude towards your business. It will drive how you value your business – example, if your kids are the reason you want to do a business then when your business causes you to be late for dinner or miss a baseball game – you will understand and be more comfortable with the value of the tradeoff.
After you find a good "Why" – People normally want to own a business for three reasons:
- You may want to take control of your own future – to be your own boss because you know you'll never get rich working for someone else and you know that your hard work right now continues to make wealthy individuals wealthier while you may struggle to make ends meet. In these challenging economic times
- you may want to create new income because your current job could be at risk, you may need to bridge the gap between what you make and what you spend or maybe you are just planning for your future.
- Third, maybe you'd like to start a home based business as a way to lower your taxes by taking advantage of the phenomenal discounts available to small business operators. Could be like most of us – all three. Whichever it is for you – that's great.
BUSINESS DECISION ELEMENTS
Now that you've built a "value proposition" for yourself – a "why" that drives your desire to own a business …. "You can stay home with your kids and generate some extra money". Whatever this is typically has a number that falls out from it – what are you making at work now or how much does day care cost or what do the extra things I want cost? Having a financial goal tied to your why is very important – it enables you to measure your progress and understand how / what opportunity may be a better fit.
When you're taking a look at opportunities look for 3 things – if anyone tries to tell you anything else – throw up a red flag. Some people say I'm an analytical guy or a technical guy or a detail guy and most of that may be true but most of all I'm a simple guy – I like things to flow and be connected and for me to see how the dots are connected and get a clear picture – not get lost in a maze.
The three things you want to feel comfortable with in order of importance are the market, your supplier and the support systems. Everything cascades from here.
MARKET
Knowing the market is the MOST important thing in starting / maintaining a business. I'm not talking about a detailed understanding of everything but a clear general knowledge that the market you're operating in is large, growing and has the momentum to sustain new players. You could have the best product in the world but if nobody wants to buy it – you do not have a business. I've seen people advertising to get into the candle business for free and make money. Does this make sense in general – what's the size of the market, is it exploding, can you sustain a viable income stream?
In general, look for a business that is supported by demographic trends and offers a consumable product. This way you are operating in a market that is expanding rapidly and as the pie grows you can grow a business with it. In addition, with consumable products customers come back to you and you can develop referrals – lowering your costs. There are lots of major trends – we are all part of them normally. Wellness is one of those demographic shifts. It starts with two explosive trends – First – a growing and expanding population that is seeking to maintain or better their quality of life – second, an aging population that is expected to live and be active 15 to 20 years longer than previous generations. These trends together are creating a tidal wave of people all looking for products and services to maintain their health and active lifestyles – this is a huge multi-generational demographic mega trend.
In this challenging economic time – you want to be working with the trends and not bucking them, so this is probably not the right time to start a real estate or a car business from scratch.
THE RIGHT SUPPLIER FOR YOU
Second – your supplier – extremely important – are you dealing with an unproven startup, or are you working with a proven market leader. Everyone in every business deals with suppliers – that is the company or companies that provide you the products, services or raw materials that you need for your business. They are also the company that will pay you / provide you discounts for products that you sell. In today's economy this is even more important to make sure of the integrity of your supplier. If there is any way to know their financial stability – find it and look them up. Do not take internet "opinions" for fact. You do not want to have done a great job of building your business and then find the company can not pay for want you've done. They've suddenly disappeared or declared bankruptcy.
When evaluating which supplier you want to work with in a market here are some parameters you may want to consider:
- Brand name – are they a known quantity? If they are startup with no track record – will this make it easier or harder for you to be successful? Usually harder because you have fewer benchmarks for your customers
- Market player – where are they in the market, how long have been in business, number of customers, where do they operate?
- Proven financial track record – are they profitable or are they in a difficult financial position?
- World class management & products – which running the show? Unknowns or established business people with a clear track record of success? Who creates the products – are they qualified, have they delivered in the past? If your going to be in business these facts will give you the confidence you need when you face the market
- Outstanding compensation system -You want your cake and eat it too. If you're dealing with a world class opportunity there should be a world class reward structure. In another blog we'll walk through different types of compensation and what to keep you eyes open for. Follow the numbers – not words.
THE SUPPORT YOU NEED
Third, let's say the market is amazing and the supplier is fantastic – can you take personal advantage of the opportunity? All the motivation, desire, drive and determination in the world will not help you become successful if you do not have the knowledge, techniques and a proven plan to follow.
One of the leading Tax Attorneys in the US told me this. He specializes in Small Businesses and was the lead trainer for IRS agents for a number of years. He said that 80% of ALL businesses FAIL for three reasons:
- Not willing to work
- Lack of Marketing
- Lack of Business Training
Given this reality – what kind of infrastructure – systems, partnership and capabilities are going to be there to support you? This is the ICEBERG. This is the area where a business person will underestimate what they need to be successful and over estimate what they are willing to do.
Here are there are two things to consider – what does the Supplier offer? Examples: o Online training, o Collateral for business development, o web capabilities, o live support for product questions, o live training
And even if they offer these business platform features and more – How much is Free, what do you pay for and when do you pay? There are many enticements that a supplier may offer – so make sure to pay attention to any limitations. The support available to you from the Supplier AND the business team could be worth thousands of dollars to you and is almost certainly the difference between success and failure.
There is also an equally critical leg to support and that is support provided by the people that are recruiting you. If you are operating in any direct marketing or Multi level Marketing arrangement – anything that involves you as a distributor working with others – understand what they are providing. For some reason this is often lost on many people. Your supplier and what they provide is one thing BUT for day to day support the people who you are hooking up with are the keys to your success. This is where your coaching and mentoring happens, this where your questions get answered and where someone with real world experience gives you the goods.
This is a BIG breakdown area and why you hear people bad mouth direct marketing companies – not because the company or its products are not any good but because they had a poor coach that didnt get their expectations in line with their commitment and give them the support they needed. Separate your supplier, from the group you are working with – a successful multi-billion dollar company does not have the time or the resources to give you the "face" time you need to get going and maintain a business alone.
Work for yourself but not by yourself
What leverage does the team you're working with give you? Do they provide personal, mentoring, advertising, resources, events, promotions, collateral, and training? Will they help you build your business?
Support to look for -understand your costs – if some or all of it is free – for how long? This could have a drastic affect on your decision about whether this opportunity is right for you. Examples of things we all need help with –
- Training
- Coaching
- Mentoring
- Business Planning
- Advertising
- Ordering
- Inventory
- Customer Care
- Contact Mgmt
- Web Sites
- Credit card Processing
- Lead Mgmt
- 24 x 7
- Events
- Much. much more!