Do Business Well

Just over 40 percent of households (42 percent) bought some kind of art in 2005, up significantly from the purchase incidence in 2003. With consumers turning their attention to the walls for decorating, they are responding to new availability of ready-to-hang art at retail outlets ranging from mass merchants and discounters to home specialty stores. No longer are consumers required to seek decorative art in out-of-the- way galleries and art dealers, or pay exorbitant prices to custom frame a print. Already-framed art, as well as the explosion of specialty framing boutiques that offer affordable and quick custom frames, have opened the art market to the masses. Continue Reading »

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Retirement is a joy to some and a misery to others. The reaction for the latter group can be so extreme that retirement can almost be seen as a death sentence. Without getting too moribund, let me say that retirement is a concern which all too often is put on the shelf until the retirement period arrives. If not sufficient forethought has been given to this important period of one’s life, the retired individual can sit perplexed and despondent, wondering how to occupy each day.

The ideal preparation for retirement is performed during the working years when the vigour is there to establish hobbies and interests and make productive plans. Continue Reading »

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Types of Media

1. Direct mail. Direct mail can be very effective, though you’ll be fighting hard for attention in a medium that is saturated with highly sophisticated competition. What follows are some general rules for reaching a list of known customers, whether business to business or consumer:

A. Start with the envelope. Print something intriguing on the outside that will make your target curious about the contents. One mass mailer who sends our company at least two or three mailings per week puts “personal and confidential” on the envelope. It’s amazing, but folks are actually more likely to open that envelope first. Continue Reading »

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There comes a time in the business cycle when survival is no longer the issue. Some of the signs will be: consistent monthly profits, three months or more of cash reserves, excellent banking and other credit relations, and an owner’s income at least equal to what could be made for similar work if employed by someone else.

More than likely this will take place between the third and fifth year. While this would seem to be the perfect time to break out the bubbly and celebrate, it may actually prove to be a time of great stress. This is because a number of new challenges will emerge. Continue Reading »

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Another important aspect of the change in your company from survival oriented to management oriented is the way in which you establish goals and monitor them. The following questions are designed to take you through a process of developing a new set of goals for your company:

1. What do you want the company to do for you in the next twenty years? Ten years? Five years? Twelve months? Are you primarily interested in the income stream that can be generated? Is wealth building as opposed to income generation your most important desire? Possibly you’d prefer a lighter work schedule, even if it meant less income. Will you be happy if you aren’t growing? Is it a high priority for you to broaden markets?

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ASSET VALUE

For most companies the asset value should represent the lowest amount below which the owner might just as well liquidate. There are only two differences between asset value and liquidation value. In calculating asset value you don’t have the costs of liquidation and you can be more generous in appraising certain assets than you might be if you had to liquidate.

INDUSTRY STANDARD VALUE

It’s common in many industries to have a valuation method. Travel agencies are generally valued at ten times annual commission. Manufacturers’ reps, on the other hand, are generally only worth one year’s commission. Magazines use a certain number of dollars per subscriber. Manufacturers might expect to get between two and ten times annual earnings. Continue Reading »

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Whenever we talk to people about why they don’t start their own business, the most common excuse we hear is, “I don’t have the money”. Well, if you are truly committed to starting your own business, you’ll find a way or make a way of getting the money. But here’s the problem: All our lives we are encouraged and taught to invest in CASH ABSORBERS and not CASH GENERATORS.

CASH ABSORBERS are those expenses that absorb your cash like the Karoo in the rain. An example of a CASH ABSORBER is a brand new motor car. First of all, it costs a fortune. Then the day you drive it out of the showroom it loses approximately 20% of its value. The interest rate makes the monthly payments even more exorbitant, not to mention the cost of insurance, maintenance and, of course, the essential state of the art sound system. This car will absorb your cash like a vampire around your throat. Or to put it a tamer way, you are committing yourself to a substantial negative return on investment. To tell you the truth, you are committing yourself to a lifetime of financial struggle. Continue Reading »

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Every Company is driven by an underlying philosophy and logic. These may never have been articulated by the founders, either verbally or in writing. But they are there, whether the owners and employees realize it. The philosophy and logic may be expressed in your efforts to decentralize decision making in the company. They may be expressed in your decision to finance the company entirely from earnings rather than seek outside money. The section on the company is where you spell out your company’s philosophy and logic—its reason for being, its identity. This section of the business plan should cover four principal issues:

1. Company strategy. “Strategy” is a fancy term for your company’s overall approach to producing and selling its products and/or services—and its goals for maximizing success. You should have some guiding principles to the way you operate that allow you to succeed and that distinguish you from the competition.
2. Mission statement. Increasing numbers of executives are concluding that, in addition to an overall strategy, they should develop some kind of statement that encapsulates their companies’ values and overall purpose in life. The mission statement, when articulated and used effectively, can unify a company’s employees.

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As I’ve noted, a company’s strategy is a statement of its overall approach to doing business, its goals, and how it plans to achieve those goals. In the context of the business plan, the strategy can usually be summarized in a few sentences that articulate the company’s expectations for growth in coming years and the steps that will be required to make it happen.

Software Publishing Corp. stated its strategy this way: “Software Publishing Corp. is positioning itself as the leading independent software supplier for personal computers by producing products aimed at the fastest-growing segment of the personal computer market: Business/Professional applications. SPC’s unique strength in this segment is its ability to produce software that turns the personal computer into a versatile problem-solving tool that individuals can use to describe and solve a problem in their own unique way without programming.” Continue Reading »

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Financial Issues tend to be unpopular among entrepreneurs. Some find the subject tedious. Others find it intimidating. The result is that many entrepreneurs do nothing. Financed in many businesses become the state of the checkbook each morning. If there’s cash, the business is still around and if there’s no cash, the businesses become the state of the checkbook each morning. If there is cash, the business is still around and if there is no cash, the business has major problems.

One of the major benefits of creating a business plan is that it forces entrepreneurs to confront their company’s finances squarely. That’s because a business plan isn’t complete until entrepreneurs can demonstrate that all the wonderful plans concerning strategy, markets, products, and sales will actually come together to create a business that will be self-sustaining over the short term and profitable over the long term. Continue Reading »

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