Good Business Quote:

Friday, December 8th, 2006

From Brian Tracy:

The fifth way that you can become wealthy is you can start your own business and earn it all by yourself. Starting your own business has been and will always be the high road to becoming wealthy for most self-made millionaires. Entrepreneurship in America offers more opportunities and opens more doors than all other possibilities put together. This is why it has been said that if you have the ability to start your own business and you don’t do it, you are a fool. I’ll repeat that. If you have the ability to start your own business and you don’t do it, you’re a fool.

Which Business Idea Should You Use?

Monday, December 4th, 2006

Bob Parsons, the founder of Inc. 500 winner GoDaddy.com offers his advice on which business idea you should pursue.  Excerpts include:

Find something that you love to do. Ideally, whatever you choose to do, you should be doing it without regard for money. Trust me, if you dig in and do well, the money will come. However, if money is your primary motivation you have two strikes against you before you start: If money is the driver you will tend to make short-sighted decisions. People who work just for the money tend not to work as hard as those who love what they do.

Also:

I’ve heard people say that I love this idea, but this particular business is already crowded. In response to that I say there is always room in any industry or business for someone who truly makes a difference. And I can tell you that someone who loves what they are doing often makes a wonderful difference. People who make a difference tend to stand out from the crowd and they are the ones who survive shakeouts.

So there you have it, also make sure to read our section on the business idea for more great info on picking the right business idea.

Buying a Company

Monday, December 4th, 2006

Blogger Warren Meyer has written a great 3 part article on how he bought a small company, step-by-step. Very interesting read.  He writes:

One fateful day, I decided that A) I hated working for other people and B) I had no groundbreaking entrepreneurial ideas of my own so that C) if I wanted to own a decent sized business, I would have to buy one.

Unfortunately, I had NO CLUE how to go find companies that were for sale and that I could afford. In fact, I was not sure at that point such opportunities even existed (again, when the rubber met the road, my Harvard MBA let me down). And, if the questions I get asked all the time are any indication, I was not the only one who didn’t know how any of this worked.

Also, don’t forget to read our content on buying a business or franchise.

(via Start-up Guide)

10 Small Business Startup Mistakes

Wednesday, November 15th, 2006

From WebProNews:

It’s hard to avoid certain mistakes, especially when you face a situation for the first time. In fact, many of the following mistakes are hard to avoid even if you’re an old hand.

1. Big Customer Syndrome. If more than 50 percent of your revenues come from any one customer you may be headed for a meltdown.

2. Creating products in a vacuum. You and your team have a great idea. A brilliant idea. You spend months, even years, implementing that idea. When you finally bring it to market, no one is interested.

3. Equal partnerships. Maybe you and a friend start the company together. In each case, you and your new partner split the company 50/50. That seems fine and fair right now, but as your personal and professional interests diverge, it is a sure recipe for disaster.

4. Low prices. Some entrepreneurs think they can be the low price player in their market and make huge profits on the volume.

5. Not enough capital. Check your business assumptions. The norm is optimistic sales projections, too-short product development timeframes, and unrealistically low expense forecasts.

6. Out of Focus. Many entrepreneurs – hungry for cash and thinking more is always better – feel the need to seize every piece of business dangled in front of them, instead of focusing on their core product, service, market, distribution channel.

7. First class and infrastructure crazy. Many a startup dies an untimely death from excessive overhead. Keep your digs humble and your furniture cheap.

8. Perfection-itis. This disease is often found in engineers who won’t release products until they are absolutely perfect.

9. No clear return on investment. Can you articulate the return which comes from purchasing your product or service?

10. Not admitting your mistakes. Of all the mistakes, this might be the biggest. At some point you realize the awful truth: you have made a mistake. Admit it quick. Redress the situation. If not, that mistake will get bigger, and bigger, and… Sometimes this is hard, but, believe me, bankruptcy is harder.

As we’ve said before, most startup failures and mistakes can be mitigated by proper planning and learning some basic small business management skils.

Free Business Plan Templates and Resources

Wednesday, November 15th, 2006

Growthink has many free business plan resources, don’t forget to read our section on the business plan.

How to Build a Board of Directors

Wednesday, November 15th, 2006

Though not applicable to most small businesses, a Venture Capitalist gives his insight on how to build a Board of Directors:

1 – Have at least one founder on the board. Many VCs like to move the founders out of the way. They think they will be difficult and meddle. That’s always a risk, but the benefit of having founders on the board vastly outweighs any downside in my mind. Having too many founders on the board is bad too. You want a diverse set of people on your board, not any one concentrated group.

2 – Keep the number of VCs on the board to two or three. The number of VCs on the board is in inverse proportion to the success of the deal.

3 – Local board members are better. They will come to the meetings. Avoid too many board members who live elsewhere. They’ll call into the meetings. Trust me. And that sucks.

4 – Have at least one and ideally two industry insiders on the board who are independent of the founders and the VCs. They should bring operating experience. They should be mentors to the CEO. They should be local so they come to the meetings.

5 – Do the meetings first thing in the morning when people are fresh. No laptops and no blackberries other than the laptop that drives the presentation if one is needed.

6 – Bring the senior management to the board meetings. They should know the board and the board should know them.

6 – Try to do a dinner the night before at least four times a year with all the directors attending. Don’t bring senior management to these dinners. They should be for board bonding which is key to a well functioning board.

7 – Always send the agenda and board materials at least one day in advance of the meeting and expect/demand that the members read it before coming to the meeting.

8 – Do not spend the meeting going through the materials slide by slide. People can read, expect that they will.

9 – Do spend the meeting reviewing where the business is, where it needs to go, and what strategic decisions need to be made to get there.

10 – Remember that the board works for the Company as much as the management works for the board. Expect board members to do what you need from them and manage them to make sure they do.

11 – Keep your board to seven members or less. Five is ideal in my experience but sometimes you need seven to get the right diversity. Two insiders, one to three VCs, and one to two industry people is ideal once the company gets to a certain scale.

This can be especially helpful if you are intending to get venture capital as a way of finding the money to start your business.

(via BizBangBuzz)

Good Business Execution is Worth Millions

Wednesday, November 15th, 2006

SixDisciplines:

Ideas are worth nothing unless executed . They are just a multiplier. Execution is worth millions.

Explanation:
AWFUL IDEA = -1
WEAK IDEA = 1
SO-SO IDEA = 5
GOOD IDEA = 10
GREAT IDEA = 15
BRILLIANT IDEA = 20

NO EXECUTION = $1
WEAK EXECUTION = $1000
SO-SO- EXECUTION = $10,000
GOOD EXECUTION = $100,000
GREAT EXECUTION = $1,000,000
BRILLIANT EXECUTION = $10,000,000

To make a business, you need to multiply the two.

The most brilliant idea, with no execution, is worth $20.
The most brilliant idea takes great execution to be worth $20,000,000.

Small Business Management skills can be helpful in this area.

Entrepreneurs are the Key to America’s Future

Wednesday, November 8th, 2006

From the Book The Entrepreneurial Imperative:

For the United States to survive and continue its economic and political leadership in the world, we must see entrepreneurship as our central competitive advantage. Nothing else can give us the necessary leverage to remain an economic superpower. Nothing else will allow us to continue to enjoy our standard of living. We either support and nurture increasingly entrepreneurial activities in all aspects of our society and around the globe, or run the very real risk that we will become progressively irrelevant on the world stage and suffer economically at home.

(via Dr. Cornwall)

10 Small Business Mistakes to Avoid

Wednesday, November 8th, 2006

From Small-Biz Xpress:

  1. They undercharge
  2. They concentrate exclusively on sales
  3. They extend credit too easily
  4. They think about taxes after the year is over
  5. They don’t have a plan of attack
  6. They don’t know how to hire and keep good employees
  7. They don’t provide outstanding customer service
  8. They are economically dependent on a small group of customers
  9. They let emotions get in the way of sound business decisions
  10. They fail to develop as leaders and managers

 

Entrepreneurship is Exploding in the United States

Tuesday, November 7th, 2006

Wonderful news from Newsweek:

Entrepreneurship is transforming America—not just for a few, but for all of us and for the better. Consider: Today roughly 45 million Americans, about 30 percent of the labor force, run their own businesses. Sometime during their careers, well over half of university graduates will start a business. Most Americans today work in firms that have entrepreneurial teams in charge. And most U.S. job growth and new technology comes from entrepreneurial companies. In short, ours is no longer an economy of big, old, stable corporations. Yes, we have many of those. But increasingly, we live in an economy of new, rapidly growing (and sometimes rapidly declining) entrepreneurial companies. America is unique in the world, a nation rebuilding itself on the principles of entrepreneurial capitalism.
(via BizOpps)