Viability of Your Business Idea

I'd guess 90% of the businesses which people want to start are not viable. The businesses don't support sufficient profit margins to shield them from increases in their costs. The businesses don't offer a sustainable, competitive advantage which will allow them to survive and grow. These people are often underestimating the sales needed to break-even, and they are overestimating their anticipated sales in general.

At the very least, for your business idea to work, you must be able to produce and deliver your product or service at a cost which is below the price you will charge for the product or service. Surprisingly, some people miss this!

Sales Price - Your Cost = Profit

If "Profit" above is negative, you lose and it is called a "loss"! Your cost to produce the product is usually a function of how many units you are selling. Make a reasonable estimate of how many units you think you can sell, and make a reasonable estimate at your costs. If possible, set your sales price close to what similar businesses charge. If doing so sets your profits well below where you think they will be, you might have a problem.

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Break-Even Analysis

One of the first things you should do is to estimate how many units of your product you must sell to break even. Calculating your break-even point is very easy for most products.

Start with the price for which you will sell your product. Let's call this price SP for sale's price. You can set your selling price to whatever you want, providing people are willing to pay that price.

Suppose we are selling a game for a price of $20. So, SP=$20.00

Your product will have some associated per unit cost for you to produce and deliver the product to the customer. This cost is referred to as a variable expense because your total company expense varies with the number of units you are selling.

(Sometimes this variable cost on a per unit basis also changes with the number of units produced. For example, let's assume it costs $5 per game to have your game product manufactured, if you produce 1,000 units. Your variable cost per unit is $5. However, if you were to produce 10,000 units, maybe, your cost per unit would only be $4.00. In this case your variable cost per unit is $4. This changing cost on a per unit basis for different levels of production is not what is meant by "variable cost." We will assume the variable cost is fixed on a per unit basis.)

Assume your variable cost is $5.00 per unit. That is your cost for each game. Call this cost-per-unit, or variable cost V. V=$5.00

Notice, if you had no fixed costs or overhead, your profits would just be the selling price minus your variable per unit expense. Here it would be SP - V = $20.00 - $5.00 = $15. As soon as you sold one unit, you'd be making money!

However, in the real world, your company will also have some fixed overhead expenses which are not directly attributable to the number of units produced. For example, you might have a monthly rent expense which is the same regardless of how many units you sell. Call your total overhead expenses of keeping the business open F for fixed expenses. Suppose your only fixed expense is monthly rent at $200 per month. F = $200.

Your sales must amortize this overhead expense effectively. Clearly, the money each sale can contribute toward paying the overhead is just SP - V or $15 per unit. This difference is called "contribution" because it contributes to paying overhead and, eventually, earning a profit. Call this contribution C. C = $15 per unit.

It should be clear that if we divide our fixed expenses by the contribution per unit, which we get the number of units we must sell to break even.

Break-Even Number of Units = F/ (SP - V)

Here, Break-Even Number of Units = F/ (SP - V) = $200/ ($20 - $5) = 13.33 units or about 14 units.

You can check your answer by working backwards. Assume you sell exactly 13.33 units. This means your sales revenue is 13.33 * $20.00 = $266.60. Your total per unit cost for the 13.33 games is 13.33 * $5.00 = $66.65. The difference between your revenue and the direct per unit cost you pay for the game is $266.60 - $66.65 = $199.95 or about $200 neglecting round off error. That exactly covers your overhead cost, F.

The significance of overhead and how it affects profitability and company growth is discussed in detail in Thinking like an Entrepreneur.

Below are some more presentations on the topic of break-even analysis:

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There are two methods of pricing. The first is sometimes called "skimming" and involves aiming to have higher-priced products. The goal is to have the word "quality" associated with your product or "status." Think, Mercedes. The second pricing method is sometimes called "market penetration." The goal is to have a low-enough prices that bargain shoppers want to buy your product, rather than your competitors'. Think Hugo.

Obviously, you won't have both the best prices and the best products, unless you happen to have no competition or the competition is grossly ineffective! The variation of price across similar products is usually moderate when compared to the difference in price among different products.

The other businesses in the industry are not idiots. Don't assume they are so inefficient that you will beat them on both price and quality!

Other things which can compromise viability of your idea include legal issues. No, you can't grow Ganja! No, you can't sell explosives marketed to freeway drivers outraged with traffic delays! No, without a medical license, you can't become a home surgeon!

But, the greatest limitations should be those you place upon yourself when choosing a business. Be sure your business at least has the possibility to be profitable!

From www.thinkinglike.com

Can You Turn Your Great Idea into a Hot New Business?

You've just experienced one of those light-bulb moments when you think you've got a dazzlingly brilliant idea for a business. Possessing the spirit of a true entrepreneur, you've decided to bring your idea to fruition in the form of a new business.

But wait. Before you invest a big chunk of savings into your new business enterprise, you'd be well advised not to jump to any preconceived conclusions about the merits of your prospective business. Remember the Edsel? If seasoned corporate executives can make a spectacular failure like that, then mere everyday entrepreneurs are certainly not immune to errors in judgment.

Will it sell and will you earn enough to make a profit?

Sure, there have been brash entrepreneurs who have been successful without giving a thought to researching their potential market or determining ahead of time what the potential for profit may be. But like any other investment, it is prudent for prospective business owners to perform the necessary research prior to putting their hard-earned monies into a new enterprise.

According to the U.S. Small Business Administration, two of the core questions prospective businesses owners need to ask themselves are:

• What service or product does my business provide and what needs does it fill?
• Who are the potential customers for my product or service and why will they purchase it from me?

If you feel your product or service truly fills a real need in the marketplace, get feedback from individuals, business associates and industry experts. What do they think about your idea? If your idea is a new product, make a prototype if possible, and present that as well. Utilize questionnaires and hold discussion forums.

As unusual as your idea may be, you will always be competing with someone else. Find out who your competitors are and determine if your idea will make the product or service better, different or more valuable. Understanding what you competitors are doing will assist you in doing it better yourself.

And just who is your target market? Determine factors such as potential size, income levels, age and geographic location. Is your target market shrinking or growing? How much are they willing to pay?

The next thing you need to determine is whether or not your new business endeavor will generate enough revenues for you to enjoy sufficient profits. One way to do this is to calculate your business costs and to determine your breakeven point, the point where sales cover costs. Anything above your breakeven point equals profits. Business Know-How offers calculators to assess business costs and your business breakeven point.

Prices charged to customers need to cover business costs, enable desired level of profits, and be competitive and in line with what customers are willing to pay.

Another important tool to assess the likelihood of new business success is the Business Plan, a summary of your business and the objectives and activities needed for it to succeed. Components may include the following:

• Executive Summary
• Company Summary
• Products and/or Services
• Market Analysis
• Strategy and Implementation
• Management Summary
• Financial Plan

Do You Need to Protect your Idea?

You've determined there's a real need and market for your product or service, and potential profitability looks great. Now is the time for you and your attorney to decide if your unique idea will require protection under intellectual property laws -- intellectual property being U.S. patents, trademarks, copyrights and trade secrets.

If legally appropriate, filing for trademark or copyright protection is easier and less costly than filing for a patent. Patent protection typically costs in the thousands of dollars. In the real world, most start-up entrepreneurs have limited resources and the pros and cons of patent protection must be carefully considered.

Benefits of a patent include having legal protection for your business idea or product, having a head start over competitors who may want to copy your product, and being able to enforce your legal protection if someone does infringe upon your rights. On the other hand, it's typically not very difficult for another company to legally design a very similar but different "copycat" product since patent specifications are so precise.

Be aware that whatever intellectual property protection you obtain, you may need to spend even more monies on legal fees in order to defend and rectify any infringements.

If you promote your business, will they come?

It's not enough to have a great product at a great price that meets a true marketplace need. In order for your new business to be an unequivocal success, you need to get the word out. Here are some basic guidelines to do just that:

• Business Cards

A good quality business card is a new business's best friend. Hand them out wherever you go. Be sure to include a logo, what your business does, and contact information.

• Website

Every business today needs a professional-looking and well-designed website. You want customers and others to be able to learn about your business and just what products and services you have to offer.

• Postcard Marketing

Nothing beats postcard marketing for cost and readability. Use as an effective way to generate sales leads, promote special offers or coupons, drive traffic to your website or introduce new products or services.

• Hold a Grand Opening

A well thought out and successfully executed grand opening can greatly assist with your ultimate goal: matching your business's products and services to the people in your community who would most need and benefit from them … and increasing your profits along the way.

• Become a part of your local business and civic community

Join your local Chamber of Commerce and a service organization like the Kiwanis or Lions Club. Attend meetings and become involved in your community. Networking of this sort helps new businesses and their owners become readily known to people in the community … prospective customers.

• Press releases

You've got a new business with a great innovative concept. Get the word out, and your customers will come. Send out a well-written press release detailing your new business and what makes it special. The media is always looking for stories on hot new businesses and trends -- Why not let it be about yours?

• Judicious advertising

Budget an affordable amount for advertising. This may include advertising in the Yellow Pages, local newspapers and business directories.

Case Study: Cereality Cereal Bar & Café

Not only has co-founder David Roth's great idea been turned into a hot new business called the Cereality Cereal Bar & Café, it has also become an unequivocal phenomenon. So popular, they have received over 5,000 inquiries from around the world from individuals seeking opportunities to partner with their company. As a result, they have decided to expand their development strategy to include outside operators-licensed partners and franchisees.

Open for business since 2003, Cereality offers its customers more than 30 different cereal varieties to choose from, 30 different toppings, a variety of milks and choices of hot and cold beverages. The menu also features proprietary cereal bars and other homemade bakery items, snack mixes, granolas, parfaits and smoothies. Customers can also get their own personalized cereal boxes made to order with their favorite combinations. Pajama-clad Cereologists prepare orders to customers' specifications.

The "light bulb" moment

David Roth, Cereality co-founder, was at a high-powered business meeting and one of the executives was covertly eating Cocoa Puffs. Roth noticed this. At one point, he asked the executive if he would ever go out to eat cereal, to which the executive answered, "Of course!" Roth subsequently observed other people's cereal habits while they were out and about; i.e., the Mom with her baby in the stroller, and the container of Cheerios she had at the ready. These observations created the spark for the Cereality idea.

Roth says, "It's about paying attention … even to the simplest thing."

Market research and profitability assessment

"The initial idea development began in the late 1990s," recalled Roth. "While no formal protocol of research was done, we spoke to best of breed in retail and in QSR [Quick Service Restaurant] -- very anecdotal -- but also to understand the potential of the cereal industry. 95 percent of Americans eat cereal; almost all eat every day. Third largest selling item at grocery stores (behind soft drinks and milk). Created a realistic business plan -- looked at it NOT as a restaurant idea but as a brand.

"We opened a pilot store at Arizona State University in the Memorial Union building -- small kiosk on a hall -- to see if the idea would 'work' and how to fulfill a huge demand (for cereal at all hours of the day and night) already in the marketplace."

Intellectual property protection

Roth says they knew they had such a powerful idea that they invested in intellectual property protection -- trademarks for their marks, slogans, catch phrases … plus patents pending on business method.

Today Cereality has already warned a number of new cereal restaurants -- some may call them copycats -- to stop using similar product names and slogans; restaurants that are cashing in on the same business idea. Cerealicious, another cereal restaurant knockoff, was sued by Cereality for trademark infringement in March of 2006. The Cereality concept has created so much buzz, Roth and Baker have had their hands full trying to protect their company from those seeking to steal their intellectual property.

Promotion of Cereality

"There was a very small ad campaign at Arizona State University with the funny slogans and product blend names you see on our website," says Roth. "We did invest in making the website really fun and appealing which helped drive buzz among bloggers and online communities.

"A press release went out in April 2004; sent to establish Cereality as the originators of the concept and to make the brand name synonymous with the idea of "cereal café." The release went on PR Newswire 'everywhere' including to the public (e.g., via Yahoo Finance), but we pursued USA Today and Business Week for initial stories -- and that's where they appeared -- based on the breakthrough nature of the idea.

"The copy in everything, including the press release, was speaking with a particular voice and attitude, and was the beginning of our idea of 'Always Saturday Morning' as our ethos/brand essence."

Taking a look at the April 2004 press release, the title alone is evidence enough of why the release was such a success: "95% of Americans like Cereal. 57% like Sex. We've Got Cereal."

Advice for budding entrepreneurs

Roth has these tips for individuals who want to turn their idea into a thriving business:

• "Pay attention to the simplest idea -- this is not rocket science; just tune in."
• "Think about meeting a need rather than trying to create demand."
• "Think about something people ALREADY have as habit and how you can make it better."
• "Stay authentic -- be true to yourself and trust your initial instincts."
• "ACT AS IF -- When you really believe, all others will have to."
• "Know your strengths and weaknesses -- and hire people who can make up for where you fall short."

By Patricia Schaefer

Business Start-Up Checklist

The business start-up checklist below is meant to remind you of the tasks you may have to perform when starting your business.

Not every small business will have to complete each step. For instance, you may decide not to register your trademark with state or federal officials. Or, you may not be required to publish a notice of intent to do business.

Since laws vary by state and by type of business, be sure to check with local authorities to determine if there are any additional legal steps you need to take.

• Choose a business based on your skills and interests
• Research the business idea

- What will you sell
- Is it legal
- Who will buy it and how often
- Are you willing to do what it takes to sell the product
- What will it cost to produce, advertise, sell & deliver
- With what laws will you have to comply
- Can you make a profit
- How long will it take to make a profit

• Write a business plan and marketing plan
• Choose a business name
• Verify right to use the name
• See if the business name is available as a domain name
• Register the business name and get a business certificate
• Register your domain name even if you aren't ready to use it yet
• Choose a location for the business or make space in the house for it
• Check zoning laws
• File partnership or corporate papers
• Get any required business licenses or permits
• Reserve your corporate name if you will be incorporating
• Register or reserve state or federal trademark
• Register copyrights
• Apply for patent if you will be marketing an invention
• Order any required notices (advertisements you have to place) of your intent to do business in the community
• Have business phone or extra residential phone lines installed
• Check into business insurance needs
• Find out about health insurance if you will not have coverage under a spouse
• Get adequate business insurance or a business rider to a homeowner's policy Send out publicity releases
• Apply for sales tax number if needed
• Get tax information such as record keeping requirements, information on withholding taxes if you will have employees, information on hiring independent contractors, facts about estimating taxes, forms of organization, etc.
• Call Department of Labor to determine labor laws if you have employees.
• Apply for employee identification number if you will have employees
• Find out about workers' compensation if you will have employees
• Open a bank account for the business
• Have business cards and stationery printed
• Purchase equipment or supplies
• Order inventory
• Order signage
• Order fixtures
• Get an email address
• Find a web hosting company
• Get your web site set up
• Have sales literature prepared
• Call for information about Yellow Pages advertising.
• Place advertising in newspapers or other media if yours is the type of business that will benefit from paid advertising
• Call everyone you know and let them know you are in business
• Other _______________________
  

by Janet Attard

Affiliate Marketing – A Great Home Based Business Opportunity for Women

With the advent of the Internet, it has now become simpler and easier to carry on a home based business. The internet is certainly a boon to women who cannot afford or don’t want to leave their homes and children in search of better employment options.

However, making money online is not as easy as it sounds. Like all other businesses, online businesses require considerable amount of investment in the form of time and effort. But with a bit hard work and expertise, women can definitely take advantage of the Internet and affiliate marketing to create a successful, profitable business.

Here are a few ways to make the most of this feasible and viable business opportunity.

Focus On Holidays

If you have an affiliate marketing Internet business, make it a point to plan some kind of activity each month, especially during the holidays. Direct mail campaigns work especially well, once you know how to implement one.

Direct mail campaigns can be carried out by developing a simple postcard or flier. Once very expensive, postcards and fliers are relatively simple and inexpensive to make and distribute. Simply come up with a holiday promotion, develop a flier using Photoshop or other graphic design program, and mail to your target market. If you have a local business, this works even better, since you can simply drop the fliers off yourself.

Organize an Ad Campaign

Advertising is undoubtedly a great way of gaining popularity for your home based affiliate marketing business. You should make sure that you regularly advertise throughout the year so that you are constantly in the news and the market is aware about your products and services. This can be done easily by using a small local ad agency.

They will take care of all your advertising needs, leaving you with all the more time to concentrate on your business. For promotional deals and more economical rates, you can search through the classifieds in the newspapers and magazines. Freelancers are another option – and their prices are often more reasonable.

Maintain a Steady Flow of Income

It is essential that you have a regular source of income in order to sustain your affiliate marketing business. Don’t be tempted to merely focus on large business projects. Additionally, you should seek out smaller ventures that will help you to generate a constant stream of income through the year. The type of products that you promote will largely depend on your financial needs and the budget of your home based business. Smaller projects not only allow you to maintain a regular flow of income, but also give you enough breathing space to replace your current business with a more feasible option, if it does not seem to be working out.

In short, affiliate marketing is one of the best home based business opportunities available for women. It enables you to make a decent living while ensuring sales for someone else. When done well, you can generate enough income to keep your home based business running and on the right track.

10 Tips for Growing Your Business the Organized Way

Growing a business is similar to tending a vegetable garden. Knowledge, careful planning, organized systems, use of proper tools, continuous care, and dedication give you the very best chance of producing a beautiful and abundant garden that brings forth fresh veggies for years to come.

The same is true when it comes to growing your business. By following a specific sequence of steps, just like growing a garden, you can succeed. Neither can be accomplished with a haphazard approach.

Discovering how other businesses are growing, thinking through your marketing strategy, taking an organized approach, using the proper tools to get the word out and focusing on achievement will help you reach your business goals and set you on the right path towards accomplishing your greatest success.

1. Prospecting
for most services and products, it is imperative to first generate qualified prospects. Only then do you work on converting those prospects into first-time buyers, repeat customers, and finally, life-time customers. If you're trying to generate an immediate sale, chances are, you're going to be disappointed with the results. You will make most of your sales by following up with your prospects repeatedly.

2. What is a Prospect?
A person is a prospect only if they:

a) Have a genuine interest in the particular service or product you provide

And

b) Have responded to one of your offers

And

c) They have provided you with contact information (name, e-mail, etc.)

And

d) They have the authority to buy your service/product and can afford it.

Everyone else is a stranger. Not a prospect.

3. Target
you can't try to market to everybody. When you do, you're marketing to nobody. Pick a niche market and focus on your main audience. Target them in all of your marketing materials.

4. Offers
to get people to respond to your marketing, develop an enticing offer and get it in front of as many people in your target market as you can. Perhaps, a free tips report, free e-zine, or free sample. The best offers are generally the FREE offers.

5. Getting the Word Out
There are a multitude of ways to get the word out about your offer. You can try traditional marketing, such as direct mail, press releases, networking, ads, etc. Or, you can use the Internet, such as online networking, joining in discussion forums, submitting to search engines, link exchanges, affiliate programs and so on.

Whatever you choose, schedule time each day to market your business. Write it on your calendar. When it's written down, it is more concrete, and there is a better chance that you will do it.

6. Follow-Up
once you begin to generate prospects, it is imperative that you get their contact information (i.e., name, e-mail address, and any other pertinent information) into an organized database. Why all the work? Because follow-up is the key to successful marketing. Once you have contact information, you can continue to make enticing offers for your product and/or service (discounts, gift certificates, 2 for 1 deals, etc.)

7. One Service/Product
Choose ONE product or services to market at a time, or you’re liable to confuse your prospects. You can have more than one product listed on your website. However, when you contact your prospects, it's best to focus on one product at a time.

8. Guarantee
Guarantee your products or services. Offer, at minimum, a 100% Money-Back Guarantee. When it is clear that you stand behind your services/products, you will have accomplished a trust-factor. This is called risk-reversal.

9. Proactive
Don't use the Passive Marketing technique. That's when you distribute general information, verbal and written, about your company, and then just sit around waiting for the phone to ring, or for your e-mail inbox to fill up with orders. In the real world, it doesn't work that way. You have to be proactive.

10. Track
Track. Track. Track. I can't say this enough. Keeping accurate numbers will help you make good marketing decisions. If you don't know what's working, you're going to waste a lot of time and money. However, if you do know exactly what's working for you, you're practically guaranteed to reach your goals.

by Maria Gracia

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Creating an Internet Marketing Plan That Works

A proper Internet marketing plan will introduce you to both online and offline customers. If you already have a short-term or long-term business plan drafted, you can include a good Internet marketing plan in your marketing strategy.

Below are the steps for creating your own Internet marketing plan:

Purpose of Internet marketing:

Answer these questions: Do you want to embark on Internet marketing to provide services to existing clients or to find new clients? Or are you interested in creating a new online community to address your prospective customers?

Have you allocated any money to be spent on internet marketing this month?

Competition:

Understand your position among your competitors. Are they already in the Internet marketing arena? Keep track of your competitors’ websites and online activities.

Find out what’s special in their online offerings. Observe the gaps in their offerings, which will help you to chart your own plan.

The marketing filter:

Successful online businesses have a well–laid-out filtering process for their marketing initiatives. Think of it in terms of a triangle. The top of the triangle begins with low-cost offerings given as freebies or free samples.

As the triangle widens, you’ll need to make additional investment in your products. By establishing price points on the triangle, you can create a tool for observing what affects the sale of your products and services at different price points.

The target market:

Locate a clearly-definable target market that you can easily control and capture. Get into the finer details of the market’s dynamics.

Find out more about your target audience’s socioeconomic status, age, sex, lifestyle, contacts, likes and dislikes, and other details. Doing this will help you to market your products and services more effectively.

Figuring out solutions:

You need to devise a specific solution for each specific problem. Solutions should be simple, but should differ from those of your competitors in an easily identifiable way.

Branding:

Choose a domain name that is unique and easy to recall, but also in tune with your line of business. It should be catchy enough to be converted into a brand. The design of your site should be simple yet effective.

Website:

The visual appeal and functionality of your website must be good enough to attract the right audience. Your website’s content should be crisp and to the point and should address the problems of the visitors. You must list all the benefits of your products and services, rather than simply emphasizing product features.

Also, you should ask your clients to register on your site or subscribe to your company’s newsletter (you do have one, don’t you?). That way you can collect the addresses of your visitors and you’ll be able to count the number of visitors that come to your site on a daily basis.

Make very certain that any download links work properly.

Strategies to pull traffic toward your website:

With the help of pay-for-click purchases, organic search-engine listings, publishing and uploading of content on a regular basis, and exchange of links with other industries having the same business targets, you can increase the traffic to your site.

Last but not least, you need to build a good team of Internet professionals to design and run your site according to your Internet marketing plan.

Ways To Make Money Online

Why the best ways to make money online are also
some of the easiest... thanks to automation

There are easy ways to make money online, and there are hard ways to make money online. But what are the BEST ways to make money online?

Well, the good news is that some of the best ways to make money online are actually some of the easiest -- if you let your website do all the work for you.

The hard ways to make money online usually involve developing your own product, such as a software program or a tangible product -- something that can take years and often needs a lot of start-up capital.

Then -- with a tangible product like, for example, designer clothing -- you might have storage costs for your supplies and stock, staff costs, and other overhead like shipping and handling.

On the other hand, the easy ways to make money online typically don't involve selling a tangible product that you need to store and ship, and don't need staff to run the business. The easy ways to make money online also keep overhead to the absolute minimum.

And what makes this possible is automation.

Automation basically means putting the actual day-to-day running of your business on "automatic pilot" -- leaving you free to grow your business.

You can automate many parts of your business, including:

• Customer service: You can use email "autoresponders" (automatic emails sent in response to email queries) to reply to customer questions with a comprehensive list of frequently asked questions -- and the answers to them.

• Order-taking: An e-commerce website processes customer orders securely and automatically, even while you sleep!

• Order-fulfillment: One of the best ways to make money online is to sell an electronic product like an eBook. Your orders can be fulfilled without your lifting a finger. Once customers have completed their order, an email automatically goes out to them and links them to the page where they can download their purchase.

• Email promotions: Because it commonly takes up to eight contacts with a prospect before they actually buy from you, you can use email to promote your business for you through a series of autoresponders.
  
  In fact, using automatic email in this way is one of the best ways to make money online. It saves you hours and hours of time that would be better spent thinking up good ideas for the promotions themselves.

An automated website is your 24-hours-a-day, 7 days-a-week, 52 weeks-a-year salesperson that doesn't take holidays, ask for a raise, call in sick, or quit to take a better offer.

And automation is not only one of the easy ways to make money online, it's one of the best ways to make money online -- period! For more on automation, see IMC's newsletter archive.

From www.marketingtips.com

Can Your Small Business Grow?

First off, let's define small business (vs. a home business).

Small business managers and owners today are at large operating out of the home. This makes distinction between the two quite difficult. So let's assume that a small business has one employee or more, even if those employees are nothing more than virtual assistants or freelancers.

Let's also assume that true small businesses are the result of a home business that grew into something larger than the entrepreneur who launched it.

According to the Center for Women's Business Research (2004):

• 1,600 new businesses are launched in America by women,
• Female business ownership growth (17%);

And according to the U.S. Census Bureau (year end 2004)

• Home business made up over 70% of America's total registered business.

Is This the Right Time for You and an Online Small Business

Since we're assuming that small business (at least online) is more productive, financially rewarding, has one or more employees, and has likely reached its peak as a home business - let's talk precisely how to get your business online - offering your products and services to a global marketplace.

You will need to strategize, or hire a consultant to assist you in this strategy, as not all home business converts easily to a small business online. And, since most entrepreneurs don't have the capital available to hire a consultant let me offer a few options.

Teach Yourself How to Strategically Get Your Small Business Online

• A variety of reasonably-priced training exists online regarding profitable business models. You may have to sift through hours of information and multiple websites to find a model that works for your business but it will save you a business strategy consultant fee.
• Universities and Colleges are now offering a wide range of entrepreneur classes. Many offer online business strategy courses through their night course curriculum. Research indicates that graduating students from these courses are far more likely to succeed at their small business than those who learned by doing.

If neither of the options appeal to you or fit your lifestyle and available time, you can always test the waters by hiring and training a college student (educated in small business) to expand your reach online.

Taking these 'baby steps' are as easy as advertising your services online as a freelancer but having the student perform the extra work. If your business is product related, you could start selling those products online (through your own website or auction sites) while your college student makes the products for you.

Home Business Turns Small Business through Online Reach

Small business means employees which have its own challenges but the rewards could be well worth it. Begin by hiring and training an employee to do the work for you while you focus on growing your brand, income, customer list, and reach through your own website, heavy traffic free websites such as Squidoo.com, or by participating in social networking.

From http://www.smartzville.com

Build A Cash Pool For Your Home

Although your income statement might show a healthy profit, it doesn't amount to a hill of beans if you have no cash flow.

One of the biggest mistakes made by new home business owners is allowing clients and customers to buy now and pay later. In other words, extending credit.

Credit is for banks and large corporations, not for you as a home-based entrepreneur. Cash flow is the lifeblood of your business. Without it, your business will wither and die regardless of how many sales you've made or how much money is owed to you.

Cash flow represents the amount of money coming in to your business through services rendered and products sold, and money going out to cover expenses and production costs.

Your primary responsibility as a home-based business owner is to ensure the flow is consistent with more money coming in than going out so a pool starts to form to hold the overflow. This overflow is what allows you to make early payments so you can benefit from vendor discounts, to take advantage of special deals, capitalize on newfound opportunities, and easily cover unexpected emergencies. As soon as cash flow fails to produce the surplus funds you need, challenges arise and stress and overwhelm quickly follow.

Integrate these seven simple rules to your operating strategies and enjoy the benefits of a steadily growing cash pool.

1. Request payment prior to delivering your product or service. If your service is delivered over an extended period of time and asking for a one-time payment in advance isn't realistic, divide the payment into segments and request payment in advance of each new time frame.

For example, if you provide weekly house cleaning, consider requesting payment at the beginning of each month in advance of providing your services - or suggest three or six months payment in advance and offer a discount as an incentive. A mere 10 percent discount over a three-month period could put an extra $100 or more into your client's pocket. Many will jump at that deal.

2. Pay every bill on time to avoid late payment charges and earlier only if special payment discounts apply.

As a hair stylist working primarily with cancer patients, imagine spending one thousand dollars a month on wigs. If the supplier offers 2/10, net 30 as payment terms, you will save two percent by paying your invoice within ten days. That might only be $20, but over a year, it adds up to $240.

Take advantage of this incentive with every supplier that offers it and you could keep thousands of dollars in your business that you would otherwise have spent.

3. Deposit payments as soon as you receive them. Instead of making one or two trips to the bank each month, make them daily or weekly. Letting checks lie around increases the risk of loss. Also, go to a teller when making your deposit. Using an ATM machine removes any evidence you deposited real cash or checks. An employee or technical error or internal theft could create problems you simply don't need.

4. Use a business credit card whenever possible for travel, meals, and minor expenses. This leaves more cash in your hands and defers payment. Using a card that awards travel miles also helps you cut future travel costs. I've enjoyed cruises and free flights to business conferences thanks to air miles.

5. Create continuity sales. Build a product or service into your business that your client could use on a continual basis. For example, if you run a bookkeeping business and your clients struggle with cash flow, recommend bank reconciliation services every month.

Many clients hand a box of receipts to their bookkeeper at the end of each year and cross their fingers hoping they did well. Helping your clients understand exactly where they are each and every month is an exceptional service that many will jump at. One client at $30 a month would give you $360. Ten clients at the same amount, paid in advance would give you $3,600 cash at the start of the year.

6. Create something that allows you to do the work once, but profit from over and over again. For example, many of today's business owners are creating e-books (electronic books) and audio recordings sharing valuable tips, information and knowledge that improve the health, happiness and prosperity of others.

Selling electronic products online removes production costs and provides a steady flow of funds into your business.

7. Invest your overflow. Once you have built a comfortable overflow, consider investing some of it to make it grow even faster for you. Letting a large sum of money sit in your bank account does nothing to accelerate growth. Talk to an investment professional and find out how you can make that money work for you.

Start with these seven simple rules and get creative. Brainstorm ideas for special offers, continuity programs, passive revenue streams and investment possibilities.

Get input from professionals, mastermind members and your coach. You can do it. They can help.

by Laurie Hayes

Find a Need and Fill It

The dot com days were fun. College kids in their dorm rooms came up with outlandish Web-based technology ideas, wrapped them in a “business proposition” and garnered millions in start-up funds from venture capitalists desperate to get a horse in the Internet IPO gold rush. Many of the technology ideas were brilliant – use the Internet to gather buying groups to drive down the price of a digital camera. Use the Internet as a worldwide auction tool for used plant equipment.

Most of the dazzling Web-based business concepts failed. Were they too ahead-of-their-time? Not at all. We’re always ready for a great new idea. Did they fail because the companies were often run by kids? Nope. Google was launched as a dorm-room idea by two college kids. Sergey and Larry still run the company. They made Google work environment into a big playroom with exercise balls, free snacks and foosball – yet they’re putting millions on the bottom line.

Most dot com businesses failed because they didn’t fill a clearly defined need. A new product, new technology, new ideas for doing business – these don’t matter unless you can demonstrate a need that is getting met by these products, technology and ideas. The Google boys delivered a more effective, more user-friendly search engine at a time when search engines were starting to get heavy use.

Sergey and Larry did one better by charging for ads stacked up on the right side of their search results. Advertisers had been struggling for a way to reach Internet users. Banner ads were weak and email marketing developed a bad reputation. The search ads caught users just as they started searching for Bermuda Vacations or B.B. King tickets.

Over the years, I’ve listened to a great number of business start-up ideas, as well as new product ideas from existing companies. The most common mistake entrepreneurs make as they develop their ideas is they take an inward view. Instead of exploring what people may need, they focus on what they themselves want to do. It’s a simple trap. A common mistake. And it’s deadly.

The question I ask back when I hear the exciting business idea is, “Who needs it?”

“Well, everyone does,” is the heartbreaking answer. This is usually followed by an impassioned description of the product or idea.

My first publishing idea was a magazine about poker. I loved poker and thought it would be fun putting together a magazine that covered all aspects of the game, from Friday night friendly games to the World Series of Poker in Las Vegas. I went so far as to visit Vegas looking for advertisers. I got caught up in a few games that first night and missed my morning appointments the next day. I quickly realized I didn’t have the moral fortitude to do business in a town like Vegas and came home early looking for a new magazine idea.

The concept of a poker magazine satisfied my interests, but it wasn’t designed to fill a clear need. There are millions of poker players across the country, but would they really read a magazine on the subject? Probably not.

After dusting myself off, I looked at two other magazine ideas. One was a spicy foods publication pitched to me by hot foods author Dave DeWitt, the other was my idea for a retirement guide to the Southwest. Both ideas were based on needs. Hot food lovers were in constant need of new recipes, information on gardening and new pepper products. Meanwhile, people were streaming into the Southwest to retire.

The needs were clear. The next step was to figure out the best way to serve those needs. I thought the chile pepper idea would be best served as a one-shot. I thought the retirement guide could be a magazine. Turned out that the chile subject was worthy of a magazine while the retirement guide – containing mostly static information – was best served as a book. Both products were very successful. Both filled clear needs.

by Rob Spiegel