Posts Tagged ‘entrepreneurialism’
Pre-Money vs. Post-Money Valuation
When a company decides that it must raise capital, a key question that must be answered is how much the company is worth. For example, if the business needs $500,000 to get started and/or grow, how much of the equity in that company should $500,000 command? Once this question is answered, the company will go out and try to find investors. When doing so, a key question often arises as to whether the valuation is “pre-money” or “post-money.”
“Before the money” or “pre-money” and “after the money” or “post-money” denote simple concepts. However, these simple concepts can even confuse even the most sophisticated analysts at times. If a company is valued at $1 million on Day 1, then 25 percent of the company is worth $250,000. However, there may be an ambiguity. Suppose the company and the investor agree on two terms: (1) a $1 million valuation, and (2) a $250,000 equity investment. In this case, the company may offer the investor 250 shares for $250,000. Immediately there can be a disagreement. The investor may have thought that equity in the company was worth $1,000 per percentage point, in which case $250,000 gets 250 out of 1,000 shares or a 25% equity position. Conversely, the company may have believed that the investor was contributing to the enterprise which was already worth $1 million. Under this rationale, the $250,000 would give the investor 250 shares out of 1,250 shares or a 20% equity position.
The critical issue was whether the agreed value of $1 million to be assigned to the company was prior to or after the investor’s contribution of cash (pre-money) or post-money.
In the above case, a pre-money valuation of $1 million and a post-money valuation of $1.25 million were equivalent. Because mixing up the terms could significantly increase the cost of capital raised, companies must be sure to understand the two metrics and agree with investors to the metric that raises them the capital at the appropriate price.
Since its inception, Growthink Business Plans has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share. Growthink has become the firm of choice for venture capital firms, angel investors, corporations and entrepreneurs in the know. For more information please visit http://www.growthink.com or download our free Business Plan Guide.
An Entrepreneurs Challenge
Living in the twilight zone has its advantages. In the early days of starting my business, I found the limitations of living in a rural area to be restrictive. However, later I realized that those limitations were not an obstacle that could stop me; they were only a challenge that would strengthen me. Since my business would be smaller, I would have the advantage of fewer employees and less strife in the processes of doing business.
Growth, while difficult in a single entity, could easily be accomplished through multiplication. By repeating the business in several locations, it could become the kind of business I wanted to run.
The challenge was no longer in the viability of the business, but in the potential of business development. So, simply put, where do I go from here?
How big was my dream and did I have the courage to pursue it to fruition?
It was BIG and I did. The processes of developing my multi-business center company, connected by computers, people, and a dream was not particularly difficult, nor were there any major obstacles to overcome. The biggest challenge was in the mind.
The process of realizing a dream is pretty much the same from any vantage point. My vantage point was a small town in the mid-west (right between the vastness of the Great Plains and the vertical beauty of the Rocky Mountains). Some of you call this the WEST ? but I’ve been to both coasts ? it is MID WAY between them, trust me.
The challenge was literally in formatting the dream and scheduling the conceptual steps and the processes by which the dream would be realized.
Creating the dream.
A good business fills a need. You must realize a need. Through a need of your own, you may realize that other people have the same need, and the cure for your needs could also be a cure for the needs of others with similar needs.
Quite essentially, while speaking to a friend one day, I said those magic words that spoke directly to my heart, “I wish somehow there was a way to?” Being the kind and generous person that she is, she fed into my dream by asking me what options could possibly provide solutions to that problem. So, for much of that afternoon we ‘brainstormed’ for solutions to my problem. That evening, when I got home, I wrote down a list of our solutions, and put them on a shelf in my home office, where I promptly forgot about them until several months later when another friend was in the same boat.
Realizing the Viability.
A good business can fill the need at a profit. Take your dream one step further; determine if the product/service that could be a solution to your problem is worth paying for.
My friend mentioned that she would actually pay someone to deal with her situation. I frowned at the thought, realizing that it was a signal to me, to put the ‘brainstormed’ solutions into actual practice. My dream became a viable option. I could feel the reality of what I was dreaming, and I could ‘touch’ what it would become.
Conformation.
A good business must have a substantially saleable product. Specifically describe the product/service and how you could build/design/create it. Determine if the value of the product/service is worth the cost of producing it.
When I got home again, I took out that first brainstorming list of solutions and put it on the table along with a pad of paper and a pen. I got a cup of coffee and sat down to work. I needed a product/service that could be sold. From that brainstorming list, I developed a list of products/services that could be sold at a profit, and I began to put together a profile of the company that would sell them. The ‘business outline’ that resulted from these hours of work, was substantial enough to start working on a business plan.
Marketability.
A good business must be marketable at a profit. Developing a market feasibility plan was the next step. By determining the marketability of the product/service and orchestrating the process within the sphere of location, pricing/value, accessibility, and dispensation, it is possible to realize the maximum profit from the product/service within a specific market during the initial phase of distribution. By establishing a marketing plan based on the feasibility of marketing your product/service during this phase of the business development process, your business can become profitable from the earliest stage possible.
Targeting Profit.
A good business must operate regularly IN THE BLACK. Often, developing a profitable business is an accidental event that can’t be explained. More often, businesses fail within the first five years because owners plan to FAIL by failing to PLAN. However, profitability in business can be explained, planned, and projected, if the business owner establishes a plan of business and manages his business according to that plan.
Determine the requirements of making a profit in your business and incorporate that process into your plan. That is what targeting profit is all about; making sure that your business plan has ‘profit’ directly in sight.
Make PEOPLE your priority.
A good business must serve its people. Occasionally a company will forget its purpose for being in business. The only REAL reason for being in business is to help other people. No matter what your product/service might be, your purpose is helping others. When THIS concept becomes genuine within the people who work in your business, they will acquire the ability to serve with objectivity the clients who purchase your products/services. Recognize your business priorities and keep them at the top of the list. Customer Service is not where you want to cut costs.
Plan your BUSINESS.
A good business follows a solid business plan. A solid business plan based on marketing strategies, prioritized business practices, and a sound proposal of profitability will project your company to triumph. A complete business plan will include concepts and procedures for day-to-day operations that will lead regularly to the level of success planned for and projected. If you are following your business plan in an organized manner, with periodic reevaluations for business development changes, your company will have its very own success story and history of success.
Comprehensive Development.
A good business is based on a solidly proven business history. EVEN if you are new to the business industry, there are proven examples of businesses for you to follow. Find a successful ‘mentor’ within your chosen industry and follow their guidance. Trying to reinvent the wheel doesn’t work. It’s been invented and it works, so why mess with perfection by trying to reinvent it. This means that there is a proven method of doing business, and it does work, so when you find a person who is successful in your chosen field, use their proven strategies and update for current technical abilities, but do not try to reinvent the processes.
Consistent Record keeping.
A good business uses a consistent record keeping method. Prepare an office for your business that is capable of tracking daily activities within your business, marketing practices, and financial records. Consistently record financial records in a clearly defined manner that will properly project your financial situation at any given time. Weekly, monthly, and annual reports are necessary for managing the profitability of your business. Be certain that these reports are available for weekly, monthly, and annual evaluation, and religiously do those evaluations based on your business plan. Be prepared to revamp and revitalize your business plan based on the evaluations you do.
NOTE: While ‘weekly’ reports are necessary for this evaluation ? do not adjust your business based solely on the weekly reports.
Use the Three E’s.
A good business promotes enthusiasm, effort, and ethics. Enthusiastically promote what you do. If you believe in what you are doing and put your best attitude toward accomplishing the job at hand, you will be promoting your business in the best possible way, with personal enthusiasm. Be sure that the majority of effort you put into your business every day is intended for profit. If you are working all day and accomplish nothing toward making a profit, your business will not be profitable in the long run. Personal ethics are a choice. If you value your business you will maintain a high standard of ethics. Honesty and Integrity cannot be regained once they are lost.
Don’t allow anyone to take those from you for any reason, hold your personal values dearly and promote your business based on solid values.
Smell the roses.
A good business allows for the enjoyment of life along with the requirements of work. As with any job, burnout is a threat if you don’t take time out to enjoy life while you work. It often amazes me, the number of people who indicate that they have no time for family, fun, and hobbies, as they are working to own their own business. What ARE they working for? If you don’t take the time to enjoy life, you will burnout and be no good to anyone, and definitely not capable of succeeding in your business. Take time out for you, for family, for LIFE. Your job will still be there when you get back, and you will be more capable when you go back to it.
Without the specific details that make a business work successfully toward a profit, you don’t actually have a business; you have a great idea. An idea won’t actually get you very far in the land of profit margins, it actually will cost you more than it will make. An idea is something that is incomplete and surrealistic, until it has been scripted and formatted into the reality of a series of goals that work together to make a profitable business.
What is your NEMESIS? What is your dream? Is your dream going to make you a life? Is your dream worth the investment of your time, effort, and money?
Success is in the details. If you want to make your dream a business, it’s important to develop the details and process your ideas into REAL goals. The difference between a dream and a successful business is in the presentation of the details.
Copyright (c) 2001 – Jan Verhoeff
Printed in the USA
Jan Verhoeff combines 27 years of service in the Free Enterprise domain and a lifetime of education in business development to bring expertise and understanding of basic business principles to new business owners. An expert in the field of business development, Jan presents conceptual information through publications, live presentations, and Power Launch, a weekly live conference chat for business developers. For more information see her site at: http://wahopportunity.blogspot.com
How to Start a Franchise
Franchising Information
Franchise oppotunities are all around us today. You may pop into Starbucks for coffee and then head for lunch at MacDonalds before returning home and ordering your dinner from another local franchise, Pizza Hut. Many of the most popular outlets you visit may be franchises as they offer the security of a brand name and the attraction of starting your own business.
The world of Franchise is certainly complex but many people are now seriously looking at starting a franchise as they look to leave their routine day jobs and embark on an exciting business opportunity and run their own business. Indeed many franchise fairs and seminars are now the perfect location to meet franchise experts and discuss funding and business plans to determine what type of niche you may quickly recoup your investment with.
Selecting the correct franchise opportunity is vital and you should research the company history and seek advice from current franchise owners before making important decisions. Many franchise opportunities allow you a great degree of freedom with your marketing and advertising, however many others have trademark guidelines and company policies which you must be aware of before launching a promotion.
Joining your local chamber of commerce or business club is a good first step as many business owners have experience in the franchise industry and also have a great network of contacts that could give your franchise business a great head start. Your local business enterprise will also be able to help you formulate a business plan and budget as well as possibly providing a small grant for start up costs.
Starting your own franchise has never been easier and you could even lead you on the road to becoming a multi franchise where you also recruit others to join your network.
Webmasters feel free to publish this article providing the resource box is kept below.
Kevin McNally
http://www.qwfranchise.com
Oil Change Guys History; Part I
How do franchise companies come to be? How do they start. What type of a person or entrepreneur becomes a franchisor? Below is the story of how one small company became a franchisor in the mobile oil change business. The story is written from our point of view and opinion. We claim freedom of speech, of the press in its entirety since a good part of it is opinion based.
Serial Entrepreneur Lance Winslow started out in the Aircraft and Car Detailing Business about 28 years ago. Mobile Oil Changes did not exist for the consumer at that time. There were only preventative maintenance services for over the road trucks and off-road heavy equipment. During this time Jiffy Lube was growing in size and convenience started to take hold. Jiffy Lube in less than 15 years cornered the market. Mr. Winslow watched this trend take hold and thousands of quick lube shops started to spring up across America, similar to the original Midas Muffler Model, but this time for oil changes. This was occurring as gas stations turned from service station garages to C-Stores for higher per square foot profits. At time the young entrepreneur never thought much about running a mobile oil change franchise.
Eventually several companies sprung up to fill this niche, few lasted as consumers were not ready to except this new trend of mobile oil changes and cities and property managers frowned upon it. In some markets they did well and in others they failed miserably. Eventually many companies learned through trial and error what the consumers needed and wanted. The operators also learned how to market these services. Now we see National Oil and Lube News; www.noln.net , has a whole month dedicated to the mobile oil change sector. The winners in this mobile on-site oil change market today are Location Lube, Lube and Go, and Oil Butler.
In 1998 Mr. Winslow was marketing a new franchise in San Jose, CA for his Mobile Car Wash Business when he ran into Dave who was the co-founder of Oil Maxx. Oil Maxx was founded back in 1995 after a study of the market revealed that there was a great potential for a mobile oil and lube service. Many people had never even heard of a mobile lube service in Silicon Valley. Dave and his partner then borrowed money from family and friends and started Oil Max, a name they chose to franchise with. Although this confused their current customers they thought it was a smart move. Soon after they discovered Oil Max was taken as a name and changed to Oil Maxx with two ‘X’s. Prior to that there were only Biz-Ops and all were East Coast based and only one was a legitimate franchise; The Oil Butler in NJ. Dave and His partner and newly formed marketing staff spent many days and nights perfecting their system and building an even stronger customer base.
Oil Maxx provided service to many major companies and individuals throughout the San Francisco Bay Area and surrounding communities. They were members of the National Association of Fleet Administrators and a preferred vendor with many fleet service/leasing companies including GE Capital, PHH Vehicle Services, Wheels/Map, US Fleet Leasing, and Enterprise Fleet Services. Oil Maxx decided to team up with our franchisees of The Car Wash Guys and The Truck Wash Guys in the California Bay Area. By co-marketing and bundling services each of the two companies doubled business by sharing customer lists. We immediately sent Oil Maxx to our customers at Adaptec, Fujitsu, and HP. They sent us to Budweiser Distribution, a courier service, a uniform service and the cable company. We also worked together to leverage other competitors out of the market, such as our once rival Texas “T”, by bundling services with the many Concierge Services, which started popping up to cater to corporate employees at the height of the DotCom and Tech Bubble. The synergies gained were so intense, they were scary, so both companies grew closer and even shared data bases of customers, billing information, scheduling routes lists and sales teams. Without any non-competes, lawyers or guarantees, all on a hand shake between company founders. (January of 1999).
Seeing the potential of this incredible synergy, Mr. Winslow, introduced Oil Maxx founders to his then sole mentor in franchising, Lou Gurnick of franchisebusiness.com. Lou Gurnick was the Chief Operating Officer for Midas Muffler from it’s inception with only $100,000 in capital to over 400 Million in sales which was still over 30 years ago. Lou Gurnick was also a consultant to Ray Kroc who franchised McDonalds and to Tom Monahan Founder of Dominos Pizza. Mr. Winslow was looking to duplicate this synergy he found with the Oil Maxx Company across the nation. He was anticipating Oil Maxx’s rapid expansion through franchising on a promise from the Oil Maxx founders to catch up to the then only Car Wash Guys then already franchised in 14 states at the time. Knowing that it would bring fleet business and corporate onsite car washing to his team and also provide Oil Maxx Franchisees with instant business. Mr. Winslow had a long-range plan to either buy all or part of Oil Maxx after the fast and explosive growth and then take the company public or trade for Car Wash Guys stock. That never came to be, as Oil Maxx failed to capture enough inertia to attack the franchising market. Most of this was due to under capitalization. Mr. Winslow had not even considered setting up the Oil Change Guys www.OilChangeGuys.com Franchise System at that time. He was completely busy setting up Car Wash Guys Franchises. To be continued. . .
“Lance Winslow” – If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
Differentiation ? Smart Marketing Strategies for the Solo Entrepreneur
Are you ever frustrated or hesitant when you talk to prospective customers because you can’t readily explain why they should come to you rather than go to your competitors? Sure, you might have your 30-second elevator speech, but then they ask you that dreaded question, “So what makes you different?” Then, all those self-doubts creep in, and you just aren’t sure what to say. Differentiation can boost confidence–yours in yourself and that prospective customer’s confidence in you!
– Dif-fer-en-ti-ate v. tr. To perceive or show the difference in or between; discriminate. –
In business terms, to differentiate means to create a benefit that customers perceive as being of greater value to them than what they can get elsewhere. It’s not enough for you to be different–a potential customer has to take note of the difference and must feel that the difference somehow fits their need better. (Other words that mean virtually the same thing: Competitive Advantage; Unique Selling Proposition; or Value Proposition.)
As you are building your business, you can use differentiation to attract more customers. Once you have momentum, differentiation allows you to charge a higher price because you are delivering more value to your customers. Make a point to evaluate and adjust your differentiation methods at least annually.
The various methods of differentiating your businesses fall into four general categories:
Price Differentiation
Focus Differentiation
Product/Service Differentiation
Customer Service Differentiation
Price Differentiation
Differentiating on price is probably the most common and easily understood method. HOWEVER, for Solo Entrepreneurs, caution is in order. On the one hand, potential customers might expect a lower price from you than from your larger competition because they perceive you as having less overhead, etc. On the other hand, cheaper prices can evoke perceptions of lower quality, a less-stable business, etc. And if you compete on price against competitors with deeper pockets, you can price yourself right into bankruptcy. Be creative with this differentiator by competing on something other than straight price. For example, you might offer:
- More value–offer more products or services for the same price.
- Freebies –accessories, companion products, free upgrades, and coupons for future purchases.
- Free shipping, etc.–convenience sells, especially when it is free!
- Discounts–includes offering regular sales, coupons, etc. (see cautions above)
Focus Differentiation
For Solo Entrepreneurs, this is the most important method of differentiation, and in many ways, the easiest. Why? Because as a Solo Entrepreneur, you simply can’t be everything to everybody, so you must pick a specific way to focus your business. Once you have done that, you have an automatic advantage over larger companies because you can become more of an expert in that one field –and you can build close relationships with key customers that will be hard to duplicate. For example, you might differentiate yourself through:
- Location–take advantage your closeness to prospective customers.
- Customer specialization–be very specific about what characteristics your customers will have-for example, racing bicycle enthusiasts or companies with a spiritual conscience.
- Customer relationships–know customers really well, form partnerships with them, and get them to speak for you!
- Affinity relationships–associate your product/service with a well-known person or organization.
- One-stop shopping–offer everything your target market needs, in your area of expertise.
- Wide selection (within your niche)-although this one may seem to be the opposite of focus–the key is to be very specific in one dimension and very broad in another.
Product/Service Offering Differentiation
How much you are able to differentiate your product or service offering will vary based on what type of business you are in. For instance, if you are in a highly regulated business, your options may be limited. Explore a totally new market or type of product or service, however, and the possibilities abound. The key to successful differentiation in this category, again, is to know your customers, really, really well. Talk to them often, and you will know what they need most and be able to offer it, long before your competitors know what is happening. For example, your product or service could stand out in one of these ways:
- Quality–create a product or service that is exceptional in one or more ways. Examples: Lasts longer
- Better
- Easier to use
- Safer
- New/First–be the first one to offer something in your location/field.
- Features/Options–offer lots of choices, unusual combinations, or solve a problem for a customer in a way no one else does.
- Customization–as a Solo Entrepreneur, you may be able to more easily handle special orders than big, mass-market competitors.
Customer Service Differentiation
Have you noticed how customer service seems to be out of vogue these days? This situation makes excellent customer service a great opportunity for differentiation and another natural advantage for Solo Entrepreneurs that already know what’s important to their customers. Build your reputation on making customers feel really good about doing business with you. Works great with referral marketing, too. Examples:
- Deliver fast–next day, or one-hour–make it faster than customers think possible.
- Unique channel–offer a service over the phone or Internet instead of in person or in their office rather than yours.
- Service-delight customers!–it may seem expensive to offer exceptional service–but it pays off in word-of-mouth advertising.
- Before/during/after-sales support–provide technical or other support to customers using your product. You might use joint ventures to provide that support–but customers will perceive it as being from you!
- Guarantee/warranty–offer 100% money-back, or free replacement parts.
- YOU–offer yourself, your unique blend of talents and skills, to attract customers. Make sure they get access to you, too!
Keys to Successful Differentiation:
- Know your customers, really, really well.
- Pick a blend of differentiation methods that, in the eyes of your customers, truly sets you apart.
- Talk about your differentiation in terms of customer benefits.
- Tell everyone about what differentiates you–often.
- Keep your differentiation fresh by listening for changing customer needs.
Copyright 2002-2003, Terri Zwierzynski, Accel Innovation, Inc.
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Terri Zwierzynski is a coach to small business owners and Solo Entrepreneurs. She is also the CEI (Conductor of Extraordinary Ideas) at Solo-E.com and the author of 136 Ways To Market Your Small Business. Terri is an MBA honors graduate from UNC-Chapel Hill. Terri has been coaching for over 10 years in a variety of settings, including 6 years as a senior-level coach and consultant for a Fortune 500 company. She opened her private coaching practice in 2001. You can reach Terri at http://www.TerriZ.com.
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Needs Versus Wants For Entrepreneurs
How often do the words “I need” come out of your mouth, as it relates to your business? When you run your own company, it’s easy to think that the only way to succeed is to be moving forward with your expenses — the newest technology, a broader circle of professionals providing you services, involvement in more and more costly marketing efforts, etc. And it’s particularly difficult to resist the urge when you know you can generally take a tax DEDUCTION for any business expenses. But did you ever stop to think how many of those requests are actually needs, and how many are simply wants?
WHAT IS A NEED?
Let’s start by defining “need.” In the strictest sense of the word, a “need” is something that you have to have to get by in this world — a NECESSITY. In your personal life, you need food, shelter, clothing, medical care — the basics. You will probably experience physical suffering of some sort if you don’t have your needs met. In your business, you also have some basic needs — business cards, basic office equipment and supplies, a scheduling and follow up system, involvement in some networking activities, and generally some professional development or continuing education for your field. You can’t run your company successfully without them. Depending on your area of specialization and experience, some assistance with accounting, legal, or other professional issues might also be considered a “need.”
A want, on the other hand, is something that you desire — something you would like to have. But by no means will you suffer in any way (except perhaps mental anguish!) if you don’t get the thing you want. “Wants” quite often fall into the category of LUXURIES — nice to have, but the world won’t end without them. Having a computer that could keep Mir running or an Amazon.com quality website certainly fall into this category. But other items could be considered wants, depending on the type of business your run, your customer base, and the level of product or service you provide.
MAKING THE DISTINCTION
The hard part comes when you live in a prosperous capitalistic society, like ours. The “western” standard of living is so high that even many of our poor tend to live above the level of basic needs. In 1998, 97% of “poor” Americans (as defined by the Census Bureau) owned a television — something that could definitely be considered a luxury. In many third-world countries, less than 30% of the population even has access to electricity — which most westerners would consider an absolute necessity. My intention is not to make anyone feel guilty — it’s simply to point out that the distinction between want and need is often RELATIVE. It depends on the area in which you live, the company you keep, the lifestyle you choose, and the expectations of the society around you.
It is also important to have some PERSPECTIVE about your place in the world marketplace. If you are running a small business, the goal is not to become a multi-millionaire in the first year — sinking every penny you can get your hands on in your company, without an eye to the future (look at all of the dot-bombs in the early 90’s). You have to start out slowly — growing responsibly and spacing out your business investments as your revenues increase. At one point in your company’s lifetime, having a staff person to handle administrative duties may definitely be a luxury — but farther down the road, it might well become a necessity for you to handle the influx of new customers. On the flip side, you might make some changes in your business structure that allow you to let go of staff, reduce your need for expensive technology, or decrease some other expense. This is why it is so important to constantly RE-EVALUATE your needs and expenditures — to make sure they are still in alignment with each other.
THE POWER OF ADVERTISING
We are influenced, every day, by the popular culture around us. Television, magazines, movies, and advertising have all done a splendid job of PROGRAMMING us to think that we need a lot of excess consumable goods. Pretend that you are watching TV or flipping through your favorite business magazine and see an ad for something fabulous — the latest PalmXXII, Turbo, complete with satellite com link, scanner, global positioning system, and built in web server. Suddenly, your heart speeds up, and you get a tingly feeling in your gut. It’s perfect — how had you ever lived without it before? You rush right to the store — what?! You don’t have any left in stock?! Your heart sinks and you feel a rush of disappointment. You spend the rest of the day moping because you couldn’t find it anywhere.
Now, this might be a bit of an exaggeration, but it’s not far off the mark for some people. How often have you learned of a new product and were certain that you absolutely had to HAVE it? What if you had never seen the ad? Would your life be any worse off? It’s as if the knowledge that something exists causes the need for it.
KEEPING UP WITH THE JONESES
And, of course, we have peer pressure! But with the advent of the “global society,” the Joneses are not just the people next door anymore. They include business tycoons and techo-gurus and imaginary people on TV that don’t even really exist. But we hold these folks up as the STANDARD against which we should measure our own lives. Just because Bill Gates has an office that will run itself entirely through voice recognition, we think that our manual way of doing things is dated. And since that 24 year-old dot-com wiz profiled in Fast Company reads 23 business journals a week, we think we need to start subscribing too.
THE HIGH COST OF NEEDS
So why is any of this a problem? Let me ask you a confidential question — how much DEBT is your business carrying? Do you have several thousand (or tens of thousands!) dollars of past credit card purchases that you are still trying to pay off? Are you paying every spare penny you earn through your company each month to pay for your “corporate” lifestyle? How does your financial future look? Are you able to save for a rainy day — to put aside a reserve in case the economy tanks?
When your spending PRIORITIES are out of whack, you tend to experience stress, guilt, and anxiety — it can even affect your health. And just think about how many personal relationships are strained (even broken) over money issues. This can be a particularly sensitive issue for entrepreneurs, as the line between business and personal finances is often so blurred. Is that really how you want to live your life?
BALANCING NEEDS AND WANTS
Certainly, no one is suggesting that you give away everything you own and become a monk! But it is important that you strike a balance between those things that you have to have and the things that you would like to have. And it’s important that you be able to PRIORITIZE your business spending. The goal is to focus on those things that will really improve your efficiency, effectiveness, and bottom line — rather than just look flashy.
SO WHAT DO I DO NEXT?
Start by making a LIST of all your wants and needs. Try to be brutally honest about which category they fall into. Then, take a look at the items in your want list. First, ask yourself how much each purchase will IMPROVE your quality of life as a business person — how it will boost your company’s bottom line or build a base for future growth. Rate them with an “A” for a large improvement down to a “C” for a negligible improvement (and if it will actively detract from your entrepreneurial quality of life, cross it off the list!) At this point, don’t even worry about the “B’s” and “C’s” — if we get you to a point where you can have all of your “A” wants, then you can think about the rest.
Now, take a look at your “A’s” — try to decide if there is some way you can BALANCE between your high-priority wants and your needs. What are you willing to give up? Where are you able to compromise? Perhaps you can forego the expensive computer and make do with the one you have to afford hiring a PR agent to help increase your exposure. Or buy your office furniture used to leave enough room in your budget for that additional certification program you’ve been wanting to take. If you make these decisions based on how the purchase will improve your life and your business — based on your own personal priorities (instead of someone else’s!)– you shouldn’t go wrong.
Ramona Creel is a Professional Organizer and the founder of OnlineOrganizing.com — a web-based one-stop shop offering everything that you need to get organized at home or at work. At OnlineOrganizing.com, you may get a referral to an organizer near you, shop for the latest organizing products, get tons of free tips, and even learn how to become a professional organizer or build your existing organizing business. And if you would like to read more articles about organizing your life or building your business, get a free subscription to the “Get Organized” and “Organized For A Living” newsletters. Please visit http://www.OnlineOrganizing.com or contact Ramona directly at ramona@onlineorganizing.com for more information.
Lets Not Forget About The Little Guy
Every business has to start somewhere. What truly makes this country great is the freedom of enterprenuership that every one of its citizens have. Capitalism at its best signifies the power of a single person to reach monumental goals and turning a simple idea into a huge corporation. But in our pursuit of this glorified state, have we snubbed the little guy?
Corporate earnings are billions of dollars a year for executives and shareholders. Online companies such as eBay, PayPal, Google, and Blockbuster have crushed the little guy beneath the giant wheels of change. What would have been important to the small companies as they used to be is a far cry from the values that these corporations embrace today. Will it always be this way? Change is inevitable, but does it really take stepping all on the individuals that got them there in order to succeed? It’s as if once a certain dollar amount is reached in net revenue, the blinders go on, and the company loses touch with the little guy.
EBay, Inc. began in 1995 with one little guy’s idea on a better way to garage sale, as a way for his girlfriend (now his wife) to trade Pez dispensers online. By 2001, more than $9 billion in merchandise was sold via the auction monster. Now, eBay Inc. is the biggest internet marketplace, reporting a gross profit of $2,656,894 for 2004.
In an interview with eBay’s founder Pierre Omidyar in BusinessWeek Magazine, Senior Correspondent Robert D. Hoff asks a pertinent question:
Hof: “It seems ironic that eBay started out intending to level the playing field for small businesses and individuals, and now eBay is a big corporation. How do you make those jibe these days?” Omidyar: “It sure is ironic. I like to think we’re a different kind of big company, because of the way we interact with our community. If we lose that, we’ve pretty much lost everything. If you’re starting a revolution and you succeed, then are you still a revolutionary? It’s a little bit weird, but I think we still have a long way to go, bringing the level playing field to the rest of the world.”
Interestingly, earlier in the interview, Omidyar touts his original ideals of listening to his customers, and shaping the software based on their suggestions, sometimes even the same night he received an email from a customer. But increasingly, as of late, eBay’s customers are reporting a greater dissatisfaction with the way the conglomerate is handling their marketplace. After all, it is eBay sellers that are the actual customers, because they pay all the fees, and therefore are the source of eBay’s revenue. And unless you are a Power Seller, forget about calling eBay. Their number is reserved for only the elite few who can meet their standards of maintaining so many thousands of dollars in sales per month. You’ll be lucky if they respond to your email within a week. So I wonder what makes a level playing field, as Omidyar so aptly puts it. Can eBay truly claim to not have reached it yet? Come on?
Since the company raised its prices to sellers earlier this year, though, there are defections to Overstock, Yahoo, Amazon, and other smaller auction sites. Is eBay in that much financial distress that it has to rob the sellers of their hard earned auction profits only to pay higher fees? By the looks of the profits listed earlier, we can all see they’re not struggling. According to BusinessWeek’s David Kiley:
“Ebay’s stock is trading at almost half its 52-week high despite continuing to make money. One wonders if eBay has simply become as complacent as General Motors became in the 1980s, figuring that Toyota and Honda would never amount to much, and that people would prefer a used Buick to a new Hyundai. Ebay is still a market share leader by a big margin. But investors and Wall Street tend to value a stock based on what they think future performance will be. Looks pretty bleak.”
Tiffany & Co., which has filed a lawsuit against the Internet auction giant for facilitating counterfeits, claims that eBay has a responsibility to police its auctions. Gucci, Prada, and other big names are closely watching the suit, as the ramifications will affect them as well. Originally clinging to the values of Omidyar himself, policing auctions was indeed something that they did. Now, the complacency of eBay and it’s “hands off” attitude is almost disgusting. Big mistake; the stakes are high for eBay. Other firms are watching and legal experts predict a flood of similar copyright lawsuits if Tiffany prevails. Lawyers salivate at the thought of getting a piece of the eBay pie.
“Everybody wants to see where this is going,” said Lou Ederer, an intellectual property rights expert. “How much longer can eBay hide behind their bigness? They are taking the position that they can’t monitor thousands of auctions going on all at once. But where do you draw the line? Firearms, alcohol? There are certain industries where the line has to be drawn.”
Another giant, Google, is seemingly only a bit better. Google’s search engine does not generate revenue, as there are no paid inclusions to be listed in the search engine. Rather, Google relies upon its infamous PageRank to rate the importance of sites, and how they get listed. Factors such as keyword density and placement, aging, and link popularity all figure in to the secret algorithm, called PageRank. So where does Google make its money? Google’s pay-per-click advertising, AdWords, is the major source of Google’s income. Google’s concept started in 1996 with two little guys, Larry Page and Sergy Brin. While students at Stanford University, the pair collaborated on a search engine called BackRub, named for its unique ability to analyze the “back links” pointing to a given website. Housed with low end computers in a meager dorm room, the two college students originally sought a buyer for their technology, but no one was interested, so they decided to give it a go themselves. They got a few investors, and Google, Inc. was born. What had been a college research project was now a real company offering a service that was in great demand. The rest is history.
Now, with Google’s enormous impact on the internet, considering that 85% of all website traffic comes from search engines, people cannot fail to take notice. If your website doesn’t appear in Google, chances are you’re not getting good quality traffic. Google ranks #3, surpassed only by Yahoo and MSN, #1 and #2 respectively. Further, the corporation seeks to match its closest competitors by moving away from search engine technology and into the fields of web-based email, shopping, local searching, blogging, and even home pages, in order to steal that market share as well. When is it enough? That’s the funny thing about greed–it engenders more greed, and procreates like a bunch of rabbits.
But the search engine giant is in trouble in the courts, having lost one lawsuit already to Louis Vuitton, Inc. for trademark infringement in October, 2003, and another that the Versailles Court of Appeals, upholding the Vuitton decision, published in March, 2005. The court ordered Google to stop allowing the linking of advertisements to search terms trademarked by two travel companies by Google’s AdWords and to pay damages to the trademarked companies. According to CNN.com, “?The 20-page October 13 ruling by the court in the Paris suburb of Nanterre called into question the legality of the search system at the heart of Google’s business model.” The lawsuit will have ramifications on the validity of the pay per click advertisements, calling Google’s main source of revenue onto the carpet as more court cases ensue.
Google is in the process of removing French news agency Agence France Presse (AFP) from its Google News service, which aggregates links to online articles and accompanying photos from about 4500 news outlets. AFP sued Mountain View, California-based Google in the U.S. District Court for the District of Columbia in March, 2005. The news agency is seeking to recover damages of at least $17.5 million from Google. AFP also asks the court to forbid Google from including its content in Google News. And the greed continues.
In other news, Blockbuster’s CEO John Antioco was ousted at the May 11th, 2005, shareholder meeting, only to reinstated to CEO two weeks later by the board when the dissident financier and corporate raider Carl Icahn voted himself onto the board, with voting rights of 10% of Blockbuster’s Class A shares, and 8% of Class B shares, only to find out that outing the chairman would cost the corporation $51 million dollars. The two other board members voted in actually had extensive media experience. The only experience Icahn has is buying shares and then being loudmouthed at shareholder meetings. So keeping Antioco on the board, and thus voiding the compensation package, seems like more of an afterthought, or even a fast recovery from what could have been a very costly second quarter. The way corporate America is set up seems to be a good way to be accountable (i.e. to the FCC and stockholders), but is a good idea for the ones with the most money making all the decisions? What’s laughable in the Blockbuster drama is that Icahn wasn’t privy to the executive contract that Antioco had, and once Icahn was informed after his election to the board, he quickly changed his tune.
Blockbuster, Inc. was founded by Wayne Huizenga, who was named Ernst & Young World Entrepreneur of the Year for 2004 and 2005. He is the only man to have created six NYSE companies, and three Fortune 500 companies: Waste Management, Inc., Blockbuster, Inc., and AutoNation. He started as a door to door salesman for a trash hauling company. From meager beginnings into the world of multi-billionaires, Huizenga’s is truly a Cinderella story, although his character wasn’t always pretty. And now Blockbuster stock is half of what it was a year ago, and keeps dropping. It seems for every mountain peak, there is the downhill slide.
What I hope to accomplish by this article is not stir up anger towards corporate America; quite to the contrary! What I actually hope to do is give each and every little guy out there the hope and light the fires of passion that you can be a success story as well. But there is a clear warning that growing beyond the bounds of reason has its consequences as well. If your goal is to gain enough wealth to be comfortable, then by all means, go for it. But if your design is to be the best, or to be all things to all people, there is fair risk to you of replacement.
Are American corporations getting too big for their britches and forgetting their roots? You bet. So hey, America, stop forgetting the little guys that made you great in the first place! The little guys like you and me, enterpreneurs with one goal in mind: to make a living, can make a difference. After all, it only takes one to rock the boat.
Jennifer E. Sullivan is an Internet Business Consultant who specializes in search engine optimization and web marketing. Her emphasis is on small to medium business marketing. She has written several web marketing articles, including “Hiring an SEO Consultant: 10 Reasons Why You Should”, “PageRank for Websites: Is There More to the Web?” and “Success for the Early Entrepreneur”. You can find more information on her services at http://www.firstclass-seo.com
Delivery Companies Make the Grade
In the United States we have the most efficient delivery service companies in the world. This is because the free market competitive system has pushed entrepreneurs to become more efficient to make more profit and to keep costs down. More and more products are now delivered right to your door. Businesses have found efficient ways to do this and consumers are loving it.
These products come by delivery services, smart and innovative leading edge companies or those who specialize in getting it there Absolutely Positively Overnight such as FedEx Home Delivery, UPS, Emery, Airborne or regional expeditor of which you would not believe how many there are in the larger cities.
Now products can either be picked up by transporting yourself via the family mini van or SUV or by having them transported to you. There are many theories of methods which can be used to transport products to your home; some are good and some are merely wishful thinking; such as Santa Clause utilizing chimneys and roof tops. Then there are services; you might transport yourself to get a hair cut, Karate Lessons, consulting assistance, etc. using a bicycle, moped, skateboard, passenger car, taxi, bus, motorcycle, a new Segway Scooter or your feet and tennis shoes. Or you might hire a service to come wash your car; put a coating on your Deck; Clean you windows, since you don’t do windows; or have your pool cleaned, dog groomed or some much needed home repair. If a crisis emerges; God forbid you might be in need of essential or emergency services from professionals such as paramedics, firemen, animal control team, refuse collector, AAA Tow Services or police.
The efficiencies of each of these product or service delivery systems are the best in the world, thanks to the free enterprise, innovation and the entrepreneur. So, what would you like delivered today? Think about it.
“Lance Winslow” – If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
Envisioneering
It never ceases to amaze me. Almost everyone peers into the future through a rear-view mirror. The future is imagined as a continuation of the past. I suppose there is a certain security in that; much like a padded cell. Hardly anyone practices creative envisioneering.
To be an envisioneer, you must: first have the courage to look into the future with the recognition that there is nothing there yet, except that which you imagine; and then, the force of will to imagine a personal ideal; and then, the impertinence to believe in that imagined ideal as being more real than all that has come before or exists in this present moment. In short, you must be an idealist.
Each of us is educated to be a realist, to deal with things as they are, to see the world as it is and to ‘realistically’ go about making our way within what already exists, to be a creature of event and circumstance. Those who decide to shape events and circumstances to match what they envision are the idealists. They end up as the movers and shakers, the leaders, the ones who create innovation, the future and ultimately, history. The employee is a realist. The entrepreneur is an idealist.
We may aspire, in our hearts, to be prosperous, to be fulfilled, to live a life of purpose and passion. To exist, in our minds, as a realist makes it almost impossible to succeed in achieving these ideals. We must learn to become idealists, to practice the art of creative envisioneering, if we are to have any hope of making real our ideals.
The main contrast between the realist and the idealist is that the realist sees with his eyes open and the idealist sees with his eyes closed.
Realists rely upon the definite. Idealists rely upon the infinite. Realists live in a world of cause and effects. Idealists live in a world of causal and effectual. Realists say, ‘I’ll believe it is real when I see it.’ Idealists say, ‘I’ll see it as real when I believe it.’ Realists rely upon the evidence of their senses. Idealists rely upon the evidence of their imagination. Realists are reactors. Idealists are creators.
It is often said that idealists are out of touch with (physical) reality. But, it is the realists who are the ones who are out of touch with the greater (metaphysical) reality; and idealists are the ones who mold and shape our future reality. They are envisioneers; creating the future they imagine; living their dreams; enacting their inner vision; using the metaphysical principles to form the physical actualities. Realists say… impossible. Idealists say…I’m possible.
Idealists (envisioneers) create the future that the realists end up (by default) living in, having no choice but to cope with the existing reality, while the envisioneer is still busily creating a new dream. If you want to live the life of your dreams, you must become an envisioneer and learn to ignore the comfortable constraints of reality.
Wisdom is the understanding that what you know is nothing at all and what you imagine is everything else. Reality is a crutch for the unimaginative. The envisioneer has taught himself to believe in what is imagined more than in what is existent.
Do you want more out of life? Envision more. Become a dreamweaver.
© Leslie Fieger. All rights reserved worldwide.
Leslie is the author of The DELFIN Knowledge System Trilogy: The Initiation, The Journey and The Quest plus many more success publications. He also the co-author of The End of the World with Hugh Jeffries and Alexandra’s DragonFire with his daughter Ashley. Subscribe to his free and ad-free eZine at http://www.ProsperityParadigm.com or http://www.LeslieFieger.com.
Reprinting and republishing of this article is granted only with the above credit included. Permission to reprint or republish does not waive any copyright.
5 Tips to Step Boldly into the World & Set Yourself Apart from Others
“Real champions believe in themselves even when no one else will!” Author Unknown
To take your life and business to a level that makes you ecstatic there is a good chance you will need to step boldly into the world and stand distinctively apart from others. Here are 5 tips to support you to embrace the unknown in a big way and maximize your results.
Fully Express Your Self~ Concern for what others will think often results in presenting “a diluted version of ourselves to the world” says the leader of the Think Big Revolution, Michael Port (http://www.MichaelPort.com ). When you fully express your authentic self without fear of the result you take more risks and show up as confident, unique, and intriguing.
Fully Express Your Passion~ We tend to bury our passions under responsibilities with the underlying notion that our day will come. The clock is ticking! What are you willing to stand up for? What difference do you want to make thru the work you do on a daily basis? What gets you juiced? Fully express your passions and you will enthusiastically show up in a big way.
Boldly Take Action Daily on What Matters~ I wonder how much time is spent daily on stuff that doesn’t make a difference. What if you made a commitment to yourself right now to spend time daily taking action and becoming 100% absorbed in activities that make a positive impact on others, your business, and your life. How would that make your life different from today?
Leverage Your Connections~ No one has made it to the top alone. Your connections are unique to you. No one has the same network as you. We all learn and grow from these connections. When we create win/win relationships and connect by sharing information, resources, and connections we grow together. When you develop and leverage these assets within your network you create a tool to set yourself apart from others.
Step out in Faith~ Dr. Martin Luther King, Jr. said, “Take the first step in faith. You don’t have to see the whole staircase, just take the first step.” We restrain ourselves by not trusting in ourselves, our cause, or our capabilities. We want to be “right” so badly that we postpone action. We learn and get better by playing the game, and making errors. Have faith that you have all you need in this abundant world to make a big difference. The world is your playground?. explore? discover? have fun? and trust your intuition.
Take Action Challenge:
What change will you make in order to fully express your authentic self in a big way?
What passion are you burying that you will unleash daily?
What change will you make to your schedule so you become 100% absorbed in actions that make a positive difference every day?
What relationship will you develop into a winning partnership?
Where will you step out in faith trusting that you are equipped to handle whatever shows up?
What I want for you is to confidently stand in all that you are on a daily basis knowing you have treasures to share, and the world will not suffer for the lack of it. Step up to a higher level of integrity and bold, conscious living?. Starting Now!
Copyright 2005 © Beth A. Tabak, All rights reserved.
Beth Tabak is a Business & Life Coach, columnist, & owner of Starting Now. She is 100% committed to coaching small business owners and professionals to grow beyond limits, and create the business and life they keep thinking about. Set your goals, pick up a task list, take a class, discover a new resource all complimentary at http://www.startingnowcoaching.com .
