Five Problems to Watch for When Starting a Business

With the economy currently in a state of decline and unemployment on the rise, the business world is filled with young entrepreneurs creating their own jobs by creating their own businesses. As the number of start-ups in each industry increases, however, the competition in those industries becomes even fiercer.

No one wants their new business to fail- every new business owner believes that it is their will to succeed and their drive to work that will keep the doors open. In reality, scores of new businesses across the country close their doors after only months of operation. No matter how strong your desire to succeed, success is only possible if you have all of the necessary tools to keep your business running.

This article will point out five problem areas typical of new businesses, and how to make sure that your business does not fall prey to these issues.

1: Lack of Business Knowledge or Management Skills

Ultimately, a business’ greatest strength or weakness is the owner’s ability to make canny decisions and appropriate judgement calls. Gut instincts are good, but nothing replaces a working knowledge of the different aspects of a business, and how each aspect should be managed and organized. If you don’t understand your business inside and out, you won’t be able to run your business for maximum efficiency, and that will endanger your profit margins.

2: Setting Overly-Ambitious Goals

People who are new to running their own business often over-estimate their initial profits, sales, and market penetration. It’s easy to say “Only 10% of my market would need to buy my product in order for me to become a millionaire!” because the percentage sounds so small- but only a thorough and accurate feasibility study can tell you what you can expect in terms of sales and market penetration in any given period of time. Market data is key, especially in the early days of a start-up, without previous numbers to use in projecting future earnings.

3: A Poor (or Non-Existent) Business Plan

Though it sounds hard to believe, many people start a new business without first creating a business plan! That’s like beginning construction of a house without a blueprint. The business plan provides a solid guide for many years to come, reminding you of your business’ goals, plans, and structure. A good business plan doesn’t just cover the nature and size of your endeavour- it includes goals for the future and the objectives for success.

4: Lack of Support

No matter how “small” your small business is, you can’t do it all on your own. A healthy business needs support of all kinds: financial reserves, equipment backup and repair, and people to help should business get overwhelming or you fall ill. Not all of these types of support are created equal: capital is the most important type of support your business can have. Capital can help you afford the other resources you don’t have, and also give you the ability to purchase prototyping, research, and equipment. That doesn’t mean you have to be rich already to be an entrepreneur: raising capital through investors can be difficult, but it’s never impossible for the go-getter with a great idea and an airtight business plan.

5: Lack of Ambition and Drive

Many people who dream of owning their own business dream of setting their own hours and enjoying the good life once success is theirs. That dream can be a reality, but only after an incredible amount of hard-work and determination. Owning a business is easy: running a successful business is hard. Look deep inside yourself and see if you really have the determination and the faith in yourself to keep going, no matter how hard it gets or how many obstacles stand in your way. Knowing yourself, your strengths and shortcomings, and what it is you truly want will take you a long way in business as well as in life.

Despite the difficulties in the economy, now is a great time to be a young entrepreneur. There is always room in the marketplace for another brilliant idea, sharp mind, and useful product. By avoiding these five problems, you can be sure you’re giving your business, your investors, and yourself every opportunity for success.

What Other Businesses Can Learn From Groupon

Groupon, pioneer of group buying and one the fastest growing companies in history, will have its launch on the stock markets today with an initial public offering (IPO) that’s values the business at thirteen billion dollars, more double the $6bn that Google offered for the three year old company last year.

A recent Business Insider profile of Groupon had some fascinating insights on this unique company and its growth, there’s a number of lessons that most business owners, entrepreneurs and managers can take from this company’s dramatic growth and market leadership regardless of the sector they operate in.

Apply tech to your business Many people make the mistake that Groupon is tech startup when it’s actually a sales operation.

Groupon’s business model isn’t really new, what they have done is applied various web technologies to the directory and voucher shopping industries and come up with a 21st Century way of doing things.

Bringing together different modern tools like social media, cloud computing, local search and the mobile web makes businesses more flexible and quick to develop new market opportunities.

Prepare for quick changes Groupon was born out of another business – The Point. As The Point steadily died, Andrew Mason and his mentor Eric Lefkofsky decided to try something different and Groupon was born.

This ability to change focus quickly – often called “pivoting” – is essential in changing markets. In volatile times like today where today’s business conditions can’t be taken for granted we have to be prepared for rapid changes.

Fortunately the cost and time to changes your business focus has dropped dramatically with digital and online tools, which is another reason to embrace tech.

Get a good business mentor Eric Lefkofsky bought maturity and a perspective to Groupon’s young leadership, having a different and more experienced view of the business helped it develop and grab the opportunity.

An experienced business mentor can be worth their weight in gold.

Back a good idea In Nicholas Carson’s Business Insider profile he describes Andrew Mason role at Eric Lefkofski’s business before The Point as “an intern, ‘kind of squatting in their offices'”. Lefkofski was prepared to back the geeky kid camping on his premises.

Putting your prejudices and judgements on the shelf to back good ideas, particularly those that don’t cost much to execute, is one way to find where the opportunities lie.

Tell your business story Regardless of what you think of Groupon’s claims, they tell a very good story which has lead to their amazing growth and the development of the group buying industry.

Being able to tell your story, in your terms, is one of the great advantages the web, local search and social media deliver. There’s no reason why your business shouldn’t be dominating the local market in whatever field you work in.

Regardless of what your business does, it can benefit from applying the online tools that are available to all of us.

We may not be the next Groupon but the web gives us the opportunity to build our business to take advantage of the 21st Century. It’s worthwhile understanding the new tools at our fingertips.

How to Choose a Great Business Lawyer for Your Business: My Top Ten Tips

Conventional wisdom (and many lawyers) will tell you that, if you’re a business owner or manager, you will get yourself in trouble if you don’t have a good business lawyer. But when I hear this, I view this as somewhat of a negative statement, which frankly annoys me. I assume that smart business people do not want to be belittled and told that, they if they don’t have a lawyer, they will be too naive or inexperienced to avoid pitfalls.

Another way of saying this is that I personally hate doing anything to move away from something. I much prefer to make choices that allow me to move towards perceived advantages of my actions. So I address my clients accordingly.

So with this in mind I will rephrase the primary benefit of having a great lawyer by your side as follows: you will make more money. You should thus view a business lawyer as your partner who will help you make the choices that will improve your business and drive your bottom line upwards.

Now, if you are looking for a lawyer or are not happy with your present lawyer, how do you choose a great business lawyer. But first a definition. What is a business lawyer? I personally distinguish a business lawyer from a corporate or commercial lawyer. To me the business lawyer in the classic sense of the term denotes the classic lawyer-client relationship where the lawyer is more than someone who cranks out paper. I define the business lawyer as your quasi business partner or confidante. Someone you can confide it, who can solve your problems, understand you and help you grow.

Now Here are my TOP 10 TIPS to choosing a GREAT BUSINESS LAWYER, not in any order of importance.

10. Don’t assume you need a big blue chip firm. I come from several big blue chip law firms. They do great law and sometimes you need the “brand” or “label” of the big law firm next to you, for instance if you’re going public. But for more routine work, you don’t need such a firm. They are expensive and comprise many layers. So for you to deal with the top dog, you will be paying up to $1,000 per hour, or more. If your budget is one quarter of this, you will mostly be dealing with a junior associate who will not have the business experience you are looking for. It really depends on your needs, and your budget.

9. Don’t focus only on the billable hour rate. If you’re hesitating between someone who costs you $250 per hour and someone else at $350 per hour, don’t make your decision strictly on cost. What matters are two things: first what the final bill will be and, second, what value who will have received. The hourly rate is a red herring. What is the point of asking someone to do a job for you at $250 per hour if the person needs 40 hours for the job where the other lawyer at $350 per hour only needs 20 hours? Particularly if the other lawyer can do a better job for you. Billing policy is too much of a thorny and elaborate issue to address in a few lines. My point is simply that the hourly rate is not the be all and the end all.

8. Look for someone you would be happy to have a drink with. If your relationship with your business lawyer is going to be successful, you need to connect with him (her) on a personal basis. It is to your advantage to let your lawyer into your life as a quasi-friend. For this to happen there must be personal chemistry.

7. Look for business experience. If your business lawyer is going to advise you on your business, it is trite to say that having business experience is a must. Again it goes to the difference between dealing with a junior associate just out of school and someone who has real practical hands on business experience.

6. Look for someone open to a fixed fee arrangement. No one I know wants to retain a lawyer not knowing what the final bill will be. While this is often difficult for a lawyer to estimate, he (she) may be open to a flexible or fixed fee arrangement. And he (she) should be able to give you at least a good idea on the fees.

5. Look for a deal maker not a deal breaker. In any business deal, there can be dozens of reasons why the deal can’t work or why the agreement is not right. You don’t want a lawyer that throws unnecessary obstacles to making the deal work. It takes a practical approach. It is all about business risk and your lawyer should give you the pros and the cons and provide advice rather than blocking the deal.

4. Think of your business lawyer as your part-time VP legal. Some business lawyers are open to retainer arrangements where they will agree to act as your part-time VP legal at a lower cost than hiring a law firm. A lawyer could for instance offer to work a certain numbers of days per month for you at a fixed fee. It could save you money and help you grow your business with a smart person on the inside who gets to understand your business inside out.

3. Find someone with good business connections. Getting things done in this world often requires a good business network. Having access to this through your lawyer is invaluable.

2. Find a people person. If you want your lawyer to make things happen for you, he (she) will need to be someone who does not antagonize everyone around him (her). Having someone who relates well with other people can be a key to making something work.

1. Think bottom line. Lawyers cost money but I submit this should not be your first thought. What you should be thinking about is whether by spending say $1,000 your lawyer can help you generate $2,000. If so, the lawyer is not a cost. He (she) is a co-generator of a rate of return of 100%. If you think about it that way and your lawyer delivers, the cost will not be so bad to digest.

With these elements, you will be in a position to make the best decision for what works for you.

ERP and CRM – The Modern Tools That Will Keep Your Business Inside the Competition

This article is written to give you, being a business owner or a service provider, an idea on how the ERP and CRM really work. You could be an expert on these fields of technology already or it’s the other way around. But the thing is one day or another, you will be using these software or even today, there could also be an application ERP and CRM on your mobile phone or touchpad already that is helping you in certain ways. Without further adieu, the main objective of this article is for you discover more on how these virtual technologies will help you in setting up your business for success.

Introduction to ERP and CRM – Would they Make Sense?

ERP stands for Enterprise Resource Planning. There are thousands of ways to define it. But in a general sense, the definition is already on the words themselves – plan your enterprise resources. What makes it somehow new and alluring is the way it appears on WebPages, newsletters and eBooks. ERP is a technology system made to make business management simple, accurate and accessible to all users inside and outside the organization. By equating each feature with functions, it can be well understood as: simple is to a website, accurate is to programming and accessible is to internet. Use ERP software to your business and there is a greater chance of winning the market.

CRM stands for Customer Relationship Management. It is actually another version of ERP but this one focuses more on handling the people that gives revenue and profit to your business. Control your business operation using ERP and manage your clients using CRM; this is how it works. Get to know your first buyer by requesting him to fill out a simple form online. The product he bought, his name, the place where he lives and even his age; a CRM system captures almost every information that can be used to improve more your business operation. CRM is powerful.

Linking the Aspects of Your Operation into Concepts of ERP and CRM

The first question that an ERP expert will ask you if you want him to help you manage your business is “What is your business?” Your answer will actually give him the big picture. The nature of your business, the industry where you belong, the size of your business, your target market and the supplier of your products will also be asked. And then what’s next? Well, the main goal of a consultant is to recommend you the ERP module that will fit into your business. If your business is an electronic store, then you need an inventory system to handle it. If it’s a technical support team, then you need a database that will contain your list of products, product documentation and a library that can be accessed in seconds by your staffs. Every angle, every aspect and every process – all are integrated into an automated system that will simplify an operation of tasks.

Setting Up Your Business First Before Acquiring the Software

Your main objective should-be before acquiring an ERP and CRM software is to lay down your business objectives. They should be specific, achievable and never been done before by you. It is that for every objective, there is an ERP module and sub-modules that will make them happen. Certainly, a program sequence will run its script and produce a result that will satisfy a specific operation in your business. The challenge here is that you must believe with the power of programming and automation in order to make it work for you. These are the principles and concepts behind ERP and CRM. These are developed by great and well-experienced programmers. Well, basically not all are experts but certainly they have a common goal – make your system of operation easier.

Acquiring the Right (if Not the Best) Software Package

You can choose between cheap and expensive, one with full-pack features and another which is limited, developed by top corporations and created by a freelance programmer, and even a popular one and an old version of it. You are free to choose, anyway. But the main concern here is “Do You Know How to Use it?” If your answer here is NO, then you need at least an expert who will teach you how. If your answer is YES, then you are close to being RIGHT on your decision to purchase an ERP software package. That is good reason enough to go grab the software for your business. But it doesn’t just ends there. ERP and CRM are huge software and to implement them will also require huge money, time and people. Becoming incomplete with these resources, you can fail. Getting the right software is planning those three major business resources very well.

Step by Step Procedures on Acquiring ERP and CRM from a Consultant’s Standpoint

You are convinced that you really need ERP and CRM software in order not to be left behind. Acquiring these software is totally different from paying over the counter for the soft drink that you picked from the fridge. These are the right steps on buying software of such types. You can use them as guide.

1. Get the product name and review the basic features and specifications.
2. Get a free trial version, if not of the actual product but of the same product that is offered by the seller, and simulate it.
3. Read forums, ask questions to the seller and look on some product reviews. They will help you a lot.
4. Ensure that there is a product support – documentation, technical support and warranty.
5. Install it. Implement it. Make sure it’s working free of bugs.
6. Hiring an expert can be your option anywhere in the entire process but it highly recommended doing it right at the very start if you are a beginner.

Do You Need to Consult?

Consult only if you don’t know how to do it. Consulting is paying money to the consultant. If you can do it on your own, better. If you cannot, hiring an ERP and CRM consultant is much better. Test the consultant’s expertise by requesting a quote or asking challenge questions. If you’re lacking on time, people, idea and resources – hire a consultant. Paying for a consultant’s service is an investment. It can do a lot to your next quarter’s profitability.