Category: Business

Benefits of Buying an Established Business

Proven Business Concept. Buying an established business is simply less risky than starting a business of your own. The concept has been proven to work and has a track record of that success. This also comes in handy when it comes time to finance the business, banks are much more willing to lend to a buyer with a proven concept than fund a start-up business.

Established & Recognized Brand. When purchasing an established business, there will already be a brand in place, that is recognizable in the community and has a history and reputation behind it. It is much easier to market an established business to a community than to market a new business.

Staff In Place. Hiring employees is time-consuming and costly and within the realm of a start-up business, every penny counts! An established business comes with staff in place that has already been hired, trained and developed to operate the business. These employees will not only be able to help you transition into your ownership role they will also provide you with a more flexible schedule to focus on business strategies and family.

Customer Base. An established business has had the time to develop customer relationships and a loyal following. Which means the business will benefit from revenue from the time of purchase on. With a start-up company, the owner will have to work much harder to gain traction within the community and attract customers.

Growth & Planning. Instead of working to make your start-up business viable, as the new owner of an established business, you will be able to focus on scaling and strategic planning. This factor alone can alleviate a large piece of the risk and stress of a start-up business.

Deciding to buy a business will put you one step closer to reaching your entrepreneurial goals!


Direct Sales

  • Products: Now with this topic there may be a few ways to look at it. For instance, if you are going to be selling a product you’ll want to know how “in demand” those products or services are or will be. You’ll probably make the most money with the products that people use frequently or can be used all year long such. There’s also the side of just absolutely believing and wanting to share the products. On this side, the money is ne but you’re more into the products and even use them yourself. I believe that one this side, success will come naturally.
  • Support: When I was searching and sifting through the many different direct sales companies the number one question I asked was “How is your support and your up line?”. You may that think you’ll only get positive responses because they want you to join their team, but you would be surprised about how honest people are. For instance when I asked one gal, her response was “When the company first started out they had some minor problems, but they have worked really hard to get things right. I almost didn’t stick with it but thought I would at least give them a chance.” Now, that shows you a lot about the company and the representative you would be signing up under.

You want to make sure you have an awesome support team and up line. You want to sign up with a consultant who can help you succeed and give you support you need when or if questions or problems arrive.

  • Quotas/Costs: This is another biggie for me, especially if you are new to direct sales arena and do not have much experience with selling or marketing. I always check the quotas that are required for consultants to meet in order to stay active. Find out if there are any costs involve. Costs can include: start up costs/kits, website, etc. Most companies do have quotas that need to be met to make sure the consultants are serious about succeeding with the company. Quotas are good, just not outrageous ones!


Cash Flow With Old Inventory

You need to have sufficient inventory to be profitable. However, having too much inventory is a larger problem than too little inventory.

Too much inventory ties up critical cash for your business. It can also result in more damages to your merchandise. The key is to find the right price to move your merchandise. Slow moving items take up space and cash that could be used for more profitable items.

There are times you have to adjust your pricing strategy. For example, let’s assume your retail price is double your cost. In this example, you pay $10 and it retails for $20. If it is a slow mover or discontinued item, what should be the new price? I would take 20% off for 1-3 months, 50% off and then 75% off.If you have to sell at 75% off, you will be selling below cost. Cost should never be a factored in marking down an item.

I can hear you yelling now. I’m not giving away my inventory. You are looking at your inventory from the wrong perspective. Your product is worth what a customer will pay for it.

Using the above example, let’s say you sold your product at 75% off. How much did you make on that item?

Your answer is probably that it was a loss of $5. This was based on a $10 cost and $5 retail. That answer is partially correct. The more correct answer is that you made $5.

You took an item that was producing zero and turned it into $5 cash. You can take that cash and space and use it for a profitable item. Many times a business does not have enough cash to buy the desired quantities of the best selling products. If you take the cash from the poor sellers and use it for good sellers, you will more than make your money back.

No matter how good a buyer you are, there will be items that don’t sell. The key is to realize this and react before it ties up too much cash and profit.

An added benefit of taking care of your problem inventory is increased sales. You will get customers who will shop your store on a regular basis looking for your markdowns. Many of them will buy your high gross items also. If you take care of your problem inventory on a regular basis, your markdowns dollars will be less.


Car Leasing Business Development

Market research and competitive analysis are factors that aid in business development. If the car leasing business does extensive market research and can clearly identify its target market, it can develop a suitably effective marketing plan. Advertisements can be developed that are effective and that will definitely have great ROI.

A Few Business Development Tips for Car Leasing Firms:

  • Ensure that the firm is a separate business entity and you have adequate liability protection.
  • Have adequate insurance coverage against theft, accidents, etc.
  • Make sure that all necessary licenses and permits required to operate your business legally are obtained from the proper authorities.
  • Ensure that you have well-trained staff that will help retain customers as well as entice customers to become regulars.
  • Operating from a well-placed office that is convenient and in the city center, if possible.
  • Advertising on TV, radio, newspapers and magazines can help a lot. Frequent
    advertisements will help people remember your firm better and help in recruiting new customers.
  • Having a referral system by having an understanding with hotels, offices, and industries can help ensure a regular supply of customers.
  • Developing a unique slogan that will be witty and eye-catching can help in developing the business.
  • Being ethical and honest in all your transactions is very important to create the right image, making sure people will not hesitate to deal with you again.
  • Offering specials to regular customers is another effective way to ensure that your existing customers become regulars.
  • Try to make the users buy the car as much as possible at the end of the lease term, as this works out better for you financially.
  • Make sure that you have maintained good credit profiles, ensuring the availability of funds should you need them to expand or develop your business.
  • Make sure you have accurate cash flow forecasts that will also help you know your current financial position.
  • Have a clear idea of what the current trends are and how you can make the necessary improvements to develop your business successfully.

Some professional firms offer services as well as products to help run a successful business.


Managerial Accounting

Before you can measure your growth you need to be clear about where you are now and where you hope to go. What size is the market? Have you targeted a certain geographic area? Or perhaps a certain channel, like hair salons for your handmade moisturizing products.

Whatever the growth goals are, you can develop a system for tracking your progress. Let’s take a look at Carls’ Candles and the managerial accounting system he has developed to measure his growth.

Carl has been making container candles for three years now. At the current prices Carl has been able to increase sales year over year. But the growth rate has slowed and last year he only grew his sales revenue by 5%.

The market for container candles is growing and the distribution outlets are numerous. Carl has been marketing his candles direct by selling through independent retailers and small gift shops in the area.

Carl sells to the retailers at $3 per candle. The direct costs for each candle are $1 and the overheads are $4,000 per month. In Carls’ overhead budget he includes his own wages, electricity, and insurance. The direct costs include soy wax, containers, fragrance, wicks, and delivery.

Break even for Carl is $3 minus $1 divided into $48,000, or 24,000 candles per year. For the last three years Carl has sold 26,000 then 30,000 and 31,500 candles each year. Carl wants to develop a pricing program that will help him to stretch out into new areas like wholesale distribution.

If Carl keeps his price the same for all his customers he won’t be able to offer a lower price to the wholesalers. But if Carl drops his price to the wholesalers, below the $3 per candle, then he would not be making enough profit. What can Carl do?

Using managerial accounting, Carl has listed out the raw material costs for his candles.

  • $.45 Soy Wax
  • $.05 Glass Container
  • $.01 Wick
  • $.15 Fragrance
  • $.44 Delivery
  • $1 Total Direct Cost per Candle

Carl can offer the same candle to a wholesaler at $3 minus 44 cents for delivery, which equals $2.66 per candle. Will this be enough to increase his sales volumes? Carl puts out a flyer and mails it to all the local wholesalers. His sales increase because now the wholesalers can distribute many more candles than Carl.


Business Incorporation

The forms for business incorporation include articles of incorporation that conform to the state law. They must be filed with the correct state authorities along with the filing fees, initial franchise taxes and other initial fees. One of the easiest ways to fill out these forms is through BizFilings. All you have to do in order to incorporate your business is complete the online order form and BizFilings handles the rest.

There are many advantages to going through the business incorporation process. One of the primary advantages is the limited liability the corporate entity affords its shareholders. With the shareholders not being liable for the debts of the corporation, shareholders are free of obligation to the company. Another advantage to incorporating your business is the fact that ownership of the corporation is easily transferable. If you decide after a year or two that you don’t want to have full responsibility for the corporation any more, you can sell it or have someone take over very easily.

Having a corporation allows you to raise capital much easier through the sales of stocks. If that weren’t enough to get you to go through the business incorporation process, it’s soothing to know that you can be taken care of in the future as well. By being involved in a corporation your retirement funds such as a 401k are set up much more easily to ensure that you are taken care of after retirement.

While there are many benefits to business incorporation, there are also the downsides you have to face. The primary downside you will notice with a corporation is double taxation. Profits of a corporation are taxed twice when distributed to the shareholders; once as income to the corporation and another time as income to the shareholder. Other disadvantages to incorporating your business include the increase of paperwork and extensive record keeping that is required.

When going through the business incorporation process, there are many decisions that you have to make. It is a huge jump in your life and you have to determine if the advantages outweigh the disadvantages. If you do decide that incorporating your business is worth it, you then have to make sure to fill out all the legal documents correctly and submit them to the right place. Hiring an attorney is not necessary by any means, but is recommended. At the end of the day you have to realize that business incorporation is a huge decision and could change your life, so make sure that you are 100% sure on the decision you go with.


ERP Applications

  • Information Transfer Is Unidirectional
    Information can flow in both directions, either from or to the ERP. If the ERP is integrated with the plant, it will have a bi-directional information flow.
  • ERP Integration Is All About Copying Data
    Since older methods of integration follow a system of copying a tag and its profile, business owners think modern ERP system can be integrated the same way. However, there is more to ERP integration, since the business related-date that the ERP handles is very different from what the plant handles.
  • The ERP Can Come Up With Standardized Answers All the Time
    Many people think that queries related to a business process follow a set pattern, as do their answers. They cannot be more wrong. Even if the system knows the right question, the right answer may depend on a number of factors.
  • You Must Use Only the Latest ERP Technology
    Although the latest ERP integration technologies offer many advantages to small business owners, they have their own share of problems. The biggest problem is the integration of new technology to the old. In some systems, you will find that retaining older applications may be more useful than overhauling it completely.
  • ERP to Plant Integration Needs To Be Total
    The ERP system deals with business process, while the plant, system deals with manufacturing and procurement issues. While the plant capacity fluctuates, the ERP capacity remains stable.
  • Data Security Is Compromised When You Integrate Plant to ERP
    Nothing can be farther from the truth. Many people are concerned about what happens to the data that is not on site. The ERP programmers have spent a lot of time and money on making the system as foolproof as possible, so even data that is not protected by elaborate passwords are not easily accessible to unauthorized personnel.
  • Installing ERP System Means That You Can Keep Fewer IT Staff
    The ERP system is not meant to replace your IT staff, it is there to help them with day-to-day problems related to maintenance and troubleshooting.

Start A New Business

Avoid making excuses

Many people have dreams of becoming successful businessmen, but they end up unsuccessful. They have excuses and a fear of failure. As a matter of fact, you may have millions of excuses for not starting your own business.

Actually, what excuses do is slow you down so you don’t achieve your goals. So, if you are serious about starting a new business, we suggest that rid you of all the excuses. You may want to look for a solution to your problems rather than make excuses.

Absorb everything

You may want to listen to your family, friends, experts and, of course, yourself. As far as dealing with things that are related to your business goals, you may want to become a sponge. With new ideas, you may want to spur on yourself to keep going. You may want to write down important ideas and maintain notes from different sources so you can have a solid business plan.

It’s not a good idea to ignore advice from experienced business men. As a matter of fact, experts know what works and what does not. Actually, smart people learn from the mistakes made by others.

Find a solution

As a matter of fact, if your product or service solves a problem people have been facing, it will be easier for you to get a customer base. For instance, if you are going to develop an application, find out if it can solve a problem people have been going through. If it does, go ahead and work on it.

Aside from this, you may want to understand your motives and find out more about the problems that your target audience may be facing.

Keep it simple

If you are like most businessmen, you will get an idea and get ready to work on it. However, at this stage, you may want to be careful not to turn your ideas into something complicated. Doing so may give you a product that no one will want to purchase.

What you need to do is start small and then continue to narrow your focus. You should find out how you can test your ideas so you can create a product or service that is simple and beneficial.

Figure out the costs

Once you have settled on an idea, your next step is to figure out how much it will cost. From start to end, you will have to calculate the total cost. This may include the location, supplies, rent, and marketing, just to name a few. After all, if you are on a small budget, you won’t be able to get things done.


Keys To A Successful Mindset In Business

Focus

Focus is definitely a key to a successful mindset. Continually remind yourself of what your business is about, what its purpose is, and why you’re doing it. Keep focusing on your goals by having them somewhere that you can see them.

Self-assessment

To achieve a successful mindset, you need to ferret out that negative mindset you may not even know you have. Here are some things to watch out for that may indicate a negative mindset:

  • Having excessive back-up plans and being over-cautious may mean you are doubtful about your success. Safety nets are understandable, but they can become a tempting escape when things are less than perfect. To be successful, you need to press through those imperfect times, not run from them.
  • Believe you deserve it. You may think that you really don’t deserve to succeed in business. You just aren’t “that type.” To be successful, though, you need to believe you are that type!
  • Uncertainty can be a manifestation of a negative mindset – you are not sure of yourself. There are resources out there; you can learn what you need to succeed. You just have to go for it.

Think Like an Entrepreneur

If you are starting your own business, it won’t work to think like an employee. You need to think like your own boss! This means the freedom and responsibilities that come with being the head of a business.

Believe In Your Product or Service

Whether you are selling something for a company or something of your own creation, you need to really love and believe in the product to succeed. If you are offering a service, you need to believe that you are offering something unique and excellent. Keep that mindset that says your product or service is absolutely worth it.


Start A Low Cost Business

Sell Other People’s Products

This online business model, known as affiliate marketing, is like being a commission paid sales person. You don’t have to buy any stock, deal with any payment programs or arrange any deliveries. The product owner takes care of that. Your job is to find the customers and get them to visit the product sales page. You can sell tangible products that get shipped to the customer’s front door or you can sell digital products which the customer downloads to their computer.

Freelance Your Services Online

If you have a specific level of knowledge or expertise there will be people looking online for them. Freelance websites like UpWork have countless numbers of customers looking for copy writers, creative designers, linguists, website developers, marketing and advertising staff, legal and financial specialists and more.

Create A Digital Product

The greatest advantage when you a create digital product is that once you have produced it, you can sell it online again and again. And you don’t need to be an expert in a particular subject to create a digital product like an eBook, video tutorial, white paper, or report. You just need to know more than the average person on your chosen subject.

Build A Membership Website

A membership site is like being like a consultant in the traditional offline world. You help and advise clients with your knowledge about your specialist subject. Every month you provide new content for your paying subscribers. You can produce content in advance that drip feeds to your clients when they sign up.