Wednesday, December 29, 2010

Why Do Small Businesses Fail?


It is no longer news that 99% of all new  small business venture started all over the world fail in the first ten years. Now since the dream of every entrepreneur is to build a successful business, I have tactfully highlighted 3 major reasons why small businesses fail and how you can bulletproof your business against them. Join me as I expose these business killers:

1) Lack Of Managerial Skill: When a small business owner lacks the managerial skills required to drive the business to greater heights, the  small business is bound to fail. An entrepreneur that wants to succeed must be able to effectively handle the employees, cash flow, production line and so on, or better still, the  small business owner must be able to hire a good manager to run the business.
2) Wrong Business Decisions: This is common to everyone irrespective of your field. Sometime ago a friend of mine, after carrying out critical analysis on a particular situation came up with a decision he considered favorable. But on implementing that decision, it back fired and at the end of the day, my friend had several lawsuits dangling on his neck.
So whenever you decide on an action to be implemented on your  small business, consider asking friends, business partners and professionals for advice. It is going to save you the stress of cleaning up the mess resulting from wrong business decision taken.
3) Harsh Government Economic, Fiscal And Monetary Policy: Hmmmm, this is an open killer of both big and small businesses. As an entrepreneur, You must be on guard to bulletproof your business against the ever changing government fiscal and monetary policies.
Since you cannot influence or alter the government’s decisions, you must be prepared to swiftly adjust your small business to align with the government rules. This will help prevent it from being hit by the adverse effect of unfavorable government policies. Instances of such government policies and effects you must keep an eye on are tax matters, double taxation, duties and levies, inflation, exchange rates and so on.

Thursday, December 16, 2010

Importance of Having a Well Crafted Business Plan

A business plan can be defined as a detailed document which describes all the major aspects of an existing business, or a start-up business. It carries all the information regarding the particular business, from goals and strategies, to financing and marketing plans. For this very reason, it is extremely important for every business to have a business plan before it starts.
This plan is one of the most essential items that are required while looking for investment capital or for a loan. Anybody investing in the business or people responsible to loan money will require all the information about the business. They will want to analyze the scope of the business, the goals stated, and the steps that are planned to achieve the goals. Based on the provided information in this plan, investors and officials determine the chances of the business to succeed. This plan is especially important to maintain if the company is looking forward to attract venture capitalist.
Nonetheless, a business plan is not only used for getting loans. It can also be used by businesses to have a planned out road map of the goals that are to be achieved. It is also of great help in improving the productivity of a company. A well drafted business plan also allows the business owner to review and revise the strategies according to the current trends. This way, he or she has the liberty of improving the ones which are beneficial and discarding the ones which are not.
What Should Your Business Plan Have? While making the business plan, it’s important to make that it is interesting, facts based and explains in detail each and every facet of your business. After all, this is the plan which will determine your chances of getting investment or loans for your business.

Tuesday, December 14, 2010

Ten Most Common Mistakes in Business Planning

Raising capital is hard enough as it is. Don’t make it even harder by committing any of these common business plan mistakes.
1. Financial Projections are Too Optimistic – Entrepreneurs always say they are “conservative” but you just aren’t
2. Business Plan is Too Long – Stay under 30 pages.
3. Executive Summary is Too Long- 2 pages or less
4. All Paragraph Format – Use bullet points, graphs, tables etc. Should not look like a novel.
5. Using a Generic Template – Investors want to see YOUR business plan. Using a template might make it look like some sort of canned business plan
6. Using a Consultant to Write the Entire Plan – Consultants can certainly help, but you need to write your own business plan. Who knows your business better than you?
7. Top Down Financial Projections – Don’t start from the top saying if we can get just 1% of the market… Start from the bottom and show exactly how you plan to capture 1% of the market.
8. No Focus on Cash Flow – As a startup cash flow is probably the most important single factor for the survival of your small business. Focus on it closely
9. Exponential Growth Projections – Most businesses do not grow exponentially like Silicon Valley darlings like Facebook, Twitter, and Foursquare. Be realistic.
10. Poor Pricing – Price your product or service based on extensive research. Too low and you are not profitable, too high and you can’t make a single sale.

Saturday, December 11, 2010

Proper Office Etiquette

Proper Office Etiquette
To work successfully with others in a productive atmosphere, it is advisable to conduct yourself complying to long-established conventions. This way you gain the confidence, respect and cooperation of people whom you work with, whom you work for.
Here are some practical sample scenarios to illustrate the various aspects of proper office etiquettes.
Ethics
It is more serious than just being impolite to discuss with outsiders a colleague's secret romance. Organizations must maintain a degree of privacy and confidentiality. Gossip is undesirable in any case. The one safe rule is never gossip about coworkers and never to discuss company business outside the immediate office.
Security
Keep important documents and file folders under lock and guard the keys to them. Do not leave vendors or visitors alone in someone's private office while the owner is away. Take time to dispose material properly, e.g. shred them. Anything thrown into a wastebasket can easily be retrieved by someone else.

Personal Habits
Annoying habits such as pencil swirling, mumbling make an unfavorable impression on others. Often people are unaware that they have bad habits that irritate others. Ask yourself these questions as a gauge:

When you talk with someone, do you pay attention to the person or stare at your feet?

Are you still talking or mumbling when walking away from a person?

Do you drum your knuckles on the desk when you become impatient or bored?

Do you interrupt people before they finish speaking or impatiently complete the thoughts of slow speakers?
Courtesy
Hold the doors and wait for others who are approaching and thank those who do this for you. People holding packages should be aware not to jostle others carelessly. Be sensitive to allow space for others and step aside for those who are leaving.
Environmental Tidiness
Sloppy housekeeping presents a poor image. Your clients will associate you with carelessness in work and think twice about giving you business. Coffee spills and breadcrumbs all over a desk are signs of sloppiness and drive your clients off. They like to deal with people who present themselves as orderly and careful, not having to worry about materials entrusted to you.

Appearance
Experts recommend that you dress for the job you want, not the one you hold. Different offices observe a varying degree of formality, follow the example of others in your office. Neat and conservative attire is good taste. Good posture and cleanliness are essentials. Clean fingernails, clean sleeve cuffs are no trivials. Hairstyles should be relatively conservative too. Attend to grooming in the rest room. Avoid heavy colognes or perfumes, which may be offensive to some people.