Monday, April 6, 2009
Well, I think that it opens up so much for a person. It gives freedom. Not only in what they want to do as a career, but how it is done and why you feel it is the best route. It allows the person to become engulfed in something they SHOULD love, and therefore making work enjoyable (in theory). And to top it all off, you answer to NO ONE! You get to be the one making the call. This is a great feeling I hear, and would like to have it some day.
Monday, March 9, 2009
This list involves internal improvements that you can make and external opportunities that you should look into.
The internal list is as follows:
1) Monitor your cash flow: Cash is King!!!
2) Review your strengths and weaknesses: It is key to know who you are and what you can do.
3) Rethink your sales strategy: Identify your profitable products.
4) Categorize your customers: Who is profitable and who is not.
5) Improve work process: Find those excessive costs and eliminate them.
6) Increase throughout: Don't turn away the little man.
7) Ramp up marketing efforts: Cut back on marketing.
8) Review your compensation: Get the most out of your workforce.
The external opportunities is as follows:
1) Create strategic alliances: Form simple partnerships, it saves money.
2) Renegotiate with vendors to reduce expenses: Pay promptly.
3) Target your competitors customers: Attract competitor customers to you.
4) Acquire your competitors: If in position, buy out competitors.
5) Upgrade personnel: Talented people are looking for jobs....
6) Keep your eyes open: Opportunities are always right in front of your eyes.
7) When the going gets tough, smart leaders get going: Prepare and be proactive.
We thought this was an interesting list of improvements and opportunities. What are your thoughts and any suggestions about this list or improvements that could be done to this list to improve???
- It takes a lot of money to finance a new business. Not true. The typical start-up only requires about $25,000 to get going. The successful entrepreneurs who don’t believe the myth design their businesses to work with little cash. They borrow instead of paying for things. They rent instead of buy. And they turn fixed costs into variable costs by, say, paying people commissions instead of salaries.
- Venture capitalists (VC’s) are a good place to go for start-up money. Not unless you start a computer or biotech company. Computer hardware and software, semiconductors, communication, and biotechnology account for 81 percent of all venture capital dollars, and seventy-two percent of the companies that got VC money over the past fifteen or so years. VCs only fund about 3,000 companies per year and only about one quarter of those companies are in the seed or start-up stage. In fact, the odds that a start-up company will get VC money are about one in 4,000. That’s worse than the odds that you will die from a fall in the shower.
- Most business angels are rich. If rich means being an accredited investor –a person with a net worth of more than $1 million or an annual income of $200,000 per year if single and $300,000 if married – then the answer is “no.” Almost three quarters of the people who provide capital to fund the start-ups of other people who are not friends, neighbors, co-workers, or family don’t meet SEC accreditation requirements. In fact, thirty-two percent have a household income of $40,000 per year or less and seventeen percent have a negative net worth.
- Start-ups can’t be financed with debt. Actually, debt is more common than equity. According to the Federal Reserve’s Survey of Small Business Finances, fifty-three percent of the financing of companies that are two years old or younger comes from debt and only forty-seven percent comes from equity. So a lot of entrepreneurs out there are using debt rather than equity to fund their companies.
- Banks don’t lend money to start-ups. This is another myth. Again, the Federal Reserve data shows that banks account for sixteen percent of all the financing provided to companies that are two years old or younger. While sixteen percent might not seem that high, it is three percent higher than the amount of money provided by the next highest source – trade creditors – and is higher than a bunch of other sources that everyone talks about going to: friends and family, business angels, venture capitalists, strategic investors, and government agencies.
- Most entrepreneurs start businesses in attractive industries. Sadly, the opposite is true. Most entrepreneurs head right for the worst industries for start-ups. The correlation between the number of entrepreneurs starting businesses in an industry and the number of companies failing in the industry is 0.77. That means that most entrepreneurs are picking industries in which they are mostlikely to fail.
- The growth of a start-up depends more on an entrepreneur’s talent than on the business he chooses. Sorry to deflate some egos here, but the industry you choose to start your company has a huge effect on the odds that it will grow. Over the past twenty years or so, about 4.2 percent of all start-ups in the computer and office equipment industry made the Inc 500 list of the fastest growing private companies in the U.S. 0.005 percent of start-ups in the hotel and motel industry and 0.007 percent of start-up eating and drinking establishments made the Inc. 500. That means the odds that you will make the Inc 500 are 840 times higher if you start a computer company than if you start a hotel or motel. There is nothing anyone has discovered about the effects of entrepreneurial talent that has a similar magnitude effect on the growth of new businesses.
- Most entrepreneurs are successful financially. Sorry, this is another myth. Entrepreneurship creates a lot of wealth, but it is very unevenly distributed. The typical profit of an owner-managed business is $39,000 per year. Only the top ten percent of entrepreneurs earn more money than employees. And the typical entrepreneur earns less money than he otherwise would have earned working for someone else.
- Many start-ups achieve the sales growth projections that equity investors are looking for. Not even close. Of the 590,000 or so new businesses with at least one employee founded in this country every year, data from the U.S. Census shows that less than 200 reach the $100 million in sales in six years that venture capitalists talk about looking for. About 500 firms reach the $50 million in sales that the sophisticated angels, like the ones at Tech Coast Angels and the Band of Angels talk about. In fact, only about 9,500 companies reach $5 million in sales in that amount of time.
- Starting a business is easy. Actually it isn’t, and most people who begin the process of starting a company fail to get one up and running. Seven years after beginning the process of starting a business, only one-third of people have a new company with positive cash flow greater than the salary and expenses of the owner for more than three consecutive months.
This information was researched by Scott Shane a Professor of Entrepreneurial Studies at Case Western Reserve University and can be found in his latest book “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By.”
Tuesday, March 3, 2009
Top 10 Low-Cost Franchises for 2009:
1) Instant Tax Service
3) Jan-Pro Franchising Int'l. Inc.
4) Kumon Math & Reading Centers
5) ServiceMaster Clean
6) Merle Norman Cosmetics
7) Stratus Building Solutions
8) Jazzercise Inc.
9) Vanguard Cleaning Systems
10)RE/MAX Int'l. Inc.
Really haven't heard of much of these, any thoughts or opinions?
1) Jan-Pro Franchising Int'l. Inc.
3) Instant Tax Service
4) Stratus Building Solutions
5) Snap Fitness Inc.
6) Dunkin' Donuts
7) Jazzercise Inc.
8) Bonus Building Care
9) Anytime Fitness
10) Vanguard Cleaning Systems
We were kind of surprised that 4 of the top 10 are commercial cleaning companies. Of course Subway is at the top of the list almost every year. Figured it would be a helpful idea to place the top 10 franchisees in America.