Certified Entrepreneurial Advisor

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26

Mar'18

How can I be Wealthy?

Here is my perspective on it, from my experiences with many very wealthy clients: Invest wisely. To do that, you have to understand investing and investments. You must constantly educate yourself. Don’t just delegate that to some broker. Delegation without supervision is abdication. Diversify, realize that investments are like the tide, they come in and go out of fashion. Don’t try to shoot the moon, just try to earn the risk adjusted rate of inflation plus a few percentage points. Keep your overhead low. Live below your means. Flashy displays of wealth are wasteful and make you a target. The truly wealthy live comfortably, but not ostentatiously. Maintain your health. Nothing is worse than the drain that extraordinary medical expenses can place on your net worth. Yet keeping fit and eating right are relatively easy and inexpensive. Enhance your relationships. The truly wealthy person is the one with the loving family. Everyone can improve their family relationships. Focus on loving things you can do for yours. These are things that money cannot buy. Be generous, kind and giving. The truly wealthy are those who can give of themselves, and contribute a part of their wealth. The tightfisted cheapskate who never …

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26

Mar'18

A Friend as a Business Partner: Good Idea?

This is an interesting question, and the answer depends upon a lot of factors. Being in business with friends can either be the best thing you ever did, or the worst nightmare (and friend-destroyer) ever. A lot of this depends upon you and your friend’s personalities, and the way that each of you approaches business. Being in business with anyone is going to be very stressful at times. How do you resolve disagreements (and there will be many), how do you each divide the work (and there will be inequalities), and how do you each manage (management styles can be a lot different than friendship styles). In a casual friendship, lots of stuff that might otherwise cause friction and conflict gets avoided. Take that same pair and put them in a business environment and you may have a giant cat fight. I have been in partnership with “friends” and it ended badly. It turns out my friend was very insecure, and from a large corporate environment. He needed to play politics, create factions, and act like he was back in Corporate America. It’s the only way he knew how to act. I’m a small company guy. Politics, factions, rumors, “back …

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24

Mar'18

What’s the Best Business to Pursue?

The best business startup is the one that suits your skills, experience, temperament and financial wherewithal. Only you can determine that. There are so many different opportunities, the problem is narrowing the choices to ones which have a definite market demand. What is it people need, and are willing to pay for? Generally a successful business concept addresses one of three mandates: the business performs tasks that nobody wants to do (trash, cleanup, bookkeeping, plumbing) , functions which are difficult, or require specialized knowledge (computer programming, construction, dental work), or it provides recreation or lifestyle enhancement ( restaurants, entertainment, gyms, personal trainers). In order to be successful, a business must have a USP ( unique selling proposition), a well defined, identifiable and reachable prospect base, and a business model that provides for adequate profit and cash flow. “Occam’s razor” is the principal that the best solution is usually the simplest. Many entrepreneurs try to make things too complex. Pick a business that is simple, straight-forward and not too expensive to start. Do a test marketing to see if it will fly. Then roll it out. We have some excellent videos and other material at https://CEAnow.org (https://CEAnow.org) to allow you to …

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23

Mar'18

How much money do I need for my startup?

The best amount is the amount you need, plus a contingency fund. The exact amount depends upon the business and the business environment. How will you calculate the “best amount?” The answer is simple: the business plan. Business planning is a lot more than just filling in some pre-formatted spreadsheet, or completing the blanks in some downloaded business plan form. If you’ve done your business plan correctly, you will have a tool that will help you model your business under various situations. You will understand the mathematical model that describes how your activities in marketing and sales translate into cash inflow, and what amount of cash you will have as profit. You will understand your USP ( unique sales proposition), your competition, the market dynamics, and how all of the factors: personnel, material, capital and system interact to produce profits. So what you need to do is work on that business plan. We have a few interesting videos describing the whole process at CEAnow.org.

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19

Mar'18

Do I really need a business plan?

Why? No need to have a business plan. You can go ahead and fly by the seat of your pants and maybe you will be successful. I’ve done it a few times with several businesses and it worked out just fine. ( by the grace of the Lord and blind stupid luck) On the other hand…. your odds of success increase exponentially when you have done your research, done the planning, figured out the business model, have the USP ( unique selling proposition) well defined, and have a keen understanding of what your competition is doing now and planning to do. Your chance for success increases as you can enumerate a carefully thought-out plan of execution, identify the issues you will face, and have a Plan B and Plan C for the “unk-unks” that you will encounter. Gee, do all that and you have a business plan! Need more convincing? Check out our videos on business plans and starting a business at CEAnow.org.

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18

Mar'18

What are the issues most entrepreneurs face?

What are the main struggles and issues most entrepreneurs face? In my experience, there are several: 1. Death by ducks: the tyranny of the immediate. Too many things to do, no one to do them ( or the inability to delegate ) and the resultant constant pressure to be productive in the face of an onslaught of “immediates.” 2. Marketing and sales: the over-riding obsession that most business owners must have to succeed. Nothing happens until something is sold. 3. Back office operations: paperwork, regulatory filings, accounting and the like are constant drains on productivity, but are necessary for survival. 4. Personnel: hiring the right people is incredibly difficult. It’s even harder to keep them, and there is a constant drive to find people that can and want to work. Far too many employees are just marginal. 5. Quality control: things go straight downhill if you don’t watch each element of quality. Pre-sale, production, delivery, and post-sale are all prone to quality control breakdowns, either through benign inattention or indifference. This is especially true in service organizations, where quality may be difficult to accurately measure. 6. Cash flow issues: most small businesses struggle with some form of seasonal cash flow …

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18

Mar'18

What influences business cycles? Where are we on the Cycle?

Where are we on the business cycle? It depends upon a lot of factors, because there isn’t just one “business cycle.” There are many: 1. The economic cycle of the world 2. The economic cycle of the country 3. The economic cycle of the region 4. The economic cycle of any particular industry 5. The economic cycle of a particular firm. All of these cycles interact. Sometimes they are in synch, at other times each are at a different phase, and we experience a blended effect. It’s sometimes difficult to distinguish which is what and how they are affecting any one person’s investments or business. The factors which affect a business cycle include these factors: a. Capital availability and cost b. Markets – demand for products c. Innovation and competition – and the value propositions d. Psychographics of the population or target market e. Social narrative and outlook ( such as optimistic or pessimistic, anticipatory of some event, or even what appears to sometimes be a bi-polar attitude expressed by group think) f. Regulation, political and legal structures. Is this all complex? A lot more complex than your college economics class would lead you to believe. The assessment of where …

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20

Oct'17

LLC, Limited Liability Company as a form of business

This is a great question. The answer is more complex than it first appears. The advice I’m about to give you is not legal advice, and you should seek the counsel of a qualified attorney before relying upon it. First off, let’s address the issue of “limited liability” – after all, it’s called a limited liability company. Other respondents have indicated that this means you are off the hook… the company and not you are liable. Not so fast. Emphasis here should be on “limited” — yes it may limit your liability, but it doesn’t erase it. In fact, in the practical world, it probably does little to nothing to limit your liability. Oh drat! How can that be? Well, let’s talk about the general liabilities that a company incurs: payroll taxes, bank loans, trade payables. There’s no protection from payroll taxes… they’re coming for you on that one. Bank loans: bankers aren’t fools, they’ll make you guarantee the loan personally. Trade payables: ah, there we might have some protection if the company went belly up.  Now, how about when a customer slips and falls, or a competitor alleges that we stole their copyrighted stuff? These liabilities are generally classed …

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04

Sep'17

What can I do to Promote my Business?

You didn’t state what your product or service was, so it’s difficult to answer the question. You also didn’t specify what the LVC ( lifetime value of a customer) was, so we don’t know whether a particular marketing approach might or might not be appropriate. The obvious sales techniques include media advertising,  direct mail (my favorite),  telemarketing (not my favorite),  direct door-to-door sales (brutal),  and signs on the business ( if you have a retail location.) Just doing one thing or another in an un-coordinated shotgun fashion is counterproductive and expensive. To be successful, you must come up with a compelling USP ( unique sales proposition) which leads to a strong “message” and a “brand” which then is used to create a coordinated, cohesive campaign. All that given, here are some ideas that others use successfully: Dinner seminar – you’ve gotten one of those invitations for a free dinner and sales pitch. They must work, because lots of people use it. Signs. Lots of them. Everywhere. Coupons. People LOVE to save money. Remember, the magic word “FREE” followed by the almost magic word “On Sale” Events – One financial planner hosted a showing of a popular movie —- and gave …

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05

Aug'17

What is “Days Payables Outstanding” and Why is it Important?

Simply put,  Days Payables Outstanding it’s the number of days worth of  expenditures that you owe in the Accounts Payable balance at any point in time. It’s mechanically calculated by taking your accounts payables and dividing it by the average expenditures per day. For a manufacturing business, the “average expenditures per day” is usually calculated by taking the cost of goods sold for the last year and dividing by 365. Sometimes a shorter period is used, especially if things are changing rapidly. For a service business, the total expenses are used, less salaries, payroll taxes, payroll related expenses (such as pensions) and then dividing that by the number of days … similar to what is done for a manufacturing facility. Of what use is this number? Of and by itself, not much. As a comparative figure to industry averages, mildly interesting, perhaps indicating an abnormality. As a comparative figure to past periods ( horizontal analysis), it is very indicative of what’s happening in payables management. It’s a good figure to monitor. If you can get it, a great measure of payables management is the “discounts lost” figure, which indicates how much in those “ 2–10, net 30” discounts for prompt …

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