Entrepreneurship

09

Feb'19

When should a Startup Hire an Accountant?

The simple answer: the minute you need to do some accounting. That almost smart-ass answer is really pretty profound… because it focuses on something that many harried entrepreneurs fail to grasp: when you need to start looking at accounting data. Unfortunately, many entrepreneurs are not analytical types, and they don’t like to think about accounting or other backroom activities. As a result, they often crash and burn, because the “backroom” is just like the engine room in a boat: lots of critical stuff goes on there. Let’s put it this way: you start out on a journey to someplace you have never been. The first thing you do is consult a map. What’s the difference when you are starting a business? None. Successful business owners know that the roadmap of how they are doing is their accounting reports. They understand that looking at sales, expenses, assets, and liabilities is essential. It’s the measure of where they are and what they are doing. Sure, you can look at bits and pieces from here and there ( so called flash reports) but those have no proof of integrity. When you have an accounting system, the reports you get have a much greater …

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08

Feb'19

Priorities in Starting a Business

What are the three most important priorities in starting a business? Business planning, your business organization, and being prepared mentally, physically, emotionally and spiritually.

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31

Jan'19

Rules for Successful Entrepreneurship

Here is what I have learned over 40 years: Business ideas are often shiny objects — they can divert your attention, have little to offer and aren’t real. Practical business concepts are often pretty dull, but they always focus on meeting a need, fulfilling a customer need. Realistic business concepts provide something that customers will pay for, either for convenience, need, or desire. Nothing happens until something is sold. Sales and marketing are crucial to success. You must identify and know your target market. You should know more about them than they do. You must constantly research, evaluate and investigate. You must constantly look for new markets, ways to refresh old markets and you must perfect the art of the recurring sale. A one time sale is a loser. You must have repeat business to survive. Cash flow, cash flow, and cash flow. You can’t survive without it, but it must come from profitable operations. Cash flow which comes from increased leverage, or volume which comes from selling below cost is like cancer: it will eat you out from within until your business collapses. Your “solution” had better be relevant, time-effective and cost effective. It will stay that way only …

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03

Jan'19

The Ten Rules of Entrepreneurship

Want to be a successful entrepreneur? Ten essential things to do in your start up. Ten essential truths that make any business successful.

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27

Nov'18

How Do I Become A Successful Business Person?

That’s a wonderful question, because on one level, all you need to do is just study business in school, get the “trade school” education, get out there and do what your boss says. You will find a successful career if you have a half-wit sense of how to deal with people. You will never rise above a certain level, and you will be stuck in the trenches. You may rise to an assistant manager someplace. On the other hand, do you want to be very successful? Do you want to rise to the top of your profession? Then you better pay attention to a lot more than just B School topics. You must learn a lot about how businesses operate, how they rise and fall, how products are developed, produced and marketed. You must understand the legal environment, the social environment, and the political environment of business. You need to take every business course you can think of. You need to be an expert in communications, marketing, operations, human resources, accounting, finance and management. But with all this education, you will still only rise to a certain staff level. You are book smart, but not completely educated. Your excellent academic …

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27

Nov'18

New business: How do I get Visibility and Customers?

Ah, the proverbial question: how do you get customers. That’s what you want. Visibility, yes, but the only visibility you need is with people that will buy what you have to sell. Any other visibility is a waste of time and effort. In fact, visibility in the wrong venue can backfire: it may alert your competition, or inspire some other business to invade your space. So, you want to target your customers. Not with a shotgun, but with a rifle — send that message to the prospect and get them to buy. Too many entrepreneurs confuse noise with message. Noise is all around, does no good, doesn’t result in anything. Message is distinct, tailored, directed, and designed to emote action. So, how will you send an appropriate message directly to your target market in the most effective, efficient way? First you have to know a lot about your target market(s). You have to understand their demographics and their psychographics. Until you have this information, you are shooting in the dark. Then, you have to figure out how to reach those people directly. There is always a way. You have to understand the pathways of communication. Is it by social media? …

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31

Oct'18

What holds back a business from Scaling UP

What prevents most businesses from scaling up? Here are a few things: A personal service business where the owner IS the business. A business which is only successful because it has a unique location A business which has a limited supply of product. A business which can’t overcome the logistics of multiple locations/ increased sales either because there aren’t enough qualified humans or the business processes can’t or shouldn’t be automated. A niche business which serves a limited niche. Inadequate, ill-defined, or unworkable business systems, especially marketing, sales and customer service. Inadequate vision – owners can’t imagine scaling or comprehend what that involves. Inadequate funding Owners who know that being “big” doesn’t mean being better, and in fact being the “right size” is the best success a business owner can achieve.

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26

Oct'18

Key Factors for Success of a New Business

What are the key factors for the success of a new business? Everything you learned in Entrepreneur and Fast Magazine is probably wrong. Those magazines are pornography for business starters. This is going to be damn hard work. Harder than you figured, by a factor of 5. You can’t go home at 5. Most people just give up, exhausted and spent. Burn-out within 15 months is common. You are going to feel a lot of pain, anxiety, fear, angst and dread. If you can’t deal with it, if you’re not tough enough, it’s all over. Flame out comes sometimes within a year, most often after the 2nd year. You are going to have to plan things out. Which means you better do your research. Most available research is rubbish. You have to dig, hard. The vast majority of business plans aren’t worth the paper they are on. Business starters have to understand the dynamics of their businesses, and the key elements to success. Nothing happens until something is sold. Having the perfect product but no sales is guaranteed failure. You must sell, sell, sell. Oh, and did I mention, sell? You have to understand the 5 factors that make any …

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28

Sep'18

Can a Small Business Win Against National Companies?

How can small business owners compete & win when they are up against national companies? Direct, head on product to product competition: you can’t. They will smash you like a bug. Indirect, guerrilla marketing, niche specialty, solving un-met demands, appealing to consumers’ unique needs and desires: you’ll run circles around them, but you’ll have to be agile and nimble because if you are too successful or visible they will adopt your successes and roll over on you. (squished bug analogy again) You have to be clever. You have to be resourceful. You have to out-think them and out maneuver them. You have to go where they aren’t, whether it be location, product, service or customer demographics or psychographics. You also have to be constantly evolving. The only way same-old-same-old works is where the big guys are not interested in going. Example: a small retail store in a resort destination. You must keep your customers close to you, know them, understand them and market to and with them. Successful small businesses often share one thing in common: they have enthusiastic customers.

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22

Jul'18

What happens to Expenses Incurred before Incorporation?

What happens when you incur expenses before you have incorporated your company? There are three basic types: organizational, startup, and operational. 1. The organization costs and start up costs. These are the costs of setting up and forming the corporation. They have to be capitalized, a certain portion of each can be deducted, the balance having to be amortized. See https://www.irs.gov/publications/p535#en_US_2017_publink1000208919 In basic terms, up to $ 5,000 of organization and $ 5,000 of start up costs can be deducted in the year incurred, the balance amortized over 15 years. If the amount of either type of costs exceeds $ 50,000, then the 1st year write-off is phased out, $1 for $1. At $ 55,000 of costs, the particular costs ( start up or organizational) are fully phased out and can only be amortized. 2. The operational costs of running a business which existed before incorporation. In other words, you and some friends or you by yourself start a company. It’s an unincorporated entity that has expenses of operation before you decide to incorporate. I think your question is, what do I do with these expenses that aren’t start up and aren’t organization expenses. Expenses which aren’t start-up expenses, which …

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