Beat unemployment by going into business for yourself even if you do not think you have what it takes! Use these ten criteria that make the difference more often than not between failure and success!
1. Find a need and fill it.
Stop, Look, and Listen. That is good advice for more than just driving safety or crossing the street.
Businesses have needs. People have needs, wants anddesires. People also have problems, criticisms, andcomplaints. All these are opportunities for the astute entrepreneur.
Do you need an idea for a business you might start and operate? Here is an idea: Keep a notepad and pencil in your pocket. As you hear people say things like "There ought to be a law" or "Someone needs to do something about (fill in the blank)," write it down.
Later, scan your list and ask yourself "How could I turn this into a paying business?" Think big; not small. How can you constructively affect the lives of the most people by solving this problem for them?
2. Start from zero if you must.
There are many businesses that can be started from absolute zero. Many businesses have been started by enterprising individuals when they were flat broke, sometimes having had nothing to eat for days for lack of money.
Just days ago at this writing, a friend was playing pool to earn pocket money. As he was visiting with the proprietor, this friend mentioned that he knew where the proprietor could get more pool sticks. Within minutes, our friend walked away with a cash order for a set of pool sticks and a new case. That one order netted our friend over $200 in about fifteen minutes!
Now our friend knows from experience that he can make a good living just calling on pool hall owners.
Get cash up front (at least enough to cover expenses; up to 100%).
3. Start from a minimal budget if you have one, but stay within your budget.
Our friend, a day or so later mentioned the incident to another mutual friend, who happened to already be in business as a cabinet maker. The cabinet maker got out his smart phone and looked up the cabinet source. He discovered that the cabinets sold by the online dealer were from China, and made of particle board.
The cabinet maker decided that he could make a superior cabinet for only slightly more than those on the web site. And he could do it with tools and materials he already had on hand.
By contrast, see # 8 below. The moral is, know what you are doing; do your due diligence.
4. Operate online or offline, your choice.
Online or offline, there are ways to start from zero, and use earnings to grow the business.
Two ways to start from zero online are the following:
a. Sign up as an affiliate marker for a drop-ship supplier or a digital download supplier. Then write articles about the product including your affiliate script as a link in the text or in the author byline.
b. Sign up with one or more gig sites as a provider. Make sure you check your email for orders every day.
Two ways to start from zero offline are:
a. Choose a supplier who will allow you to sell their products or services on a commission basis. Make sales calls either in person or over the phone to secure sales.
b. Choose a product you can make or a service you can provide, and for which you know there is a demand. Start making sales calls; preferably one that solves the problem you chose to address in step one.
This author has started seminar businesses and advertising businesses in this way. There are many other businesses any enterprising person can start. Use your imagination or see #1 above.
5. Always deliver what you promised (at least), when you promised (or earlier).
Some lessons are hard-learned. In one of the advertising businesses mentioned above, an offset printer kept delivering orders late, offering excuses. Another printer delivered his work at higher than published prices, claiming special circumstances or paper prices higher than he expected.
The best motto in dealing with suppliers is, "Deliver results, not excuses!" The best motto in dealing with customers is, "We deliver results, not excuses."
Surprises from one link of the chain always results in poor performance to the end-user.
6. Stay productive.
Every business has its ups and downs. Orders come in sporadically or cyclically, yet bills come due regularly, like clockwork.
In order to be working on the business, and not just in the business, one of the most important ways in which to improve the business is keep the work going steadily. If you are a one-person-business, it means take only planned breaks; otherwise, keep the selling effort steady.
7. Always maintain positive cash flow.
Cash flow is king! If every order is profitable, the business owner is exceptionally astute. Something usually goes wrong in at least some orders making them less profitable or even delivered at a loss. However, if cash flow is positive, the business will survive.
Keeping cash flow positive requires an astute financial manager. He practices "first-in-first-out" and "just-in-time" inventory control methods, sharp negotiating skills, and other financial management strategies. Check with your accountant for appropriateness and exceptions in your situation..
Dan Kennedy wrote a book titled Buy Low, Sell High; Collect Early, Pay Late! His title tells the whole story. It is a great company policy and (internal; not for public eyes) motto.
8. Operate on cash in hand not cash expected or promised.
A business owner was told by a subcontractor about a contractor client who needed a certain product. The business owner ordered the extra equipment and supplies he would need to fill the order. Before the equipment and supplies were delivered, he subcontractor called to say that the contractor had given the order to another supplier. Now the business owner has thousands of dollars tied up in equipment and materials for which he has no immediate use.
9. Declare profits when you have profits, not before.
So many accounting practices are predicated on operating from a budget, which makes sense and is good advice. Generally, budgets are set based on past experience, sometimes including a reasonable percentage of growth, also based on past experience. That makes good sense. The only problem is that things sometimes go wrong.
The budget is based on expected conditions and circumstances, e. g. market conditions and political circumstances, both of which are subject to unexpected changes.
A stock does well for a few days. The business has unexpected operating capital. They make capital investments. The customer base has a downturn in their stock prices. Or unemployment rises. Sales take a downturn. The company's stock sales plummet. The company has to sell off its capital equipment at a loss to pay its bills.
A company goes to overseas manufacturers to get products at cheaper prices. The other country goes through political changes. The supply chain is interrupted. Expected prices are unexpectedly increased.
There is an old joke about the business owner who thought he had to beat the competition's prices, so he priced his product at under his cost, thinking he would make up the difference in volume.
It is better to sell quality and service and maintain positive cash flow and profit margin than to worry constantly about being priced competitively.
10. Sell to the right market.
Finally, define your market properly. If you sell boats and you target a higher percentage of the boat market, you will probably come short of your goal. However, if you sell bass boats, and you target the bass boat market, you have a much better chance if increasing market share.
Targeting a tightly defined segment of a much larger market gives you a much better chance to improve features, quality assurance, and customer service. While larger companies spend their money diversifying their base and penetrating the larger market, you can leverage your money and adapt to the fast-changing market more quickly.
Copyright 2011 by Gene Shambaugh
Gene Shambaugh is an alumnus of Neosho County Community College and Emporia State University, author of Street Smart Selling, Twenty One simple Ways To Make Money With Your Digital Camera, Internet Marketing to Local Markets, Business Mapping For Success, Treasure Maps To Internet Marketing Success among other books, self-employed, writer, salesman, public speaker, sales trainer, and training developer. His website is http://genespeaking.com.