Archive for September, 2009
Finding A Recession-Proof Business
Finding a business that can endure today’s economic recession can be tricky. People are tightening their belts more today than in the past fifty years. We are seeing businesses close down CEO’s being replaced and some rather substantial costcutting measures including salaries and employment. So you have to ask yourself what companies are thriving? Which ones are going to make it and which ones won’t?
No I am not an economist but it has been my experience that whenever belt’s are tightened people start to think of themselves first and others second. In other words we start to focus on our basic human needs and worry less about luxury items. Let’s consider the effect the recession is having in a few key humancentric areas:
Food: Eating out at restaurants is diminishing particularly the high priced establishments. In my area of Florida alone over 35 restaurants have closed their doors recently. Not surprising people are more inclined to cook at home which means boomtimes for value priced items. For example I understand sales of Hormel’s SPAM product are way up. With this in mind I wonder when the Food Channel will replace some of their gourmet shows with a show featuring something like “Cooking on a budget.”
Health: Drugs are still doing fine but people are more inclined to buy generic as opposed to name brands. We will probably see a sharp decline in cosmetic or elective surgery but we will still need to replace hips hearts knees and other vital parts of our bodies. I have a friend who manufactures titanium hips and knees. He tells me business couldn’t be better.
Transportation: As we all know new car sales are way down which means people are trying to extend the lives of their current vehicles. This means companies selling auto parts should be prospering as well as independent mechanics offering competitive prices. The airlines will always be viewed as a necessary evil but for any of them to succeed they have to streamline their operations.
Communications: I think cell phones will hold steady but look for people to change or eliminate their land lines. I have also seen a lot of people cut down on the pay channels on television as well as their ISP connections.
Housing: Like the automotive industry sales have stagnated which means people are trying to make do with what they have. And like the automotive aftermarket look for the sale of home improvement items to increase particularly those products designed to save energy and money. This should be boom times for basic hardware stores.
Education: Private schools will be hurt by the recession as people will be more inclined to send their kids to affordable public schools. This includes state universities over private colleges.
In a nutshell the companies that will succeed are those that address the basic needs of the human being with no frills attached. Luxury items such as electronics will struggle in the meantime.
But success will also require companies to manage smarter than what they have been doing. They have to think faster to seize opportunities be more organized and disciplined in their operations and be more adaptive to change. In other words I think you’ll see a “no frills” management style emerge as companies fight to survive. Those companies with bloated bureaucracies and micromanagers will have to be cut down to size in order to manage smarter.
So what company is recessionproof? That which addresses basic human needs and is managed so the company can turn on a dime without missing a beat.
About the writer:nbsp;nbsp;Tim Bryce is a writer and management consultant located in Palm Harbor Florida.http://www.phmainstreet.com/timbryce.htm
He can be contacted at: timb001phmainstreet.com Copyright 2009 Tim Bryce. All rights reserved.Financing Yourself: The Benefits Of Risk
A Guide to Financing Your Business With Personal Funds
By Sparxoo
While your dream may be to meet that VC firm with deep pockets the reality is only 0.1 of businesses realize that opportunity. That’s why you need to be your first line of financing. Put your money where your mouth is and finance your business with personal funds. Remember you are your greatest advocate.
It’s risky. But as we’ll outline in this post risk can be a good thing. Actually the more risk you take might help you later down the line when you decide to knock on the VC or angel investors door. Let’s start with the implications of financing yourself.
Spin: The Drawing Board
Before you begin to finance your business with personal funds consider the risks. If your business fails are you going to accept the possibility of such a financial loss? Stable personal finances while in the preliminary stages of your business development will help you can absorb any losses. A great way to start a business is to moonlight on your new business while fully employed and collecting a paycheck.
Entrepreneur.com compares the concept stage of your business to an unhatched egg. The incubation process can be expensive. Do your upfront market research and planning while you are getting paid. Figure out how much time and money it is going to take to start your business. Get honest about your finances before entering into a business endeavor so that you are prepared for challenges along the way. Many businesses fail because they dont have adequate funding for unforeseen delays or setbacks.
Our team recently met with an entrepreneur with a compelling idea. But he was completely unprepared financially. He was putting consultants on credit cards with the hope of getting investors to pay them off later. This is not the best idea. You don’t want to go into a financial tailspin trying to start your business or keeping it afloat.
How to SelfFinance
Before you go to a venture capitalist or an angel investor make some progress on your own. Can you fund initial startup costs? Can you tap into friends and family for help?
Hello Uncle Larry remember me
Friends and family are a great place to start. You might not need to seek additional investors if you can fund your business through established relationships. Consider the consequences of borrowing from family and friends. If your business fails are you financially obligated to pay those from whom you borrowed? Even if you are not obligated will you destroy relationships? Contracts might be your solution to relationshipruining borrowing practices. Outline terms of agreement before borrowing and identify potential outcomes including the scenario where they lose all their money.
Other avenues of fundraising by yourself
There are alternatives to funding your business through family and friends. Though the risks might be much higher you can sell assets borrow against your home take out credit cars tap into your IRA funds or borrow against your 401k. These are very risky and might land you in serious financial straits. It is best to avoid financing in this way because you could lose everything very quickly if your business doesnt become an immediate success.
Benefits of Risk
Venture capital firms and angel investors are interested in your business proposition as well as the decisions you’ve made along the way. The more smart and successful risks you have taken to get to the venture capital firm angel investor or bank the more they will take your business seriously.
On the one hand a second mortgage and credit cards show that you have a lot on the line if your business fails. This ensures that you are going to do everything in your power to not only keep the business afloat but make it successful. On the other hand be careful not to put yourself in a personally disasterous financial situation as this will raise red flags about your financial management capabilities.
Looking Forward
According to the Small Business Administration 66.6 of small businesses survive at least two years and 44 pass the four year mark. Those odds are not there to discourage you. They are there to make you think long and hard about financing your business. You need to understand the risks of your endeavour before taking the plunge. Additionally in todays business environment startups have a more difficult challenge. But there are opportunities born from crisis. Use the market to your advantange and be a part of the 44.
About the writer: Sparxoo is a business blog that inspires breakthrough by tomorrows leaders. We are a strategy consulting firm with a pulse on marketing branding and development. See our talented team of experts and our parent company dCap Advisors.
Fear Your New Best Friend
Do you know the three steps to creating wealth? Creating wealth for your business depends upon your ability to sell sell and sell your products and services. Lets look at the three steps to creating wealth beyond your wildest dreams.
Following are the three steps to creating wealth that will have you raking in the cash:
Step 1: Fear. You need to find out what people fear. If you havent created a product then find out what people fear in life and make a product that helps get rid of that fear. If you already have customers then find out their fears so you can create even more products.
Step 2: Promise of relief. So youve found out the fear of your customers now what do you do with this information? You create a product or service that provides relief. You promise that your product will save the day and alleviate their fear.
Step 3: Money. To maximize your sales you need to let people know why you are the person to solve their concerns. You have to provide credibility so that they will give you their money. If you dont provide credibility then they wont have faith that your product will actually solve their problems. You can provide testimonials show results and give your credentials so they will literally throw their money at you. Fear is a very powerful feeling so you can use fear to your advantage.
What are examples of these three steps in action? Lets look at a couple of examples.
Example 1: Do your customers have concerns about earning the most profit from SEO on their website? You could provide an informational product that helps relieve this fear of losing out on money.
Example 2: The diet industry. The diet industry preys on the fear of being overweight and provides an easy relief solution through diet pills programs and gadgets. They prey on the fear that people feel like they will never be able to lose weight unless they order their diet products.
Take the lead from the diet industry and uncover the fears of your customers. If you can provide the magical solution with credibility to stand behind it then you maximize your profit in no time. If you dont then you could lose out on thousands or even millions of dollars in profit.
About the writer:nbsp;nbsp;Matt Bacak began investing his first earnings at the tender age of 12 a young businessman in the making. Now 15 years later Bacak survived failed businesses botched partnerships heavy credit card debt and bankruptcy all in preparation for the accomplishments he has achieved today as a wellestablished Internet millionaire and bestselling author.
For more information visit Bacak’s site at http://www.powerfulpromoter.com or sign up for his Powerful Promoting
Tips at http://www.promotingtips.com
