7 Essential Steps to Starting Your Own Business

Step 1: Let's begin...

The beginning is a good place to start I think... This may sound silly, but many neglect the importance of the start, and I think that's perhaps why 86% of startup businesses fail in the first year... Every year, almost 500,000 people take the plunge and start their own business and only 60,000 make it. My aim is to help you be in that 60,000. I want you to succeed so that you can tell others about me and what I have to offer through my company - That's my success!

So let's begin... You probably wouldn't turn up at an airport without first of all preparing where it is you want to go, working out the best journey and booking the right ticket, just as you wouldn't start a business without knowing what that business really is.

So the first thing I want you to do is put pen to paper and answer the following questions. These questions are designed to quiz your unconscious mind and the answers can be useful when you are asked "What is your business anyway?":

1. What specifically is your business?
2. Who specifically is your business for?
3. What products and services are you going to offer?
4. What evidence do you have to show that people need & want this?
5. Who are your competitors?
6. What is the price?
7. What is your first target?
8. Where are you now in relation to achieving this target?
9. When will you have achieved this target?
10. What will this business allow you to do?
11. What resources are needed?
12. Is your business ecological for you, your family and the world?

Step 2: The Disney Pattern...

Walt Disney was an American inspiration, not only for his film productions and animations, but also for his vision and entrepreneurialism. Disney had a great all-purpose strategy for creative thinking and I have found it amazingly effective when planning any new business. I like to dream of big things when it comes to my businesses, and sometimes this can result in me missing the small details that could throw my plans into turmoil. The following Disney strategy was modelled by Robert Dilts, a popular NLP trainer in America, and has saved me from dreaming big and neglecting reality. Go through the following steps by yourself or with a friend before you move on to the next stage of your business preparation.

Think of your potential business. The Disney strategy works well for any situation where you need to come up with a specific plan.

Choose 3 different spaces on the floor for you to move to and give each space one of the following labels:

Space 1: The Dreamer
Space 2: The Realist
Space 3: The Critic

Start by standing in the Dreamer position.
This is where you create possibilities. Here you are a visionary, seeing the big picture. Be creative without restraint. The dreamer position mostly uses the visual representation system. Ask yourself, 'What do I want?' 'What would it look like?' Write down your thoughts.

Shake those thoughts off by shaking your body or jumping up and down.

Then, move into the Realist position.
This is where you organise your plans, evaluate what is realistically possible, think constructively and devise a step-by-step action plan. The realist position mostly uses the kinesthetic (feelings) representation system. Ask yourself 'What will I do to make these plans a reality?', 'How will it feel?'

Shake those thoughts off by shaking your body or jumping up and down.

Finally, move to the Critic position.
This is the position where you test your plan. You are looking for problems, difficulties and unintended consequences. Think of what could go wrong, what is missing and what the payoffs will be. The critic position mostly uses the auditory representation system or your own internal dialogue. Ask yourself "What could go wrong?"

Step 3: Doing the necessaries

You should now have a list of answers to my questions, and have three different view points on your business from the Disney pattern. With these in place, I think you should be ready to do one of two things:

Go through the final checks below, then if you are sure you want to start your own business, carry on to the next stage.

or,

Go back to your day job. It's better to know now whether your business is going to fulfil your dreams or not. Ploughing in lot's of money into a business that will never succeed is a fools game. If you have doubts at this stage, call us. We are here to help and will offer our honest advice - running your own business isn't an easy option and sometimes it's just not worth it. Make sure at this point that you have the drive, determination and the right mindset to take the plunge. Once you do, there's no going back - the rewards are too great...

The necessaries:
Take half an hour to visit Companies House (type this into Google) and have a good look around. There are a number of ways to set up a company. You can set up as a 'sole trader', form a 'partnership', open a 'limited company' or even become a 'Franchisee'. We offer advice to our members, or you can call Companies House and they will be able to help.

Find the right Accountant. Again, we offer accountancy services through our partner companies to our members, or you can check out icaew (type this into Google) to find a list of Chartered Accountants. My advice would be to get a good accountant and by good, I don't necessarily mean the most expensive, but a good accountant should be able to save you more money on expenses and tax than you pay to them. They will also help you in running an ethical business and set you on your path to business enlightenment.

If you are looking for Finance. Visit the Princes Trust. They also offer advice and support for young people looking to create business.

Check out the Federation of Small Businesses (FSB). They have over 185,000 members and can help with all sorts of contracts, legal issues, banking arrangements etc.

The government also runs a Business Link in England and the equivalent in Scotland, Wales and Northern Ireland. They have a great website with lots of resources (type this into Google)

For a free intellectual property resources centre visit own-it. (type this into Google)

For free legal guidance and help visit freelawyer (type this into Google) or for Internet law in UK visit weblaw (type this into Google)

If you have made it to this page, I'm guessing you're up for the challenge of creating business for yourself... You have chosen a challenging path, but one that is so rewarding and freeing too. I've been in business since I was 9 years old, and it's all I have ever wanted to do. I tried working for others, but to be honest, I wasn't very good at it, and since creating businesses in my 20's & 30's, I'll never go back to working for someone else. The rewards, both financially and for my lifestyle are far too great.

So now that we have our business in mind, what is it going to be called?

Step 4: Creating your name...

Most new business owners spend a great deal of time thinking of catchy names for their businesses. I remember hearing about Greg Steven's who set up his business selling sofas and furniture. He was a huge Elvis fan and called himself 'The King'. After some debate, he decided to call himself 'The Sofa King'. On his vans he had 'We are Sofa King Great' printed. Read out-loud, the catch phrase can raise some eyebrows but it manages to stick in your memory - and that's what branding is all about...

So I'm going to make this chapter easy for you... Unless you are prepared to go as far as Greg to attract your customers, I recommend calling your company name 'You'... You are your business and your personal branding lets you control how other people perceive you. That's far more powerful than calling yourself 'Living Inspiration' or 'The Creative Life Company' like everyone else in business. My only exception to this rule is if you are setting up a membership organisation. You are usually selling a collection of people and benefits through a membership organisation. Outside of this though, your clients will choose you, not because you have a cool business card or snazzy office, but because something about you engenders trust and makes them decide to do business with you. People buy from people, not businesses... Personal branding is without doubt the most powerful way to get your name out there and it won't cost you anywhere near as much as trying to market a large company name. Start branding and marketing you, not a company you work for. For further details, I can really recommend a book by a guy called 'Peter Montoya' - It's called 'The Brand Called You'.

Step 5: Know who you are...

The Dalai Lama said that "Self-knowledge is a vital stage on the path towards enlightenment..."
I think knowing who you are is essential for your business. People buy from people and every projection you put out there in relation to your business will be received by others. Make sure you are the model of excellence you want in your business.

The following model helps me on my path to learning about myself. I think it's also helpful when thinking about your business. It has been created by Robert Dilts from the work done by Gregory Bateson. I refer to this model on a daily basis to make sure I am aligned on each level both in business and my personal life. To get closer to becoming an Enlightened Entrepreneur, you should have alignment and congruency on each of the levels starting with your environment...

Level 1: Your Environment
Level 2: Your Behaviour
Level 3: Your Skills & Capabilities
Level 4: Your Values & Beliefs
Level 5: Your Identity
Level 6: Your purpose & connection to the planet

As you get down the levels, you get closer to finding who you really are and at the very end, beyond who you are, you find your purpose in life and what connection you have to the world.

An all important question to ask yourself before you go into business is: Who am I when the lights are off?
If your answer is different to when the lights are on, or when you are selling, when you are with your family, when you are with friends or when you are alone, then you will have some misalignment on one of the different levels.

Check in with each level and ask yourself the following questions:
Environment: The where & when. Are you in the right place? Is this the right time? Who else is involved and effected by your business?

Behaviour: The what. What do you do? What thoughts and actions do you have in relation to your business plans? If you saw your behaviours from the outside, would they be aligned to the behaviours you would like to see from someone running your business?

Skills & Capabilities: The how. What skills do you have and need? How will you achieve your dreams? How will you move from employee to entrepreneur?

Beliefs & values: The why. Why is this business important to you? What do you believe about yourself? What do you value about this business? Why bother?

Identity: The who. Who are you? Who arn't you? Who is your business? Who do you want to be?

Purpose: Beyond Identity. What is your purpose on this planet? What is beyond you and your business? What is your highest intention of building this business?

If you have got this far, you should feel confident in what you are offering, and once you have registered your name, found your accountant and completed all of the logistical tasks associated to your business, you are all ready to start. The next stage is to work out who you are selling your products & services too. If you know what you're selling and who too, you are 90% of the way there...

Step 6: Finding you Niche

If you don't find a niche market the news is not good for your business. In fact, I would go as far as to say "find a niche within a niche". A niche market is composed of individuals and businesses that have similar interests and needs, which can be readily identified and that can be easily targeted and reached.

Finding a niche for your business means finding a great product or service for a highly targeted audience.
Let's imagine that you are an accountant (and you might be...). If you were interested in business coaching and went onto the internet to find a service provider, would you book with;
1. A fully qualified coach?
2. A fully qualified coach who specialises in helping accountants?

I think I've made my point. Most businesses don't niche small enough and try to be the 'jack of all trades'. I promise you, this strategy does not work.

By niching, and then niching again, you have the following advantages over your competition:
• You become specialised in your area and are therefore seen as 'The Expert' in what you do.
• The tighter the niche, the easier it is to find your clients - you know exactly who they are and therefore where they hang out.
• You will more than halve your marketing spend because you can target your marketing to specific campaigns in specific publications/websites etc.
• You will halve your competition
• You know exactly who to survey to find out exactly what they want before you produce any product or service.

Always ask your customers what they want before you produce any product or service. Many businesses create products and services that they think their clients want, without ever actually asking the client. Find out what your clients want, then produce it - it's a sure way to make more money.

Step 7: Creating your Steve...

Once you have installed your phone lines and have handed out some business cards, you are likely to receive calls from your local newspapers begging you to advertise with them. I have nothing against advertising in newspapers when it's done properly, but they usually promote their advertising by telling you that they have thousands of readers who will see your advert. The problem often is - those readers aren't interested in your product. I made the mistake of offering a free CD on NLP in the 'Express' newspaper (they had a special promotion on...). The Express goes out to hundreds of thousands of people and I worked out what 1% was and thought this was my likely take-up. I spent the whole day on the phone to people who had no idea what NLP is and asked if I could "just send the CD anyway because I collect free CDs from newspapers"... I wasted hundreds of pounds sending CDs out to clients who will never buy from me, not to mention the cost of my time.

The trick to selling anything is knowing who you are selling to and where they hang out. It also helps if they are actually wanting your product in the first place.

For every business I run now, I design my ideal client. This client is my market - the person I only need to whisper my product to and they will buy it. This means I know who they are, where they shop, what they read, even what they eat...

Let me introduce you to Steve, my ideal client for my business - perhaps he is familiar...
Steve is 30 to 45, married with 2 kids. He earns 35K to 45K and is fed up with his current work situation. He enjoys the company of his work colleages but the job doesn't satisfy him anymore. He wants to work with his partner and has often thought about setting up his own business - perhaps his partner can join him later. He likes to holiday every year and enjoys watching Channel 4, E4 and BBC news. He likes reading magazines including GQ, Mens Health and the occasional book on business and personal development. Steve enjoys surfing the web for personal development, watched YouTube and TED.com. He likes to shop in Sainsburys and occasionally, when he's feeling flush, in Marks and Spencer. Somewhere inside Steve, he believes he can make it on his own and if the right opportunity comes along, he's got the guts to do it...

I feel like I know Steve like my best friend. Steve also has a female version 'Stevetta' and I target my writing, advertising, products and in fact my whole business to meet Steve and Stevetta's needs...

Now not every client is Steve or Stevetta. Some don't match their profile at all and that's OK. I don't turn people away if they don't behave like Steve, but it makes it so easy for me to know where to find my clients and focuses my mind on what I can offer to him...

Once you have your Steve, or Stevetta (or whatever you decide to call them), you know who you are marketing & selling too, you know where to find them. You can begin to create your websites, marketing and even your business cards as if you are producing them for your Steve or Stevetta. By now you should also know who you are in relation to your business, you know what your purpose is on this planet and what your business outcomes are. I think it's time for you now to take the path to becoming a enlightened entrepreneur.

Conclusion
You will now be able to tick off the 7 essential steps to starting your business. I hope this guide has been useful to you. Most businesses never think of these steps and I think that they are so important. You're ahead of your competitors already.

Check off the following list and feel confident in your abilities as a entrepreneur - you are 90% of the way to being successful, the rest we can put down to on the spot learning... Good luck!

Step 1: I am clear about my outcome
Step 2: I passed the Disney test
Step 3: I've done the necessaries
Step 4: I've got my business name
Step 5: I know who I am and what my purpose in life is
Step 6: I've niched, and niched again
Step 7: I've got my Steve

Helping you move from employee to entrepreneur...
The Employee To Entrepreneur University was founded to support remarkable men and women with dreams to run their own rewarding and successful businesses and provide the support to actually make it happen.

"Through monthly meetings, courses, coaching and business boosting retreats we have created a support network that eliminates the reasons most small businesses fail. In addition, we've created a culture of individuals that play life at the top."

This is not a 'earn £1million in 1 month' type of organisation. We are here to help you build your business and help that business support your lifestyle forever. Join us in creating the life that you have always wanted through the business you have always dreamed of.

Reference:
By Toby McCartney for The Employee to Entrepreneur University eeuni.com
Website: http://www.eeuni.com

How to Start a Business With an Unlimited Profit Potential

Unlimited Profit Potential...

Think big... this is a must if you want to achieve success in life, particularly in business. However, we often get scared away of the concept because we believe that in order to go big you need to have an over sized wallet, and nothing can be farther from the truth.

Indeed, most of the greatest business of yesterday and today started from scratch and grew to become industry empires and icons of the entrepreneurial world. Anything is possible, and only you can determine how far you will go.

Yes it is true that out of 10,000 or 20,000 entrepreneurs maybe one achieves that kind of success, but the good news is that you do not have to become Godzilla big or the next Bill Gates to make it happen for you big time.

I mean, being a billionaire must be fun, but I am sure that you would have a full and happy life just by getting to a six figure income every year, and that is big, but not that big, which means that such goal is literally within anyone's reach.

Do you need to have a lot of money to invest or put up front as start up capital in order to achieve this goal?

The answer is certainly no, what you need is brain power and dedication, but above all, you need the will to keep going no matter what.

I would dare say this last component is the only the real engine capable of pushing your forward as an entrepreneur, so before even moving a finger or investing any money, you must first set your mind to challenge mode.

Once you have done that, you will have to think, learn and work, but with your will and determination pushing you forward you will be able to overcome failures and disappointments and see them for what they really are: the foundations of your success.

Therefore, in order to start a business with an unlimited potential for profits all you really need is the will to do it, plus fast and decisive action, because one thing is certain, good fortune will not fall from the sky and hit you in the head.

Reference:
Alex Cadens

Does Starting Your Own Business Seem a Bit Daunting?

No Looking Back

The idea of starting your own business can be daunting. Especially if you have never done it before. It can seem like the "risky" thing to do.

But millions of people around the world have started their own home based business, and haven't looked back. And more and more people are realising that it's the smart way to go, especially in today's economy.

Times have changed. The Internet is here, and it's not going away -- but job security is.

But fear not, because...

Change is the thing that brings massive opportunity!

And the only thing that may be stopping you from taking advantage of that change is your past conditioning. Let me explain...

The Way Of The Past

A hundred plus years ago, your ancestors were entrepreneurs, not employees. They owned their own businesses. They enjoyed their own freedom and did not concern themselves with this thing called "job security."

Then along came the Industrial Age and the need for employees skyrocketed. Large industrial concerns promoted the need for "educational reform" in order to create more employees for a rapidly expanding industry.

So in stepped the government and took over the task of mass education, and adopted the Prussian system. A system designed to produce soldiers and employees -- people who would follow orders and do what they are told.

You can see how beneficial this kind of system is to the corporate world today.

And the corporate world has lured people in by offering "job security." But these days it is becoming very apparent that job security is a thing of the past. Not only may your job not be there in a couple of years, but your employer may not be.

Why Does It Matter?

"So what's the big deal about job security?" you may ask. Well...

Firstly, it isn't there anymore.
And secondly and more importantly, it comes at the expense of something very precious -- your freedom.

The price of security is freedom. And over time, people have been unwittingly trading their freedom for security.

(If you are battling to relate to this concept, think about a maximum security prison. The people there have the highest security, but no freedom.)

Today millions of people are risking having very little freedom, and little security.

So, clinging to "job security" may be costing you dearly: The life you really want to live.

And putting on the façade of driving a nice car, living in a nice home, wearing nice clothing, and doing all the nice middle-class things (all provided by credit) is not cutting it. No amount of "looking good" is going to give you or me true peace of mind. That means...

It's time to focus and "mind your own business" instead of someone else's (your employer's and your banker's).

Just like your ancestors, choose the path of freedom. Live a life of self-autonomy. Because it's worth it.

The only thing that stops us is fear. Not lack of ability. And we only fear the unknown.

So, if you have fear about starting your own business, it's because of your conditioning (education). Think about it...

You have probably spent years in a "Prussian" school system. You were taught that you have to have all the right answers or else all hell will break loose.

That may be great within the corridors of "formal education," but it's doesn't reflect reality.

How We Learn

Remember learning to ride a bike? Did you first spend months learning all the theory so that when you first got on you were sure not to fall off? To "not make a mistake?" I doubt it.

What happened is, you got on. Fell off. Learnt and made corrections. Got on. Fell off. Learnt and made corrections... And so on, until you were riding around everywhere on your back wheel!

That is how we are designed to learn. It's natural. The "formal education" way is what's unnatural in learning how to thrive in life.

We have been so conditioned to fear making mistakes. To get all the answers right. No wonder this paralyses us unless we can somehow overcome all this conditioning. Therefore, let's not attach too much significance to the word "failure." I once read a good quote that went, "Failure is an event, not a person."

So, do you need all the right answers? Bill Gates didn't. He brought a product to market, that brought value to the market, and the market embraced it in a big way. And Microsoft Windows is still not "perfect."

Henry Ford said, "Thank God for my customers. They buy my products before they are perfected."

And yep, you too have value to add! So stop waiting to be perfect and worrying about "getting it all right" and just start offering it! Believe it or not, but there are people who will relate to you and want what you can offer them.

Just Start

Start that business. It you don't, who else will? That's what I did, in spite of being "educated" otherwise.

Entrepreneurs know that they don't have to know all the right answers. They just need to know where to find the answers when necessary. Even very successful entrepreneurs are always learning. For them there is no such thing as being "educated" (past-tense). It is an ongoing process.

All persons are hypnotised from infancy by the culture in which they grow up. The prime task of adult life is dehypnotisation, enlightenment. -- Willis Harman and Howard Rheingold

So go for it. Do something bigger and more meaningful with your life.

If you don't make a difference in the world, you will be more inclined to just complain about the problems in the world. And that has never helped anybody.

It has never been easier or cheaper to start a home based business. It can even be done part-time. All thanks to the Internet.

And being non-technical doesn't have to stop you either. Technology has brought with it its own solutions to its shortcomings. It doesn't matter if you're a Generation-Y or a Pre-baby-boomer.

With the advent of the Internet and Web 2.0, and all the coaching available out there for starting a successful home business, there is practically no risk.

The risk is in sitting there watching the "old economy" melt before your eyes.

And job security is part of that old economy.

Rather make your own security -- like your ancestors did.

Because you can...

Reference:
About the Author:
Tony Kennard is a work-at-home entrepreneur. He promotes the idea of financial freedom and self-autonomy through personal business ownership.He teaches Attraction Marketing as the best method to attract people to your business (traditional or MLM), and have it flourish.

3 Tips to Help Avoid Overwhelm If You're an Entrepreneur With a Business to Run.

Most entrepreneurs feel overwhelmed at one point or another. In fact, staying focused can be one of the biggest daily challenges.

This can prevent your business moving forward as quickly as you'd like... and leads to that feeling of there never being enough hours in the day.

Here are some tips to put yourself back on track:

1. Focus on 'results' rather than 'goals'
Goals differ from results. You might have a goal to complete a new sales page by the end of the month and get it online. You may even have a series of mini-deadlines to help you achieve this goal. But what is the RESULT you want to achieve? The result you want is to land new clients. The sales page is just part of the puzzle to achieve this. Always focus on the outcome, rather than getting bogged down by short-term goals.

2. Be specific
Results need to be specific to be effective. "Increasing sales" is not specific, for example. "Get 10 new sales in the next 30 days" is a very specific outcome. As is: "Get 20 targeted leads before the end of this week." This is a much better way of monitoring your progress.

3. Prioritize
It's easy to get overwhelmed by the seemingly 'urgent' tasks and lose sight of the truly important ones. Supposing you want to increase your online sales by a specific amount this quarter. But maybe your website isn't set up to achieve this outcome. Your first priority would therefore be to get the revisions done and put online. That result would allow you to move on to your next goal of driving traffic to your website. If you do things in the right order, it makes it so much easier to achieve results.

Using these tips will help give you clarity and focus, so that you can build your business faster and with less frustration. Once you get into the habit of using them, you'll find staying on track much easier.

Starting a New Business - Uncover Remarkable Ways to Impact Starting a Business.

Nowadays with the strained economy in America and perhaps the world, there are many people that are starting their own business. Because you are already a business owner, you can share your expertise and earn high profits as a business coach. Continue reading this article and uncover remarkable ways to impact starting a new business.

1. People with little experience in business skills would benefit greatly as you show them how to start a new business. It's important for people to understand that by having a plan they can follow a roadmap to success. If you will share your expertise with them they can avoid a lot of errors that will save them a lot of money as they are developing their new business. Of course people will pay for this expertise and that is how you can make a lot of money.

2. Create business materials in a way that are simple and easy to use for your customers. Provide answers to their questions as they use your materials. When they find your materials easy to use and very profitable for them, they will continue to come back to you to hire you again and again for your business expertise. This can greatly impact your business and their business as well.

3. Since you have already experienced starting a new business, you can share with your clients past business mistakes you've made. This can save them a lot of money and frustration. Reduced frustration and increased success motivates a person to keep moving forward to achieve their business goals.

Starting Your Own Business - Discover 7 Profitable Methods to Energize the Start of Your Business.

Nowadays people are learning the value and freedom of starting their own business. You can create enthusiasm and excitement for starting a business by promoting the success of your own business to beginning entrepreneurs. Keep reading to discover 7 profitable methods to energize starting your own business.

1. Before you decide to start your own business, make sure you check and see that there is a market with money willing to pay for products you create for that market. This is a sure way to run a successful business.

2. Make sure you feel supported in the business that you operate. However you can get that support either by going to the library or by attending networking meetings or talking with other business colleagues, make sure you feel supported in your business.

3. It makes a lot of sense to hire a business coach. By using quality business coaching services, you can customize business applications to your business.

4. Learn from your mistakes and feel comfortable about making mistakes. Making mistakes is part of the way that you learn how to succeed.

5. Focus on acting professional in your business. When you focus on acting professional, people will know that you know quality business. It will be very appealing to them and help you get customers.

6. Treat yourself and your many customers respectfully. They will appreciate that and see that you are the preferred businessperson they choose to do business with.

7. Provide superior customer service. This will help you improve profits because customer service is king in business.

Start a Business - The 4 Latest Popular Ways to Accelerate Starting a Business.

With your business expertise, now is a great time for you to increase your profits by helping people learn how to start a business and run that business successfully. Continue reading to learn the latest 4 popular ways to accelerate starting a business.

1. Take advantage of the many business resources available to help you start a business. You can hire a business coach and that makes a lot of sense. That way you can customize the training to your business. Go to the library, do online research, visit the Small Business Administration, and perhaps even the business department in your local college.

2. Check to make sure that there is a market for your business before you start creating products and developing services. You're looking for people who are looking for answers to a very pressing problem. You can look on the Internet and see what problems people are experiencing. You might want to focus on people who are still employed because we know they already have money to invest in a business of their own.

3. Remember the reason that you go into business is to serve a market. Use your expertise in a particular niche to enjoy serving that market by solving the problems of that market.

4. In your sales technique develop a short, friendly and efficient way of encouraging people to improve their lives. After all, that is what they are doing in starting their business. You are asking people to improve their lives by doing something differently from their current way of doing things.

The Importance of Accounting For Small Business Start-Ups.

Accounting is a crucial part of running a business. Many people mistakenly believe that if you are starting a small business, you really do not need accounting. However, this is not true. If you want your business to reach its full potential, you have to follow basic accounting practices. You might find accounting boring, but you cannot avoid it.

Importance Of Accounting

When you start up a small business, you need an accounting system in place. This could help you create a record of all the revenue and the expenditure of your business on a daily basis. Maintaining this data is crucial because you will need it when you file for tax returns. You might also need it for legal purposes. If, in the future, you apply for a loan to expand your business, this data can help you get one.

Another important purpose of maintaining an accounting system is that it provides you with a tool to assess your business's performance. An accounting system provides you with information about your business that will help you analyze the weak and the strong points of your business. You will realize what is helping your business and what is not.

Once you realize how important accounting is, you will be more than eager to put in that extra effort. Moreover, accounting is not that hard for small businesses. All you need to do is ensure that your financial records accurately reflect your business's income and expenditure.

Ledger

Most small businesses maintain their records in a ledger, which is a record of sales receipts and expenditures. You need to transfer all your receipts and expenditures to this ledger. You can do this on a daily, weekly, or a monthly basis. Basically, this will depend on your business.

Three Financial Measures

Accounting for small businesses usually consists of three financial measures: Balance Sheet, Profit and Loss Statement, and Cash Flow Statement.

The Balance Sheet portrays how much your business is worth. This statement will list all your assets (cash, inventories, account receivables, etc) and liabilities (loans, accounts payable, and debts). If done in a proper manner, the Balance Sheet can show you exactly where your business stands. Your ledger will not show accounts payables and receivables; however, your balance sheet will.

The Profit and Loss Statement shows how your business is performing. This statement covers a time period, which could be monthly or quarterly.

The Cash Flow Statement provides an assessment of future cash needs of your business.

So now you understand how important accounting is for your business. If you have been educated in the field of commerce, you might be able to do the accounting yourself. However, if you do not know much about accounting, you can consult an accountant to help you set up your accounting system. Consulting an accountant is cheaper than hiring a bookkeeper.

Another thing you can do is purchase accounting software. It will not only help you keep track of all the receipts and expenditures, but will also help you create quality financial reports.

The bottom line is that as long as you make the commitment to setting some time for your accounting needs and start maintaining your accounting system, you will realize how easy it is.

Reference:
Mariela Perez-Simons

Starting and Marketing a Small Business.

Starting A Small Business

A small business can be started either as a sole proprietorship (single owner with full business liablility and responsibility) or as a partnership between two or more people. Registering the business and drawing up a partnership agreement requires a lawyer and legal fees.

Before opening up your small business, a lot of research and planning is required. A good business plan will not only increase the chances of success but will also help you in raising money for your business.

Before starting out on your small business venture, ask yourself questions such as :

• Why you want to start a small business? (Maybe you want more freedom in the way you spend time and do things. Maybe your own business can help you achieve financial independence and make better use of your skills.)
• What business will be right for me? (This should preferably be a field where you already have skills or is your hobby or interest).
• How will I finance my business?
• How will I market my business? (For example, It is a good idea to create a search engine friendly website. The startup costs for a basic new website is very small. You can also list your products and services, include a reliable payment gateway, such as Paypal and a shopping cart in your website. You can list your website in online classifieds and auction websites for publicity.)
• Also think about factors such as business location, products or services to be sold, supplies and equipment required.
• Note that many people start a small business part time which may grow to be a full time business.

Marketing your Small Business

• A website is a great marketing tool for your small business. If possible you should also operate your business online. A website can be used to market your products and services to a wide range of audience and locations. A website also allows you to track customer preferences and personalise content based on customer profiles.
• Developing your network is most essential in marketing your small business. Do not ignore the value of referrals in the success of your business. Attend networking events and seminars regularly to increase your network and learn more about networking.
• Advertise in newspapers and magazines. Radio and television advertising can be also be useful if within your budget.
• Do remember to measure the results of your advertising campaigns in order to ensure that your marketing efforts are effective.

Why Plan Your Businesss?

The owner of a small sheet-metal fabrication company once told me, "Why plan? It only gets in the way of what would have happened anyway." That's a fatalistic notion often held by managers of small businesses. Too many believe that they're totally at the mercy of larger competitors. In fact, for many, exactly the opposite is true.
Think of the reasons for your company's success. You'll probably come up with a series of traits that are uniquely yours-characteristics that your larger competitors can't begin to duplicate. That's why you're in business.

Of course, you may already believe in the idea. However, you may have to sell it to the others in your company. This ammunition may come in handy.

Recognizing Uses of the Plan

For many of us who left corporate America in favor of a smaller work environment, the idea of drafting a business plan may seem offensive. After all, isn't frustration with all that busywork one of the reasons we left in the first place?

We all have an aversion to doing anything on our job that doesn't immediately help the situation we're now experiencing. However, isn't it also true that a little foresight and action before the fact can help eliminate many of the problems we face each day. Wouldn't it be nice to anticipate something like a price cut by your major competitor or a rise in the interest rate on your credit line? Of course it would. And with that anticipation comes an organized and effective response. That's what planning does. Additionally, we prepare a workable business plan to

• Determine where the company needs to go


• Forewarn of possible roadblocks along the way


• Formulate responses to contingencies


• Keep the business on track to reach its planned goals

Planning for Promotion of the Company

Many people associate a business plan with start-up companies. Often our first exposure to a business plan is for the purpose of convincing investors and lenders that we have a viable idea at which they should throw money. That's not what we're developing here.

Though the techniques may be similar, the purposes are entirely different. So are the results. Promotional plans are often untested, pie-in-the-sky theories of what someone thinks will work. The goals, objectives, and numbers are usually unproven. Detailed departmental plans for hitting targets are frequently hazy-if they exist at all. Promoters don't want to burden their investors with the mechanics of execution. That comes later, after the money is in the bank.

Think of a start-up's promotional plan as concept-driven. It's more general in nature. The presentation leaves many questions of practical execution unanswered. These plans are fine for their purpose. However, most aren't intended as a blueprint for running the company.

Planning for Operational Purposes

We're not creating a promotional plan for a new start-up company. Instead, by using this book, you create a practical realistic planning tool for your business. The emphasis is on integrating the details of what each department within the company does to help the firm reach its overall goals. We want to tell each person in the company the single most important thing they need to do-must accomplish-to contribute to the overall success of the business. Certainly this results-oriented attention to detail can (and probably should) be used for a start-up venture. However, the promoters are right-it would confuse outsiders not familiar with the inner workings of the company.

Our focus is on practical solutions to everyday business objectives. We design these to work in concert with one another. When they do, the company moves from where it is today to where its owners, investors and managers want it to be.

Establishing Goals

Why establish goals? I've heard from colleagues who run other small businesses that they always seem to fall short of any goals they set for the company. There's almost a feeling of helplessness. Their companies are small and lack the resources needed to turn goals into reality. Some wonder why they should spend time developing a business plan that might help the company make money over the next year or two-especially when they could be working on something else that's guaranteed to make money today. That's hard logic to refute, especially in a tight economy. Many small-business owners and entrepreneurs go after the quick buck. Those are the ones that don't last. Companies that lack a definite direction and the ability to stay on course eventually sink. It's the firms with vision and a plan to exploit that vision that become the stars. If you don't set goals and then try to reach them, it's guaranteed that your firm will stay right where it is today. With changing technology, changing customer demands, and increasing sophistication, marching in place is business suicide. During the 1990s and as we approach the next century, no company has the luxury of conducting business as usual. If you stay where you are today, the rest of us will leave you in the dust.

Company Goals

These are the targets for change and transition that your firm must reach over the planning horizon-for our purposes, the next twelve months. Company goals cover such major issues as

Products offered

• Customers targeted


• Company image


• Competition


• Levels of service


• Product quality

Companywide goals established in the business plan move the company into the position where it needs to be.

Department Goals

At very small companies, often that's for one person. No matter. Design department goals to connect with specific requirements of both the overall company goals and the goals of other departments in terms of product and timing. We make department goals in order to

• Assist other departments that depend on those specific results
• Achieve the overall company goals

A good example would be in the area of finance. Say the firm needs additional funds to buy the machinery needed to expand its manufacturing operation. This will generate the sales revenue needed to meet overall profit targets. Here are examples of specific department goals:

• Get additional funds.


• Purchase and take delivery of new machinery.


• Expand manufacturing.


• Generate added sales.


• Help attain the overall profit objectives.

Failure to reach of any one of these department goals could jeopardize reaching the overall company's target. Additionally, within every department, it's easy to identify exactly what that department must do to further the company's cause.

Appraising Your Current Position

The question here, however, is why do this? After all, most managers of small businesses are close enough to their everyday operation to know where they are, aren't they? Not necessarily. At least few take the time to think about where they are, then write it down so that others can judge its accuracy. We're talking about things like:

• Market position


• Company strengths and weaknesses


• Reputation


• Industry viability


• Technology


• Product line


• Adequacy of capital


• Capability and sufficiency of employees


• Sufficiency of plant, machinery, and equipment (the infrastructure)

Often the hardest part of starting a business plan is honestly determining your current position today. It's not always so obvious. Take the case of Domino's Pizza Corporation. What business is it in? Of course, it sells pizza. So does every one of its competitors. The Domino's planners decided that differentiating Domino's product based on higher quality was too hard a sell. Besides, it wasn't necessary. So what business is Domino's really in? The convenience industry. Its pizza isn't any better or worse than most of the competition. However, the niche Domino's chose for itself in its plan was the business of selling convenience. For a while it had that entire market to itself. Another example is that of a payroll processing service. Its current position is that of providing financial convenience to its clients. The company performs a task that other companies would rather not do. While assessing the current position, someone came up with the bright idea of expanding the services offered. After all, financial convenience extends beyond simply doing the payroll. Why not add bookkeeping, tracking and collecting receivables, and personnel consulting? See how the planning process not only answers a lot of questions you may not have thought about for some time, but prompts questions that may turn into opportunities? That's the kind of penetrating thought that goes into assessing your firm's current position.

For more related article check out:
All in One Business Planner

Is Entrepreneurship For You?

In business, there are no guarantees. There is simply no way to eliminate all the risks associated with starting a small business - but you can improve your chances of success with good planning, preparation, and insight. Start by evaluating your strengths and weaknesses as a potential owner and manager of a small business. Carefully consider each of the following questions:

Are you a self-starter? It will be entirely up to you to develop projects, organize your time, and follow through on details.

How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, and professionals such as lawyers, accountants, or consultants. Can you deal with a demanding client, an unreliable vendor, or a cranky receptionist if your business interests demand it?

How good are you at making decisions? Small business owners are required to make decisions constantly - often quickly, independently, and under pressure.

Do you have the physical and emotional stamina to run a business? Business ownership can be exciting, but it's also a lot of work. Can you face six or seven 12-­hour workdays every week?

How well do you plan and organize? Research indicates that poor planning is responsible for most business failures. Good organization ­ of financials, inventory, schedules, and production ­can help you avoid many pitfalls.

Is your drive strong enough? Running a business can wear you down emotionally. Some business owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Strong motivation will help you survive slowdowns and periods of burnout.

How will the business affect your family? The first few years of business start­up can be hard on family life. It's important for family members to know what to expect and for you to be able to trust that they will support you during this time. There also may be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk in the short-term.

Why Small Businesses Fail

Success in business is never automatic. It isn't strictly based on luck - although a little never hurts. It depends primarily on the owner's foresight and organization. Even then, of course, there are no guarantees.

Starting a small business is always risky, and the chance of success is slim. According to the U.S. Small Business Administration, roughly 50% of small businesses fail within the first five years.

In his book Small Business Management, Michael Ames gives the following reasons for small business failure:

• Lack of experience
• Insufficient capital (money)
• Poor location
• Poor inventory management
• Over-investment in fixed assets
• Poor credit arrangements
• Personal use of business funds
• Unexpected growth

Gustav Berle adds two more reasons in The Do It Yourself Business Book:

• Competition
• Low sales

More Reasons Why Small Businesses Fail

These figures aren't meant to scare you, but to prepare you for the rocky path ahead. Underestimating the difficulty of starting a business is one of the biggest obstacles entrepreneurs face. However, success can be yours if you are patient, willing to work hard, and take all the necessary steps.

On the Upside

It's true that there are many reasons not to start your own business. But for the right person, the advantages of business ownership far outweigh the risks.

You will be your own boss.
Hard work and long hours directly benefit you, rather than increasing profits for someone else.
Earning and growth potential are far greater.
A new venture is as exciting as it is risky.
Running a business provides endless challenge and opportunities for learning.

For more related information, check out:
Small Business Planner