How To Be An Entrepreneur

If you want to be an Entrepreneur, you have to be ready to fail. Failure is part of what you go through a lot. It’s like when you’re dating. You date person after person looking for that perfect match, but you’re going to have failed relationships until you find it. And oh, by the way, even the perfect match may be destined for a failure… but we try not to think that way.

As an Entrepreneur we are looking for opportunities to make money. Can’t find any opportunities you say? Hundreds pass by you every day, you just have to be tuned in to be looking for them. So be on the lookout. You could read business magazines or books to help you get tuned in. Just make sure you make yourself aware.

The problem then becomes choosing the right opportunity, because once you choose you will find 10 more that may work even better. You could be methodical in choosing which one to pursue, by evaluating the market and surveying potential customers. It is probably a good idea to do this, but sometimes the best opportunities look a little weird in the beginning, then develop into great products or services.

Take the leap and select an opportunity, which I will assume is a product or service but it may also include methods of marketing or a new way of doing an old business. Ultimately though you are selling something, so spend a little time and or money to attempt to sell your product or service, and get feedback from potential customers. Make little changes based on the feedback you get and try again. Ultimately you will find out if your product is worth continuing with. Perhaps it’s not… then it’s time to move on to a different opportunity.

You may go through several different opportunities, or perhaps you will start and fail at several businesses, before you find the magical combination that creates winning growth. Keep at it because you will get there. Just remember that you only need one success and if you try and fail enough, you will try and succeed at least once.

One important thing to keep in mind: Because you will need to be able to fail, you don’t want to bet the farm on your opportunity.  You always want to have a fall back in case things get bad.  Then you will be able to build up some money and try again.  If your failure leaves you flat broke it will be very difficult to start again right away.

Burn Out Is A Killer

We are all human, so the idea that we can eat, work, and sleep is just outrageous, as well as detrimental to our business.  Some of the biggest business deals, in fact, happened over a round of golf.  Having nothing to talk about but your business makes Johnny a very dull boy.  So you’ve got to take time and recharge.  If you’re like me, every spare dime is going into your business so spending money to do stuff may be out of the question.  So we need to find an activity to do that doesn’t cost a lot and gets our mind off of business.  Here are just a few ideas:

1. Exercise

I am not one to do much exercise… but I have been known to take long walks, hit the punching bag, or lift a few weights. Time away from our business exercising eases some of the stress and really is not that expensive if done right.  You don’t need to buy fancy exercise equipment, just walk… or do push ups.  You can watch T.V. and do the twist.  Just do something.

2. Draw or Paint

I have painted a couple of pictures to get my mind off of things.  It costs just a little to do drawings or paintings, and if you’re mind is as detail oriented as mine, it gets your mind completely off of anything else.  Now you’re not trying to be Picasso, you’re just trying to do something different.

3. Play a musical intrument

I have my guitars around and I will play on occasion.  My daughter Chelsey is the professional though.  She plays a lot.  She is getting really good too.  If you have an instrument around a little practice will get your mind off of your work and be an interesting past time.

4. Yell at your children

Just joking there… although kids, especially teenagers, can be a little difficult at times.  I guess the point is to do something with them that they like, especially if you can’t think of anything else to do.  They can come up with a lot of interesting things that cost money, but maybe they can also think of something that doesn’t cost so much to do.  Have a picnic out with your children!

5. Have a date night with your spouse

When was the last time you went out with your significant other?  Maybe it’s about time.  Have dinner, go to a movie, or if you have a few bucks do the casino.  I have a couple of restaurants that I really like and I can’t go there alone.  You could also do something a little more unusual like visit a Sybaris.  (Google it)

6. Read a good book

You could read The Good Book or perhaps some fiction.  I say fiction because I’m a big reader of self-help and how-to books.  Read for the pure joy of reading, not to learn how to do something else.  Have some quiet time with a book and don’t give up when your mind starts going elsewhere.  Just reread the parts where you spaced off and keep on trying.  If the book is good enough it will get and keep your attention.

7. Advanced: Take a leap

To do these kinds of activities you may have to spend a few bucks.  You could take a vacation to someplace adventurous.  You could bungee jump.  You could learn to fly an airplane.  I actually did take flying lessons at one time… It helped me overcome my fear of flying commercially and it was a good, but expensive, past time.  I gave it up partially because my wife would not go up with me.  I’m looking at boating now.

The main thing you try to accomplish with the taking a leap activities is doing something completely new.  Doing something that challenges your fears.  It is definitely a good way to get your mind off business.

Good luck to you in finding activities.  Make sure to spend a couple hours a week or more doing something away from work/business.  It’s important to your mental and physical health.

So You Have No Money To Start A Business?

When people think of starting a business, they think of investing money and time for a future return. Is it possible to start a business with no money at all? Anything is possible with a little imagination.

Imagine that you are going to get a job. You interview for the job and get it. Then you start your job and you get your paycheck a little later. This is classic business. You are selling your time for money. You can also sell your time for money in a business. This is called temping or consulting. You find a person or company with a need and you sell them your services: time in return for money.

What kind of services can you sell? Think like a teenager for a moment.  You could deliver papers. You could mow lawns. You could babysit. Now think about what special skills you have. Can you paint? Build furniture or walls? Fix small electronics? Do you have computer skills you can teach people? You are only really limited by your imagination.

Maybe you could sell things you own to raise money. Rather than starting without money, you could sell some of your belongings to raise money.  Do you own bonds?  Do you collect coins?  Do you have an LP collection?  Do you have musical instruments you don’t use?  Do you have unused sports equipment?

You can drop ship or sell on consignment. Many companies allow individuals to sell their products and drop ship to the customer, or even loan goods out to be sold.  Some companies have catalogs you can show customers and then order with their credit card, or get paid first then order.

You can market online for free. You can often get free web space and free advertising on the internet, then market as an affiliate for other companies.  You probably will not make a lot of money right away but you can make money with just your time, a computer, and an internet connection.  If you have no computer or internet connect, you are probably not reading this.  However, the library does offer computers with internet if you are lacking.

That’s about all I can think of at this moment, but there are probably other avenues you can follow.  Just use your imagination and who knows what you can come up with.

For Small Business, Fear Is The Word

So what are you afraid of? Losing all you have? The IRS? The new health care law? The bad economy? Well, get over it! Now is the best time in our lifetimes to start a new business! There are a lot of challenges in this economy, and perhaps to starting a business in general.  But in the words of FDR, “The only thing we have to fear is fear itself.” It’s true.

The best and most successful entrepreneurs have no fear of failure. In fact, they fail a lot.  Part of being in business is getting “no” or having something not work as well as you thought it would, picking yourself up, and trying again. If you haven’t been dead broke in your life, you haven’t been an entrepreneur. Now having said that, good business managers will understand and accept the risks they are taking. Only the foolish go “all in” with a plan that they aren’t pretty certain will work – after they know the ins and outs of the idea. And not having a fall back is a very bad idea… you have to have some sort of a safety net.

But why do you fear:

Losing all you have? Start a legal corporation (with an attorney’s help) and you will only ever lose the corporation’s assets.  The corporation can go bankrupt but you will still have your stuff.

The IRS? I have good reason to fear the IRS, I have seen many people have issues with them. Be informed about taxes and you should be ok. Use an accountant if you need to but you still must be knowledgeable about tax laws. Still, you can learn them over time, you don’t need to know everything before you start.

The new health care law? It doesn’t have much of an impact on a new small business.  Learn as you go.

The bad economy? I feel for people who lose their jobs and homes but as a small business person, this is the absolute best time to start a new business and ride the growth wave when things turn around.  The bad businesses have gone out and there is room for new players.

Yes, fear failure… but make it a healthy respect and know as much as possible about your idea; but try. If you don’t try and fail you won’t be successful eventually… because you’ll never try.

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What Is Your Yacht?

I have a subscription to Yachting Magazine, as well as Money. Most of the Money Magazine articles are online so I often read them before I get my monthly subscription, but I still scan it for something interesting I missed.  As far as Yachting goes, they stack up for months before I read them.  I think it is that I love to look at the pictures but most of the time I don’t like to dream so big.  Still, every once in a while I go through the magazines for the past few months and just look at the pictures.  They have interesting articles but it’s just too much for me to read at the end of a day so I just look at the pictures and marvel at the prices.  How can anyone afford something so expensive?  And not just so expensive to buy but to operate and maintain?

So why do I torture myself with such a big dream?  Well, I figure I might just be able to afford it someday if I work hard enough.  And then I realize that no matter how hard I work I will never be able to afford such a luxury.  But, if I work smart enough I just might.  Ok, so what is the difference between working hard and working smart?  Working hard is chopping down a tree with an unsharpened axe.  Working smart is cutting down a tree with a chain saw.  The effort required for the chain saw is much less and accomplishes the same thing.  Still, in both examples you are cutting down just one tree.  So what if we put in the effort of the unsharpened axe but used the chain saw instead?  Then we can cut down 10 trees with the effort of axing down the one tree…

I guess what I’m saying is that you need to put in a decent amount of effort… but you need to do it in a smart way.  Ah, yes, that is the point.  To be successful at anything that is worthwhile, you need to put in your full effort day in and day out, in a smart way.  To do this, and understand that you will not get results day in and day out, you must be motivated.  Results are motivating as I have said before, but without results you must find something that motivates you to put in a full effort.

My dose of motivation is reading my Yachting magazines.  I dream someday that somehow I will earn a decent enough living that I will pay off all of my debts, retire, and buy a yacht.  Maybe not a big one, but one that you could live on.  My job will not do this for me but maybe, just maybe, my business efforts will.  So what is your yacht?

Crazy Town – Thank You Jason Aldean

We just got back from Nashville, Tennessee, where we learned that it’s a Crazy Town for people who want to break into the music business. My daughter is a songwriter and played her songs nightly at the different venues. We were at the Commodore one night, the Bluebird Cafe the next, and Douglas Corners the third.  Chelsey played her songs at various bars six days in a row. We learned that there are a lot of songwriters out there that are good and also want to break through and sell their songs, but there isn’t very many songs that are sold or become popular. It seems to be a modern day gold rush. And even somebody as talented as Jason Aldean gets told “no” tons of times… so many that he almost gave up. He gave himself 6 more months and then he would find a real job and support his young family. Perseverance and constant improvement is what got him his record contract…

In the world of business, very few businesses make it past the first year because of many factors.  Mostly that it takes more to get a business going than the entrepreneur thought it would.  They run out of money and time, and they have to give up.  For some success was just around the corner and they gave up too soon.  For others the business idea just did not make sense… but how do you know the difference?  About the only way is to take the pulse of your customer and potential customer, and find out what they think.  Perhaps you are just a little off and need to make some improvements.  Perhaps your idea makes no sense and you need to take a different approach.

If you’re close to breaking through, find the money somehow… sell your idea to investors who will help you make it through.  Ask a relative for help, make them your business partner.  Find some way not to give up.

For those of you who want to be a songwriter, I truly feel for you.  A great song is a combination of factors that requires talent and learned skills… If you have enough determination to be successful you will need to constantly improve yourself, network, market your songs wisely, and never give up.  Be thrilled to live in your car and chase your dream.  There are just a few nuggets of gold out there.

What You Need To Know Before Starting A Business

My short answer is nothing.  There is nothing you need to know before taking the leap and saying “I am in business”.  You can do it, say it now… Now you are in business.  That wasn’t so hard was it?

Everything else you need to know you can learn as you go.  You just need to learn it at the right times.  For instance, you may not know what a business entity is.  Ok, it’s time to learn.  Why do you need to know this?  Well, it has a bearing on whether you are a legal business and how you pay your taxes; oh, and if you’ll lose all your personal belongings if you’re sued.  Important stuff to know so make sure you check it out.  You’ll need some sort of business entity created to open a checking account.

Taxes? Legal issues? Other stuff? Learn as you go… Taxes will be important after the first of each year, just keep good records. Legal issues: Don’t do anything bad intentionally and read a bit each week.  We all make mistakes, even legal ones, but most are resolvable without going to jail or paying big fines… just don’t do anything intentionally wrong.  Anything else you just learn as you go.

I know there may seem to be an overwhelming amount of things to know but the most important thing is to find a good product and make a profit.  The rest is just stuff that can be picked up along the way.

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So How’s All Of This Going To Make Me Rich?

The first rule of business is that there is only one reason to be in business: profit.  If you are in business for any other reason, you should consider it a hobby or a non-profit.  Now we don’t want to make a profit at the expense of everything else but we do want to make a profit.  The way we make a profit is by selling a product or service for more than it costs us to acquire the product or service.

If we can find a product or service with a market, and we can sell for a profit after all of our costs, we can probably expand our marketing effort to reach more of the market.  In other words, if I can sell 10 of an item and be profitable, why can’t I sell 10,000 of the same item?  If I make $1 an item profit, I have gone from $10 profit to $10,000 profit.

There are a lot of if’s here and many people try several different things before they find the magic product with the expanding market.  So it probably will not happen overnight for you, but you keep working at it.  Take the time to do the market research for items you are considering and you will save yourself a lot of money.

As I told my son who is going to be a famous actor, concentrate on being better at your craft and the money will come.  If you concentrate too much on the money you will miss important things that you should have recognized.  Find ways to understand more about business.  Do your research.  Find and evaluate new products.  Test out the market.  Do good things and the money will eventually come.

Starting a business is an investment for your future, it is in no way a method to get rich quick.  You have to pay your dues before you reap the rewards.  Understanding this will make it much easier to get through your early years.

So how are you doing?  Have you found the right product yet?

The Basics Of Cash Flow

If you have a checking or savings account, you deal with cash flow on a personal level. Start a small business, open a checking account, and now you are dealing with business cash flow. When you are just starting a business, the game is easy. Spend as little as possible and make as much as possible. Usually the latter is a little more sluggish than you would like it to be, so not spending money on silly things is very important. If you cannot do business without spending money on something, by all means come up with the money and spend it. But there are so many opportunities out there to spend money for your business, and not for things to build your business, that you will find yourself broke very quick if you do not watch it.

After your business has grown (and always), cash flow is important to monitor as it may not be as straight forward as it was early in the business.  There may be accounts receivable and accounts payable to work with, as well as just managing a basic checking account.  In other words, there are many more moving parts to cash flow and it is easy to find yourself having a difficult time meeting all of your obligations.  So having a forecast of cash flow is very important.

Most business software, such as Quickbooks, have cash flow reports and forecasts that can be used to figure out what your spending looked like and what things look like in the future.  You can also do it on paper yourself, but you can make better use of your time with good software.

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Understanding The Laws Of Supply And Demand

Before I went to college, I thought there was one law of supply and demand.  There are actually two laws: One law of supply, and one law of demand.  Supply and demand may be interrelated, but when you look at the laws you are looking from two different viewpoints.  One as the consumer and one as the supplier.

If you sell a product that is in high demand, you can sell it for a higher price and will not see a decline in sales.  The higher you go in price, the more demand will drop off, until it drops off a cliff (i.e. no sales).  You will want to price where you make the most overall profit, which will be some mathematical formula where profit per item times units sold will be the greatest amount.  For some items, a small change in price will eliminate sales; for others it takes a large change in price for sales to drop off.  This difference is called the elacticity of demand.

If you are the purchaser or consumer of an item, supply will tend to drive your price.  The more different vendors you can buy from, the greater the supply of an item, or your ability to substitute another item will give you leverage to get a better price.

As a reseller of an item, your best bet is to buy an item in plentiful supply to you that is in great demand in the marketplace; so much so it outpaces the retail supply.  If it is difficult for other businesses to enter this market and sell to the consumer, it is better for businesses already servicing the market.  If you can be in a market where all of these things happen, you’ll have a perfect storm that will create a whirlwind of profit.  However, this is pretty rare so don’t hold your breath… you just want to look for the best possible situations that work in your favor.

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