Business and Investment

3 Crucial Elements For Jumping Sales Numbers

2009-03-13T04:11:00.000-07:00

Marketers from every niche have common ground when it comes to bills. Yeah, every month there’s a new stack of bills demanding to be paid. Will there be enough profit to slide right through bill paying time without a flinch? Or do you find yourself fretting about whether you’ll even break even? You don’t have to be victimized by envelopes and 8x10 sheets of paper. Implement these 3 techniques to boost your sales.

1. Find More Customers
The first thing that comes to mind when we think of making more money is getting more customers through our doors. In fact, the majority of advertising focuses on doing just that. There are several things you can do to entice more customers to buy from you.

Implement Follow-Ups
Marketing gurus have discovered that follow ups can increase your customer conversion rates by as much as 50%. Now, that’s a whopping improvement! Don’t let potential customers fade away. Keep the doors for future communication open, and watch the drastic growth in your profits.

Encourage Referrals
Every satisfied customer will tell 3 friends or family members about your business - without encouragement. Imagine what would happen if you start rewarding their efforts.

Get Free Publicity
Nearly everyone keeps a sharp eye on the local news. Hey, it’s funner to know what’s going on when you personally recognize the names and faces in print! Find ways to make your business newsworthy and catch the attention of potential customers without even paying advertising fees.

2. Sell More Per Customer
Think about it... how can you get every customer that walks through your doors to spend more money before walking back out the doors? Here are 3 sure-fire, profit increasing tips:

Increase your prices.
Hey, that might not be as bad as you think. Along with the price increase, focus on increasing the perceived value of your product. Yeah, we all expect to pay a little more for high quality stuff. Not everyone is bent on finding the absolute cheapest price in town... they may be more interested in lasting quality.

Add some higher end products or services to your business.
It’s never wise to put all of your eggs in one basket. That’s why wise marketers diversify their products and services. Think of it this way... higher priced products may not make as many sales, but each sale will bring in a much greater profit. You don’t need to make as many sales to come out on the best end of the deal.

Upsell
Offer every customer an additional product that accents his current purchase at the register. Hey, maybe they forgot they’d need batteries to go with the toy they're getting for their niece's birthday gift! You can be a hero... a richer hero.

3. Sell More Often
The fact that it’s easier to sell to the people who know and trust you is obvious. Sometimes we get so focused on new customers that we miss the gold mine in our own back yard. Take advantage of the hard work you’ve invested in winning the loyal customers you already have with these ideas:

Create a Special Deal
Show your customers you appreciate them and understand their needs with a special offer catered just for them. You’ll be thanking them, and selling more in the process.

Add New Products
Increase the number of products you already have available - especially products that your customers have asked for. They’ll know that you’re looking out for them, and you’ll take their thanks to the bank.

Communicate
Resell yourself on a regular basis. Don’t forget to let them know about upcoming specials that they’ll appreciate. Most of all... keep selling them on the benefits of the products or services you offer.

by: Allyn Cutts http://www.AllynCutts.com

Services Are Everything in Removals Company

2009-03-05T00:03:00.000-08:00

One of the most profitable companies are from services companies. Because services company doesn’t need much resources to run the business. At this time, I try to discuss about the removals services company as a case study of the most profitable company.

After googling to search the moving company sites, I found http://moveme.com as the most complete site that offers moving services. Ok, let’s analyze this site as our reference of services company.

The most important of services business is about the quality. Quality of service could affect your business extremely. if you service your customer with low standard of service, don’t wonder if they run to your competitor. After the quality, the quantity of services those your company has, could be an advantage.

Back to http://moveme.com , the site is offering much service, it looked that the site builder had thought each aspect of the business. it starts from the plan, it serves you to plan your move. Whether you want renting home, buying home, moving to new home or financing home. The company is trying to be a generalist – specialist. They focus on home services and related services. http://moveme.com visitors who looking for needs of their home would be pleased by the services.

http://moveme.com serves all customer class. Even you only have one bedroom accommodation and you need to move. You can use man and van companies in this site instead using a large removals company. Or you need to move to other country ? http://moveme.com also serves international people to move to other countries.

A business will not complete if there is no FREE product for their customers, http://moveme.com gives a removal quotes to their customers for free and without obligation.

After all, I give an “excellent” mark to http://moveme.com as a services company in quantity services aspect. For quality services aspect, are there readers of this blog could give me the reference. Somebody who ever used http://moveme.com services.

Interested to build a moving company ?or you already have removals company and not affiliated with http://moveme.com yet? get the number, take the phone to join http://moveme.com removals companies network. and see your business grow with them.

for all kind of business, if your company cant beat the "giant", why not join with.

Home Based Business vs. Family Time

2008-11-14T03:15:00.000-08:00

Ironically, most of us got into the home based business world because we wanted to have more time with family. So how is it that we sometimes have less time? Let’s take a look and see what can be done about it.

The promise of having more time with family is one of the major attractions for a home based business, but time has to be carefully managed and guarded. If you are in a regular job working at least 40 hours per week, it can be tough. One thing that must be communicated to your family is that there has to be a short term pain for a long term gain.

You have a finite amount of hours available to you, but here are some suggestions. If you have children at home and it becomes chaos as soon as you get home, then one possible strategy is to stay at work an extra hour later. You can return quite a few phone calls in an hour and it would probably be uninterrupted. A home based business can have a remote office!

Another strategy is to take mass transit if you normally drive. It may allow you an extra 30-60 minutes per day to organize contacts, return phone calls, or listen to training materials with your mp3 player. If your company has training or motivational phone calls that are at a bad time for you, it is possible to record them (check with local laws on it).

I have recorded many calls to a $39 digital voice recorder with a $15 connector that goes from my phone to the recorder (available from Radio Shack). You are then free to listen to the calls on your time.

I make it a priority to spend time with my kids when they come home from school. I work from home full time, so I take a break mid-afternoon to see how their school day was and enjoy a snack together. I then head back to my home office until dinner time.

I also have less need for sleep than the rest of my family so I frequently take an hour or two at night or early morning. This can be extremely productive time for a home based business, but unfortunately does not usually allow you to return phone calls. I used my lunch time at my old workplace for that using a cell phone – my investment in the large minute plan was worth it.

The exact solution for you has to be determined by you for your particular home based business. However, my advice is to plan ahead and block out the family time. Make sure you clearly communicate with all family members about what time you are blocking out for your business activity. As long as you communicate well, you should be able to spend anxiety-free time on your business.

With some good planning, you can be successful in being good to your family and your home based business.

by: Ron LeBlanc
About the author:
Ron LeBlanc, PE spent 20+ years in science and engineering when woke up to his true potential and began working from home. He lives in Boulder, CO and works out of his home. He enjoys helping other people learn to do home based businesses. Get his tip-filled newsletter and some special offers at

Creating a Business Strategy

2008-11-13T01:07:00.000-08:00

On a scale of one to ten, having a good business strategy rates about a fifteen!

No matter what kind of business you have -- whether you sell products or a service, as the saying goes, "if you fail to plan, then you're really planning to fail."

Creating a strategy can mean the difference between you working 60 to 80 hours a week all year long -- and then breaking even, or worse, losing money.

On the other hand, many successful entrepreneurs who have a strategy work fewer hours and make piles of money -- and they usually attribute their success to having a strategic plan and following it.

So what is strategic business management? Very simply, it's the process of defining the goals and objectives for your business, creating an action plan so you can reach them and then following the plan.

How do you create a strategic plan for you business?

1. First, know what your vision for your company is. If there were no barriers, nothing stopping you from taking your company as far as you could -- what would that look like?

2. Next, what are your company's core operating values? What are its guiding principles? In other words, why are you in business and how do you do business?

3. Now create a 3 to 5 year plan. Your long-term plan is based on the broad objectives that will help you get from where you are now, to where you want to be.

4. Develop a plan for this year. These are the specific objectives you plan to accomplish this year that will lead you closer to your long-term goals. Remember to be "SMART" when setting your annual goals (Specific, Measurable, Attainable, Realistic, Time-oriented). Include a list of the barriers that are stopping you from getting where you want to go. Figure out what resources you've already got, and what resources you need to get you past those barriers. And then create an action plan that clearly lays out how you will achieve your goals. Involve key employees with this part of the planning process.

5. Create a set of milestones or benchmarks. This is very important, so that you can measure your progress.

6. Share the plan with your employees, and anyone else who will be involved in the process. Your annual strategy is the roadmap that will make sure everyone ends up at the same destination -- but to be effective, everyone needs the same map!

7. Put the plan into action. Now that you have the roadmap, it's time to begin the journey.

8. Check your progress. Just like any trip, you need to check the map every now and then; to be sure you're still on the right road. If something isn't working, the sooner you figure it out and make the necessary adjustments, the sooner you'll be back on track.

9. Follow the same cycle next year. (Dream, Plan, Act, Check).

Creating a business strategy and following it will ensure that you enjoy the journey as much as getting to your final destination.

by: Hans Hasselfors
About the author:
Hans Hasselfors is a successful business entrepreneur and internet marketing consultant. Get the net working for you. Join a community of like-minded authors and publishers and make your living online. Become a member of our article directory.

Do you have a Business Idea?

2008-11-11T21:44:00.000-08:00

Every year tens of thousands of people strike out on their own with a vision of starting a successful business. They have the idea, they've got the plan…all they need now is to take the actions to turn their dream into reality.

It is at this point that many a budding entrepreneur comes unstuck. No matter how hard they try, failure seems to greet them at every turn. Of course, all seasoned entrepreneurs know that it takes a hell of a lot of determination and guile to keep on driving forward in the face of adversity. It also takes some know-how…practical knowledge that stacks the odds of success in their favor.

Getting to grips with Joint Ventures

One of the best routes to business success for entrepreneurs is establishing joint ventures. The right joint venture partner can help kick-start a business and get the all-important cash flowing in. What's more, setting up a joint venture does not require a financial outlay on the part of the entrepreneur either.

So, what could a joint venture partner bring to your business? They could bring expertise, a ready-made customer database, manpower, equipment and access to foreign markets. The right joint venture partner could even run your operation for you in return for a share of the profits generated, or provide financing in exchange for equity share. The possibilities are endless!

Finding Joint Venture Partners

Historically, locating joint venture partners to work with tends to be a drawn-out process. First off you must advertise your requirements and then conduct interviews to find the right type of candidate who fits with your needs and company ethos.

Today, thankfully, there is an easier way. Joint venture search companies, such as www.jvbase.com provide entrepreneurs with quick access to joint venture partners.

These types of joint venture search facilities screen potential joint venture partners, manually matching them up with your requirements. They remove a lot of the hassles that are traditionally associated with finding joint venture partners, so leaving you free to concentrate on the more important aspects of moving your business forward.

If you have a business idea and have the determination to make it work, no matter what obstacles stand in your way, get together with a joint venture partner. By doing so, you could find yourself on the fast track to success.

by: Seb Jay
About the author:
Content is provided by Seb Jay on behalf of

How to Start Your Home Based Business and Quit Your Day Job

2008-11-11T02:32:00.000-08:00

Ever dream of leaving that daily commute, nagging boss, and finding your freedom in running your own home based business? Can’t wait until the day you can walk out the door and work at home? Well, the key is finding the right home based business that will allow your dream to become a reality, and quickly.

No one wants to feel forced to stay in a job they do not like. If you already have a part time home based business that you believe can make you enough money, go for it. However, if you have no idea what to do in your business, then you first want to find a home based business that will pay you a continuous residual income on a monthly basis. This way you do not have to stress about selling enough to live on each month.

You will also want to find a consumable product for your home based business. Some of the most lucrative businesses are those in which the consumer needs to replenish a supply of it on a monthly basis. This way you only have to build a small base of repeat consumers, and you don’t have to work so hard to build a new consumer base.

Also, you will want to find a product that is easy to market. Complicated products are hard to sell, because consumers don’t want to think that hard about what they are going to purchase. Make sure that the service or product your home based business is selling is not only simple to understand but reliable and easy to use. People want to buy a product that will work on a regular basis. Create a great reputation for your home based business by choosing a quality product.

Selling an exclusive product or service is key to making money in your home based business. If it cannot be found anywhere else, you’ve found your niche. Make sure your clients feel like they just have to get the product or service from you. Many companies start up and sell a product that people can find almost everywhere. Find your uniqueness in your home based business product and use it to your advantage.

Hard work and a great product are two components that spell success for the home based business owner. One without the owner makes success very difficult. Find your niche. Then sooner than later you’ll be able to put in your notice and find your financial freedom in your home based business.

by: Charles Fuchs

About the author:
Copyright © Charles Fuchs is an established online marketer who specializes in helping people start their very own Home Based Business. Download the Free Home Based Business Manual Absolutely Free (a $97 Value!). Free Information:

20 Small Business Tips, For Success

2008-11-10T02:50:00.001-08:00

These are just some general tips to keep in mind as you design/operate your small business:

1. Take the time out to explore and understand whether or not you are compatible with running our own business. Some people are just plain happier and better off financially on the other end of the paycheck.

2.Get your personal finances in order. Before you jump into the entrepreneurship world, get your own money matters squared away.

3. Pick your niche. Many small business owners succeed in businesses that are hardly unique or innovative. Take stock of your skills, interests, and employment history to select the business that is best suited for you.

4. Benefit from your business plan. The exercise of creating a business plan is what pays the dividends. Answer the tough questions now before the meter starts running.

5. Do not think you need bankers and investors at the outset of your business. The vast majority of small businesses are bootstrapped.

6. Acquire the proper background. In the early months and years of your business, you will have to acquire many skills. Gain the background you need to oversee all facets of your business well, but determine what tasks you should outsource or hire employees.

7. Remember that nothing happens until a sale is made – How many good products go nowhere because they do not reach the shelves? Sales drive your business. You will need a good marketing plan to sell your product or service.

8. You have to see a customer to know one. N o matter how busy you are, spend at least 25% of your time with customers. You cannot make the proper business decision without understanding their viewpoint.

9. Solve your customers’ problems. The best way to satisfy your customers is not by selling them products but by giving solutions to their problems. There is a big difference.

10.Quality takes minutes to lose but years to regain. Quality is not a destination, it is a never ending journey. After you have strayed from quality’s path, your journey maybe sidetracked forever.

11. Put profitability first, rewards seconds. In small businesses, profitability must come first. Find out how to measure your cash flow and understand key financial ratios.

12. Hire supporters. If you intend to create a growing business, your number one duty is to assemble a great team of employees.

13. Do not do it alone. Find such help from small business peers, a mentor, even trade associations. They can help take some of the trial and error of beginning your business.

14. Vendors are partners too! Treat your vendors like customers and watch your partnership grow.

15. Make use of benefits. Understand how to provide insurance and other benefits for your employees and cut your tax bill at the same time.

16. Ignore regulatory issues at your peril. Federal, state, and local governments require licenses, registrations, and permits. Obey them or face losing your business.

17. Know the tax laws. Invest in understanding tax issues that affect your small business.

18. It’s the people! Whatever happens to a small business happens at the hands of the people who work for it. The evolution of the business is a result of their efforts.

19. Fast, good, cheap. Pick any two. Serious trouble awaits those who attempt to be all three in the market place. Stick with what you do best.

20. Develop a passion for learning. As your business grows, you need to change and grow along with it. One common denominator can be found in all successful business owners and that is a passion for learning.

by: Dave Ryan
About the author:
For more great business, marketing and mind power ideas to develope your business visit the Higher-Profits Blog at

Checklist for starting a business

2008-11-10T02:30:00.000-08:00

Use this comprehensive checklist to plan each step of your new business and transform your dream of entrepreneurship into reality. These steps may not necessarily be completed in the order listed; however, you can use them as a guideline for completing all of the necessary business startup tasks.
- Determine what kind of business you want to start.
- Learn about the industry for your business.
- Analyze the market for your business.
- Study your competition.
- Educate yourself on running a business.
- Join trade associations.
- Name your business.
- Perform a trademark search.
- Register a domain name.
- Design a website.
- Obtain a logo.
- Determine business structure (sole proprietor, partnership, or corporation).
- Evaluate your personal budget.
- Write a business plan.
- Write a marketing plan.
- Locate financing.
- Create a list of start-up supplies with budget.
- Set up a system for accounting and payroll.
- Apply for business license, fed tax ID, fictitious business name.
- Select a location and set up shop.
- Order signage.
- Obtain business tools (computer, printer, fax, postage, office supplies, and fixtures).
- Order business stationery (business cards, letterhead, brochures).
- Obtain inventory.
- Create an operations and employee manual.
- Hire employees.
- Set a launch date.
- Plan a grand opening event.
- Send announcements to everyone you know.
- Send press releases.
- Turn on the OPEN sign!
- Revisit your business plan and update often.
- Evaluate your marketing strategy often.
- Prepare a realistic business plan.
Think of this as your business road map. Define exactly where you want to get to with your business and then you can effectively map out your path towards achieving your goals!
By creating a detailed business plan you should cover all options and eventualities and have a clear future vision that will guide you through the rest of the start-up processes.
- Your business plan should encompass the financial considerations of starting your small or home based business:-
Do you have the capital required?
Do you need to raise additional funds?
Who are you going to approach for finance?
Who do you trust for advice?
And don't forget to open a business bank account…
- Consider the legal implications of becoming a business owner and proprietor.
Are you better off as a sole trader, a limited company or are you considering a partnership?
Make sure you consider all the angles and protect yourself and your assets personally from the outset.
Anything you bring to the business has to be itemized, valued…even if you're a sole trader.
And make sure you are professionally covered with the appropriate business indemnity insurances.
- Get your family and friends behind you from the get-go.
Make sure your family and friends are fully understanding and supportive of your ideas to venture into small business start-up.
Do they understand the level of commitment you will have to show for on-going and long term success?
Their belief in you and continued support of you will work wonders towards your on-going success, so don't forget to look out for them too.
- Protect your family, protect your business.
If, God forbid, something were to happen to your health, how would your business survive, how would your family cope?
Consider insurances - from health, critical illness and income protection insurance to life insurance - and consider your pension and long term financial security.
- Face those 'taxing' questions from the start.
Your small or home based business has to consider its taxation situation.
Do you need to register your business for sales tax purposes; have you informed your tax office of your business's inauguration?
Do you have a good tax professional lined up to guide and assist you?
The bottom line when it comes to taxation is that from the outset you need to make sure your papers and books are in order, this will save you time, money and heart ache in the long run.
- Prepare realistic and achievable goals and targets for your first year.
Do not expect to conquer the world with your first year's business returns.
Starting a business is a life changing undertaking and one you must be patient with. The rewards are there, but make sure you set yourself achievable targets - when you reach them they will give you the confidence and satisfaction to set new goals and to continue building your business' success.

by: Matt Bacak

About the author:
Matt Bacak became "##1 Best Selling Author" in just a few short hours.
Recent Entrepreneur Magazine’s e-Biz radio show host is
turning Authors, Speakers, and Experts into Overnight Success Stories.
Discover The Secrets

Organizational Conflict - The Good, The Bad & The Ugly

2008-10-20T04:53:00.000-07:00

In my work with public sector managers and supervisors, the issue that generates the most emotion, and frustrated comments, is conflict within the organization. We generally do not look at conflict as opportunity -- we tend to think about conflict as unpleasant, counter-productive and time-consuming. Conflict that occurs in organizations need not be destructive, provided the energy associated with conflict is harnessed and directed towards problem-solving and organizational improvement. However, managing conflict effectively requires that all parties understand the nature of conflict in the workplace.

In this first part of our organizational conflict series, we are going to discuss several views of conflict. In later issues of The Public Sector Manager we will return to the topic with more specific tips on how organizational conflict can be directed to achieve positive ends.

Two Views: The Good, The Bad

There are two ways of looking at organizational conflict. Each of these ways is linked to a different set of assumptions about the purpose and function of organizations.

The Bad

The dysfunctional view of organizational conflict is imbedded in the notion that organizations are created to achieve goals by creating structures that perfectly define job responsibilities, authorities, and other job functions. Like a clockwork watch, each "cog" knows where it fits, knows what it must do and knows how it relates to other parts. This traditional view of organizations values orderliness, stability and the repression of any conflict that occurs. Using the timepiece analogy we can see the sense in this. What would happen to time-telling if the gears in our traditional watches decided to become less traditional, and re-define their roles in the system?

To the "traditional" organizational thinker, conflict implies that the organization is not designed or structured correctly or adequately. Common remedies would be to further elaborate job descriptions, authorities and responsibilities, increase the use of central power (discipline), separate conflicting members, etc.

This view of organizations and conflict causes problems. Unfortunately, most of us, consciously or unconsciously, value some of the characteristics of this "orderly" environment. roblems arise when we do not realize that this way of looking at organizations and conflict only fits organizations that work in routine ways where innovation and change are virtually eliminated. Virtually all government organizations work within a very disorderly context -- one characterized by constant change and a need for constant adaptation. Trying to "structure away" conflict and disagreement in a dynamic environment requires tremendous amounts of energy, and will also suppress any positive outcomes that may come from disagreement, such as improved decision-making and innovation.

The Good

The functional view of organizational conflict sees conflict as a productive force, one that can stimulate members of the organization to increase their knowledge and skills, and their contribution to organizational innovation and productivity. Unlike the position mentioned above, this more modern approach considers that the keys to organization success lie not in structure, clarity and orderliness, but in creativity, responsiveness and adaptability. The successful organization, then, NEEDS conflict so that diverging views can be put on the table, and new ways of doing things can be created.

The functional view of conflict also suggests that conflict provides people with feedback about how things are going. Even "personality conflicts" carry information to the manager about what is not working in an organization, affording the opportunity to improve.

If you subscribe to a flexible vision of effective organizations, and recognize that each conflict situation provides opportunity to improve, you then shift your view of conflict. Rather than trying to eliminate conflict, or suppress its symptoms, your task becomes managing conflict so that it enhances people and organizations, rather than destroying people and organizations.

So, the task is to manage conflict, and avoid what we call "the ugly"....where conflict is allowed to eat away at team cohesiveness and productivity.

The Ugly

We have the good (conflict is positive), the bad (conflict is to be avoided), and now we need to address the ugly. Ugly occurs where the manager (and perhaps employees) attempt to eliminate or suppress conflict in situations where it is impossible to do so. You know you have ugly in your organization when:

many conflicts run for years
people have given up on resolving and addressing conflict problems
there is a good deal of private bitching and complaining but little attempt to fix the problem
staff show little interest in working to common goals, but spend more time and energy on protecting themselves

When we get "ugly" occurring in organizations, there is a tendency to look to the manager or formal leader as being responsible for the mess. In fact, that is how most employees would look at the situation. It is true that managers and supervisors play critical roles in determining how conflict is handled in the organization, but it is also true that the avoidance of ugliness must be a shared responsibility. Management and employees must work together in a cooperative way to reduce the ugliness, and increase the likelihood that conflict can be channeled into an effective force for change.

Ugly Strategies

In future articles we will look at what you can do to proactively manage conflict to increase the probability that positive outcomes occur. Right now, let's look at some common strategies that result in the increase of ugly conflict.

Most of the ugly strategies used by managers, employees, and organizations as a whole are based on the repression of conflict in one way or another. We need to point that, in general, you want to avoid these approaches like the plague.

Ugly #1: Nonaction

The most common repressive management strategy is nonaction -- doing nothing. Now, sometimes, doing nothing is a smart thing to o, provided the decision to do nothing is well thought out and based on an analysis of the situation. Most of the time, people "do nothing" about conflict situations for other reasons, such as fear of bringing conflict into view, or discomfort with anger.

Unfortunately, doing nothing generally results in conflict escalating, and sets a tone for the organization..."we don't have conflict here". Everyone knows you have conflict, and if you seem oblivious, you also seem dense and out of touch.

Ugly #2: Administrative Orbiting

Administrative orbiting means keeping appeals for change or redress always "under consideration". While nonaction suggests obliviousness since it doesn't even acknowledge the problem, orbiting acknowledges the problem, but avoids dealing with it. The manager who uses orbiting will say things like "We are dealing with the problem", but the problem never gets addressed. Common stalls include: collecting more data, documenting performance, cancelling meetings, etc.

Ugly #3: Secrecy

A common means of avoiding conflict (or repressing it) is to be secretive. This can be done by employees and managers. The notion is that if nobody knows what you are doing, there can be little conflict. If you think about this for a moment, you will
realize its absurdity. By being secretive you may delay conflict and confrontation, but when it does surface it will have far more negative emotions attached to it than would have been the case if things were more open.

Ugly #4: Law and Order

The final "ugly strategy". Normally this strategy is used by managers who mistakenly think that they can order people to not be in conflict. Using regulations, and power, the person using the approach "leans on" people to repress the outward
manifestations of conflict.

Of course, this doesn't make conflict go away, it just sends it scuttling to the underground, where it will grow and increase its destructive power.

Conclusion

The notion that conflict should be avoided is one of the major contributors to the growth of destructive conflict in the workplace. The "bad" view of conflict is associated with a vision of organizational effectiveness that is no longer valid (and perhaps never was). Conflict can be directed and managed so that it causes both people and organizations to grow, innovate and improve. However, this requires that conflict not be repressed, since attempts to repress are more likely to generate very ugly situations. Common repression strategies to be avoided are: nonaction, administrative orbiting, secrecy and law and order.

source : http://www.work911.com

Think Small...and Kill Your Business

2008-09-19T02:24:00.000-07:00

In talking with one of my funding reps recently, he mentioned that in his many dealings with entrepreneurs at many levels, he found that the vast majority of them had been trained to "think small." The reasons for this were that they were constantly being reminded of

1. the difficulty of raising capital,
2. high interest rates charged by lenders to small companies or
3. the insistence by many venture capitalists that the company
owner(s) surrender control of their companies.

If, instead, they continued to "think small," they could still retain control of their company, even if they were unable to expand due to lack of capital and a funding strategy. Thus, these entrepreneurs are encouraged to export their products or services and are discouraged from becoming multinational corporations.

I've found similar attitudes. When I discuss a $1 million funding , I've often heard, "But it costs more to go public in the States" or "We only grossed $2 million, last year." These are often examples of being stuck in a mental rut, locked into what is thought to be "possible."

In such cases, my response is, "I understand. That's what you've been thinking about and planning...and that's fine. However, can you set that plan aside for a few moments and imagine what you might be able to do if your company were a multinational corporation? If you could get not only that million, but several millions more?" I generally hear a long silence at that point. Then the ideas begin to pop, the possibilities expand. If, however, you really don't want to be a multinational corporation with its associated problems and the hard work required, along with the potential huge rewards, probably reading on is a waste of your time.

But if such an idea appeals to you, what are some ideas which might be considered?

ACQUISITIONS

You can grow the value of your company rapidly by finding cash producing companies in your field, supportive of your main product/service, that you might be able to acquire for cash. That saves you the huge costs of creating a new market. You buy it already established instead. It builds company value far faster than by simply ramping up production, advertising and/or marketing.

FRANCHISING

Does your product or service lend itself to franchising? Macdonalds and similar firms would be far smaller if they had simply opened branches. The business would have become unwieldy very quickly. Helping others to own their own businesses while they, in turn, increase your company's cash flow, makes great business sense. It's another way to buy a new market rather than building it.

FACTORING

While you're building your company, can you increase cash flow if your product or services are sold to other commercial enterprises. Factoring is the fastest, most reliable form of rapid cash flow ever invented. One of the cheapest, too. The practice is over 3,000 years old and used by hundreds of thousands of companies.

INTEGRITY AND PROFESSIONALISM

We work with a very powerful Asian funding Trust. Probably the single biggest factor which made us decide to work with this funding group was their extremely high levels of integrity and professionalism. They trumpet a win-win-win intention from the very beginning. In over twenty years in the financial field, I've never met a group like them. It's the sort of integrity and professionalism that Capital Funds Group, Ltd. seeks when looking for companies desiring expansion capital.

THINKING BIG

My suggestion is simple: Think BIG! What was your original dream? Might you be able to achieve it faster than you've thought? How big are you willing to grow? As an entrepreneur, what are you willing to tackle? If you can qualify for the funder's program, we'll support you in your rapid expansion toward your goals.

Article Source:
http://www.bestmanagementarticles.com
http://business-intelligence.bestmanagementarticles.com
About the Author:
Mr. Barnes is an established financing consultant. An expert on factoring, business loans and equity investment, he is Pres & GM, Capital Funds Group, Ltd. in Canada. "Putting Companies and Money Together"

Ready for Anything ; Make sure you're fully prepared for when disaster strikes

2008-07-07T08:17:00.000-07:00

When Trinise Prosper, 37, returned to New Orleans two years after Hurricane Katrina, she and two of her sisters, Antoinette, 44, and Brenda, 32, decided to start a full-service bakery. But getting their new business, Sweet Savors Bakery, off the ground wasn't easy. The sisters applied for a federal small-business grant and never heard back. New Orleans lacked phone and credit card service at the time, and supplies were more expensive. "We did everything out of pocket," says Trinise. "It was very hard to get [the business] up and running. We pulled together and got it done."
Sweet Savors Bakery opened in New Orleans' Gentilly District in March 2007 and now employs 10 people. Still, the wreckage Hurricane Katrina left behind profoundly impacted the sisters, who had all worked for another sister's bakery business that was destroyed in the storm. That experience taught them to always prepare for the worst, and today, Sweet Savors Bakery has a disaster insurance policy that covers the company's products and equipment, as well as the building it leases. The company also has a written disaster plan that addresses floods, fires and other events. "If you don't have [a plan]," Trinise says, "you're setting yourself up to fail."

In fact, having a disaster plan can actually help your business grow during good times, says Donna Childs, author of Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses. She sees three distinct benefits to having a disaster preparedness plan in place. First, a plan can reduce your insurance premiums and free up money for investment in growth initiatives. Second, a plan underscores the resiliency of your supply chain--something that can make your company more competitive for government and corporate contracts. Third, a plan enhances your operational efficiency. "Disaster planning necessarily requires that you understand how your business works," Childs says. "Instead of doing things in an ad hoc, informal way, you start putting systems in place that will improve your efficiency."

Sweet Savors Bakery pays $100 a month for disaster insurance on top its general insurance policy, coverage that's come in handy when suppliers inquire about the company's disaster preparedness. Combined with a written disaster plan, there's greater strategy and more peace of mind going forward. "We don't know if [a major hurricane is] going to happen again," Trinise says. But "if it happened, we'd come back and reopen." A well-written disaster plan methodically outlines how you would handle both major and minor disasters that could affect your company. An earthquake is one thing, but what will you do if a key piece of equipment breaks or the business next door has a hazmat spill? "It's not just what happens to you, it's what happens around you," says Steve Elliot, founder and CEO of business continuity and disaster recovery consulting firm Elliot Consulting Services. A good place to start is ready.gov, a Department of Homeland Security site that offers a wealth of business disaster planning tips.

The Federal Emergency Management Agency estimates that 40 percent of small businesses wouldn't reopen after a disaster. Would yours? Trinise says Hurricane Katrina taught her a lot about running a business, from self-reliance to creating a "disaster account" that the company can access quickly in a catastrophe, no matter how big or small. "If a disaster happens, you have these funds, [and] you don't have to wait on insurance," she says. "Always be up on your game. Be ahead of yourself." For more on how to ensure that your business is prepared for a disaster, go to entrepreneur.com/shortcuts to read an excerpt from Prepare for the Worst, Plan for the Best: Disaster Preparedness and Recovery for Small Businesses by Donna Childs.

By Chris Penttila
resource : www.entrepreneur.com

From Yahoo! With Love

2008-07-05T15:09:00.000-07:00

Yahoo! (Nasdaq: YHOO) shareholders want answers. Unfortunately, they're only walking away with even more questions.
CEO Jerry Yang joined Chairman Roy Bostock yesterday in updating investors on the recent turmoil at the company. That would have been a great time to address owner concerns over freefalling share prices and executive defections. Instead, the company sidestepped those issues to sing the praises of its ad-outsourcing pact with Google (Nasdaq: GOOG), and to throw some light on how it blew the deal with Microsoft (Nasdaq: MSFT).

Investors won't like the explanations.

G is for Google -- and Gullible
The AdSense deal with Google "will generate approximately $250 to $450 million in incremental operating cash flow for Yahoo! in the first twelve months following implementation," explained Yang and Bostock.

Sounds good, right? Dig deeper. It's an admission that Yahoo! stinks at paid search. Why else would Yahoo's cut from a Google deal be more than all of what Yahoo! can clear on its own? There's no sugarcoating that. Or is there?

"The net result is that the agreement helps us accelerate one of our strategic aims -- closing the monetization gap," the letter explains. "At the same time, it allows Yahoo! to continue to compete aggressively in search and display advertising."

What? Yang isn't just trying to portray his company's surrender to Google's paid-search charms as a Yahoo! achievement in "closing the monetization gap." He's also saying that Yahoo! still naively wants to pepper its search results with its own ads.

Don't get me wrong. Yahoo! is making headway in display advertising, so there is no reason for it to yield to a rival there. However, its insistence on continuing to sell its own sponsored search results is delusional from the perspective of the executive boardroom, while also shortchanging its shareholders by failing to maximize profits.

By allocating some of its ad inventory to serve alongside Google's targeted text ads, the company hopes it can keep that channel open. The thinner demand may even drive up click prices -- but how can it not have an impact on supply? Advertisers will now know that they can simply buy spots through Google if they want to appear on both search engines. That hardly makes Yahoo! the "must buy" for sponsors that the company envisions its platform to be.

It also cheats the bottom line. If scrapping its paid-search business completely in favor of Google would deliver even more cash flow, why is Yahoo! kidding itself with its slow-motion euthanasia of its own Panama paid-search platform?

M is for Microsoft -- and Misplayed
Yang and Bostock also detail the botched Microhoo hookup. The letter recounts several meetings between the two companies, culminating with the June 8 breakup, when "Microsoft stated unequivocally that it has no interest in acquiring all of Yahoo!, even at the price range Microsoft had previously suggested."

We get it. It was Microsoft's decision to walk away ... but only after Yahoo! shook its head for more than four months. The burden rests with Yahoo! to explain why its stock is trading roughly $10 lower than Microsoft's original buyout offer, but the company's somehow casting itself as the victim.

The letter explains that Microsoft countered with a proposal to buy only Yahoo!'s search business. It would pay $1 billion up front, invest another $8 billion in Yahoo!, and grant Yahoo! a piece of the action for 10 years of exclusivity. However, nowhere in the letter does it actually spell out whether this would have created more -- or less -- than the incremental annual cash flow improvement it will be getting through Google.

Yahoo! only explains that the exclusivity was a problem, even though everyone but Yahoo! seems to understand that once you go Google, you don't go back. Just ask Time Warner's (NYSE: TWX) AOL.

I is for Icahn -- and Innocent
The letter closes by defending itself against Carl Icahn's proxy battle. "Based on Mr. Icahn's narrow agenda, it seems highly unlikely that either he or his slate would bring added value to Yahoo!."

Added value? The current board's indecision with Microsoft has actually subtracted value for Yahoo! shareholders. I'm not entirely a fan of Icahn's actions here, but the letter's insistence that the current board "has the independence, experience, knowledge and commitment to navigate the Company through the rapidly-changing Internet environment, execute on our strategic objectives and deliver value for Yahoo! and its stockholders" is just too funny to take seriously.

Is Yahoo! really that out of touch? This letter should have explained the prolific defections and the tumbling stock. It should have explained the Google and Microsoft paths on an apples-to-apples basis. It should have been modest enough to own up to its fiscal and board shortcomings.

It failed on all counts. But what else is new?

By Rick Aristotle Munarriz
resource; http://www.fool.com/

Workplace Trends of the Future

2008-07-02T04:57:00.000-07:00

The rapid evolution of technology, the aging population of baby boomers, the rising cost of healthcare and energy, and other societal and business trends are having a significant and irrevocable impact on the workplace.

Where, how and why we work has changed dramatically over the past two decades and it will go through further transformation over the next twenty years, according to employment experts at Challenger, Gray & Christmas, Inc.

The global outplacement and business coaching consultancy predicted these ‘Workplace Trends of the Future’ at last Monday’s opening of the Society for Human Resource Management’s 60th annual national conference.

Four-Day Workweeks

With rising gasoline prices, the availability of increasingly portable and affordable technology, and the desire among growing numbers of employees for better balance between their work and home life, four-day workweeks will become the new standard for corporate America.

A Challenger survey found that 23 percent of companies are already offering a condensed workweek, typically consisting of four 10-hour days, in part as a response to rising fuel costs. Some companies are also discovering that today’s workers, armed with the latest productivity-enhancing tools, are able to get their work done in four 8-hour days, which puts more Americans within reach of the long-held dream of three-day weekends.

Mandated Wellness Programs

Given the spiraling cost of employer-paid health insurance, more and more organizations will institute wellness programs and mandate worker enrollment. Office equipment such as Steelcase’s Walkstations, which allow workers to walk on treadmills while at their computers, will catch on in offices nationwide. Other programs, such as in-office gyms, company-funded fitness classes and healthy food options will help workers keep in shape.

More employers will take a hard line against unhealthy habits like smoking and drinking. They may follow the lead of an Indiana company, which announced that workers who allow health risks, such as tobacco use, obesity or high cholesterol, to go unchecked will pay more for their company health insurance beginning in 2009. A handful of companies are refusing to hire smokers, and at least two have terminated employees who failed to quit smoking.

Corporate Degree Programs

Increasingly, jobs require advanced technological know-how, creative problem-solving abilities and superior communication skills. However, the high level of education needed for these positions is becoming financially out of reach for a growing number of Americans. Employers will be forced to create their own degree programs to develop potential future employees. Companies have already seen the benefits of tuition assistance in terms of recruiting, training and retaining workers.

Organizations will initiate entire programs with precise coursework centered around their company culture and goals, eliminating the need for extensive on-the-job training, and saving both the company and workers thousands of dollars. Future students will hold degrees in things like Web Design from Microsoft College or Virtual Community Relations from Google University. Large employers such as IBM have already instituted courses specifically tailored to their needs. This will become more widespread as companies look for better ways to develop a well-trained workforce.

Global Relocation of Workers

The expansion of the global economy will lead to a worldwide talent pool, where companies will aggressively recruit the best available workers, regardless of where they reside. In this environment, it will be just as likely for Americans to be hired by firms based in India as it will for foreign computer programmers and engineers to be hired by US firms. Already, several countries in Europe and Asia have stepped up recruitment of highly skilled, highly educated foreign students in hopes of building a more capable and talented workforce. According to a 2006 Japan Research Institute report, foreign students made up 16.2 percent of all students in the UK, 11.2 percent in Germany and 11 percent in France. In April, the Department of Homeland Security made it easier for American tech firms to employ foreign workers by allowing the hiring of foreign students who attend an American school for at least 29 months, without needing an H1-B visa.

Goodbye to Cubicles

In an effort to improve employee collaboration, productivity and efficiency, employers will replace cubicles with open community spaces. To maximize employee interaction and teamwork, companies will eliminate isolating cubes and redesign their workspaces to feature common areas, conference rooms and tables, as opposed to individual desks. Employees will work via wireless laptops and move from space to space as required by their work. This more flexible design will accommodate the increasing number of telecommuters who only work in the office sporadically.

Some companies have already reaped the benefits of retooling their workspace. Network technology corporation Cisco added wireless networking capabilities, virtual offices and quiet rooms to its Japanese offices, resulting in more unified teams, increased revenue, reduced cost, increased space efficiency and optimized flexibility and convenience.

Goodbye to Corporate Headquarters

Within 20 years, the corporate headquarters will be nearly extinct. In an effort to cut real estate costs, become more eco-friendly and attract the growing number of workers seeking better work-life balance, more and more companies will adopt a ‘work wherever and whenever you want’ policy. Those who must work from a traditional office will work in leased space close to their homes.

Some major employers, such as Best Buy, Sun Microsystems and AT&T, are already on the leading edge of a seemingly radical management approach that judges employees on the quality and quantity of their work, not their physical presence in the office. In other words, if you get your report done and it meets quality expectations, it doesn’t matter if you wrote it at your desk, sitting in the bleachers at your child’s soccer match, or on the beach in Mexico. This type of work arrangement undoubtedly resonates with the millions of Americans who want more work-life balance. Environmentalists will like that it greatly reduces commuter traffic. And this approach should also appeal to corporate finance directors. Sun Microsystems estimates it saved $400 million in real estate costs over a six-year period by liberating employees from the traditional confines of the corporate office.

A Free-Agent Workforce

Free agents are the fastest-growing worker segment in the United States, and their number will increase rapidly over the next decade as companies look to hire the best talent on a project basis, and workers take charge of their own careers. Free agents are expected to comprise 40 percent of the American workforce by 2012, according to market research firm EPIC-MRA, as baby boomers adopt alternative careers in retirement and tech-savvy young workers seek more control and variety in their burgeoning careers.

The move to hiring temporary and contract employees, freelancers and consultants is beneficial for both companies and workers. Companies enjoy greater flexibility in meeting the cyclical ebbs and flows of business, while realizing tremendous savings related to benefits and the administration of a full-time, permanent workforce. Free agents also gain flexibility and an improved work/life balance, not to mention the potential to earn more money as they sell their expertise to the highest bidder.

resource: www.jobjournal.com

Superior Leader - Warren Buffet

2008-07-01T04:35:00.000-07:00

Superior business leader and American investor Warren Buffett is often called “Oracle of Omaha” or the “Sage of Omaha” and philanthropist. (Wikipedia, 2007) Buffett is the CEO, and the biggest shareholder of the Berkshire Hathaway Company. Buffett’s has an estimated current net worth of approximately $52 billion in US funds. Forbes Magazine ranks Buffett the third richest person in the world in September 2007 behind Carlos Slim and Bill Gates.

Warren Buffett is known for his economical and plain lifestyle. Buffett still lives in the same Omaha, Nebraska house that he purchased in 1958 for $31,500 with a current value of $700,000. In 1989, Buffett spent $9.7 million of the Berkshire’s funds on a corporate jet. He jokingly named it “The Indefensible” because of his past criticisms of such purchases by other CEOs. (Wikipedia, 2007)

Warren Buffett decided to make a commitment to give his fortune to charity back in June 2006. Buffett’s charity donation is approximately $30 billion, which is the largest donation in the history of the United States. The donation was enough to more than double the size of the foundation with 83% of it going to the Bill and Melinda Gates Foundation. Buffett believed that his family had enough money to get started in life so Buffett decided to give his fortune to charity. Buffett’s annual salary in 2006 was only $100,000. In 2007, Buffett was listed among Time Magazine’s 100 Most Influential People in the World. (Wikipedia, 2007)

What makes Warren Buffett a good business leader? This is what everyone wants to know because Warren buffet is so successful. It all starts with leadership. Warren buffet is a true leader where his leadership makes a difference in the world. Leadership is very much related to change and Warren Buffett has the capabilities of leadership change to fit the changing world. Warren Buffett has repeatedly demonstrated the ability to map read in the irregular waters of change. Is Warren Buffett born a leader? The authors of this paper believe not. Experience and research has shown little evidence that an individual who comes to power is a “born leader.” Warren Buffett took the falls that any other leader has to take. Warren Buffett learned from his mistakes and turned his mistakes into a positive thing. Warren Buffett shares his leadership at all organizational levels and Buffett is empowered to share leadership responsibilities. In the world of business, many titles related to leadership roles are actively used in business and Warren Buffett wears those titles to make him effective in multiple leadership positions in business. Distinction between good leadership and good management is made often. Managers are made to be organizational, controllers and budgeters. Warren Buffett has leadership in all three departments and one must have these traits to be a good business leader.

Another important trait in Today’s business leadership is communication. Warren Buffet is a skilled communicator in all aspects of life. Communication is the real key of leadership. Skilled communicators have an appreciation for positioning in the business world. Warren Buffet is experienced at positioning himself at the right place at the right time. Warren Buffet has the understanding of the people he is trying to reach and what he can and cannot hear from the people. Knowledge of audiences’ needs and wants gives the orator the ability to listen. Warren Buffett is an excellent listener with the ability to convey his understanding.

When Warren Buffett talks, people listen. Warren Buffett can send a message through an open door and does not have to push the message through a wall.

Leadership is crucial to any successful business and good leadership is what Warren Buffett is all about. This is what makes Warren buffet a good business leader.

Mr. Warren Buffett’s investment strategies and course of leadership are shining examples of characteristics shared by cognitive theorists. Cognitive theory is an approach of explaining behavior through perception, anticipation, and thinking. Mr. Buffett’s continual approach of analyzing both possible investment choices, market trends, and the ability to place management resources of the right caliber in the right position has consistently brought this investor to the forefront amongst peers and the marketplace. At the core of every sound investor is a creative innovator.

Innovation demands creativity. Creativity in turn draws on our cognitive faculties, across the full amplitude from emotion to reason. In the number-heavy world of global investing, innovative thinking is critical. Innovative investors decipher future trends, spot likely winners by combining science (financials) with art (acuity and perception) and continuously mitigate risk. They assess user needs, product features, the proper deployment of money, professional organizational structures and risk management. (Kore Kalibre, 2006)

Mr. Buffett’s instinct and ability to interpret market trends is also held by tight reigns. Despite over 50 years of growth, Mr. Buffett always adheres to one of the most basic business principles: “…only compete where you have a competitive advantage. Warren Buffett refers to staying within your circle of competence. Social psychologists tell us, though, that we are prone to overconfidence when it comes to assessing our abilities…” (Arthridge, 2006) A man of Warren Buffett’s position and track record could easily be derailed to a sense of over confidence. The principle of only competing within your range of competitive advantage is a principle that can be applied to many other areas in life, and Mr. Buffett’s ability to work and live by this idea has allowed him to continue forward with minimal bruising.

By establishing the previous examples, the authors can reinforce the principles of cognitive theory in that Mr. Buffett behavior patterns are clearly dictated by thought processes, which include interpretation, analysis, and foresight. “As experiences and events gain meaning and value, the process becomes increasingly top down as the mind in (a) attempt at an orderly process influences perception though beliefs, goals and external process” (Gardener, 2007)

Warren Buffett’s is a self empowered leader, because he is loyal, sets goals, plans a strategy for achievement, and stays committed until he accomplishes his purpose. Up to date, he is the greatest stockbroker of all-time. He is a very conservative investor that prefers to invest in companies that sell name brand products that he uses. For example, Coca-Cola, Gillette Razors, See’s Candy, Gulfstream Jet, and GEICO are the major companies he invested in. In the nineties his assets quadrupled in less than five years. He is a smart investor that usually does not take big investment risks. For example, he will not invest in internet stock, because the return is unpredictable. He likes to invest in companies that he is sure will be successful 20 years later. He buys the company with the intentions of keeping it forever. Usually, the management team of each company is the same staff that sold it Warren Buffett from the beginning. He stays loyal to his partners, and the team workstheir best to keep him happy.

After Warren Buffett’s wife died, he decided to donate 85% of his money to charity. However, “he wants his money to be used the same year he donates it”.(Harris, 2006) The requirement will accelerate the process to help the world. According to Fortune magazine, five-sixths of his money will go to the Bill and Melinda Gates Foundation. This foundation which focus on finding cures for diseases that are common in poor nations. The rest of the money will be split among four other charities, that are each run by his three children and one that is in his late wife’s name.

Warren Buffett is not a huge spender. In fact, he still lives in the same house he bought 40 years ago. Warren “told ABC News “Nightline” that being born into wealth did not entitle his children”(Harris, 2006). In addition, he told Fortune magazine that, “A very rich person would leave his kids enough to do anything, but not enough to do nothing.”(Harris, 2006) In other words, he wants his children to work earn their money and value hard work and smart choices.

In the year 2006, Warren’s first annual donation to the Bill and Melinda Gates Foundation was $1.5 billion and the rest was divided among the four charities. He was the first person to make a donation better than Bill Gates, the richest man in the world. It seems as if Bill Gates and Warren Buffett set a good example and lead others to be more generous, because now the Barron Hilton has committed to donating half of his fortune to charity also. Barron Hilton is the founder of the Hilton Hotels and is worth $2.3 billion. Hopefully, a trend started among the fortunate to give to the less fortunate.

The personality of Warren Buffett ties to the Social Cognitive Level, because he tries to understand and make sense of other people. He observes the differences in social knowledge when dealing with people. Social cognition refers to making sense of ourselves, others, and how the information is used. In the sixties and seventies Albert Bandura and Walter Mischel were psychologists, studying personality development. They found that social learning and cognitive principles improve ones abilities to self-regulate and to follow goals. Warren investment choices were successful, because he conditioned his the way he processed information, choices, and expectations.
by: Michael J. Spindler
source; http://www.articlecity.com

Microsoft's Gates: Bye, See You Next Week

2008-06-30T04:26:00.000-07:00

BusinessWeek talks to Bill Gates as his "final" day at Microsoft approaches

by Jay Greene

It's been one of the most carefully orchestrated transitions in corporate history. Microsoft (MSFT) Chairman William H. Gates III announced two years ago he would walk away from his day-to-day duties at the company he co-founded to spend more time working on philanthropy. Since then, Gates and Microsoft Chief Executive Steven A. Ballmer have groomed those who will succeed Gates in developing the technology, strategy, and vision for Microsoft.

But for all the high-profile preparations, Gates isn't leaving completely. While June 27 is his last official day as a Microsoft full-timer, Gates will continue to work there the equivalent of one day a week. Ever the geek, Gates, 52, will keep playing a key role in some of Microsoft's biggest long-term technical bets. "The plaque is off the door, but the office is still partially occupied," says analyst Charles Di Bona of Sanford C. Bernstein.

A week before his last day, Gates is as busy as ever in his office at Microsoft's Redmond (Wash.) headquarters. It's a functional room with a whiteboard on one wall and three oversize computer monitors. Black-and-white photos of his kids stand on a bookshelf. The windows provide a view of the Cascade Mountains.

Gates sits at a table to discuss his new role but has a hard time keeping his seat. He jumps up to point out the opportunities ahead for Microsoft. He hasn't lost any of the enthusiasm for software that he had when he started writing code in prep school more than three decades ago. "I'll actually be more in-depth than I am today," he says of his new role.

Gates has designed his perfect job. He'll dive deep into two or three key businesses, without trying to track dozens of other company initiatives. Later this summer, after taking some time off, Gates will meet with Ballmer and the company's two chief technical officers, Ray Ozzie and Craig Mundie, to map out the areas where he can be most useful. One area already on Gates' list: Web search, where the company continues to trail far behind Google, despite billions spent on acquisitions and development. What's more, Microsoft's failed $47.5 billion bid to acquire Yahoo! (YHOO) pushed that company to partner with Google in a way that seems certain to expand Google's clout.

Gates says his role with the search team will be as an adviser, not decision-maker. But it won't be sporadic. "In search, I'm going to be so involved on an ongoing basis [that] they'll know my opinion," he says. Microsoft is trying to chip away at Google's lead by focusing on narrow search queries, such as shopping tips or medical advice.

Gates is also likely to help with Microsoft's efforts to develop new ways for people to interact with computers that go well beyond the traditional mouse and keyboard. For years, he's been passionate about letting people use speech, touch, and pen technologies, and he lights up as he talks about these so-called natural user interfaces. "Steve may ask me to look in on some particular projects to help spur them on because he knows I love the stuff," Gates says. Already Microsoft has launched Surface, a tabletop computer that responds to the movement of fingers across a screen. Microsoft is baking even more sophisticated touch technology into the next version of Windows, due out in 2010.

Gates began to shed his operational responsibilities in January, 2000, when Ballmer became CEO. Still, he wielded tremendous influence throughout the company. Forrester Research (FORR) CEO George Colony says Microsoft could benefit from Gates' reduced involvement. He thinks Gates cast an enormous shadow that, at times, limited creativity. "The company is used to a god of some sort, blessing or cursing a product," he says. "There were certain absolutes as to how this company is run." Microsofties may now feel free, he says, to rethink the doctrine without violating "the rules of Bill."

source; www.businessweek.com

buy, sell, or hold

2008-06-29T06:46:00.000-07:00

How entrepreneurs are playing the commercial real estate market.

The commercial real estate market must feel lonely these days -- its cousin, the housing market, is getting all the attention. But commercial property prices are softening, too, which is good news for entrepreneurs looking to buy real estate or sign a new lease. Vacancy rates have been rising since late 2007, a positive sign for renters. Most banks have tightened their credit requirements, so there are fewer buyers in the market. And real estate investors are sitting on the sidelines, waiting to see how prices play out. "Last year, if you had an empty building, you had 10 people bidding on it," says Al Mirin, a senior vice president at CB Richard Ellis, the international real estate brokerage. "Now, you have three or four."

That means this may be a good time for business owners to scout for new locations -- or make that long-awaited purchase. Dallas entrepreneur Lars Hundley, for example, had always planned to buy a warehouse for his business, Clean Air Gardening, an online retailer of gardening equipment. The weakening real estate market allowed him to do it sooner. Ever since founding the company in 1998, Hundley had outsourced the packaging and shipping of orders. By 2007, however, the cost for that service had ballooned to more than $10,000 a month, sometimes as much as $20,000.

So when the real estate market in Dallas began to cool, Hundley decided it was time to bring shipping in-house. Last spring, he put 20 percent down on a $635,000 warehouse and hired two more employees to handle orders. The seller was in a hurry to unload the property. A previous offer had been accepted but had fallen through when the buyer couldn't find financing, and Hundley was able to pick it up for about 5 percent less than its asking price -- not a steal, but a good deal nonetheless. Even after the cost of insurance, taxes, and the $6,600 monthly mortgage payment, Hundley says the company will save almost $50,000 a year. Plus, he has a real estate play. "Before, I had a domain name and inventory, but that's about it," Hundley says. "Owning a building gives me a hard asset that I can pay off and eventually sell or rent out to someone when I retire."

Don't expect to find fire-sale prices -- at least not yet. Purchase prices peaked last year and have fallen since then, according to real estate data firm Reis, but this is nothing like the downturn of the late 1980s and early 1990s, when real estate in some markets was dirt-cheap. In the first quarter of 2008, the average purchase price for office space was $247 per square foot. That's a 9 percent decline from the previous quarter, when the average price was $274. But compared with the first quarter of 2007, prices are basically flat. "Fundamentals aren't terrible right now, but they're starting to show signs of weakness," says Chris Stanley, an analyst at Reis. That means the market could decline further. According to a report from Goldman Sachs, commercial real estate prices nationwide could fall 25 percent by the end of 2009, compared with their 2007 peak.

Rents are also softening, even in areas that have seen nothing but growth in recent years. In southwest Florida, rents grew only 3 percent from the first quarter of 2007 to the first quarter of 2008, compared with 19 percent from 2006 to 2007, according to real estate data firm CoStar. In Austin, growth has slowed to 5 percent, down from 19 percent. And in Orange County, California, prices were flat, compared with a 12 percent increase a year ago. But Mitch Roschelle, head of the real estate advisory practice at PricewaterhouseCoopers, says it's hard to predict whether they will continue to fall. "There's a fair amount of wait-and-see going on," says Roschelle, who believes landlords and tenants may opt for short-term leases so they don't get locked into prices they will later regret.

If you're interested in buying but not ready to take the plunge, you have another option: Ask for a lease with an option to buy after one or two years. When a property has sat on the market for a while, sellers are more willing to consider this option, says Brian Burke, a real estate developer in Costa Mesa, California. There are a couple of drawbacks. Landlords generally won't make a lot of changes to the building; instead, any renovations are done at the tenant's expense. And you may have to pay slightly higher rent, Burke says, though a portion can sometimes be credited toward the purchase price.

Buying space isn't an option for Larry Kutscher, CEO of Register.com -- his company, which has 400 employees, is based in midtown Manhattan. But he hopes he can take advantage of the relatively tepid market to find a good deal on a new lease when his current one expires in September 2009. Even in New York, which remains one of the nation's strongest commercial real estate markets, rents have been rising more slowly amid the problems in the financial services industry. Kutscher has already hired a broker to scout new space, and he has had some friendly discussions with his current landlords. He thinks the market will slow further, so he is not in any rush. "Time is our friend right now," says Kutscher. "We are hoping the change in the market will make landlords more reasonable with their expectations."

Kutscher is also something of a lease vulture. He is keeping an eye out for space left vacant by downsizing financial services firms; he hopes that another company's misfortune might be his good luck. "We are hoping that space opens up and we can get something nice for less," he says.

By: Timothy Harper

source; www.inc.com

That's Life-For most entrepreneurs, quality of life will be a key consideration in any relocation decision.

2008-04-20T00:55:00.000-07:00

You're not likely to move your company to an area where you don't want to live.

But when it comes to your employees, the answer to the quality of life question depends largely on whether or not you want to take workers with you or find them locally.

If you're planning to staff your operation from the local labor pool, a quality of life analysis isn't critical because your potential employees already live in the area and are presumably satisfied with it. What's more important in that case is to determine if the community has a work force with the skills you need. If, on the other hand, you're hoping to entice current employees to move, you need to choose a place they'll want to go, says Gene DePrez, co-global leader of IBM PLI-Global Location Strategies. Think about the type of living environment your employees will want. Look for places that offer that environment yet also meet your business's needs.

Any quality of life analysis is going to be extremely subjective, says Andy Shapiro, managing director and principal of Biggins Lacy Shapiro & Co., a consulting firm that specializes in location economics. "What you might see as a high-quality factor may be perceived by the next person as [unimportant]," Shapiro says. "Whether there's a professional sports team may not make a whit of difference to you, but it could influence someone who's being asked to relocate."

The typical quality of life indicators are housing costs and availability, overall cost of living, schools, crime rates, congestion, cultural opportunities and so on. "Quality of life can also be extended to include employment opportunities for the trailing spouse," Shapiro notes. "You want to make sure that the [relocating] employee is made whole, not just from a financial perspective, but that they are trading a type of life and environment for one that is equal to or better than what they had before."

When evaluating an area's quality of life, resist the urge to use generalizations in your analysis. Instead, make it as personal as possible based on what you know about the types of people who have the skills you need or the employees you hope will move with you. And realize that you won't please everyone.

Finally, says DePrez, remember that the people you want working for you don't necessarily have to be where your company is physically located. If the nature of the work lends itself to a virtual arrangement, let employees live in a place with a quality of life that they prefer, and you can choose an office location that suits you.

By Jacquelyn Lynn

Immigrants Are More Likely to Become Successful Entrepreneurs & Business Owners

2008-02-27T21:48:00.000-08:00

Interestingly, research shows that immigrants are more likely to become successful entrepreneurs than native-born Americans.

According to a new study released last week by Duke University and UC-Berkley, immigrant entrepreneurs founded 25.3 percent of all U.S. engineering and technology companies established in the past decade. This is very significant, since immigrants make up only 11.9 percent of the entire U.S. population.

In every 10-year census from 1880 to 2000, the percentage of immigrants who are self-employed is higher than the percentage of natives who are self-employed.

According to the 2000 U.S. Census, immigrant women were more likely to be business owners when compared to native-born women. Census data shows that 8.3 percent of employed immigrant women were business owners, compared to 6.2 percent of employed native-born women.

This leads me to wonder why immigrants are more likely to become successful entrepreneurs. What characteristics do foreign-born immigrants possess that most native Americans are lacking? Why is there such a high rate of entrepreneurship among immigrants?

Characteristics of Entrepreneurs

A research study, conducted in 1994, analyzed more than 50 studies conducted on the personality traits of successful entrepreneurs. This study found a consensus around six general characteristics of entrepreneurs:

tolerance of risk, ambiguity and uncertainty
commitment and determination
creativity, self-reliance and ability to adapt
leadership
opportunity obsession
motivation to excel

Other research on entrepreneurship has linked various demographic and cultural attributes to a higher likelihood of business success. These characteristics include:

Being an offspring of self-employed parents.
Being fired from more than one job.
Being an immigrant or a child of immigrants.
Previous employment in a firm with more than 100 people.
Being the oldest child in the family.
Being a college graduate.

In my opinion, immigrants have many of the same character traits as entrepreneurs. This may make them predisposed to succeed at a higher rate in the area of self-employment and entrepreneurship. I think the three biggest factors that link immigrants to entrepreneurship are: (1) risk-tolerance, (2) having the ability to adapt to changing and unfamiliar situations, and (3) motivation to excel combined with lots of hard work.

Tolerance of Risk, Ambiguity & Uncertainty

Immigrants are—by and large—a group of people who have shown (by the mere act of immigrating) that they are willing and capable of taking risks to improve their lives. Compared to the risks associated with immigration, the risks of entrepreneurship are small.

Although there are American-born people with this "can-do" attitude, they're a small percentage of the population, just like immigrants are a small percentage of the population of their county of origin.

Ability to Adapt

The ability to adapt to changing circumstances and a foreign environment creates confidence in your abilities and skills. This is a huge advantage when starting a business. Many immigrants have no family or friends in the country they are immigrating to. Thus, self-reliance becomes critical.

Immigrants must overcome numerous challenges during the adaptation phase (language barrier, culture shock, outsider status, no family ties, possible discrimination, etc.). The ability to adapt to a foreign environment can be easily transferred to the business world. All of the immigrants I have met (so far) are exceptionally hard-working people. They work long hours, and are not afraid to get their hands dirty. Is it any wonder that they succeed financially?

Motivations for Entrepreneurship—Desire or Necessity?

I wonder whether some immigrants are forced into entrepreneurship out of necessity, rather than desire. Many lower-class immigrants do not have a college degree, and therefore do not "qualify" for white-collar, office work. Maybe some immigrants experience discrimination during the hiring process (due to accent, foreign mannerisms, etc.) and so, working for themselves becomes a necessity. This is simply speculation, but it could play a role.

Motivation to Achieve

I find it fascinating that research on entrepreneurship shows a higher rate of entrepreneurship among children of immigrants, than children of native-born Americans. I think children of native-born Americans are handed things too easily, which kills motivation, initiative and desire to achieve.

Children who are handed expensive cars, college educations, vacations, and new houses—all funded by mommy and daddy—rarely become first-generation millionaires or successful entrepreneurs. Why is this? Because life is too easy. What motivation do these children have to achieve? Too much has already been handed to them. They are not accustomed to overcoming obstacles.

Children of immigrants are "hungry" in a way that children of native-born Americans are not. This hunger for success drives the creation of new businesses, and the cultivation of skills necessary for financial success.

Who Wants to Be a Billionaire? #2

2008-02-18T08:02:00.000-08:00

David Hitz of Network Appliance

In high school, David Hitz built a computer from a kit, but his mom warned him not to think of computers as a career. Good thing he didn't listen. Hitz, 45, founded Network Appliance (aka NetApp) in 1992 with James Lau, 48, to simplify digital storage. The Sunnyvale, California, company that began with less than a dozen full-time employees soared to 6,600 strong and $2.8 billion in revenue for fiscal year 2007, an increase of 36 percent from the 2006 fiscal year. Before age disqualified him, Hitz made Fortune's "40 Richest Under 40" list more than once.

Here he describes the mind-set that helped him build a billion-dollar business, including how he learned valuable management lessons while herding, branding and castrating ranch cattle.

Some people describe you as charismatic, and you've called yourself the loudmouth of the company. Are those traits important for NetApp to thrive?
When a company is little, there's just a handful of you. It's relatively simple to get that group of people to figure out where they are going. As the company grows, one of the biggest challenges is to get all of the people headed in the same direction. To accomplish that, you need to be a loudmouth, and I mean that broadly. You need to talk, you need to write. Writing is an extremely powerful tool. It helps you test your thinking. Writing is also a great way of communicating to lots of people at once. I started a blog and I've written papers that I call future histories, which are my best attempts to describe how I think the world is going to look three years out, sometimes further.

Is charisma one of those intangible qualities that would help someone achieve the success you've achieved?
Maybe charisma is what happens when somebody is doing something they care about and shows passion for the thing they are doing. I really believe it's important to start by doing something you love.

When we went public in late 1995, I was about 32. All of a sudden, I was a multimillionaire. It really [led to] some soul searching. I could do anything I wanted. What is it I wanted to do? I realized I was doing the thing I want to do. There isn't something else.

Before graduating from Princeton, you studied at Deep Springs, a college where students work on a ranch. How did that experience influence you?
Deep Springs is in the middle of nowhere. You're out there doing stuff and you don't necessarily know how to do it. That's part of the point. It's a very make-do environment.

That lesson carries through to the startup world. When you're shipping a product with eight people, you'd better not be having very many fights where people say, "That's not my job because here's the thing I focus on." Whatever it is, you just figure it out and do it. That doesn't mean be stupid about it. Read a book. See if you can find someone who has done it before and talk to them. Occasionally, if it's important enough, you better hire someone to do it. But just dive in.

When you launched this business, how big did you envision it?
Nowhere near as big as it got, I can tell you that. When we put together our business plan, we believed that there was a total market of maybe 700 million.

When did you think this could be a billion-dollar business?
Our original concept in the early '90s was to do storage over Ethernet that would be useful for engineering environments. As the dotcom boom came in, you started seeing companies wonder, "How can I get all my stuff onto the internet?" We raised our hands and said, "Storage out over Ethernet--that's what we do."

It really was the dotcom boom that took us to a billion dollars. We grew like crazy. From 1993, when we first shipped product, to 2001, every year we basically doubled--in revenue and head count.

Your company celebrated its 15th anniversary last April. How do you sustain the business without going flat?
Dan's [Dan Warmenhoven, CEO of NetApp] philosophy of market share is when you reach 10 percent market share in your current market, you'd better think about expanding to something much larger. And then when you reach 10 percent of that next strategic perimeter, you'd better think about expanding again. So you are always the scrappy little guy looking at what big guys you can be fighting against.

When we started, we did storage for small UNIX workgroups. It was a very natural evolution to do storage for larger UNIX workgroups. Then we said we're going to do storage for Windows as well. Later we got out of the market for low-end storage for engineers--storage for individuals at their desktops--and into the market for the kind of storage that companies run their businesses on. That's a whole different zone of storage, and we had to develop whole new technologies. That opened up the market immensely.

How do you stay engaged and interested?
If the issues were all the same as five years ago, I wouldn't be interested. I love thinking about new problems. In 2003 or so, we were a $1 billion dollar company and now we're near three. That's an enormous difference.

Have there ever been moments when you've wondered how to control the tidal wave you've created?
Guess what: If you're doubling every year, you are not in control. You'd better figure out how to get a set of people, all of whom understand, roughly speaking, where you are trying to get to, and then trust them to do the stuff they're supposed to do. Not just because that's the most moral solution or the most fun--I can't imagine another model that will work at those growth rates.

Some people may be surprised to hear you say that.
A lot of people head toward mechanical analogies when they describe companies: "It's a well-oiled machine." I don't feel that way. A company is like something that grows. It's organic. You hire someone, and that person hires someone, and pretty soon there's a whole group of people. You didn't design it. Occasionally you might prune it or change it or rearrange things.

Say I planted an acorn, weeded it, watered it and made sure it was in a sunny spot. Ten years later, there's an oak tree and someone says, "What does it feel like to have built that oak tree?" You participated. You helped. But there was the magic as well. The workings of 100 human minds combined together definitely might as well be magic.

by Andrea Cooper

http://www.entrepreneur.com

Who Wants to Be a Billionaire? #1

2008-02-18T07:53:00.000-08:00

Does your idea of success include more than 6 zeros? Entrepreneurs who have reached the pinnacle of financial success reveal how you can develop the "billionaire mind-set."

Back in the ''90s, the big goal for many entrepreneurs was to earn a million dollars. A million meant you had made it--you were not only thriving, you were rich. Alas, being a millionaire now just doesn't have the same cachet. To reach the same level of prestige now, you need to be a billionaire. Once, that might have been a far-fetched dream for entrepreneurs. But today, it isn't only global corporate kings who can luxuriate in such wealth and lead billion-dollar enterprises. Entrepreneurs are creating and running some of these wildly successful companies, too. You'll meet two of them--Marc Ecko and David Hitz--in the following pages.

Marc Ecko once said he hoped people would think of him as Willy Wonka. It's easy to see why, because Ecko brings a sense of edgy wonder to his work. As chief creative officer of Marc Ecko Enterprises and co-founder with his twin sister, Marci Tapper, 35, and business partner Seth Gerszberg, 36, Ecko presides over an empire of clothing and accessory lines, such as Ecko Unltd. and Zoo York, as well as a video game and multimedia division and a magazine.

Ecko (born Marc Milecofsky) began as an entrepreneur at age 14, painting T-shirts in his family's garage in New Jersey. He got the nickname "Echo" when he was born because his mother didn't know she was expecting twins. Ecko isn't known for being quiet now, though--his grand gestures include releasing a video on the web showing graffiti artists spray-painting "Still Free" on Air Force One in 2006. The video was so realistic that government officials checked to make sure the real presidential plane had not been vandalized. (It hadn't.) Last year, he bought Barry Bonds' record-breaking baseball for more than $750,000 and let people vote on what should happen to it.

Ecko thinks bold in his business dealings, too. In addition to his wholesale operations, he plans to open 150 retail outlets by 2010, and a flagship store in Times Square is in the works. The New York City company earned sales in excess of $1.5 billion in 2007. We talked with Ecko about his business and having fun.

You started the business while studying pharmacology at Rutgers. What did you want your business to be?
At the time, I was just doing T-shirts, but I'd go to trade shows and see brands doing everything from snowboard jackets to jeans to leather. Every time, little bits of the business revealed itself. I was like, "That's fair game. I should be able to do that, too."

Your company nearly went bankrupt about 10 years ago. Everybody was telling you to bail out. Why didn't you?
We knew there wasn't anyone we were meeting in our space who was any smarter or working any harder than us. Maybe they had more experience. They didn't necessarily have more smarts.

Here's the other thing, to be candid: You're $7 million in debt, $16 million in sales. You're functionally bankrupt. Who the hell is going to buy you? We were not a very attractive thing to purchase, even though we were putting ourselves out there on the block. It managed to get us a lot of interesting meetings with players and thinkers, though. People were intrigued by us. We were young and scrappy, and they found us charming, so they gave us the time of day. And man, every time we'd get a session, we'd just try to learn as much as possible.

Like what?
Everything. You're sitting across from the general merchandising manager. What's merchandising? Oh, you're in charge of information management systems. OK . . . what's that? You'd investigate who the players were; you'd ask what the best practices were.

Your sales went from $16 million to $96 million by 2000. What changed?
We stopped trying to sell the company. Then we had the good fortune of [talking to] Alan Finkelman. Alan's father was a part owner in a traditional sportswear company that sold mass, mainstream products to discounters and discount chains. But they had the infrastructure: the warehouse, the production shops, the computer systems. My partner Seth convinced Alan to help us.

Alan could buy into our company. What it would allow us to do is focus on marketing, production, all the stuff we'd learned about in the pursuit of wanting to sell the company.

Alan said if we could pay him back in two years, he'd let us buy back all of his percentage for the interest plus a dollar. That let us put our heads down and focus. Sure enough, in 18 months or so, we bought back his position. If it wasn't for him, we might not have ever had that outlet to turn it around.

What kinds of mistakes did you make along the way?
From 1999 to 2000, we had a hiccup in our sales. Frankly, I take most of the blame. I became arrogant about my capacity. I got first-class tickets to Amsterdam, Milan and Paris and went on a shopping trip. I came back with a soundtrack to a new direction. Coming off the heels of a very successful 18-month run-up, I thought I could do no wrong.

I designed a line that was just shit. It was done in a very self-indulgent, ivory tower kind of way with no semblance of merchandising, no data as to what worked before, what are the colors that are working in the market--all the things you do that are best practices. The stuff got to retail and completely bombed.

I sobered up. What did I do wrong? It was like a wind sprint to get back on course. To feel that pain again and feel like it could all disappear was a very healthy thing for refining our process and putting more quantitative analysis into the design.

What is your role in the company today?
I look for big, bold strokes--business development in new areas. It became very clear that the best thing I can do, rather than being deep in the weeds with design, is to be a muse to my organization. If I come in and say, "I want graphic T-shirts with deep V-necks," in three months, it'll be there. If I'm in the weeds, negotiating changes, it's just one more message that might or might not get executed. The more distance I've created from a hands-on, deep touch design perspective, the better and more effective I've been as a design leader.

As chief creative officer, I've got a painting factory. I have a dozen or so oil painters and sculptors that are constantly building fine art for me. I'm trying to create images that I can't necessarily create in a purely commercial environment. It's like R&D almost. That artwork informs our designs in a huge way.

Do you have any advice you want to give to readers?
There's a book by Daniel Goleman, Working With Emotional Intelligence. That was a big tipping point for me, applying that to my business.

I don't think there's one silver bullet that will shoot you to the moon. Not being emotional and being able to call shit on yourself and on the people around you is really important. And not having to worry about tap-dancing or tiptoeing around people's feelings. Just to be sober and say, "Look, this is how it really is." I think having an environment that lends itself to that without everyone getting pissy is really important. That, coupled with being passionate and being able to distinguish between the shades of passion and emotion, because there is a distinction. Being passionate doesn't give you license to be emotional.

What new things do you want to do?
Right now, one of our big focuses is our retail expansion. That's a great cultural shift for our company, controlling our own destiny.

I'd like to do something on a really large scale relating to public school reform. I don't know how that's going to take shape. I'd love to one day create lots of public art for this country. There are more video game projects I've got cooking. Just to have fun--that's the most important thing.

Is it still fun for you?
It's so much fuckin' fun. I'm so lucky, it's ridiculous. Some days it's hard, a lot of heavy lifting. But I can always end the day thinking, "What else would I be doing?" If you can't envision doing something else, then you've got the right gig.

Common Mistakes In Business Plans

2008-02-17T01:42:00.001-08:00

Your business plan is typically the first impression potential lenders of investors get about your business idea. Even with a great product, team, and customers, and you are unable to convey to properly convey your image, it could be the last impression if your plan has some of the following, common mistakes.

Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.

1. Financials

Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.

Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.

While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.

No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?

If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.

Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.

For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.

No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.

2. Marketing

Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.

If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.

Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.

One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.

While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.

We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.

Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.

3. Organization

Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.

Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.

Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.

Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.

Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.

Keep the technical details out of the business plan and in the white papers.

Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.

Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.

An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!

Use operating plans, white papers and marketing plans for the in-depth details.

Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.

Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.

4. Execution Mistakes

Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.

Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.

Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.

Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.

by: The Business Plan Factory

http://www.articlecity.com

Make a Killing in the Bond Market

2008-02-16T07:49:00.000-08:00

We Fools love looking for opportunity in a beaten-down industry. Thanks to the recent market turmoil, those great values are much easier to find -- especially in the bond market.

With daily headlines detailing bankruptcies, foreclosures, defaults, and big-time writedowns, it's no wonder the bond market has been under so much strain. And don't kid yourself -- the majority of the damage is as justified as it is painful, and it will probably get worse before it gets better.

But when markets are controlled by fear -- justified or not -- you'll often find related investments being sold for no reason, giving you the opportunity to make a killing.

This time around, the opportunity is as in-your-face as it gets. The risk is low, the returns are high, and perhaps best of all, you might not pay a penny in taxes doing so. The red-hot sector of which I speak? Municipal bonds.

You've got to be kidding me
OK, so you might have a hard time picking up a date by bragging about your municipal-bond portfolio. So what? These investments can still make you money.

Municipal bonds' tax advantages make them particularly attractive. Interest income is exempt from federal tax, and even state and local tax, if you play your cards right. When you factor in the tax savings, returns on municipal bonds look almost as appealing -- if not moreso -- than stocks right now. With that in mind, let's dive a little deeper into this typically boring industry.

The market's pain is your gain
Among the CDOs now being felled by subprime bonds, many high-quality, tax-free municipals were thrown into the mix as well. With bond insurers Ambac (NYSE: ABK) and MBIA (NYSE: MBI) facing possible defaults, CDOs are selling at fire-sale prices, pulling their municipal-bond children down the tube with them. This creates irrational -- even forced -- selling, which should make opportunistic investors very excited.

And with ETFs, investing in municipals has never been easier. For example, the Van Kampen Select Sector Municipal Trust's (AMEX: VKL) 5.1% yield gives you a taxable equivalent of 7.08% -- considerably more than the 5.3% the S&P 500 returned over the past decade.

It gets better. The PIMCO Municipal Income Fund (NYSE: PMF) yields a taxed equivalent of 8.34%. BlackRock's Investment Quality Municipal Trust (NYSE: BKN) puts the equivalent of 7.9% in your pocket. The Pioneer Municipal High Income Trust (NYSE: MHI) will give you the equivalent of 7.9%. And you can earn all of that without dealing with the gut-wrenching 500-point market swings we've recently endured.

For such safe investments, those are some serious returns. Municipals, which can include everything from a bridge in Baltimore to a school in Sacramento, have a very, very rare history of defaults.

According to bond giant PIMCO, from 1970 to 2005, the average investment-grade municipal bond defaulted a mere 0.07% of the time, compared with 2.23% for corporate bonds. Even Orange County, when dealing with its high-profile bankruptcy in 1994, made good on its debt.

With such low default rates, municipal bonds may not be quite as safe as Treasuries, but they're pretty darn close. Yet the yield on the 10-year Treasury note stands at 3.67%, and it shows no signs of a rebound. What gives?

Most of the discount, as I mentioned, stems from a crazed, confused debt market -- but that's not the only reason. Simple supply and demand also play a role. Foreign investors have a serious appetite for these bonds, owning more than one-quarter of all U.S. Treasuriees. That extra demand pushes prices up and yields down.

Municipals, on the other hand, get no international love. Their tax-exempt status doesn't matter a hoot to foreigners who don't pay U.S. taxes to begin with. Lower total demand keeps prices low and yields high. That's great news for you and me.

What's your money worth?
You might earn more than 7% holding stocks over the long term, but you'll have to endure periods of dips and bobbles. Municipals, on the other hand, should give you smooth sailing and constant returns throughout your journey. Amid a rising trade deficit, the retirement of baby boomers, and increased competition from foreign countries, 7% may even match stock returns going forward. Add in the possibility of higher taxes early next year, and municipals could get even more attractive.

Sometimes, the blandest, most basic investments make much more sense than high-flying stocks. In today's crazy markets, municipals' time has come.

By Morgan Housel

http://www.fool.com

How to Pick a Great Stock

2008-02-13T23:01:00.000-08:00

Those who pick stocks are not always accurate but over time the average is usually a positive one. There are so many opportunities to jump on hot stock picks throughout the years. Learning which ones to jump on at the right time will translate to wealth. Unwisely jumping on the wrong picks at the wrong time can cost you a lot of money.

Penny stocks are definitely risky and that is a factor when deciding what picks to recommend. Great effort is made to minimize risk as much as possible but risk is always there, even more so with penny stocks. As a general rule of thumb you should never invest more than 20% of you whole portfolio in penny stocks.

There are a number of factors used to calculate a good pick. You can use these factors on your own or simply follow our picks. A couple of these factors include recent industry news, upcoming company marketing campaigns, and growth history. There are of course other factors used in this calculation as well.

Watching the industry of a particular stock is very important. The behavior of any stock depends on the direction of the industry it falls under. Penny stocks are definitely sensitive by nature to this. If you own a penny stock in the oil industry and the price of oil starts to go down then you wont be making much money. This is not to say that stocks cant go up in value during an industry downward trend because they can but in general it is the opposite.

If you get your hand on a juicy piece of information about a company before it hits the news stands you are going to make some serious money. Usually the best information to get your hands on is the fact that a company is about to launch a new marketing campaign. Marketing means more stock awareness which means more investors which means more money. Stay on the edge of the news and you will profit tremendously.

Past performance is not always a good predictor of future performance. However, if that history has been consistent and you have no reason to think that the future would be any different then past performance may be a great factor in deciding whether to lay down some money on a particular stock.

We have our own list of factors that we use to determine our best penny stocks and it is a formula that has been consistently successful. Create your own list of factors to vet a stock or follow our picks. Never invest with money you cannot afford to lose.

By: Scott Johns
Article Source: http://www.find-investment-advice.com

Think Like Warren Buffett

2008-02-13T08:52:00.000-08:00

Back in 1999, Robert G. Hagstrom wrote a book about the legendary investor Warren Buffett, entitled "The Warren Buffett Portfolio". What's so great about the book, and what makes it different from the countless other books and articles written about the "Oracle of Omaha" is that it offers the reader valuable insight into how Buffett actually thinks about investments. In other words, the book delves into the psychological mindset that has made Buffett so fabulously wealthy.

Although investors could benefit from reading the entire book, we've selected a bite-sized sampling of the tips and suggestions regarding the investor mindset and ways that an investor can improve their stock selection that will help you get inside Buffett's head.

1. Think of Stocks as a Business
Many investors think of stocks and the stock market in general as nothing more than little pieces of paper being traded back and forth among investors, which might help prevent investors from becoming too emotional over a given position but it doesn't necessarily allow them to make the best possible investment decisions.

That's why Buffett has stated he believes stockholders should think of themselves as "part owners" of the business in which they are investing. By thinking that way, both Hagstrom and Buffett argue that investors will tend to avoid making off-the-cuff investment decisions, and become more focused on the longer term. Furthermore, longer-term "owners" also tend to analyze situations in greater detail and then put a great eal of thought into buy and sell decisions. Hagstrom says this increased thought and analysis tends to lead to improved investment returns. (To read more about Buffett's ideologies, check out Warren Buffett: How He Does It and What Is Warren Buffett's Investing Style?)

2. Increase the Size of Your Investment
While it rarely - if ever - makes sense for investors to "put all of their eggs in one basket," putting all your eggs in too many baskets may not be a good thing either. Buffett contends that over-diversification can hamper returns as much as a lack of diversification. That's why he doesn't invest in mutual funds. It's also why he prefers to make significant investments in just a handful of companies. (To learn more about diversification, read Introduction To Diversification, The Importance Of Diversification and The Dangers Of Over-Diversification.)

Buffett is a firm believer that an investor must first do his or her homework before investing in any security. But after that due diligence process is completed, an investor should feel comfortable enough to dedicate a sizable portion of assets to that stock. They should also feel comfortable in winnowing down their overall investment portfolio to a handful of good companies with excellent growth prospects.

Buffett's stance on taking time to properly allocate your funds is furthered with his comment that it's not just about the best company, but how you feel about the company. If the best business you own presents the least financial risk and has the most favorable long-term prospects, why would you put money into your 20th favorite business rather than add money to the top choices?

3. Reduce Portfolio Turnover
Rapidly trading in and out of stocks can potentially make an individual a lot of money, but according to Buffett this trader is actually hampering his or her investment returns. That's because portfolio turnover increases the amount of taxes that must be paid on capital gains and boosts the total amount of commission dollars that must be paid in a given year.

The "Oracle" contends that what makes sense in business also makes sense in stocks: An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.

Investors must think long term. By having that mindset, they can avoid paying huge commission fees and lofty short-term capital gains taxes. They'll also be more apt to ride out any short-term fluctuations in the business, and to ultimately reap the rewards of increased earnings and/or dividends over time.

4. Develop Alternative Benchmarks
While stock prices may be the ultimate barometer of the success or failure of a given investment choice, Buffett does not focus on this metric. Instead, he analyzes and pores over the underlying economics of a given business or group of businesses. If a company is doing what it takes to grow itself on a profitable basis, then the share price will ultimately take care of itself.

Successful investors must look at the companies they own and study their true earnings potential. If the fundamentals are solid and the company is enhancing shareholder value by generating consistent bottom-line growth, the share price, in the long term, should reflect that. (To learn how to judge fundamentals on your own, see What Are Fundamentals?)

5. Learn to Think in Probabilities
Bridge is a card game in which the most successful players are able to judge mathematical probabilities to beat their opponents. Perhaps not surprisingly, Buffett loves and actively plays the game, and he takes the strategies beyond the game into the investing world.

Buffett suggests that investors focus on the economics of the companies they own (in other words the underlying businesses), and then try to weigh the probability that certain events will or will not transpire, much like a Bridge player checking the probabilities of his opponents' hands. He adds that by focusing on the economic aspect of the equation and not the stock price, an investor will be more accurate in his or her ability to judge probability.

Thinking in probabilities has its advantages. For example, an investor that ponders the probability that a company will report a certain rate of earnings growth over a period of five or 10 years is much more apt to ride out short-term fluctuations in the share price. By extension, this means that his investment returns are likely to be superior and that he will also realize fewer transaction and/or capital gains costs.

6. Recognize the Psychological Aspects of Investing
Very simply, this means that individuals must understand that there is a psychological mindset that the successful investor tends to have. More specifically, the successful investor will focus on probabilities and economic issues and let decisions be ruled by rational, as opposed to emotional, thinking.

More than anything, investors' own emotions can be their worst enemy. Buffett contends that the key to overcoming emotions is being able to "retain your belief in the real fundamentals of the business and to not get too concerned about the stock market."

Investors should realize that there is a certain psychological mindset that they should have if they want to be successful and try to implement that mindset. (To learn more about investor behaviors, read Understanding Investor Behavior, When Fear And Greed Take Over and Master Your Trading Mindtraps.)

7. Ignore Market Forecasts
There is an old saying that the Dow "climbs a wall of worry". In other words, in spite of the negativity in the marketplace, and those who perpetually contend that a recession is "just around the corner", the markets have fared quite well over time. Therefore, doomsayers should be ignored.

On the other side of the coin, there are just as many eternal optimists who argue that the stock market is headed perpetually higher. These should be ignored as well.

In all this confusion, Buffett suggests that investors should focus their efforts of isolating and investing in shares that are not currently being accurately valued by the market. The logic here is that as the stock market begins to realize the company's intrinsic value (through higher prices and greater demand), the investor will stand to make a lot of money.

8. Wait for the Fat Pitch
Hagstrom's book uses the model of legendary baseball player Ted Williams as an example of a wise investor. Williams would wait for a specific pitch (in an area of the plate where he knew he had a high probability of making contact with the ball) before swinging. It is said that this discipline enabled Williams to have a higher lifetime batting average than the average player.

Buffett, in the same way, suggests that all investors act as if they owned a lifetime decision card with only 20 investment choice punches in it. The logic is that this should prevent them from making mediocre investment choices and hopefully, by extension, enhance the overall returns of their respective portfolios.

Bottom Line
"The Warren Buffett Portfolio" is a timeless book that offers valuable insight into the psychological mindset of the legendary investor Warren Buffett. Of course, if learning how to invest like Warren Buffett were as easy as reading a book, everyone would be rich! But if you take that time and effort to implement some of Buffett's proven strategies, you could be on your way to better stock selection and greater returns.

by Glenn Curtis
http://www.investopedia.com

How Commodity Trading Differs from Stock Trading

2008-02-12T08:23:00.000-08:00

There are major differences between trading stocks and trading futures. While stories of fortunes made or lost overnight on the futures markets are largely untrue, the futures trader, if using a sound trading system, can usually make more money on the futures
market and make it much faster. However, if that trading system
is not sound the trader can have greater losses.

This is because futures contracts are highly leveraged. Margins (the deposit required) on futures contracts are much less than for stocks, as low as 3% on some futures contracts compared with up to 50% for stocks. As well, futures investors are not charged
interest on the difference between the margin and the full contract value.

The margins for futures contracts act more as a performance bond or good faith deposit whereas the margin for stocks is more of a loan.

Although the margin on futures contracts is quite small, it rides the
full value of the underlying contract as that contract rises or falls,
thus providing the leverage mentioned earlier.

Commissions charged by futures brokerages are normally much less
than brokerage commissions for other investments.

Futures markets use the open outcry (auction type) method of trading ensuring very public, fair, and efficient markets. Plus, it is
much harder to trade on inside information as so many variables
affect the markets. Also, futures markets are very liquid. Transactions
can be completed quickly, which lowers the risk of adverse market moves

If you own stocks you are an owner of the company. This allows you
to share in the company’s profits, and losses, through dividends, and
increases or decreases in the stock’s value. It also gives you certain
voting rights with the company. However, a company can go bankrupt,
leaving you holding worthless stock.

When you buy and sell futures you are only entering into a contract and
don’t really own anything. What you have is an agreement to buy a
commodity or financial instrument (wheat or Treasury Bonds for example)
at a specified price at a certain date in the future.

The person on the other side of the transaction has agreed to sell you
that commodity or financial instrument at that specified price by the
specified date. If you sell a futures contract prior to that date you have
offset your position and have either a profit or loss on the trade.

The stock you bought 3 years ago is the same stock you can buy today.
Futures contracts, on the other hand, have very limited lives. They are
traded in a regular series of contract months referred to as delivery months.

Futures contracts have expiration dates after which no further trading
for that month can take place. The September corn contract you traded last year is not the September corn contract you are trading this year. In fact last September’s corn contract no longer exists.

Many futures contract months of the same commodity trade simultaneously
on the market, sometimes even years into the future. The current contract
is called the front month and the other contracts are called the back months. They are called back months even though they are for future months.

For example, corn trades for the months of January, March, May, July,
September, November and December. Suppose today’s date is August 4, 2000. The current contract month for corn would be September 2000 and so is
called the front month. The months of November and December 2000,
January 2001, March 2001, May 2001 and July 2001 are back months even
though they are in the future and even flow into the next year.
(This may sound confusing but its not ...really)

All of these months can be traded at the same time although most of the
trading activity takes place in the front month.

When the current month expires the next contract month becomes the
front month and so on

By: Rob Hall
http://www.road2cash.com/