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A Serial Entrepreneur Becomes A Millionaire From An Accidental Startup

Monis Rahman, serial entrepreneur, accidentally launched Rozee.pk when he needed to find more programmers for his startup.

Getting A Mentor

I had a strategy session with a business start-up owner a few months ago. She was six months into her start-up and needed some ideas during her development stage.

Simple Steps To Creating Your First Website

When you make that decision to start a business, you immediately become a multi-tasking maniac. Let's face it, you will have a lot of work on your hands.

Why 'Core Competency' Is Important To A Startup

Well, I like the answer that Norm Brodsky gives in his book, The Knack: "It was the one thing we had that our competitors couldn't offer, and by the time they caught up, we had a foothold in the market and were known for providing that service."

Friday, October 31, 2008

Start-ups,take Control of your Cash

by Cheryl Isaac

Just this week, Exxon Mobile posted record profits of close to 15 million dollars. Most were shocked and amazed that during this recessionary period, a corporation was able to pull off such unprecedented profits. However, in looking a little closer, it can be seen that the company's gross margins were around 10%. I'm sure Exxon was not so thrilled about this finding.

When planning to move your business from a start-up to an emerging business, understanding profit margins will be a determining factor for whether your company is prepared for the move.

Your sales are not as important as your margins. I know this sounds crazy but your gross margin is your total sales revenue minus your total cost of goods or services divided by sales. Your gross profit is gross margin minus your operating expenses; which will give you earnings before interest and taxes. So you see, it's not how much you sell but what it costs you to sell what you sell.

In a videotaped panel discussion for start-ups hosted by National City Bank, Teresa Hall Bartels former owner of ManPower, urged women to "pay attention to the bottom line, that is not all about bringing in revenues but also of controlling expenses."

When we hear that one of the reasons businesses fail is because of capital, we often think about capital to start. What about capital to keep the business running? Small business owners often toil over one main thing: cash flow and how to maintain it.

To help with the growing concern of cash flow issues, the Small Business Administration has recently urged its lenders to give three month payment deferments to borrowers who are struggling so that they can free up capital.

  • Watch your expenses just as often as you keep track of sales
  • When you analyze how much revenue you're bringing in, don't forget to see how much it costs you for each additional dollar
  • Keep track of your receivables and how long it takes for your customer to pay vs. when you have to pay your bills
Questions? Comments? Post here...

Tuesday, October 28, 2008

"How I Built my Multi-Million Dollar Business"

by Cheryl Isaac

I attended a Small Biz Success Expo in Dayton Ohio on October 23rd and this was the name of the panel discussion--"How I built my multi-million dollar business." The panelists were Michael Schuh of Michael's Salon and Spa and Marty Grunder of Grunder Landscaping.

There were a few success tips I took from this discussion.
  • Michael Schuh cautioned the audience to "learn how to care." His discussion centered around finding out what your customers want or need and delivering it, learning how to retain clients.
  • Marty Grunder talked about "finding the little things and doing them over and over again." You know, those things that you do better than others that compete with you. His tip was to figure out those things and continue doing it. Find your brand, your competitive advantage, your value statement--the simple things that make you different.
  • Both men advised to seek out the best in your industry and ask for advice.
Marty Grunder's message and his style of connecting with his audience really stuck with me and so I hung around to talk to him after the event and to buy his book. After learning about what I did, he offered me his book for FREE and urged me to "help Dayton businesses." Wow! He gave me his book free and then asked me to help other businesses? As a young entrepreneur, certain admonishments from established entrepreneurs tend to stay with me. Those words have resonated with me these last few days and will stay with me; particularly because being from Columbus, I have toyed with the idea of really marketing my services to Dayton.
My husband is from Dayton and he has a satellite law office in Dayton. We're often in Dayton to visit his parents and so I have closely followed trends in the city. Dayton's economy has taken a beating and the city has been "written off" by some analysts. These statistics have stirred up something in me that wants to help in whatever small way I can. To me, economic empowerment is best achieved through one main route--small business ownership. Yet, my thought has been, "will Dayton embrace what I do?" I will keep you tuned as I discover the answer to this question in the near future.
Marty Grunder's book is entitled, The 9 Super Simple Steps to Entrepreneurial Success. On the back cover are the words "You're 9 Steps away from the business of your dreams!" (I have a list of books to read so I have not started on this book yet but I'll let you know how it turns out). To learn more about Marty Grunder, you can visit his websites at http://www.martygrunder.com/ and http://www.grunderlandscaping.com/
Questions? Comments? Post here...

Saturday, October 25, 2008

No Shortcuts in Business

by Cheryl Isaac

I was thinking about small business owners and the struggles we face with starting and growing a business the other day as I listened to my pastor talk about "no shortcuts." He discussed the mistake that we sometimes make by seeking immediate gratification. He urged to avoid shortcuts that often don't work. Instead, make the investment of time and hard work to achieve a goal.

For me, that message translated to small business and the shortcuts that start-ups sometimes want to take. I met with a prospective client this week who wanted to know what business is "hot" right now or making a lot of money. I usually have to tell people that I'm not a business broker or franchise advisor with a list of businesses. Quite often, my answer to clients is usually to start a business that brings them some joy and that they have some background knowledge of. Since I end up being the back-office-business-concierge for my clients, I've learned the hard way that I want to work with people who love what they do.

When Dave Thomas started Wendy's, his idea was met with negativity and skepticism. It took him a while to convince bankers that another hamburger joint would do well in those days. He kept motivated by his love of hamburgers and his background knowledge of the industry (after having worked at KFC). Without his passion and a little working knowledge of his proposed industry, he would not have started the now famous restaurant.

I also met a woman the other day at the courthouse as I waited to have lunch with my husband. As she and I talked, she told me about her start-up business story. She started a retail store three years ago. She didn't know about business plans or funding. Not even about the permits she needed or how to separate the business from personal. She did not know whether or when the business would be viable. She said she had no clue and because of that, people misjudged her and doubted her. She had to start slow, complete her plans, take some business classes, do some research, pay the city for not obtaining the right permits, but now her business is running and doing well.

I also met with a lady about three months ago, who came in to see me distressed because someone in a governmental agency (I'll withhold the name) told her that her business idea just won't work. She was distressed that someone would stomp on her dream. I took a look at her plan, asked her some questions, and looked over her projections. Then I apologized to her for that person and calmly explained what they were trying to say, that the way in which her concept was structured, plus her optimistic projections won't work, but that her business would work. She would just have to do some additional development of the idea and some research.

There are no shortcuts in life and definitely not in business. Sweat and tears usually accompany a business start-up. Are you willing to put in the work?

Questions? Comments? Post here...

Cheryl Isaac is the writer of this blog and the Chief Executive Officer of Isaac Business Services, LLC.

Tuesday, October 21, 2008

When do you get "high" in Business?

by Cheryl Isaac

For most, it is when the business reaches its critical mass. Netlingo.com defines critical mass as having enough customers or market share to be profitable. Norm Brodsky, author of The Knack, defines critical mass as "a particular threshold that every successful start-up crosses sooner or later...it may be the size of the customer base...or the number of active accounts."

If you have your business plan with you, look at the number of products you have to sell to break-even or the number of clients you must service. Your critical mass is that magic number of customers or accounts or products sold that brings you cash generated each month to sustain the business. It is the magical number that could give you the ability to stop using that line of credit. When you reach this number, you can look at someone with a straight face and say, "I'm high."

Donald Trump says, "figure out how to do a business better; that's the path to wealth." Trying to reach your critical mass is a maze of trying to do business better. This is when you come up with a concept but after testing it in your market, you realize that your target audience might want your concept packaged differently. During this time you REALLY learn about your ideal customer and about what drives him or her.

So why should you figure this out? This is what makes successful business owners. We must realize what it takes to get our business on the right path, to build the right customers for our business, to grow a book of clientele and to expand our brands. During a business planning process, I once had a client tell me, "I just need to know how many products I need to sell to keep my business running smoothly without my bank's help. And what do I have to do to get to that point?"

So how do you get to critical mass? You have to put pen to paper (or have someone do it for you) to figure out your monthly cash flow you would need to have a self-financing business. Then you need to see how many sales it would take to get to this number. Then figure out how many customers would bring you the amount of sales needed. Then plan a road map for how you would get these customers to give money to your business.

A start-up business owner must become accustomed to reading financial statements. You must learn how your balance sheet affects your business growth. You must have a realistic sales forecast in mind and know how that compares with your profits and gross margin. Most importantly, you must realize that sales is not the only important aspect, but that you would also need to look at your costs as it relates to sales.

How else can you get to critical mass without planning for it? And if you get there by mere happenstance, then how can you stay there without doing something irrational if you don't plan?

Questions? Comments? Post here...

Cheryl Isaac is the writer of this blog and the Chief Executive Officer of Isaac Business Services.

Wednesday, October 15, 2008

The Real Woman in Your Business

by Cheryl Isaac

Did you know that 1 out of 11 women is an entrepreneur? Or that a woman starts a business every 60 seconds? Well these were some of the opening statistics quoted at a NAWBO meeting by Kaira Sturdivant Rouda. President of Real Living and author of Real You Incorporated; 8 Essentials for women entrepreneurs.

Back in August, I blogged about another NAWBO meeting that helped influence some of my thinking as a business owner. I'm back again to boast about yet another special meeting. NAWBO is the National Association of Women Business Owners and I am a proud member of the Columbus chapter.

This month, Kaira Sturvidant Rouda graced our presence and I was ecstatic to hear her speak! I must confess, I shamelessly stalk successful women business owners and their endeavours because this motivates me. After reading and re-reading her article on http://www.womenentrepreneur.com/, I was glad that I would get the chance to hear her speak in person and to buy her book.

Kaira Sturvidant Rouda is the Owner and President of Real Living, one of the fastest growing real estate franchise companies in the United States. Her book, Real You Incorporated, encourages women to build their brands by refusing to fit in to the "boys club." I will begin reading it this weekend so I'll tell you more about it.

Kaira talked about "who you are" as a business owner and recognizing that "every encounter is an opportunity to show the real you." I thought about that and realized how profound and real that statement is. I thought about how my personal life has transformed since I became a business owner. Even my friends have commented on it. I am careful about what social internet forums I associate with, what pictures I take, what organizations I am a part of, what clothes I wear, how I conduct myself when I go out, how I treat people, etc.

So I've decided to take the advice of Kaira and I will continue on working to "...get myself right to then extend my brand." Although as start-up business owners, our brand may not be where we envision it to be, we have to work on getting it there. Successful women business owners have all worked in steps to bring their business vision to fruition and like Kaira, they know that "your unique competitive advantage is you!" That quote from her is one that will remain with me from that meeting.

We also did some Real You exercises where we listed our heroes and their attributes. The purpose was to get us to realize that the common attributes we listed for our "heroes" were those we probably already exhibit as part of our brand and personality. Some of my heroes were Susan Solovic, Sean Combs, Nelson Mandela and Barack Obama. The attributes that I admired that almost all had in common were: strong business-minded, tenacious, courageous, and thoughtful.

To learn more about Kaira Rouda and her book, you can visit, http://www.realyouincorporated.com/ or http://www.realyouliving.com/. You can also visit NAWBO's website at www.nawbocolumbusohio.com

Questions? Comments? Post here...

Sunday, October 12, 2008

Your personal budget IS your business Budget

by Cheryl Isaac

I'm a huge fan of budgeting. Maybe it's the ex-banker in me or my financial planning background. I always advise my start-up business clients to develop a budget strategy as a factor in preparation for the exit from their paying jobs. We cover the basics and then they usually comprise their own systems. I usually dedicate specific time to start-up business budget strategies.

I proposed a budgeting session for a client last month who had a finance background. He told me then that he was well prepared in that field. I expected that response. Then I asked him some tough questions regarding the credit cards and savings he anticipated would help him with his start-up costs, and he was silent. "Hmmm...I guess I haven't figured out those answers yet" he replied.

As a start-up business owner, successful tracking of one's financial spending is a crucial factor when assessing business growth because our personal spending becomes parallel to our business spending. So you know the credit cards and savings that will help launch your business, but how comfortable are you in relation to how much you would have to pay back each month? Or what about how much you would have to use to pay your personal mortgage and car note? Have you factored in utilities and office supplies--maybe in your business plan what about from your account? And since you probably won't have the same comfortable paycheck you now have, do you know exactly how much you would need to pay yourself in order to keep your bills paid? What about how much your spouse would now need to bring in?

There are some websites that help with managing a budget. For instance, Quicken, Quickbooks and Microsoft Money have dominated that field. Then there are websites that offer tools to help you track your spending. Like one of my favorites, www.wesabe.com. Or other sites like www.Moneycenter.yodlee.com, or www.mint.com (another favorite of mine). Moneycenter.yodlee.com is a little more sophisticated because it allows you to upload your bank accounts, credit cards, mortgage, loans, investments, and even frequent-flier accounts. All of these websites allow you to see how much you're spending in each bucket and some, like Mint.com even offer suggestions on how to decrease spending (i.e. how to save 5% on groceries).

Be careful to ensure that these sites are safe. Look for security signs like McAfee or VeriSign.

Questions? Comments? Post here...

Cheryl Isaac is the writer of this blog and the Chief Executive Officer of IBS-Isaac Business Services.

Wednesday, October 8, 2008

Women Utilizing Credit and Capital to Build a Business

by Cheryl Isaac

Back in August, I had a blog post that discussed million-dollar business women and some of their similar traits as uncovered by the Center for Women's Business Research. Well did you know that the Center also mentions that women-owned businesses with revenues of $1 million or more use a "wider range of capital sources" to grow their businesses?

So how do they accomplish that? They position their businesses well and go out and seek financing through different avenues. A business plan becomes very essential during this positioning process. According to Susan Solovic, the author of The Girl's Guide to Building a Million-Dollar Business, "the exercise of drafting your plan is more important than the actual plan itself, because it makes you think through the next steps and focus on your strategies, expenses, revenues and profitability." Too often I hear potential clients say, "I can come up with a quick plan myself" or "I don't need a plan." There is nothing quick about the business planning process and EVERYONE needs a plan for their business--a plan that is actually on paper!

Million-dollar women business owners have thorough, well-written, and professionally in sync business plans. They are aware of their profitability ratios, their projected revenues and how that connects with their sales forecasts, they know what they need to sell in order to break-even each month, and they know their business net worth. All of this can be projected for a business start-up too.

After positioning your business, start trying to develop a relationship with your local banker. Research the market for a bank that accurately addresses the small business sector and its needs. Start with your SBA branch and ask for information about local banks that participate in the SBA loan program. You'll be surprised at how many banks are not participating lenders! Also find out about your state's small business incentives and see which banks participate also. This will give you some idea about the bank you should associate your business with. Ask your banker about the wide array of services offered to small businesses. Pitch your business to friends, family and business partners who could help financially. Research angel investing and venture capitalism.

Develop potential financing relationships when you're not in a bind and look for funding when you don't need it. A line of credit is great for this process--you use it when you need it and when you don't need it, most times you don't pay for it.

Questions? Comments? Post here...

Cheryl Isaac is the writer of this blog and the Chief Executive Officer of IBS-Isaac Business Services.

Sunday, October 5, 2008

A Different Approach to Finding $ for your Business

by Cheryl Isaac

One of the reasons sited by the Small Business Administration for why start-up businesses fail, is lack of capital. Well we all know of the traditional ways of finding funds to start or grow a business: like borrowing from family and friends, borrowing from your local bank or credit union, and even the more recent trends; venture or angel capitalism. However, have you looked into social networks as a form of raising capital for your new business?

Social lending networks provide a platform for members to borrow and lend money among themselves without going through long and paper-intensive processes. In short, it provides a more stable environment for people with cash to help people who need cash.

According to Lending Club, a social lending network, their borrowers complete a personal loan request online and instantly view the interest rate at which they qualify. They also proclaim to have no hidden fees, and a low interest rate that is is fixed for three years. To learn more about Lending Club, visit www.lendingclub.com.

Prosper, another social network, connects borrowers to lenders by offering the opportunity for a lender to bid on a loan request. The person with the money views the person seeking money and their employment and credit history to determine what amount and rate they are willing to lend. The borrower then accepts or declines. And voila! The disbursement process begins. To find out more about their process, you can visit www.prosper.com.

Zopa, another popular social lending network, has their process set up this way; the investment from someone who wants to lend money is done via a Certificate of Deposit (CD). The investor chooses the rate he/she wants, and he/she also chooses the borrower they want to help. As you can imagine, the lower the rate the investor chooses, the more "Zopafunds are earmarked for the borrowers, to help them with their monthly payments." Zopa also sells this opportunity as a "risk-freeway to help friends & family." So instead of a family member simply shuffling funds to an aspiring entrepreneur, they can buy a 1-year CD with Zopa and have their family member sign up with Zopa to receive the funds. Interesting right? To learn more visit www.zopa.com.

Keep in mind that these networks usually ask for 640 or higher credit score, and a certain debt-to-income ratio. Also, there may be some restrictions since certain networks, like Zopa for example, are linked to various credit unions. These networks not only lend money for business ventures, but they give personal loans as well. One key thing to remember, is that when using a social network to acquire funding for your business, these loans will be strictly personal loans and will not be processed as business loans; meaning you will not be building business credit.

Questions? Comments? Post here....

Cheryl Isaac is the writer of this blog and the Chief Executive Officer of IBS-Isaac Business Services.

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