Your Business Plan Will Become Your Partner Are you planning to start a new business? Or are you considering expanding your current business and require a bank loan or investment from outsiders?
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
luni, 8 aprilie 2013
You Can Make Money With A Home Based Business
You Can Make Money With A Home Based Business Would you like to make money by starting your own home-based business? People choose to work from home for several reasons including the desire to stay home with their children, the need for extra income, or simply being dissatisfied with their current job. A home-based business will provide you with an exciting way to make money and be your own boss. Numerous opportunities are available to internet marketers.
When starting your home-based business you should develop a business plan and research your options thoroughly. Making wise decisions and following your business plan each step of the way can help you in creating a steady stream of income. Operating a home-based business will require hard work and effort. You will not become wealthy over night. It will take determination to succeed as an internet marketer. The amount of money you make will be directly related to the amount of work you are willing to do.
When making your business plan, include both short and long term goals. Determine how you will achieve those goals and put your plan into action. Affiliate programs are excellent home-based business programs and there are numerous other internet marketing offers that will create steady income if you are willing to make the effort. Some of these opportunities may require an initial investment from you and others are advertised as free. Research all internet marketing opportunities carefully to make sure you understand the terms and conditions.
As an internet marketer, you will have to distinguish yourself from the competition if you want to succeed. You should know your target audience and know your competition even better. Do not let self-doubt stop you from accomplishing your goals. Every successful internet marketer gives their business the very best effort possible. Hard work and determination will make your home-based business a success and provide you with a steady stream of income.
Starting a home-based business is one of the most exciting and challenging endeavors you will ever undertake. A sound business plan and the will to succeed will set you apart from the competition. Choose the products or services you provide carefully. Make certain your services will be needed over the long term and make customer service your top priority. A loyal customer base is the key to the success or failure of your home-based business. A home-based business is an excellent way to gain independence and financial freedom. A sound business plan and a strong work ethic are all it takes to succeed.
When starting your home-based business you should develop a business plan and research your options thoroughly. Making wise decisions and following your business plan each step of the way can help you in creating a steady stream of income. Operating a home-based business will require hard work and effort. You will not become wealthy over night. It will take determination to succeed as an internet marketer. The amount of money you make will be directly related to the amount of work you are willing to do.
When making your business plan, include both short and long term goals. Determine how you will achieve those goals and put your plan into action. Affiliate programs are excellent home-based business programs and there are numerous other internet marketing offers that will create steady income if you are willing to make the effort. Some of these opportunities may require an initial investment from you and others are advertised as free. Research all internet marketing opportunities carefully to make sure you understand the terms and conditions.
As an internet marketer, you will have to distinguish yourself from the competition if you want to succeed. You should know your target audience and know your competition even better. Do not let self-doubt stop you from accomplishing your goals. Every successful internet marketer gives their business the very best effort possible. Hard work and determination will make your home-based business a success and provide you with a steady stream of income.
Starting a home-based business is one of the most exciting and challenging endeavors you will ever undertake. A sound business plan and the will to succeed will set you apart from the competition. Choose the products or services you provide carefully. Make certain your services will be needed over the long term and make customer service your top priority. A loyal customer base is the key to the success or failure of your home-based business. A home-based business is an excellent way to gain independence and financial freedom. A sound business plan and a strong work ethic are all it takes to succeed.
Writing A Business Plan What Makes A Good One
Writing A Business Plan What Makes A Good One Writing a business plan can be a lot of hard work or it can be great fun. An effective plan can help your company to greatness. A poor one can lead you out of business. No plan is like asking to fail before you even start.
Not every business needs a 200 page bound business plan. However every business needs to have some idea of where they want to go and how they are going to get there. This article covers some key insights into writing a business plan that get your business to where you want to be.
The first stage of any plan is ANALYSIS. You need to take a very objective look at a number of factors that may impact your business. There are many factors to consider but the two major ones are competition and your operating environment.
Let's look first at competition. Every business has competition, even if you think your product or service is unique. How is this? Well it's quite simple really, people have choices to make. The most fundamental choice they make in most cases is whether to buy what you offer or but something else. For example I could buy a game console or I could buy groceries instead. Customers only have so much money available so you first task is to ask yourself what is my competition like and can I beat them? The more you understand your competition the more you can develop your business strategy of being different and outperforming them.
Now let's look at operating environment. This is understanding what factors around your area of operation are likely to affect your business performance. For some companies this includes looking around the World in other cases it's just your local neighbourhood. You need to ask questions such as:
How is the economy going?
What is consumer confidence like?
Where is technology heading in my industry?
After answering all the questions you need to decide how these might negatively or positively influence your performance.
Now you know more about your competition and operating environment it's time to set some OBJECTIVES. This is what you want to achieve in the period your business plan covers. It is said that good objectives are SMART. That is specific, measurable, achievable, realistic and targeted. Here's an example of a SMART objective for a hypothetical business.
"By the end of this year we will have increased sales of product X by 7.5% over the previous year."
You can see how clear this objective is. It is much easier to achieve high performance with clear objectives.
Now you need to outline your STRATEGY. How are you going to reach you objective(s)? This is where your marketing plan often comes in as it helps describe the programs you will run to achieve your desired objective(s). To continue the example above our strategy may be to gain distribution for our product in one new major retail chain.
To make your strategy work you must then allocate appropriate RESOURCES. Certain things will need to be provided to reach your goal. This could be dollars, people, equipment, etc. Your plan must have included the resources you are allocating and why you believe this is adequate to get the result.
Every business plans also has some PROJECTIONS. This is your basic financials that you plan will deliver. Are you expecting a profit or loss? How much?
Lastly you need to allow for CONTINGENCIES. Things change all the time and your plan needs to consider these possibilities in advance. A good way to do this is to ask What if?
What if a new competitor enters our market?
What if a distributor delists our product?
What if interest rates rise?
Your analysis should give you some idea of likely contingencies. It saves a lot of stress if you have some documented ideas for dealing with them before they become a big problem.
Writing a business plan is never perfect, the plan is on paper and you're operating in the real world. However a good plan can really guide you in the right direction. Take time to put real thought into preparing your plan an above all make sure you USE YOUR PLAN!
Not every business needs a 200 page bound business plan. However every business needs to have some idea of where they want to go and how they are going to get there. This article covers some key insights into writing a business plan that get your business to where you want to be.
The first stage of any plan is ANALYSIS. You need to take a very objective look at a number of factors that may impact your business. There are many factors to consider but the two major ones are competition and your operating environment.
Let's look first at competition. Every business has competition, even if you think your product or service is unique. How is this? Well it's quite simple really, people have choices to make. The most fundamental choice they make in most cases is whether to buy what you offer or but something else. For example I could buy a game console or I could buy groceries instead. Customers only have so much money available so you first task is to ask yourself what is my competition like and can I beat them? The more you understand your competition the more you can develop your business strategy of being different and outperforming them.
Now let's look at operating environment. This is understanding what factors around your area of operation are likely to affect your business performance. For some companies this includes looking around the World in other cases it's just your local neighbourhood. You need to ask questions such as:
How is the economy going?
What is consumer confidence like?
Where is technology heading in my industry?
After answering all the questions you need to decide how these might negatively or positively influence your performance.
Now you know more about your competition and operating environment it's time to set some OBJECTIVES. This is what you want to achieve in the period your business plan covers. It is said that good objectives are SMART. That is specific, measurable, achievable, realistic and targeted. Here's an example of a SMART objective for a hypothetical business.
"By the end of this year we will have increased sales of product X by 7.5% over the previous year."
You can see how clear this objective is. It is much easier to achieve high performance with clear objectives.
Now you need to outline your STRATEGY. How are you going to reach you objective(s)? This is where your marketing plan often comes in as it helps describe the programs you will run to achieve your desired objective(s). To continue the example above our strategy may be to gain distribution for our product in one new major retail chain.
To make your strategy work you must then allocate appropriate RESOURCES. Certain things will need to be provided to reach your goal. This could be dollars, people, equipment, etc. Your plan must have included the resources you are allocating and why you believe this is adequate to get the result.
Every business plans also has some PROJECTIONS. This is your basic financials that you plan will deliver. Are you expecting a profit or loss? How much?
Lastly you need to allow for CONTINGENCIES. Things change all the time and your plan needs to consider these possibilities in advance. A good way to do this is to ask What if?
What if a new competitor enters our market?
What if a distributor delists our product?
What if interest rates rise?
Your analysis should give you some idea of likely contingencies. It saves a lot of stress if you have some documented ideas for dealing with them before they become a big problem.
Writing a business plan is never perfect, the plan is on paper and you're operating in the real world. However a good plan can really guide you in the right direction. Take time to put real thought into preparing your plan an above all make sure you USE YOUR PLAN!
Work Your Home Based Business Idea in Three Easy Steps
Work Your Home Based Business Idea in Three Easy Steps Create a Business Plan first
The primary necessity is to get a perfectly designed plan of action for a genuine business. A business plan on its own is useless. It is a mere reflection, but it will not suffice you also need an action plan. A business scheme is the first step in working out your idea into actions that you can follow. Well-illustrated business plans can be found online or at your library.
Begin now
- Do not be afraid of failure. Remember failure is the first stepping stone to success, if this home based business idea does not work out for you now do not let this deter you. Always remind yourself of the spider when you feel like losing hope.
- Do not let that wonderful home-based business idea gather dust. Start today.
- Waiting for the right time to start your business might make success elude you forever. If there is any specific right time, it is right now. Do not waste your precious time.
-
Put a figure on it
This is the greatest stumbling block for most home-based business owners. That is, they fail to evaluate their work. If you do not give proper attention to this, you may have to wrap up your business. You need to know that real figures and numbers are needed for you to stay in business. If this is not your agenda of work, you are probably going all wrong.
Large businesses usually set up balanced scorecards. The idea is to have a referring point to compare how successful your work is. For example, to get five customers in one month you could settle on free seminars but if you see that your plan is not getting you five clients, you need to reassess your plan. Change of plan prevents waste of energy and resources.
Entire contents copyright 2005 Morpheus Institute.
The primary necessity is to get a perfectly designed plan of action for a genuine business. A business plan on its own is useless. It is a mere reflection, but it will not suffice you also need an action plan. A business scheme is the first step in working out your idea into actions that you can follow. Well-illustrated business plans can be found online or at your library.
Begin now
- Do not be afraid of failure. Remember failure is the first stepping stone to success, if this home based business idea does not work out for you now do not let this deter you. Always remind yourself of the spider when you feel like losing hope.
- Do not let that wonderful home-based business idea gather dust. Start today.
- Waiting for the right time to start your business might make success elude you forever. If there is any specific right time, it is right now. Do not waste your precious time.
-
Put a figure on it
This is the greatest stumbling block for most home-based business owners. That is, they fail to evaluate their work. If you do not give proper attention to this, you may have to wrap up your business. You need to know that real figures and numbers are needed for you to stay in business. If this is not your agenda of work, you are probably going all wrong.
Large businesses usually set up balanced scorecards. The idea is to have a referring point to compare how successful your work is. For example, to get five customers in one month you could settle on free seminars but if you see that your plan is not getting you five clients, you need to reassess your plan. Change of plan prevents waste of energy and resources.
Entire contents copyright 2005 Morpheus Institute.
Why You Need a Business Planning System NOT a Business Plan
Why You Need a Business Planning System NOT a Business Plan Copyright 2005 David Coffman
When someone mentions business planning we have been conditioned to think about writing a business plan. There are hundreds of books and articles, tons of software, an army of consultants, and a multitude government programs to help you write a business plan. There are virtually no resources to help you set up what today's business environment really demands - a continuous, ongoing planning system.
A commonly accepted theory is that for a business to survive and prosper it must be flexible and nimble. It must be able to turn on a dime as conditions warrant. Having a written five-year plan is not part of this picture. In fact, trying to follow a long-term plan during rampant change is not logical. It is applying linear thinking to a non-linear situation. It just doesn't work.
Having a formal, written business plan is so accepted as being crucial to success that there haven't been many studies or surveys to test this premise. If business plans were such a wonderful thing, there would be a significant and conclusive difference between businesses that have them and those that don't. Interviews of 100 founders of companies on 1989s "INC 500" list of fastest growing private companies in the U.S. found only 28 percent had "full-blown" business plans. The 1993 AT&T Small Business Study found that 59 percent of small businesses that grew over the previous two years used a formal business plan. A 1994 survey of the country's fastest growing companies found 23 percent lacked a business plan. "The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S.," by Dr. Stephen Perry, surveyed 152 failed and 152 non-failed small businesses in 1997. He found that 64 percent of the non-failed firms had no written business plan. He also found that non-failed firms had more extensive written plans than failed firms, 23 percent compared to 9 percent, respectively.
As you can see the results of studies and surveys are all across the board and don't prove anything. Clearly, a significant percentage of successful businesses don't have written business plans. None of these studies reveal the nature of the process that created the plan. Was it the result of an annual process with occasional updates or an ongoing, continual process? As Professor Albert Shapero said, "Companies that plan do better than companies that don't, but they never follow their plan."
The focus needs to be on the PROCESS not on the plan. If a continual, ongoing planning process is in place, a written business plan is just not important. Writing a business plan without a planning system in place is a massive effort that is done very infrequently. Many businesses write three to five year plans and update them annually. The plans are reviewed periodically during each year to analyze the plan vs. actual variances. Little, if any, thought is given to strategy between the annual updates. Strategy should be the focus everyday. Setting up a planning system allows and sometimes forces you to focus on strategy.
A planning system consists of two functions. One is a goal setting and attaining process, and the other is a trend watching or environment scanning process. Setting up a planning system takes several steps. The first and foremost task is to set aside or make time for planning on a regular, ongoing basis. It must become part of your routine, not an occasional event that can be easily postponed. In the evaluation phase, the owner or management team and the company are analyzed. From the analysis, key or critical areas of the business are identified. These areas are filtered down to focus on the most important ones. Performance measures are determined and systems to gather and process the necessary data are set up, if needed. A base of current performance is used to set goals.
Now the regular, ongoing stuff begins. Strategies are formulated, tested, implemented, monitored, and reworked until the goals are achieved. Each planning session is split between working on strategies and trend watching. As goals are achieved, the goal setting and strategy formulation process begins again.
Let's put the focus back where it belongs on continuous, ongoing planning instead of writing business plans. As Karl Albrecht said in his book Corporate Radar, "The majority is not always right, the conventional wisdom is not always wise, and the accepted doctrine could well be flawed. The more fashionable an idea, the more it is likely to be exempt from critical evaluation. Breakthrough thinking sometimes calls for contradicting the most widely held assumptions and beliefs."
When someone mentions business planning we have been conditioned to think about writing a business plan. There are hundreds of books and articles, tons of software, an army of consultants, and a multitude government programs to help you write a business plan. There are virtually no resources to help you set up what today's business environment really demands - a continuous, ongoing planning system.
A commonly accepted theory is that for a business to survive and prosper it must be flexible and nimble. It must be able to turn on a dime as conditions warrant. Having a written five-year plan is not part of this picture. In fact, trying to follow a long-term plan during rampant change is not logical. It is applying linear thinking to a non-linear situation. It just doesn't work.
Having a formal, written business plan is so accepted as being crucial to success that there haven't been many studies or surveys to test this premise. If business plans were such a wonderful thing, there would be a significant and conclusive difference between businesses that have them and those that don't. Interviews of 100 founders of companies on 1989s "INC 500" list of fastest growing private companies in the U.S. found only 28 percent had "full-blown" business plans. The 1993 AT&T Small Business Study found that 59 percent of small businesses that grew over the previous two years used a formal business plan. A 1994 survey of the country's fastest growing companies found 23 percent lacked a business plan. "The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S.," by Dr. Stephen Perry, surveyed 152 failed and 152 non-failed small businesses in 1997. He found that 64 percent of the non-failed firms had no written business plan. He also found that non-failed firms had more extensive written plans than failed firms, 23 percent compared to 9 percent, respectively.
As you can see the results of studies and surveys are all across the board and don't prove anything. Clearly, a significant percentage of successful businesses don't have written business plans. None of these studies reveal the nature of the process that created the plan. Was it the result of an annual process with occasional updates or an ongoing, continual process? As Professor Albert Shapero said, "Companies that plan do better than companies that don't, but they never follow their plan."
The focus needs to be on the PROCESS not on the plan. If a continual, ongoing planning process is in place, a written business plan is just not important. Writing a business plan without a planning system in place is a massive effort that is done very infrequently. Many businesses write three to five year plans and update them annually. The plans are reviewed periodically during each year to analyze the plan vs. actual variances. Little, if any, thought is given to strategy between the annual updates. Strategy should be the focus everyday. Setting up a planning system allows and sometimes forces you to focus on strategy.
A planning system consists of two functions. One is a goal setting and attaining process, and the other is a trend watching or environment scanning process. Setting up a planning system takes several steps. The first and foremost task is to set aside or make time for planning on a regular, ongoing basis. It must become part of your routine, not an occasional event that can be easily postponed. In the evaluation phase, the owner or management team and the company are analyzed. From the analysis, key or critical areas of the business are identified. These areas are filtered down to focus on the most important ones. Performance measures are determined and systems to gather and process the necessary data are set up, if needed. A base of current performance is used to set goals.
Now the regular, ongoing stuff begins. Strategies are formulated, tested, implemented, monitored, and reworked until the goals are achieved. Each planning session is split between working on strategies and trend watching. As goals are achieved, the goal setting and strategy formulation process begins again.
Let's put the focus back where it belongs on continuous, ongoing planning instead of writing business plans. As Karl Albrecht said in his book Corporate Radar, "The majority is not always right, the conventional wisdom is not always wise, and the accepted doctrine could well be flawed. The more fashionable an idea, the more it is likely to be exempt from critical evaluation. Breakthrough thinking sometimes calls for contradicting the most widely held assumptions and beliefs."
"Why You, Why Now" - A Critical Component of a Winning Business Plan
"Why You, Why Now" - A Critical Component of a Winning Business Plan Business plans continue to be an essential element of the capital-raising process. They must convince investors to take notice - investors that are shrewder today due to the ups-and-downs they have experienced over the past few years.
Adding to the financing challenge is the plethora of high-quality companies, both public and private, in which investors can choose to invest. In this environment, more and more investors are asking companies seeking capital the question "Why You, Why Now"?
The question seems simple at first, but has many complexities. The management team must clearly delineate what it is about the business opportunity that makes it such a good investment now. Should this investment have been made a year ago to cement a market leadership position? Or, is the venture before its time - will slow market adoption cause slow sales over the next few years, and as such, should the investment wait. Questions like these, based on investment failures from the past few years, continue to surface and must be addressed by the management team in their business plans.
Likewise the team must address what it is that makes them uniquely qualified to succeed. Does the team have proprietary (and protectable) technology, management talent and experience that competitors do not, long-term strategic partners? According to Growthink president, Dave Lavinsky, "Management teams must prove to investors why they are unique and why they will succeed. They can't just state how wonderful they are - they need to prove it through detailing past successes and unique qualifications."
A business plan that fails to address the "Why You, Why Now" question, is most likely a business plan that will remain in the stack of "not now" business plans. Business plans must present a compelling argument as to why the investor should invest and in our fast-paced world with unbelievable opportunities and opportunity costs, why investors should invest now.
Adding to the financing challenge is the plethora of high-quality companies, both public and private, in which investors can choose to invest. In this environment, more and more investors are asking companies seeking capital the question "Why You, Why Now"?
The question seems simple at first, but has many complexities. The management team must clearly delineate what it is about the business opportunity that makes it such a good investment now. Should this investment have been made a year ago to cement a market leadership position? Or, is the venture before its time - will slow market adoption cause slow sales over the next few years, and as such, should the investment wait. Questions like these, based on investment failures from the past few years, continue to surface and must be addressed by the management team in their business plans.
Likewise the team must address what it is that makes them uniquely qualified to succeed. Does the team have proprietary (and protectable) technology, management talent and experience that competitors do not, long-term strategic partners? According to Growthink president, Dave Lavinsky, "Management teams must prove to investors why they are unique and why they will succeed. They can't just state how wonderful they are - they need to prove it through detailing past successes and unique qualifications."
A business plan that fails to address the "Why You, Why Now" question, is most likely a business plan that will remain in the stack of "not now" business plans. Business plans must present a compelling argument as to why the investor should invest and in our fast-paced world with unbelievable opportunities and opportunity costs, why investors should invest now.
Why Start Your Own Work At Home Business Opportunity? Here's Why!
Why Start Your Own Work At Home Business Opportunity? Here's Why! Would you like your own work at home business opporutnity?
People choose to work from home for several reasons including
the desire to stay home with their children, the need for extra
income, or simply being dissatisfied with their current job. A
home-based business will provide you with an exciting way to
earn money and be your own boss. Numerous opportunities are
available to internet marketers.
When getting started working at home with your own home business
you should develop a business plan and research your options
thoroughly. Making wise decisions and following your business
plan each step of the way can help you in creating a steady
stream of income. Operating a home-based business will require
hard work and effort. You will not become wealthy over night. It
will take determination to succeed as an internet marketer. The
amount of money you make will be directly related to the amount
of work you are willing to do.
When making your business plan, include both short and long term
goals. Determine how you will achieve those goals and put your
plan into action. Affiliate programs are excellent home-based
business programs and there are numerous other internet
marketing offers that will create steady income if you are
willing to make the effort. Some of these opportunities may
require an initial investment from you and others are advertised
as free. Research all internet marketing opportunities carefully
to make sure you understand the terms and conditions.
Working At Home When working at home online, you will have to
distinguish yourself from the competition if you want to
succeed. You should know your target audience and know your
competition even better. Do not let self-doubt stop you from
accomplishing your goals. Every successful internet marketer
gives their business the very best effort possible. Hard work
and determination will make your work at home business a success
and provide you with a steady stream of income.
Working at home is one of the most exciting and challenging
endeavors you will ever undertake. A sound business plan and the
will to succeed will set you apart from the competition. Choose
the products or services you provide carefully. Make certain
your services will be needed over the long term and make
customer service your top priority. A loyal customer base is the
key to the success or failure of your home-based business.
Working at home with your own business is an excellent way to
gain independence and financial freedom. A sound business plan
and a strong work ethic are all it takes to succeed. The perfect
work at home business is the Plugin Profit Site.
People choose to work from home for several reasons including
the desire to stay home with their children, the need for extra
income, or simply being dissatisfied with their current job. A
home-based business will provide you with an exciting way to
earn money and be your own boss. Numerous opportunities are
available to internet marketers.
When getting started working at home with your own home business
you should develop a business plan and research your options
thoroughly. Making wise decisions and following your business
plan each step of the way can help you in creating a steady
stream of income. Operating a home-based business will require
hard work and effort. You will not become wealthy over night. It
will take determination to succeed as an internet marketer. The
amount of money you make will be directly related to the amount
of work you are willing to do.
When making your business plan, include both short and long term
goals. Determine how you will achieve those goals and put your
plan into action. Affiliate programs are excellent home-based
business programs and there are numerous other internet
marketing offers that will create steady income if you are
willing to make the effort. Some of these opportunities may
require an initial investment from you and others are advertised
as free. Research all internet marketing opportunities carefully
to make sure you understand the terms and conditions.
Working At Home When working at home online, you will have to
distinguish yourself from the competition if you want to
succeed. You should know your target audience and know your
competition even better. Do not let self-doubt stop you from
accomplishing your goals. Every successful internet marketer
gives their business the very best effort possible. Hard work
and determination will make your work at home business a success
and provide you with a steady stream of income.
Working at home is one of the most exciting and challenging
endeavors you will ever undertake. A sound business plan and the
will to succeed will set you apart from the competition. Choose
the products or services you provide carefully. Make certain
your services will be needed over the long term and make
customer service your top priority. A loyal customer base is the
key to the success or failure of your home-based business.
Working at home with your own business is an excellent way to
gain independence and financial freedom. A sound business plan
and a strong work ethic are all it takes to succeed. The perfect
work at home business is the Plugin Profit Site.
Why Should You Have a Business Plan?
Why Should You Have a Business Plan? Are you planning to start a new business? Or are you considering
expanding your current business and require a bank loan or
investment from outsiders?
If you are going to look for an investment of capital it is quite
likely that you will be required to have a business plan. If you
are starting a business, despite the work involved, a business
plan can prepare you for the obstacles ahead and help ensure your
success.
A business plan is something that many small businesses fail to
create, however, many business owners are adamant that having a
written business plan is one of the keys to their present
success. Creating a business plan forces you to contemplate
possible obstacles to your business and prepares you to find
solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that
you have the experience or resources to run the business. They
will want to see your projected income as well as your suggested
repayment plan already laid out. Taking the time to do this is
not only important for them, but it gives you a measuring tool to
verify if your business is growing properly. You can gage your
success on how close to the plan your business has actually
performed. Perhaps you'll do worse, or perhaps you'll do better,
either way it helps you determine how well your business is
getting on.
If you have never seen a business plan before you may be
concerned that is is too difficult a proposition for you to
manage on your own.
While there are services available where you can hire someone to
write a business plan for you, depending on your needs it may be
wise to familiarize yourself with a business plan's layout. This
will not only help you to provide the necessary information, but
may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in
creating a business plan. Some of the topics you will be required
to explain are your Market, Customer, Competition, Marketing
Plan, Research & Development along with financial forecasts. You
may consider hiring someone to help you with your financial
sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business
partner - indicating where you need to improve and helping you
stay one step ahead of your competition. Make it a priority to
have this crucial road map for your business
expanding your current business and require a bank loan or
investment from outsiders?
If you are going to look for an investment of capital it is quite
likely that you will be required to have a business plan. If you
are starting a business, despite the work involved, a business
plan can prepare you for the obstacles ahead and help ensure your
success.
A business plan is something that many small businesses fail to
create, however, many business owners are adamant that having a
written business plan is one of the keys to their present
success. Creating a business plan forces you to contemplate
possible obstacles to your business and prepares you to find
solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that
you have the experience or resources to run the business. They
will want to see your projected income as well as your suggested
repayment plan already laid out. Taking the time to do this is
not only important for them, but it gives you a measuring tool to
verify if your business is growing properly. You can gage your
success on how close to the plan your business has actually
performed. Perhaps you'll do worse, or perhaps you'll do better,
either way it helps you determine how well your business is
getting on.
If you have never seen a business plan before you may be
concerned that is is too difficult a proposition for you to
manage on your own.
While there are services available where you can hire someone to
write a business plan for you, depending on your needs it may be
wise to familiarize yourself with a business plan's layout. This
will not only help you to provide the necessary information, but
may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in
creating a business plan. Some of the topics you will be required
to explain are your Market, Customer, Competition, Marketing
Plan, Research & Development along with financial forecasts. You
may consider hiring someone to help you with your financial
sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business
partner - indicating where you need to improve and helping you
stay one step ahead of your competition. Make it a priority to
have this crucial road map for your business
Why Doesn't Your Business Plan Consistently Secure Your Desired Results?
Why Doesn't Your Business Plan Consistently Secure Your Desired Results? From small businesses to large corporations, when you render all the challenges and issues facing these economic engines from employees to growth and innovation, the inability to secure desired results or implementation always float to the top as the number one to number three obstacles that prevent business success. As a business owner or management executive, have you ever asked yourself one of these five questions:
1. How do I move from my vision to my desired results?
2. How do I get my employees to perform?
3. How do I recruit new employees with the skills that my company needs?
4. How do I attract new customers or clients?
5. Why can't I consistently achieve my desired results?
All of these questions when rendered down are about implementation. The failure to implement each corporate wide business goal consumes valuable resources specifically time, people and money. These resources may have been already allocated to other initiatives.
Effective implementation is what separates the successful companies from the not so successful ones. Many authors from Rick Page in "Hope is not a Strategy" to Jason Jennings and Laurence Haughton in "It's Not the Big that Eat the Small, It's the Fast that East the Slow" write about the affects of poor implementation.
Possibly why implementation continues to vex today's businesses is because executives search for an ineffective answer through a business plan instead of a strategic business plan. A recent search using Inventory Overture revealed that searches for business plan were over 200 times as many as for strategic business plan (148,650 vs. 614). From these searches, it suggests that business owners may be looking for the wrong answer.
Why choose a strategic business plan over a business plan? The answer is simple because a strategic business plan defines "Who Does What By When" through the critical success factors and supporting goals that are in alignment with the sales and marketing plans.
The structure of a strategic business plan is all about implementation. Using the ADDIE Plus methodology may help you in your efforts to create an effective strategic business plan.
Assess - The current market conditions, future market conditions and the organization need to be assessed. This evaluation should begin with an overall organizational assessment and may extend to internal and external customers.
Design - After the evaluation, a design is crafted. This design should include the vision, values and mission of the organization and is overall architecture for the plan. Simply, speaking this is the "Big Picture."
Develop - The plan is developed according to the structure of the organization. Smaller plans or pictures such as marketing and sales fit within the overall plan.
Implement - Using specific goal setting and goal achievement, the strategic plan is implemented. At this juncture, who does what by when is identified.
Evaluate - Goal achievement is the mechanism to monitor and evaluate successful implementation.
Plus - Follow-up is the plus to ensure necessary course correction that may again require some new assessments along with design, development, implementation and evaluation.
Using the ADDIE+ methodology provides business owners a consistent vehicle from which to create, monitor, evaluate and follow-up on their strategic business plan.
If you truly want to reach that next level of success by bridging the implementation gaps, stop focusing on a business plan and take the time to create a strategic business plan that clearly defines who does what by when.
Copyright 2005(c) Leanne Hoagland-Smith, www.processspecialist.com
1. How do I move from my vision to my desired results?
2. How do I get my employees to perform?
3. How do I recruit new employees with the skills that my company needs?
4. How do I attract new customers or clients?
5. Why can't I consistently achieve my desired results?
All of these questions when rendered down are about implementation. The failure to implement each corporate wide business goal consumes valuable resources specifically time, people and money. These resources may have been already allocated to other initiatives.
Effective implementation is what separates the successful companies from the not so successful ones. Many authors from Rick Page in "Hope is not a Strategy" to Jason Jennings and Laurence Haughton in "It's Not the Big that Eat the Small, It's the Fast that East the Slow" write about the affects of poor implementation.
Possibly why implementation continues to vex today's businesses is because executives search for an ineffective answer through a business plan instead of a strategic business plan. A recent search using Inventory Overture revealed that searches for business plan were over 200 times as many as for strategic business plan (148,650 vs. 614). From these searches, it suggests that business owners may be looking for the wrong answer.
Why choose a strategic business plan over a business plan? The answer is simple because a strategic business plan defines "Who Does What By When" through the critical success factors and supporting goals that are in alignment with the sales and marketing plans.
The structure of a strategic business plan is all about implementation. Using the ADDIE Plus methodology may help you in your efforts to create an effective strategic business plan.
Assess - The current market conditions, future market conditions and the organization need to be assessed. This evaluation should begin with an overall organizational assessment and may extend to internal and external customers.
Design - After the evaluation, a design is crafted. This design should include the vision, values and mission of the organization and is overall architecture for the plan. Simply, speaking this is the "Big Picture."
Develop - The plan is developed according to the structure of the organization. Smaller plans or pictures such as marketing and sales fit within the overall plan.
Implement - Using specific goal setting and goal achievement, the strategic plan is implemented. At this juncture, who does what by when is identified.
Evaluate - Goal achievement is the mechanism to monitor and evaluate successful implementation.
Plus - Follow-up is the plus to ensure necessary course correction that may again require some new assessments along with design, development, implementation and evaluation.
Using the ADDIE+ methodology provides business owners a consistent vehicle from which to create, monitor, evaluate and follow-up on their strategic business plan.
If you truly want to reach that next level of success by bridging the implementation gaps, stop focusing on a business plan and take the time to create a strategic business plan that clearly defines who does what by when.
Copyright 2005(c) Leanne Hoagland-Smith, www.processspecialist.com
When Do I Need To Hire A Business Plan Consultant
When Do I Need To Hire A Business Plan Consultant Every new business owner knows that a business plan is critical - it is drilled into them by potential investors and every banking officer they meet. So why is something that is so important to the launch of a new venture so difficult to write? Good question! In this article I will try to address when you should go out and hire a business plan writer versus taking on the task yourself. First time entrepreneurs often cringe when sitting down to write their business plan. Some spend 6 months agonizing over each period and comma, and even worse others spend 6 months procrastinating and do nothing. So lets break it down and see where / when a business planning company should be brought in:
Who will read your business plan and why?
First you need to really understand the purpose of your business plan and who your audience (reader) will be. This is an important point as a business plan being written for a $100,000 loan is VERY different than a document needed for a $10 million round of venture capital! Since this article is focused on first-time small business owners, I will focus on preparing business plans raising less then $1 million in capital. For this "startup" or "seed" business plan 30-35 pages are perfect. You are not expected to deliver a thick book (and no one will read it anyway!). Once you have this down, you can honestly assess which sections you are qualified / comfortable writing and which may need consulting help.
Here is what you should write on your own
It is important for you to write a basic draft / outline of your business plan. Without this direction you are probably asking too much of your consultant. Once you have your thoughts organized on paper you can see what you are comfortable completing. Here are a few suggestions:
Executive Summary: Draft the opening of your business plan - then hire a pro to come in and re-write it. Your executive summary will be read first and first impressions are critical!
Marketing: You need to write your own definition of your target customer / audience. For the market research on industry growth and fancy charts go ahead and hire a consultant.
Competitive Analysis: You should put together the first draft of this section, as it is almost as important to understand your competitors, as it is your customers. If you find a consultant that is an expert in your field, then you can work together and add to your initial list.
The Dreaded Financials
This is the most difficult part of a startup business plan, as you are making projections and assumptions on products / services that you have not even produced or sold yet! If you are stuck on this section you can hire a business plan consultant to just assist you with completing your projections (income statement, cash flow, and balance sheet). Figuring out the cost of goods, delivery costs, and return rates can be simplified by breaking them down into a "light" spreadsheet. Next you need to understand your startup and operating costs - items like electricity, travel, phone expenses, etc. Again just organize these and your consultant can make all the fancy charts and graphs. Just make sure you understand all of the assumptions - for example if you are opening a retail business, you should not look towards your consultant to "guess" your rent - go out and meet with a realtor and come back with real data. If you work closely with your consultant, the financials are a great section to bring in professional help.
Managing Expectations
Now that you know a bit more about when to hire a business plan writer you also need to manage your expectations. You can't expect a $1,000 business plan to have 20 pages of competitive analysis and a full-blown marketing strategy! If you carefully work through which sections of your business plan need outside help and then manage your consultant closely, your final document will be a success! My next two articles will focus on "How to Find / Hire a Business Plan Consultant" and more importantly "When to Fire your Business Plan Consultant!"
Who will read your business plan and why?
First you need to really understand the purpose of your business plan and who your audience (reader) will be. This is an important point as a business plan being written for a $100,000 loan is VERY different than a document needed for a $10 million round of venture capital! Since this article is focused on first-time small business owners, I will focus on preparing business plans raising less then $1 million in capital. For this "startup" or "seed" business plan 30-35 pages are perfect. You are not expected to deliver a thick book (and no one will read it anyway!). Once you have this down, you can honestly assess which sections you are qualified / comfortable writing and which may need consulting help.
Here is what you should write on your own
It is important for you to write a basic draft / outline of your business plan. Without this direction you are probably asking too much of your consultant. Once you have your thoughts organized on paper you can see what you are comfortable completing. Here are a few suggestions:
Executive Summary: Draft the opening of your business plan - then hire a pro to come in and re-write it. Your executive summary will be read first and first impressions are critical!
Marketing: You need to write your own definition of your target customer / audience. For the market research on industry growth and fancy charts go ahead and hire a consultant.
Competitive Analysis: You should put together the first draft of this section, as it is almost as important to understand your competitors, as it is your customers. If you find a consultant that is an expert in your field, then you can work together and add to your initial list.
The Dreaded Financials
This is the most difficult part of a startup business plan, as you are making projections and assumptions on products / services that you have not even produced or sold yet! If you are stuck on this section you can hire a business plan consultant to just assist you with completing your projections (income statement, cash flow, and balance sheet). Figuring out the cost of goods, delivery costs, and return rates can be simplified by breaking them down into a "light" spreadsheet. Next you need to understand your startup and operating costs - items like electricity, travel, phone expenses, etc. Again just organize these and your consultant can make all the fancy charts and graphs. Just make sure you understand all of the assumptions - for example if you are opening a retail business, you should not look towards your consultant to "guess" your rent - go out and meet with a realtor and come back with real data. If you work closely with your consultant, the financials are a great section to bring in professional help.
Managing Expectations
Now that you know a bit more about when to hire a business plan writer you also need to manage your expectations. You can't expect a $1,000 business plan to have 20 pages of competitive analysis and a full-blown marketing strategy! If you carefully work through which sections of your business plan need outside help and then manage your consultant closely, your final document will be a success! My next two articles will focus on "How to Find / Hire a Business Plan Consultant" and more importantly "When to Fire your Business Plan Consultant!"
What You Don't Want to Know About Bad Meetings
What You Don't Want to Know About Bad Meetings Bad meetings are a cultural malady that senior executives pass on to new employees.
Long pointless meetings are useful in that they keep incompetent people from interfering with those who are working.
An employee who needs permission to buy a box of paperclips can spend tens of thousands of dollars worth of employee time on bad meetings.
Many people attempt to save time by Not planning. This false short cut guarantees that everyone will spend more time later.
Unstructured spontaneity leads to serendipity, which (in business) leads to bankruptcy.
Meetings are a magnetic opiate that keep people from the tasks they were hired to perform.
The main activity in many meetings consists of simple chit chat. If it's an important meeting, then this becomes sincere chit chat.
A meeting without an agenda is like a journey without a map.
A teleconference without an agenda is like a journey without a map, in the dark.
Most meetings are social street lamps attracting the unproductive moths in an organization.
People fail to prepare an agenda for two reasons. They think they're saving time and they don't know what to put in it.
Expecting a meeting to produce results without an agenda is like expecting the Easter bunny to leave eggs on your doorstep.
Bad meetings waste a fortune. My surveys show that companies waste almost 20% of their payroll on bad meetings.
Long pointless meetings are useful in that they keep incompetent people from interfering with those who are working.
An employee who needs permission to buy a box of paperclips can spend tens of thousands of dollars worth of employee time on bad meetings.
Many people attempt to save time by Not planning. This false short cut guarantees that everyone will spend more time later.
Unstructured spontaneity leads to serendipity, which (in business) leads to bankruptcy.
Meetings are a magnetic opiate that keep people from the tasks they were hired to perform.
The main activity in many meetings consists of simple chit chat. If it's an important meeting, then this becomes sincere chit chat.
A meeting without an agenda is like a journey without a map.
A teleconference without an agenda is like a journey without a map, in the dark.
Most meetings are social street lamps attracting the unproductive moths in an organization.
People fail to prepare an agenda for two reasons. They think they're saving time and they don't know what to put in it.
Expecting a meeting to produce results without an agenda is like expecting the Easter bunny to leave eggs on your doorstep.
Bad meetings waste a fortune. My surveys show that companies waste almost 20% of their payroll on bad meetings.
What to Consider when Filing for Personal Bankruptcy
What to Consider when Filing for Personal Bankruptcy President Bush in April signed into law The Bankruptcy Abuse and Consumer Protection Act. This bill promises many changes to law, and will make it more difficult for the average person in financial trouble to have debts removed with bankruptcy. Recent social and economic changes indicate that those considering a bankruptcy should do so now, as the queue is getting longer.
It will be now be harder to file under Chapter 7 of the code, which allows the courts to wave consumer debt and give the debtor a new start. Filings posted will be tested and those who have a decent income it seems will have to file under a more strenuous Chapter 13, which demands repayment by installments and the assistance of a lawyer. Now looming, bankruptcy filings are not only higher than they were previously, but are also higher than expected. Acros the country, filings are substantially higher than last year, and some bankruptcy practitioners say that their business has increased dramatically.
To make it more confusing is another law, that requires credit card companies to establish a payment schedule that permits consumers to repay debts in amended installments. Since early year, most credit card providers have doubled their minimum payments. An average person with say $12,000 in credit card debt, will have approximate monthly payment increases from between $150 to $450, an increase most people can ill afford.
This increase in bankruptcy filings has overwhelmed bankruptcy lawyers, who face a burden of being liable for false information filed by clients once the new law takes effect. Certainly an unwelcome change. This additional liability, together with the additional tasks, has prompted many lawyers to raise fees subsstantally over the same time as last year.
What does this mean for bad debt? From here on, bankruptcy filings will be more confusing, complicated and costly. The system is already overloaded with bankruptcy cases. If you suspect you're in the bankruptcy category, you should move on it now. Waiting even another day could be too late.
It will be now be harder to file under Chapter 7 of the code, which allows the courts to wave consumer debt and give the debtor a new start. Filings posted will be tested and those who have a decent income it seems will have to file under a more strenuous Chapter 13, which demands repayment by installments and the assistance of a lawyer. Now looming, bankruptcy filings are not only higher than they were previously, but are also higher than expected. Acros the country, filings are substantially higher than last year, and some bankruptcy practitioners say that their business has increased dramatically.
To make it more confusing is another law, that requires credit card companies to establish a payment schedule that permits consumers to repay debts in amended installments. Since early year, most credit card providers have doubled their minimum payments. An average person with say $12,000 in credit card debt, will have approximate monthly payment increases from between $150 to $450, an increase most people can ill afford.
This increase in bankruptcy filings has overwhelmed bankruptcy lawyers, who face a burden of being liable for false information filed by clients once the new law takes effect. Certainly an unwelcome change. This additional liability, together with the additional tasks, has prompted many lawyers to raise fees subsstantally over the same time as last year.
What does this mean for bad debt? From here on, bankruptcy filings will be more confusing, complicated and costly. The system is already overloaded with bankruptcy cases. If you suspect you're in the bankruptcy category, you should move on it now. Waiting even another day could be too late.
"What is an Investor Ready Business Plan"
"What is an Investor Ready Business Plan" A Business Plan, as all good entrepreneurs starting out in life should know is the foundation, or rather a springboard, towards the establishment and growth of a new business. A business plan is an essential tool for companies raising capital - and your business plan needs to be Investor Ready.
What is an Investor Ready business plan?
An investor ready business plan is a document that has been professionally prepared to meet the needs of both Venture Capitalists and Angel investors. In your Business Plan, you should be able to see your own project through the investor's eye. Your plan must be able to answer the concerns of an investor.
The investors, both VCs and angels, are risking their hard earned capital by investing in your venture in the hope of long term returns that are worth many times their original investment. An Investor Ready Business Plan demonstrates to investors that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by prepareing a comprehensive and detailed view of their business objectives and goals. Some important sections that address different concerns of the investors are below:
Management
Investors invest in management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions.
Customers
It is important to communicate to the investors that you understand the needs and requirements of your customers and to articulate your marketing strategy within your business plan.
Product/Service Description
A complete description of the product or the services offered by you should be outlined in detail. A description of the overall market for your product or service, along with the details of your customer base is essential. The investors need to know the reach and the kind of customers your product / service is catering to.
Marketing Plan
One of the most important sections of your business plan is your marketing plan. This section will outline your sustainable competitive advantage to your investors. In a way assure them why you will succeed where others have failed. This section is where you include a definitive description of your customers, market size, demographics, characteristics, growth prospects, trends and sales potential per product / service category.
Here is where the pricing strategies are outlined and how they can directly influence the growth potential of each product /service. It is also important to include the future growth, market share and trend influences.
Barriers to Entry
Along with giving the details of what your product / service is and who your customers are, you also have to inform your investors how you will you prevent your competitors from taking away your customers. The barriers to entry section outlines your business strategy to keep your competitors at bay and grow in the market. Investors need to feel comfortable about the soundness of your strategy before they invest in your venture.
Click here to contact us to learn more about writing an investor ready business plan: http://www.investorbusinessplan.com/writing-business-plan.html
For more in-depth information on Business Plans, you can visit our site at:
http://www.investorbusinessplan.com
What is an Investor Ready business plan?
An investor ready business plan is a document that has been professionally prepared to meet the needs of both Venture Capitalists and Angel investors. In your Business Plan, you should be able to see your own project through the investor's eye. Your plan must be able to answer the concerns of an investor.
The investors, both VCs and angels, are risking their hard earned capital by investing in your venture in the hope of long term returns that are worth many times their original investment. An Investor Ready Business Plan demonstrates to investors that you are an expert in your industry and that you have a clear mission. An entrepreneur addresses these needs by prepareing a comprehensive and detailed view of their business objectives and goals. Some important sections that address different concerns of the investors are below:
Management
Investors invest in management - not just ideas. It is very important that you express your knowledge, passion and dedication to your business as best as you can. The competence of your team along with their experience levels and their commitment levels are also factors that investors look into before making their investment decisions.
Customers
It is important to communicate to the investors that you understand the needs and requirements of your customers and to articulate your marketing strategy within your business plan.
Product/Service Description
A complete description of the product or the services offered by you should be outlined in detail. A description of the overall market for your product or service, along with the details of your customer base is essential. The investors need to know the reach and the kind of customers your product / service is catering to.
Marketing Plan
One of the most important sections of your business plan is your marketing plan. This section will outline your sustainable competitive advantage to your investors. In a way assure them why you will succeed where others have failed. This section is where you include a definitive description of your customers, market size, demographics, characteristics, growth prospects, trends and sales potential per product / service category.
Here is where the pricing strategies are outlined and how they can directly influence the growth potential of each product /service. It is also important to include the future growth, market share and trend influences.
Barriers to Entry
Along with giving the details of what your product / service is and who your customers are, you also have to inform your investors how you will you prevent your competitors from taking away your customers. The barriers to entry section outlines your business strategy to keep your competitors at bay and grow in the market. Investors need to feel comfortable about the soundness of your strategy before they invest in your venture.
Click here to contact us to learn more about writing an investor ready business plan: http://www.investorbusinessplan.com/writing-business-plan.html
For more in-depth information on Business Plans, you can visit our site at:
http://www.investorbusinessplan.com
Venture Capital Negotiating Issues
Venture Capital Negotiating Issues When companies enter into negotiations with venture capital firms, there are several issues which need to be defined and agreed upon. This article describes the key issues.
Valuation. Valuation is the most prominent negotiating issues. Valuation is the price of the company in which the venture capitalist invests. Valuation determines what percent of the company the investor is buying for their capital.
Timing of the Investment. Many investors will commit a large amount of capital, but will contribute that capital to the companies in installments. Often, these installments are only made when pre-designated milestones are met.
Vesting of Founders' Stock. Like capital, investors often prefer that stock is given to company founders and key employees in installments. This is known as vesting.
Modifying the Management Team. Some investors insist that additional or substitute management employees be hired subsequent to their investment. This gives investors additional security that the company will execute on its business model. An important issue to negotiate with regards to modifying the management team is the amount of stock or options that will be issued to new management team members, as this will dilute the holdings of the founders.
Employment Agreements with Key Founders. Venture capitalists typically do not want companies to have employment agreements that limit the circumstances under which employees can be fired and/or set compensation and benefits levels that are too high. Other key employment agreement issues to be negotiated with venture capitalists include restrictions on post-employment activities and employee severance payments on termination.
Company Proprietary Rights. If the company has an important product with intellectual property (IP), investors will want to ensure that the company, and not a company employee, owns the IP. In addition, investors will want to ensure that new inventions be assigned to the company. To this end, investors may negotiate that all employees must sign Confidentiality and Inventions Assignment Agreements.
Exit Strategy. Investors are very focused on how they will "cash out" of their investment. In this regard, they will negotiate regarding registration rights (both demand and piggyback); rights to participate in any sale of stock by the founders (co-sale rights); and possibly a right to force the company to redeem their stock under certain conditions.
Lock-Up Rights. Venture capitalists may require a lock-up period at the term sheet stage. The "lock-up period" is typically a 30-60 day period where the investors have the exclusive right, but not the obligation, to make the investment. Investors typically conduct due diligence during this time without fear that other investors will pre-empt their opportunity to invest in the company.
Each of these issues are critical when raising venture capital, since the outcome can significantly impact the success of the venture and the wealth potential of the company founders and management team. Because venture capitalists are very knowledgeable regarding these issues, and have great skill in negotiating on them, companies who are raising venture capital should seek advisors who also have this experience and expertise.
Valuation. Valuation is the most prominent negotiating issues. Valuation is the price of the company in which the venture capitalist invests. Valuation determines what percent of the company the investor is buying for their capital.
Timing of the Investment. Many investors will commit a large amount of capital, but will contribute that capital to the companies in installments. Often, these installments are only made when pre-designated milestones are met.
Vesting of Founders' Stock. Like capital, investors often prefer that stock is given to company founders and key employees in installments. This is known as vesting.
Modifying the Management Team. Some investors insist that additional or substitute management employees be hired subsequent to their investment. This gives investors additional security that the company will execute on its business model. An important issue to negotiate with regards to modifying the management team is the amount of stock or options that will be issued to new management team members, as this will dilute the holdings of the founders.
Employment Agreements with Key Founders. Venture capitalists typically do not want companies to have employment agreements that limit the circumstances under which employees can be fired and/or set compensation and benefits levels that are too high. Other key employment agreement issues to be negotiated with venture capitalists include restrictions on post-employment activities and employee severance payments on termination.
Company Proprietary Rights. If the company has an important product with intellectual property (IP), investors will want to ensure that the company, and not a company employee, owns the IP. In addition, investors will want to ensure that new inventions be assigned to the company. To this end, investors may negotiate that all employees must sign Confidentiality and Inventions Assignment Agreements.
Exit Strategy. Investors are very focused on how they will "cash out" of their investment. In this regard, they will negotiate regarding registration rights (both demand and piggyback); rights to participate in any sale of stock by the founders (co-sale rights); and possibly a right to force the company to redeem their stock under certain conditions.
Lock-Up Rights. Venture capitalists may require a lock-up period at the term sheet stage. The "lock-up period" is typically a 30-60 day period where the investors have the exclusive right, but not the obligation, to make the investment. Investors typically conduct due diligence during this time without fear that other investors will pre-empt their opportunity to invest in the company.
Each of these issues are critical when raising venture capital, since the outcome can significantly impact the success of the venture and the wealth potential of the company founders and management team. Because venture capitalists are very knowledgeable regarding these issues, and have great skill in negotiating on them, companies who are raising venture capital should seek advisors who also have this experience and expertise.
Two Types of Business Plan Executive Summaries
Two Types of Business Plan Executive Summaries Companies seeking capital often ask how long the Executive Summary of their business plan should be. The answer depends upon the use of the summary, mainly determining if 1) it precedes the full business plan, or 2) it will be used as a stand-alone document.
When the Executive Summary precedes the business plan, its length should be short, typically only one to two pages and certainly no longer than three pages. This is because the Executive Summary is not meant to tell the whole story of the business opportunity. Rather, the summary must simply stimulate and motivate the investor to learn more about the company in the body of the plan.
The second type of Executive Summary is a stand-alone document. That is, it is given, by itself, to investors for their initial review. If interested, the investor will then request the full business plan. A stand-alone Executive Summary is often used to limit the flow of information. That is, if an investor is not interested in the general opportunity that your summary presents, you don't want to reveal to them intimate details of your plan.
Regardless of which type of Executive Summary you are developing, the summary must included the following critical elements:
1. A concise explanation of the business
2. A description of the market size and market need for the business
3. A discussion of how the company is uniquely qualified to fulfill this need
In addition, a stand-alone Executive Summary should include summaries of each essential elements of the business plan. This includes paragraphs addressing each of the following:
- Customer Analysis: What specific customer segments the company is targeting and their demographic profiles
- Competition: Who the company's direct competitors are and the company's key competitive advantages
- Marketing Plan: How the company will effectively penetrate its target market
- Financial Plan: A summary of the financial projections of the company
- Management Team: Biographies of key management team and Board members
The Executive Summary is the most critical element of the business plan. If it does not grab the investor's attention, the investor will neither read nor request the full business plan. As such, spend time developing the best possible summary, create two versions (e.g., stand-alone and full plan predecessor) as appropriate, and work to get it in the hands of the right investors.
When the Executive Summary precedes the business plan, its length should be short, typically only one to two pages and certainly no longer than three pages. This is because the Executive Summary is not meant to tell the whole story of the business opportunity. Rather, the summary must simply stimulate and motivate the investor to learn more about the company in the body of the plan.
The second type of Executive Summary is a stand-alone document. That is, it is given, by itself, to investors for their initial review. If interested, the investor will then request the full business plan. A stand-alone Executive Summary is often used to limit the flow of information. That is, if an investor is not interested in the general opportunity that your summary presents, you don't want to reveal to them intimate details of your plan.
Regardless of which type of Executive Summary you are developing, the summary must included the following critical elements:
1. A concise explanation of the business
2. A description of the market size and market need for the business
3. A discussion of how the company is uniquely qualified to fulfill this need
In addition, a stand-alone Executive Summary should include summaries of each essential elements of the business plan. This includes paragraphs addressing each of the following:
- Customer Analysis: What specific customer segments the company is targeting and their demographic profiles
- Competition: Who the company's direct competitors are and the company's key competitive advantages
- Marketing Plan: How the company will effectively penetrate its target market
- Financial Plan: A summary of the financial projections of the company
- Management Team: Biographies of key management team and Board members
The Executive Summary is the most critical element of the business plan. If it does not grab the investor's attention, the investor will neither read nor request the full business plan. As such, spend time developing the best possible summary, create two versions (e.g., stand-alone and full plan predecessor) as appropriate, and work to get it in the hands of the right investors.
Top Ten Reasons To Create A One Page Business Plan
Top Ten Reasons To Create A One Page Business Plan 1. Choose opportunities more wisely and waste less time
because I have my plan in place (P 6)
2. A single page can contain all the elements you need to
tell your employees, board of directors, potential partners
or banker where you are taking your business and how you are
going to get there. (P 17)
3. The most important reason to have a business plan is to
clarify your thinking, regardless of the size of your
company (P 18)
4. It facilitates creating and analytical thinking, problem
solving, communication, and teamwork. (P 18)
5. It creates hope and enthusiasm about the future. (P 18)
6. It also brings out procrastination, frustration,
differences of opinions and possibly anger. (P 18)
7. Somehow writing initiates the transformation from idea
to reality. (P 21)
8. The written word produces a contract with yourself that
results in immediate action. (P 21)
9. Writing allows others to participate in your dream and
give you feedback (P 21)
10. Because your coach, consultant, business builder
strategist, friend, relative tells you that one of the
top reasons businesses fail is a lack of planning! That's why!
Quotes 1-9 are from the One Page Business Plan Book, by Jim
Horan. For more information on the One Page Business Plan,
visit http://www.coachmaria.com/events/onepage.html
because I have my plan in place (P 6)
2. A single page can contain all the elements you need to
tell your employees, board of directors, potential partners
or banker where you are taking your business and how you are
going to get there. (P 17)
3. The most important reason to have a business plan is to
clarify your thinking, regardless of the size of your
company (P 18)
4. It facilitates creating and analytical thinking, problem
solving, communication, and teamwork. (P 18)
5. It creates hope and enthusiasm about the future. (P 18)
6. It also brings out procrastination, frustration,
differences of opinions and possibly anger. (P 18)
7. Somehow writing initiates the transformation from idea
to reality. (P 21)
8. The written word produces a contract with yourself that
results in immediate action. (P 21)
9. Writing allows others to participate in your dream and
give you feedback (P 21)
10. Because your coach, consultant, business builder
strategist, friend, relative tells you that one of the
top reasons businesses fail is a lack of planning! That's why!
Quotes 1-9 are from the One Page Business Plan Book, by Jim
Horan. For more information on the One Page Business Plan,
visit http://www.coachmaria.com/events/onepage.html
The Use of Common Stock in Venture Capital Transactions
The Use of Common Stock in Venture Capital Transactions When raising capital for a business venture, a company can either raise debt capital, equity capital or a combination of the two. Debt capital is money loaned to the company at an agreed interest rate for a fixed time period. Conversely, equity capital is money invested by owners (shareholders) for use in business operations that need not be repaid. Combinations include convertible securities which may be debt that can be converted into equity at some point in the future.
The simplest form of equity capital is common stock. Common stock has many distinguishing factors as follows:
- Common stock is not convertible into another type of security
- Each share enjoys one vote
- Dividends are payable without limit but only when declared by the board of directors
- In liquidation, common stock holders are the last priority to which to distribute assets
In venture capital transactions, there may be two types of common stock which are issued. The first is Class A common stock, which is like preferred stock without the special voting rights which some statutes require in shares labeled ""preferred."" A second type of common stock is junior common stock. While this type of stock is not used very frequently, it allows companies to get cheap stock into the hands of key employees at minimal tax cost.
Determining what type of capital to raise and how to structure the financing transaction is of critical importance to growing ventures. As such, it is crucial to understand the key terms and consult the appropriate legal and business advisors when embarking on the capital-raising process.
The simplest form of equity capital is common stock. Common stock has many distinguishing factors as follows:
- Common stock is not convertible into another type of security
- Each share enjoys one vote
- Dividends are payable without limit but only when declared by the board of directors
- In liquidation, common stock holders are the last priority to which to distribute assets
In venture capital transactions, there may be two types of common stock which are issued. The first is Class A common stock, which is like preferred stock without the special voting rights which some statutes require in shares labeled ""preferred."" A second type of common stock is junior common stock. While this type of stock is not used very frequently, it allows companies to get cheap stock into the hands of key employees at minimal tax cost.
Determining what type of capital to raise and how to structure the financing transaction is of critical importance to growing ventures. As such, it is crucial to understand the key terms and consult the appropriate legal and business advisors when embarking on the capital-raising process.
The Term Sheet's Role in Raising Venture Capital
The Term Sheet's Role in Raising Venture Capital Entrepreneurs and companies who are seeking venture capital often negotiate with one or more venture capital firms on a number of important issues. These issues include the amount of capital to be raised, the investment terms, etc. The document which summarizes these terms is known as a "term sheet."
The term sheet is similar to a letter of intent, that is, it is a nonbinding summary of the key points of the transaction. These points are later covered in detail in the Stock Purchase Agreement and related agreements signed at the time of execution of the transaction.
The value of the abbreviated term sheet format is that it speeds up the process of consummating a transaction. Specifically, it allows the parties to agree on the general terms of the transaction rather than having to debate less important details. In addition, because it is not binding, it allows the parties to take their discussions to the next level without the danger of committing too much. Note, however, that some parts of a term sheet may be binding. Typically the binding aspects only refer to confidentiality and disclosure issues.
Venture capital firms, and not the companies seeking capital, typically prepare the term sheet to include the terms under which they are willing to invest their capital. Alternatively, when seeking capital from angel investors, firms typically create their own term sheets for the angels to review. This fact tells a bit about the balance of power in an investment transaction. Venture capital firms are often more sophisticated and have more power than the companies seeking capital. Alternatively, angel investors are typically less sophisticated and have less power, and are more prone to consider the investment terms as laid out by the company seeking capital.
Getting to a term sheet is a key milestone in the capital raising process. Although not all term sheets result in a transaction, the term sheet shows that both parties are legitimately interested in executing a transaction. It is then up to the investor and company to agree upon the details.
The term sheet is similar to a letter of intent, that is, it is a nonbinding summary of the key points of the transaction. These points are later covered in detail in the Stock Purchase Agreement and related agreements signed at the time of execution of the transaction.
The value of the abbreviated term sheet format is that it speeds up the process of consummating a transaction. Specifically, it allows the parties to agree on the general terms of the transaction rather than having to debate less important details. In addition, because it is not binding, it allows the parties to take their discussions to the next level without the danger of committing too much. Note, however, that some parts of a term sheet may be binding. Typically the binding aspects only refer to confidentiality and disclosure issues.
Venture capital firms, and not the companies seeking capital, typically prepare the term sheet to include the terms under which they are willing to invest their capital. Alternatively, when seeking capital from angel investors, firms typically create their own term sheets for the angels to review. This fact tells a bit about the balance of power in an investment transaction. Venture capital firms are often more sophisticated and have more power than the companies seeking capital. Alternatively, angel investors are typically less sophisticated and have less power, and are more prone to consider the investment terms as laid out by the company seeking capital.
Getting to a term sheet is a key milestone in the capital raising process. Although not all term sheets result in a transaction, the term sheet shows that both parties are legitimately interested in executing a transaction. It is then up to the investor and company to agree upon the details.
The Secret of Credit Card Numbers
The Secret of Credit Card Numbers Have you ever really looked at your credit card and tried to figure out what that huge string of numbers really means? Do these card issuers have so many customers that your account number has to be 16 digits long?
You may be surprised to know that all those numbers you see actually do stand for something, and it's not just who YOU are. Let's take a look.
Most of the major credit card companies operate on the same system when choosing a credit card number. Other cards like gas cards, department store cards and phone cards go their own way. Let's concentrate on the ones that all play by the same rules.
The very first digit in the series will be a 3,4,5, 0r 6. This number designates the type of card as follows:
3 = a Travel & Entertainment Card like American Express or Diners Club.
4 = Visa and Visa-branded debit cards, cash cards, etc.
5 = MasterCard and MasterCard-branded debit cards, cash cards, etc.
6 = Discover
American Express and Diners Club use the second digit to identify the company. That means that Diners Club cards will start with either "36" or "38", and American Express cards will use either "34" or "37".
The remaining numbers in the series are used for different purposes depending upon the card type and issuer.
In most cases, the next group after the opening series of numbers represents the routing number of the card-issuing bank, the group after that is the user's account number, and the final digit is a check digit. The check digit is a number that is calculated by applying a special formula to all of the other numbers. The check digit is the result of that formula and is used as an anti-fraud check.
To keep things from getting too confusing, look at your card as you follow along for the next steps.
American Express
The American Express Card uses digits three and four for type (business or personal) and the currency of the cardholder's country of origin. The next digits from the fifth through the eleventh are account numbers. Digits twelve through fourteen indicate the card number within the account and the last digit is the check digit.
Visa
With Visa, digits two through six represent the bank number. Beginning with the seventh digit and running through the twelfth or the fifteenth represents the account number and the last number is the check digit. Since all Visa cards do not have the same amount of numbers in the sequence, the number of digits in a group may vary.
MasterCard
For MasterCard, the second digit, through to anywhere between the third and the sixth digit is the bank number. All remaining digits, except the check digit at the end of the series, identifies that cardholder's account.
Now that we've gone over it all, you're probably wondering why you were ever wondering in the first place. Just remember though, knowledge is power. Some things are just fun to know.
You may be surprised to know that all those numbers you see actually do stand for something, and it's not just who YOU are. Let's take a look.
Most of the major credit card companies operate on the same system when choosing a credit card number. Other cards like gas cards, department store cards and phone cards go their own way. Let's concentrate on the ones that all play by the same rules.
The very first digit in the series will be a 3,4,5, 0r 6. This number designates the type of card as follows:
3 = a Travel & Entertainment Card like American Express or Diners Club.
4 = Visa and Visa-branded debit cards, cash cards, etc.
5 = MasterCard and MasterCard-branded debit cards, cash cards, etc.
6 = Discover
American Express and Diners Club use the second digit to identify the company. That means that Diners Club cards will start with either "36" or "38", and American Express cards will use either "34" or "37".
The remaining numbers in the series are used for different purposes depending upon the card type and issuer.
In most cases, the next group after the opening series of numbers represents the routing number of the card-issuing bank, the group after that is the user's account number, and the final digit is a check digit. The check digit is a number that is calculated by applying a special formula to all of the other numbers. The check digit is the result of that formula and is used as an anti-fraud check.
To keep things from getting too confusing, look at your card as you follow along for the next steps.
American Express
The American Express Card uses digits three and four for type (business or personal) and the currency of the cardholder's country of origin. The next digits from the fifth through the eleventh are account numbers. Digits twelve through fourteen indicate the card number within the account and the last digit is the check digit.
Visa
With Visa, digits two through six represent the bank number. Beginning with the seventh digit and running through the twelfth or the fifteenth represents the account number and the last number is the check digit. Since all Visa cards do not have the same amount of numbers in the sequence, the number of digits in a group may vary.
MasterCard
For MasterCard, the second digit, through to anywhere between the third and the sixth digit is the bank number. All remaining digits, except the check digit at the end of the series, identifies that cardholder's account.
Now that we've gone over it all, you're probably wondering why you were ever wondering in the first place. Just remember though, knowledge is power. Some things are just fun to know.
The Marketing Plan and the Four P's
The Marketing Plan and the Four P's The Marketing Plan section of the business plan demonstrates how a company will penetrate the market with its products and services. The Marketing Plan should include "the four P's" - Product, Promotions, Price, and Place.
Products and/or Services
The first "P" stands for Product, but includes all products and services that the company offers. This section of the business plan should detail all the features of the products and services, how they work, their unique/proprietary attributes, etc. For products that are patented and/or technical in nature, drawings and backup materials should be presented in the Appendix.
Most growing companies offer certain products and services today but expect to offer more in the future. It is important to mention both current and future products/services here, but to focus primarily on the short-to-intermediate term horizon.
Promotions
Promotions include each of the activities that induce a customer to buy the company's products and services. Promotional activities could include advertising, public relations (PR), free samples, discounts, direct mail, telemarketing, partnerships, etc.
This section of the business plan discusses which promotions will be used and how they will be used. For instance, if partnerships will be used to secure new customers, the plan must explain which companies are partners, how they will be able to provide new customers, how the partnership will work (from operational/ financial standpoints), etc.
This section must be as specific as possible, particularly as it relates to discussing future promotions. To say that a company is going to generate PR in trade magazines is simply too vague. Rather, the plan must explain the type of article/feature that may be written about the firm and why, which specific trade journals that will be targeted and/or the projected publication dates.
In discussing how the company will promote itself, it is important to discuss how the company will position itself. This positioning statement details the attributes that customers will assign to the company, its products and services. The choice of promotional activities must support this positioning. For example, discounts might not be consistent with a desire to be considered an upscale brand.
Price
This section of the plan should detail the price point(s) at which the company's products and services will be sold. If the products/ services are sold as bundles, these should be detailed in this section. Rationale for the pricing should be given when applicable (e.g., why the company has chosen an initiation fee plus monthly membership fees versus a one-time lifetime membership fee).
Place
The final "P" refers to "Place" or "Distribution" and explains how a company's products and/or services will be delivered to customers. This section is crucial because if customers cannot access products and services, they cannot purchase them.
This section is especially critical for high-growth, capital-constrained companies. Attaining profit-effective distribution channels is often the most vexing challenge for these businesses. Examples of distribution methods include retail locations, website, distributors, wholesalers, direct mail catalogs, etc.
Many companies have multiple distribution methods to deliver their products and services to customers and each should be detailed here.
Detailing the "the four P's" in the marketing plan is critical in proving to investors that your company will be able to efficiently and effectively penetrate its market.
Products and/or Services
The first "P" stands for Product, but includes all products and services that the company offers. This section of the business plan should detail all the features of the products and services, how they work, their unique/proprietary attributes, etc. For products that are patented and/or technical in nature, drawings and backup materials should be presented in the Appendix.
Most growing companies offer certain products and services today but expect to offer more in the future. It is important to mention both current and future products/services here, but to focus primarily on the short-to-intermediate term horizon.
Promotions
Promotions include each of the activities that induce a customer to buy the company's products and services. Promotional activities could include advertising, public relations (PR), free samples, discounts, direct mail, telemarketing, partnerships, etc.
This section of the business plan discusses which promotions will be used and how they will be used. For instance, if partnerships will be used to secure new customers, the plan must explain which companies are partners, how they will be able to provide new customers, how the partnership will work (from operational/ financial standpoints), etc.
This section must be as specific as possible, particularly as it relates to discussing future promotions. To say that a company is going to generate PR in trade magazines is simply too vague. Rather, the plan must explain the type of article/feature that may be written about the firm and why, which specific trade journals that will be targeted and/or the projected publication dates.
In discussing how the company will promote itself, it is important to discuss how the company will position itself. This positioning statement details the attributes that customers will assign to the company, its products and services. The choice of promotional activities must support this positioning. For example, discounts might not be consistent with a desire to be considered an upscale brand.
Price
This section of the plan should detail the price point(s) at which the company's products and services will be sold. If the products/ services are sold as bundles, these should be detailed in this section. Rationale for the pricing should be given when applicable (e.g., why the company has chosen an initiation fee plus monthly membership fees versus a one-time lifetime membership fee).
Place
The final "P" refers to "Place" or "Distribution" and explains how a company's products and/or services will be delivered to customers. This section is crucial because if customers cannot access products and services, they cannot purchase them.
This section is especially critical for high-growth, capital-constrained companies. Attaining profit-effective distribution channels is often the most vexing challenge for these businesses. Examples of distribution methods include retail locations, website, distributors, wholesalers, direct mail catalogs, etc.
Many companies have multiple distribution methods to deliver their products and services to customers and each should be detailed here.
Detailing the "the four P's" in the marketing plan is critical in proving to investors that your company will be able to efficiently and effectively penetrate its market.
The Management Team Section of the Business Plan - Don't Just Include Resumes
The Management Team Section of the Business Plan - Don't Just Include Resumes Even the best new concept or existing plan will fail if executed poorly. The Management Team section of the business plan must prove to the investor why the key company personnel are "eminently qualified" to execute on the business model.
The Management Team section should include biographies of key team members and detail their responsibilities. It is important that these biographies are not merely resumes that include the educational backgrounds and previous job titles and responsibilities of the team members. Rather, biographies should highlight the most relevant past positions that the individuals have held and specific successes in each. These successes could include launching and growing new businesses or managing divisions of established companies.
Team member biographies should be tailored to the company's growth stage. For instance, a start-up company should emphasize its management's success launching and growing companies. A more mature company should emphasize how team members have successfully operated within the framework of larger enterprises.
Depending upon the stage of the company, key functional areas may be missing from the team. This is acceptable provided that the plan clearly defines the roles that these individuals will play and identifies the key characteristics of the individuals that will be hired. However, it is generally not favorable if personnel are missing for ultra-critical roles. For example, a plan that is fundamentally a marketing play should not seek financing without a stellar marketing team.
The Management Team section should also include biographies of the company's Advisory Board and/or Board of Directors. While having well-known advisors/board members adds credibility to the business plan, it is highly effective to explain how these advisors will directly impact the company through strategic advice and/or providing conduits to key clients, partners, suppliers, etc.
In summary, the Management Team section of the business plan is an opportunity to prove to investors that your company has the necessary talent to succeed. Rather than waste this opportunity by merely showing employee resumes, which could be included in the Appendix, the section should be used to explain precisely how the team is uniquely qualified to execute the venture in its present state.
As President of www.growthink.com, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
The Management Team section should include biographies of key team members and detail their responsibilities. It is important that these biographies are not merely resumes that include the educational backgrounds and previous job titles and responsibilities of the team members. Rather, biographies should highlight the most relevant past positions that the individuals have held and specific successes in each. These successes could include launching and growing new businesses or managing divisions of established companies.
Team member biographies should be tailored to the company's growth stage. For instance, a start-up company should emphasize its management's success launching and growing companies. A more mature company should emphasize how team members have successfully operated within the framework of larger enterprises.
Depending upon the stage of the company, key functional areas may be missing from the team. This is acceptable provided that the plan clearly defines the roles that these individuals will play and identifies the key characteristics of the individuals that will be hired. However, it is generally not favorable if personnel are missing for ultra-critical roles. For example, a plan that is fundamentally a marketing play should not seek financing without a stellar marketing team.
The Management Team section should also include biographies of the company's Advisory Board and/or Board of Directors. While having well-known advisors/board members adds credibility to the business plan, it is highly effective to explain how these advisors will directly impact the company through strategic advice and/or providing conduits to key clients, partners, suppliers, etc.
In summary, the Management Team section of the business plan is an opportunity to prove to investors that your company has the necessary talent to succeed. Rather than waste this opportunity by merely showing employee resumes, which could be included in the Appendix, the section should be used to explain precisely how the team is uniquely qualified to execute the venture in its present state.
As President of www.growthink.com, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
The Key to a Successful Business
The Key to a Successful Business Where would a business be without a business plan?
A business plan sets the course for the future of the
business. It gives the business owner or manager a
sense of direction, listing the objectives and goals of
the business from the outset.
Writing a business plan requires a lot of time; a
successful business plan cannot be a rush job. Once
an idea for a business has been developed,
researching the many facets of owning and operating a
business is the next most important step. Your local
county council should be able to assist you with
accessing the required information of a legal nature, as
should your local business enterprise center. The rest
of the research will be up to you! You will need to
research products for your business, at the same time
as researching other enterprises that may be in direct
competition to you. Furthermore, you need to research
the market to determine whether there is a need for
your business product or service.
With the research out of the way, sitting down to write
a business plan requires focus. Your business plan will
become the bible of your business for at least the next
3 to 5 years so it is important to make it clear, concise
and comprehensive. Most enterprises will complete a
SWOT analysis to determine their strengths,
weaknesses, opportunities and threats of the
business. Whilst the business is in infancy,
brainstorming would be the most accurate way of
performing the analysis, as the business would not yet
have customers and profitability would not yet have
been experienced. However, it is very important to
remember that a good business plan is flexible and
can be changed as your business experiences growth.
After completing a SWOT analysis, you will need to
determine your business name if it has not already
been decided (and register it), as well as your vision
and values, your business goals and long term mission
and how you will achieve all of this when the business
is up and running. Writing every thought down
regardless of how minute you feel it is will allow you to
collate everything pertinent to your business for easy
reference in the future. Who knows, the thought or idea
that you have today may well turn into a million dollar
idea in a years time! Maintaining good records and
following a strong business plan is the key to a
successful business!
A business plan sets the course for the future of the
business. It gives the business owner or manager a
sense of direction, listing the objectives and goals of
the business from the outset.
Writing a business plan requires a lot of time; a
successful business plan cannot be a rush job. Once
an idea for a business has been developed,
researching the many facets of owning and operating a
business is the next most important step. Your local
county council should be able to assist you with
accessing the required information of a legal nature, as
should your local business enterprise center. The rest
of the research will be up to you! You will need to
research products for your business, at the same time
as researching other enterprises that may be in direct
competition to you. Furthermore, you need to research
the market to determine whether there is a need for
your business product or service.
With the research out of the way, sitting down to write
a business plan requires focus. Your business plan will
become the bible of your business for at least the next
3 to 5 years so it is important to make it clear, concise
and comprehensive. Most enterprises will complete a
SWOT analysis to determine their strengths,
weaknesses, opportunities and threats of the
business. Whilst the business is in infancy,
brainstorming would be the most accurate way of
performing the analysis, as the business would not yet
have customers and profitability would not yet have
been experienced. However, it is very important to
remember that a good business plan is flexible and
can be changed as your business experiences growth.
After completing a SWOT analysis, you will need to
determine your business name if it has not already
been decided (and register it), as well as your vision
and values, your business goals and long term mission
and how you will achieve all of this when the business
is up and running. Writing every thought down
regardless of how minute you feel it is will allow you to
collate everything pertinent to your business for easy
reference in the future. Who knows, the thought or idea
that you have today may well turn into a million dollar
idea in a years time! Maintaining good records and
following a strong business plan is the key to a
successful business!
The Ins and Outs of Credit Card Debt Settlement
The Ins and Outs of Credit Card Debt Settlement Are you a self-confessed shopaholic who buys anything and everything that you get your shopping addicted hands on? Such thoughtless and impulsive buying will most likely result in the accumulation of a bunch of junk that will simply collect dust. Can you even remember that silk scarf you just had to have and since it was a virtual steal at 50% off you just had to buy it? Where is it now and how many times have you actually worn it? Is it still fashionable?
If you're like most people, chances are you'll have to rummage through bins and bins of collected shopping "litter" which you've accumulated through the years, just to be able to see that once precious scarf. You may still be in a state of denial by saying "Fashion goes round and round and that scarf will have its shining moment once again."
Unfortunately, many people fall into this mode of impulsive buying that they really can't afford and before they realize it they become saddled with debt. If you fall into this category, you'll soon need to learn a thing or two about debt settlement which can assist you in extracting yourself out of that self-imposed state of financial trauma and begin to start rebuilding your life bit by bit. And the time to start is now! Of course, you have to be honest with yourself, admit that you've got a serious debt problem and then humble yourself enough to seek the help you need to pull yourself out of this devastating ordeal.
First things first, a lot of people may actually think that they only have a few choices when it comes to solving their debt problems. The two most common options for those who are burdened with enormous amounts of debt are either to consider declaring bankruptcy or debt consolidation. Unfortunately, if you take the easy way out by declaring bankruptcy, it will leave an embarrassing and indelible mark on your credit report for up to 7 years, which will result in higher interest rates, less credit and if you try do qualify for a mortgage (some lenders do give loans immediately after bankruptcy) you will most likely not be able to get a loan to cover 100% of the financing you need. Normally, an 80% first mortgage and if you can get a second mortgage, it will be at much higher interest rate and probably only 10% of the loan value for a total of 90% of the loan to value and you'll have to come up with 10% down.
Clearly, everything will come with a higher price for a period of time but you'll have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency and it's realistic to get 25% - 50% of the debt forgiven, if you can show that you'll continue to make monthly payments until the remainder is paid off.
Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask... because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination and get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies but many are.
Some groups offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.
In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable and that you are working with a quality company that doesn't over-charge you for their services.
On the other hand,if you would really like to save money, which only makes sense since you are already heavily in debt... then negotiate with the collection agency yourself. It's not difficult, rather than getting upset when you get called night after night simply tell the collection agency rep that you would like to pay off your debt but you can only do it if you can get it reduced and then ask them that you would like to get the debt you owe reduced by 50% - 60%, even 75% and ask them to see what they can do. Ask for a lot up front because as in any negotiation there's always a give and take. Believe me, they will go to work for you and your offer will be seriously considered because they only get paid when they collect and it's better to get their percentage on a smaller amount than "diddly squat" on the full amount.
Of course, you'll have to decide what route you want to take... bankruptcy versus debt settlement but shop around and realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, but be careful and don't let them push you around and never work with anyone you don't feel 100 percent comfortable with.
If you're like most people, chances are you'll have to rummage through bins and bins of collected shopping "litter" which you've accumulated through the years, just to be able to see that once precious scarf. You may still be in a state of denial by saying "Fashion goes round and round and that scarf will have its shining moment once again."
Unfortunately, many people fall into this mode of impulsive buying that they really can't afford and before they realize it they become saddled with debt. If you fall into this category, you'll soon need to learn a thing or two about debt settlement which can assist you in extracting yourself out of that self-imposed state of financial trauma and begin to start rebuilding your life bit by bit. And the time to start is now! Of course, you have to be honest with yourself, admit that you've got a serious debt problem and then humble yourself enough to seek the help you need to pull yourself out of this devastating ordeal.
First things first, a lot of people may actually think that they only have a few choices when it comes to solving their debt problems. The two most common options for those who are burdened with enormous amounts of debt are either to consider declaring bankruptcy or debt consolidation. Unfortunately, if you take the easy way out by declaring bankruptcy, it will leave an embarrassing and indelible mark on your credit report for up to 7 years, which will result in higher interest rates, less credit and if you try do qualify for a mortgage (some lenders do give loans immediately after bankruptcy) you will most likely not be able to get a loan to cover 100% of the financing you need. Normally, an 80% first mortgage and if you can get a second mortgage, it will be at much higher interest rate and probably only 10% of the loan value for a total of 90% of the loan to value and you'll have to come up with 10% down.
Clearly, everything will come with a higher price for a period of time but you'll have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency and it's realistic to get 25% - 50% of the debt forgiven, if you can show that you'll continue to make monthly payments until the remainder is paid off.
Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask... because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination and get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies but many are.
Some groups offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.
In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable and that you are working with a quality company that doesn't over-charge you for their services.
On the other hand,if you would really like to save money, which only makes sense since you are already heavily in debt... then negotiate with the collection agency yourself. It's not difficult, rather than getting upset when you get called night after night simply tell the collection agency rep that you would like to pay off your debt but you can only do it if you can get it reduced and then ask them that you would like to get the debt you owe reduced by 50% - 60%, even 75% and ask them to see what they can do. Ask for a lot up front because as in any negotiation there's always a give and take. Believe me, they will go to work for you and your offer will be seriously considered because they only get paid when they collect and it's better to get their percentage on a smaller amount than "diddly squat" on the full amount.
Of course, you'll have to decide what route you want to take... bankruptcy versus debt settlement but shop around and realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, but be careful and don't let them push you around and never work with anyone you don't feel 100 percent comfortable with.
The Importance of Personal Background Checks -
The Importance of Personal Background Checks - The purpose of personal background checks is to get a feel for the applicant's character. Personal and professional references are a good starting point, however, experts in the investigative field caution employers on using this method solely. Prospective employees are obviously going to give references of people whom they trust will provide a good character reference for them. Those references may not necessarily be fabricating information regarding the applicant; they simply may not know pertinent information about him or her.
Another method employer's use is obtaining a credit report on the prospective employee. While privacy advocates argue the necessity in reviewing credit reports, many employers find them to be full of important information. An employer can determine what types of credit accounts the applicant has open and their history of paying bills on time. For some employers, this is a good indicator of how responsible of an employee he or she will be. Employers also may draw a correlation between credit history, job performance and employee retention. Though these conclusions are heatedly debated, according to the Fair Credit Reporting Act, employers do have the right to investigate much of a person's credit history as a pre-employment tool.
Credit reports also contain pertinent job and address information. Some employers and private investigation firms use credit reports as a means of cross-referencing information supplied on the employment application. Though credit reports contain much needed personal information, they should be used in conjunction with other personal background check methods in order to have a well-rounded view of the applicant's character and ability to perform the job duties.
This type of consumer report also contains information that may be valuable, although legally questionable, to the employer. Age and marital status are data that are often reported. Employers should already be familiar with privacy and equal opportunity legislation and be careful not to discriminate on the basis of these facts. The purpose of performing personal background checks is to ensure the safety and security of the company and violating Federal laws is out of the question.
Identity theft, criminal prosecutions, outstanding debt and bankruptcies are all examples of information that can be acquired through a personal background check. As an employer, it is your responsibility to only gather what information you need; information gathered should be directly related to the safety and quality of the company and more specifically, the job performed. For example, if a company needs to hire a receptionist, it might not be necessary to know whether or not he or she has filed bankruptcy recently. Other than using that as a tool to judge character, some information gathered through personal background checks may not be relevant to the position.
If an employer should require a more extensive background check, things such as who someone has dated, use of alcohol or drugs or personal lifestyle can also be obtained. Usually when a firm investigates a person's background, they may interview neighbors, friends, associated, former co-workers and others to gain a picture of the person as a whole. Some of the information may be of interest to the employer and some may be irrelevant. It is important when hiring an investigator, to let them know specific information you are looking for.
When investigating a prospective employee's background, it is vitally important to be honest about your intentions. Federal law requires employers to provide separate consent forms for each type of investigation to be conducted; it is also good business practice to be forthcoming about these matters. Background checks on employee's can save companies money by avoiding potential lawsuits, theft, and costly employee retention. It is usually best to outsource the work to a private firm, if the information is very detailed. For some employers, searching at the local or state level is much more cost-effective and may produce the results they need without outsourcing.
Another method employer's use is obtaining a credit report on the prospective employee. While privacy advocates argue the necessity in reviewing credit reports, many employers find them to be full of important information. An employer can determine what types of credit accounts the applicant has open and their history of paying bills on time. For some employers, this is a good indicator of how responsible of an employee he or she will be. Employers also may draw a correlation between credit history, job performance and employee retention. Though these conclusions are heatedly debated, according to the Fair Credit Reporting Act, employers do have the right to investigate much of a person's credit history as a pre-employment tool.
Credit reports also contain pertinent job and address information. Some employers and private investigation firms use credit reports as a means of cross-referencing information supplied on the employment application. Though credit reports contain much needed personal information, they should be used in conjunction with other personal background check methods in order to have a well-rounded view of the applicant's character and ability to perform the job duties.
This type of consumer report also contains information that may be valuable, although legally questionable, to the employer. Age and marital status are data that are often reported. Employers should already be familiar with privacy and equal opportunity legislation and be careful not to discriminate on the basis of these facts. The purpose of performing personal background checks is to ensure the safety and security of the company and violating Federal laws is out of the question.
Identity theft, criminal prosecutions, outstanding debt and bankruptcies are all examples of information that can be acquired through a personal background check. As an employer, it is your responsibility to only gather what information you need; information gathered should be directly related to the safety and quality of the company and more specifically, the job performed. For example, if a company needs to hire a receptionist, it might not be necessary to know whether or not he or she has filed bankruptcy recently. Other than using that as a tool to judge character, some information gathered through personal background checks may not be relevant to the position.
If an employer should require a more extensive background check, things such as who someone has dated, use of alcohol or drugs or personal lifestyle can also be obtained. Usually when a firm investigates a person's background, they may interview neighbors, friends, associated, former co-workers and others to gain a picture of the person as a whole. Some of the information may be of interest to the employer and some may be irrelevant. It is important when hiring an investigator, to let them know specific information you are looking for.
When investigating a prospective employee's background, it is vitally important to be honest about your intentions. Federal law requires employers to provide separate consent forms for each type of investigation to be conducted; it is also good business practice to be forthcoming about these matters. Background checks on employee's can save companies money by avoiding potential lawsuits, theft, and costly employee retention. It is usually best to outsource the work to a private firm, if the information is very detailed. For some employers, searching at the local or state level is much more cost-effective and may produce the results they need without outsourcing.
The importance of planning
The importance of planning Are you planning to start a new business? Or are you considering expanding your current business and require a bank loan or investment from outsiders?
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you'll do worse, or perhaps you'll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan's layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There's a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner - indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
The Ideal Length of Your Business Plan
The Ideal Length of Your Business Plan How long should a business plan be? A business plan needs to be whatever length is required to excite the investor, prove that management truly understands the market, and detail the execution strategy. From surveys of investor needs, Growthink has found that 15 to 25 pages of text is the optimum length in which to accomplish this. Any more and the time-constrained investor will be forced to skim certain sections of the plan, even if they are generally interested, which could lead them to miss essential elements. Any less and the investor will think that the business has not been fully thought through, or will simply not have enough information to make an investment decision.
Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the business plan is not meant to tell the whole story. Rather, the company must be "boiled down" into its essential elements. If the investor is interested, there will be plenty of additional time to tell the whole story.
Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company's value proposition within fewer pages.
While the body of the business plan should be 15 to 25 pages, the Appendix can be used for supplemental information. The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.
If the Appendix is long, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick business plan, which will make them queasy before even opening it up.
To summarize, the goal of the business plan is to create interest - not to have an investor write you a check. In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. As Mark Twain once said, "If I had more time, I would write a shorter story." Likewise, condensing your business plan to a concise, compelling document is challenging and time consuming. Fortunately the rewards are significant.
Many management teams feel that their company is too complex to describe in 15 to 25 pages. While this is sometimes true, the business plan is not meant to tell the whole story. Rather, the company must be "boiled down" into its essential elements. If the investor is interested, there will be plenty of additional time to tell the whole story.
Business plans, like other marketing communications documents, should be visually appealing and easy-to-read. This can be accomplished by using charts and graphics and by formatting the plan for readability. Effectively using these techniques will enable the investor to more quickly and easily understand the company's value proposition within fewer pages.
While the body of the business plan should be 15 to 25 pages, the Appendix can be used for supplemental information. The Appendix should include a full set of financial projections, and as appropriate, technical and/or operational drawings, partnership and/or customer agreements, expanded competitor reviews, and lists of key customers among others.
If the Appendix is long, a divider should be used to separate it from the body of the plan, or a separate Appendix document should be prepared. These techniques ensure that the investor is not handed a thick business plan, which will make them queasy before even opening it up.
To summarize, the goal of the business plan is to create interest - not to have an investor write you a check. In creating interest, the full story of your company need not be told. Rather, the plan should include the essential elements regarding why an investor should invest and spend more time examining the business opportunity. The shorter length does not mean that your business plan should take less time to prepare. Rather, it will take more time. As Mark Twain once said, "If I had more time, I would write a shorter story." Likewise, condensing your business plan to a concise, compelling document is challenging and time consuming. Fortunately the rewards are significant.
The Do's and Don'ts of Giving Feedback
The Do's and Don'ts of Giving Feedback Copyright 2005 Inez Ng
Being able to give effective feedback is not just a good skill to possess in business, it is a great life skill to have. Because when you are masterful at giving feedback, not only can you help your employees to sustain continuously improving performance, you can also improve the performance of the baseball team you coach, the cleaning lady at home, or the performance of your own children on completing their chores. Any person's performance in any activity can be positively impacted by effective feedback. Isn't that a powerful skill to have? Wouldn't you want to be a master at giving really useful and impactful feedback?
The good news is that it is not difficult to be good at giving feedback. It does take some effort and practice. But it is definitely a skill that can be learned. So, to get you started, here are the Do's and Don'ts of giving feedback.
Let's start with the Do's:
Be Timely: in order for feedback to be effective, you need to act quickly. If months have gone by before you bring up an incident, the person receiving the feedback will interpret your delay to imply that it couldn't have been that important, and the effect of the feedback is greatly diminished.
Be Specific: talk about your feedback in very direct and specific terms ("I noticed there were several calculation errors in last month's report"). If you are vague ("your work is unacceptable"), how can you get the message across? Focus on the action and the results. Be very factual in your discussion.
Be Open and Offer Suggestions: if the objective of your feedback discussion is to produce an improvement of performance, then come equipped with suggestions (again be specific) on what the person can do to affect that change. Be open to their perspective and be willing to discuss how they see that situation. Enroll them in coming up with a solution that they can buy into. If you don't get buy-in, change will not happen.
Create the right environment: feedback is best done in person, and in a private setting. In a business setting, arrange a time and place for your discussion. Don't just catch people on the fly and throw a few comments their way as they are heading down the hallway and expect your comments to have any impact.
Check for understanding and buy-in: if the feedback discussion is about a performance issue, make sure you check-in on how your comments have landed with the person. Establish some sort of accountability to verify their buy-in. For example, if you have an employee who constantly misses deadlines. During the discussion, ask for a commitment that he will meet all deadlines for the next quarter. Make sure that the commitment is specific, and not something vague like: "I'll do a better job of meeting deadlines next quarter."
And now for the Don'ts:
Don't Make it personal: there is a difference between giving feedback and criticizing. Do not make it personal. Don't interpret actions (showing up late) and pass judgment on the person (he is slacker and isn't truly dedicated to this job). Criticism destroys relationships. If your employee feels like he is being attacked, he is not going to be very open to hear what you have to say, he will immediately become defensive, and your job becomes much harder. Focus the discussion on the action, not the person. Make your employee feel that he is being supported, even if his performance is not up to standard.
Don't Only give feedback when there's a problem: if you're their leader, people need to know where they stand with you. If you have a great employee who always exceeds your expectations, take the time to give him just as much feedback as your biggest challenge. As a matter of fact, make it a point to give more positive feedback comments than "constructive" ones with every person. You'll be amazed at how much more motivated your employees will become with consistent positive reinforcement.
Don't Address multiple issues in one discussion: your employee will go into overload and you will lose the impact of the discussion. If there are multiple issues, have different discussions and just concentrate on addressing them one at a time.
So there you have it, a short list of Do's and Don'ts you can apply to whatever feedback you need to give. Remember, most people, even your rebellious teenager, want to do a good job and to please. They do need some clues as to how they are doing and what they need to change. So master the art of feedback and you can really help each other.
Being able to give effective feedback is not just a good skill to possess in business, it is a great life skill to have. Because when you are masterful at giving feedback, not only can you help your employees to sustain continuously improving performance, you can also improve the performance of the baseball team you coach, the cleaning lady at home, or the performance of your own children on completing their chores. Any person's performance in any activity can be positively impacted by effective feedback. Isn't that a powerful skill to have? Wouldn't you want to be a master at giving really useful and impactful feedback?
The good news is that it is not difficult to be good at giving feedback. It does take some effort and practice. But it is definitely a skill that can be learned. So, to get you started, here are the Do's and Don'ts of giving feedback.
Let's start with the Do's:
Be Timely: in order for feedback to be effective, you need to act quickly. If months have gone by before you bring up an incident, the person receiving the feedback will interpret your delay to imply that it couldn't have been that important, and the effect of the feedback is greatly diminished.
Be Specific: talk about your feedback in very direct and specific terms ("I noticed there were several calculation errors in last month's report"). If you are vague ("your work is unacceptable"), how can you get the message across? Focus on the action and the results. Be very factual in your discussion.
Be Open and Offer Suggestions: if the objective of your feedback discussion is to produce an improvement of performance, then come equipped with suggestions (again be specific) on what the person can do to affect that change. Be open to their perspective and be willing to discuss how they see that situation. Enroll them in coming up with a solution that they can buy into. If you don't get buy-in, change will not happen.
Create the right environment: feedback is best done in person, and in a private setting. In a business setting, arrange a time and place for your discussion. Don't just catch people on the fly and throw a few comments their way as they are heading down the hallway and expect your comments to have any impact.
Check for understanding and buy-in: if the feedback discussion is about a performance issue, make sure you check-in on how your comments have landed with the person. Establish some sort of accountability to verify their buy-in. For example, if you have an employee who constantly misses deadlines. During the discussion, ask for a commitment that he will meet all deadlines for the next quarter. Make sure that the commitment is specific, and not something vague like: "I'll do a better job of meeting deadlines next quarter."
And now for the Don'ts:
Don't Make it personal: there is a difference between giving feedback and criticizing. Do not make it personal. Don't interpret actions (showing up late) and pass judgment on the person (he is slacker and isn't truly dedicated to this job). Criticism destroys relationships. If your employee feels like he is being attacked, he is not going to be very open to hear what you have to say, he will immediately become defensive, and your job becomes much harder. Focus the discussion on the action, not the person. Make your employee feel that he is being supported, even if his performance is not up to standard.
Don't Only give feedback when there's a problem: if you're their leader, people need to know where they stand with you. If you have a great employee who always exceeds your expectations, take the time to give him just as much feedback as your biggest challenge. As a matter of fact, make it a point to give more positive feedback comments than "constructive" ones with every person. You'll be amazed at how much more motivated your employees will become with consistent positive reinforcement.
Don't Address multiple issues in one discussion: your employee will go into overload and you will lose the impact of the discussion. If there are multiple issues, have different discussions and just concentrate on addressing them one at a time.
So there you have it, a short list of Do's and Don'ts you can apply to whatever feedback you need to give. Remember, most people, even your rebellious teenager, want to do a good job and to please. They do need some clues as to how they are doing and what they need to change. So master the art of feedback and you can really help each other.
The Crucial Function of Computer File Shredders -
The Crucial Function of Computer File Shredders - An unpleasant aspect of modern life is the fact that thieves can steal files from computers. Personal emails, business plans, private documents, trade secrets, and online histories can all be devastating if they fall into the wrong hands. It is a good idea for people or businesses to have a type of file shredding software that keeps thieves and hackers from being able to obtain this type of information. File shredders are available for all major computer platforms, including Microsoft Windows, Apple, and Linux. File shredders are usually very reasonably priced; most cost under $30, and some are even free.
Many people mistakenly think that computer files can be easily deleted from the computer's hard drive. They believe that a file is permanently gone once it is put in the trash or recycling bin and the bin is emptied, but the truth is that the files are still on the computer; they are just slightly more difficult to access. Recovery software is available that can bring back previously deleted files. People must use special software to permanently remove files for the computer's hard drive.
There are many reasons to use file shredders. They can erase confidential information so that others will not be able to view it. File shredders can delete the entire hard drive, including all files, folders, and previously deleted material. File shredders can also delete emails and all history of online activity.
People may need to regularly delete sensitive material from their computers. Doctors, lawyers, and psychologists need to be especially careful about maintaining their clients' confidentiality. Businesspeople need to keep certain trade secrets and business plans secret from their competitors. Also, any financial records, credit card numbers, and bank account information should be protected as well. File shredders can be easily used to permanently delete all of this material. With most file shredders, all it takes is a simple drag and click to permanently remove files.
It is a good idea to erase the entire hard drive of a computer before disposing of it. If another person obtains the computer, they can access anything that the previous owner had on it if the hard drive is not erased. Financial records, credit card numbers, personal information, and histories of website visits will all be out in the open for the new owner to view. File shredders can prevent this from happening.
File shredders are valuable for all computer users. Anyone who ever purchased anything over the Internet, written a personal letter to someone, or stored confidential business information on their computer would be well advised to use a file shredder.
Many people mistakenly think that computer files can be easily deleted from the computer's hard drive. They believe that a file is permanently gone once it is put in the trash or recycling bin and the bin is emptied, but the truth is that the files are still on the computer; they are just slightly more difficult to access. Recovery software is available that can bring back previously deleted files. People must use special software to permanently remove files for the computer's hard drive.
There are many reasons to use file shredders. They can erase confidential information so that others will not be able to view it. File shredders can delete the entire hard drive, including all files, folders, and previously deleted material. File shredders can also delete emails and all history of online activity.
People may need to regularly delete sensitive material from their computers. Doctors, lawyers, and psychologists need to be especially careful about maintaining their clients' confidentiality. Businesspeople need to keep certain trade secrets and business plans secret from their competitors. Also, any financial records, credit card numbers, and bank account information should be protected as well. File shredders can be easily used to permanently delete all of this material. With most file shredders, all it takes is a simple drag and click to permanently remove files.
It is a good idea to erase the entire hard drive of a computer before disposing of it. If another person obtains the computer, they can access anything that the previous owner had on it if the hard drive is not erased. Financial records, credit card numbers, personal information, and histories of website visits will all be out in the open for the new owner to view. File shredders can prevent this from happening.
File shredders are valuable for all computer users. Anyone who ever purchased anything over the Internet, written a personal letter to someone, or stored confidential business information on their computer would be well advised to use a file shredder.
The Art of Employee Motivation
The Art of Employee Motivation If you think that your employees' poor performance on their designated jobs is costing you a whole lot of loss profits, then instead of just doing a total overhaul of your employee roster, why not try to do some employee motivation tactics to get them to actually come around and be able to save your company from looming bankruptcy. It really is fairly easy and simple to rouse some employee motivation, you just have to take these techniques to heart:
People nowadays are concerned of the lack of importance that is being put into health care plans. Is your company one of those companies who does not provide their employees with the health benefits that they should be entitled too? This is a possible reason why your employees' morale are down. You need to reassess the situation and try to give them the health benefits that will ensure them that they will be protected by the company that they have been loyal even in their times of sickness. Always remember that a happy worker is a satisfied worker so make sure to use this employee motivation tool in order to give your employees morale a much needed boost.
Remember, companies are usually employed with some women who will, most often than not, become mothers. So it is highly important that you know their needs especially during the time when they would want to avail of their maternity leave. It is important that your company, no matter what kind of product or service you offer, is always sensitive to your employees needs, no matter what gender.
When it comes to having a good health plan for your employees, you must be sure that your health plan is actually of any good or else it would not really do any good to your employees'
morale. Make sure that the health plan will be able to cover all their basic needs and it wouldn't really hurt if you throw in some added kicks.
Basic health care plans that you can use for employee motivation actually covers the following: full coverage for any basic illness or injury, coverage of hospital payments in case the employee has to be checked in at the hospital or if there are some minor surgeries that need to be done.
Added benefits to further boost employee motivation through a health care plan is through having their dental health covered as well as their optical needs, eyeglass subsidies as well as free dental cleaning and check-ups will be a good treat for your employees and will surely be a great added employee motivation move.
Apart from having a good health care plan for your employee motivation tactics, you must also be able to provide for them some other additional care such as an insurance plan which they can rely on in case something bad happens to them and they are still of service to your company. Even if this employee motivation move will not be availed by the employee's family during the time of his or her service, your employee can still choose to continue on paying for the premiums of the insurance plan even after he or she has retired from your company. Unfortunately for your employees, once they resign
from a job position at you company the said insurance plan will be revoked since the company will not be able to play for your insurance premiums anymore (remember, all the payments from these employee motivation tactics will actually come from the employee's salary).
Another great employee motivation move for loyal employees of your company is to have a car loan ready for them, employees who have already served some considerable amount of years in the company should be entitled to a car plan wherein deductions from their salary will be used to pay for their vehicle of choice. This is a great employee motivation move since those who are not able to afford a car (a brand new car at that!) would actually want to continue staying in your company because of this added employee motivation benefit.
From time to time, especially during special occasions, you need to be able to give your employees some added morale boost by organizing events or parties that will foster camaraderie among your employees. A little good time certainly wouldn't hurt anyone and this will all be in the spirit of good ole' company fun. Employee motivation directed events such as Christmas parties and company picnics are surely a welcome treat to your seemingly overworked and over fatigue employees.
You must also remember to give your employees some time to unwind like providing your regular employees the benefit of having a two-week paid vacation leave. That's the least you can do for your employees who you have held captive for the majority of the year in your office.
These are really simple and easy employee motivation tactics that you can do in order to boost your employees' morale and be able to ensure a good upkeep of your company.
People nowadays are concerned of the lack of importance that is being put into health care plans. Is your company one of those companies who does not provide their employees with the health benefits that they should be entitled too? This is a possible reason why your employees' morale are down. You need to reassess the situation and try to give them the health benefits that will ensure them that they will be protected by the company that they have been loyal even in their times of sickness. Always remember that a happy worker is a satisfied worker so make sure to use this employee motivation tool in order to give your employees morale a much needed boost.
Remember, companies are usually employed with some women who will, most often than not, become mothers. So it is highly important that you know their needs especially during the time when they would want to avail of their maternity leave. It is important that your company, no matter what kind of product or service you offer, is always sensitive to your employees needs, no matter what gender.
When it comes to having a good health plan for your employees, you must be sure that your health plan is actually of any good or else it would not really do any good to your employees'
morale. Make sure that the health plan will be able to cover all their basic needs and it wouldn't really hurt if you throw in some added kicks.
Basic health care plans that you can use for employee motivation actually covers the following: full coverage for any basic illness or injury, coverage of hospital payments in case the employee has to be checked in at the hospital or if there are some minor surgeries that need to be done.
Added benefits to further boost employee motivation through a health care plan is through having their dental health covered as well as their optical needs, eyeglass subsidies as well as free dental cleaning and check-ups will be a good treat for your employees and will surely be a great added employee motivation move.
Apart from having a good health care plan for your employee motivation tactics, you must also be able to provide for them some other additional care such as an insurance plan which they can rely on in case something bad happens to them and they are still of service to your company. Even if this employee motivation move will not be availed by the employee's family during the time of his or her service, your employee can still choose to continue on paying for the premiums of the insurance plan even after he or she has retired from your company. Unfortunately for your employees, once they resign
from a job position at you company the said insurance plan will be revoked since the company will not be able to play for your insurance premiums anymore (remember, all the payments from these employee motivation tactics will actually come from the employee's salary).
Another great employee motivation move for loyal employees of your company is to have a car loan ready for them, employees who have already served some considerable amount of years in the company should be entitled to a car plan wherein deductions from their salary will be used to pay for their vehicle of choice. This is a great employee motivation move since those who are not able to afford a car (a brand new car at that!) would actually want to continue staying in your company because of this added employee motivation benefit.
From time to time, especially during special occasions, you need to be able to give your employees some added morale boost by organizing events or parties that will foster camaraderie among your employees. A little good time certainly wouldn't hurt anyone and this will all be in the spirit of good ole' company fun. Employee motivation directed events such as Christmas parties and company picnics are surely a welcome treat to your seemingly overworked and over fatigue employees.
You must also remember to give your employees some time to unwind like providing your regular employees the benefit of having a two-week paid vacation leave. That's the least you can do for your employees who you have held captive for the majority of the year in your office.
These are really simple and easy employee motivation tactics that you can do in order to boost your employees' morale and be able to ensure a good upkeep of your company.
Stuck With A Zero Marketing Budget For Client Gifts?
Stuck With A Zero Marketing Budget For Client Gifts?
Startup Advice: Advice from Experts to Start your own Business
Startup Advice: Advice from Experts to Start your own Business
Most entrepreneurs get paranoid over the idea of starting a business. With so many federal, state, and, local laws governing any business, it becomes crucial to make an informed decision about the venture. Here are a few steps worth considering before your business takes off in full swing
Most of us get paranoid over the idea of starting a business. With so many federal, state, and, local laws governing any business, it becomes crucial to make an informed decision about the venture. Gathering all the necessary information for a business setup could be a time-consuming, and an exhaustive process. Here are a few steps worth considering before your business takes off in full swing.
Initial capital investment:
The very foundation of your business rests on the initial capital amount you invest in it. Dearth of funds initially could spell serious trouble for you in future. So, whether it's an online or an offline business venture, make sure that you're not low on the initial capital to be invested.
These days, local banks have opened their doors for you to get loans for low budget business ventures. As long as you have a healthy credit score, getting a small loan is really simple. Just keep in mind that you don't go overboard on your initial business expenses. Watch your financial moves carefully. Once your business takes off well and gets you a huge profit, you could consider taking another loan to expand your business
Experience in managing the business
Lack of experience is a major put off for most people contemplating a business venture. This major deterrent as far as starting a business is concerned.
Expert business plan:
It is imperative to have concrete business guidelines. Most often, it's observed that, home-based and other small-scale businesses fair badly due to a lack of a business "blue-print". Such businesses suffer heavy monetary losses. Without a concrete business proposal, almost 70% of the businesses wind up within a year of being established. Therefore, a rough draft of the business plan taking into account all the minute details are necessary for any business venture. The business plan should explicitly define the target audience for your products. It should also present a detailed description of the average cost per product and your expected profit on each product. Besides, it should also portray the desired break-even point and your expected income from the business. Thus, for a smooth sailing business, it's extremely important that your business plan defines the ways of converting your business into a cash generating system.
Take valuable guidance from a business mentor:
http://www.startup-advice.com/Vending-startup.html
http://www.startup-advice.com/Day-Care-startup.html
http://www.startup-advice.com/Laundromat-startup.html
http://www.startup-advice.com/SBA-startup.htm
Don't hesitate to learn from the experiences of your most admired business mentor. They would show you the right way to expand your small-scale business into a vast business empire. Never miss out on an opportunity to gather those pearls of wisdom from an established businessman. Most business books also talk about the ways to a successful business enterprise is only by learning from the experiences of seasoned business stalwarts. So, pick up all the nuances for a successful business from your very own business mentor. Keeping in mind all the above-mentioned factors you can ensure a long life for your start up business enterprise. We wish you luck for your forthcoming business venture.
For startup advice and guidance please visit:http://www.startup-advice.com
Short Sale Success Secrets with Foreclosures
Short Sale Success Secrets with Foreclosures If you're active in real estate investing, you may already realize one of the biggest issues real estate investors face: Finding Great Deals.
Foreclosures at a 52-year High
With foreclosures at a 52-year high, there are thousands of deals available on the market, if you know where to find them and how to secure them. The first challenge you'll face once you locate the property is that most of these homeowners are mortgaged to the hilt. They have no equity, and big loan payments. In fact, many actually owe more than the property is worth!
Most investors will walk away from these deals because they see no obvious profit. That's because they don't know about the Short Sale.
WHAT IS A SHORT SALE?
The concept behind the short sale is simple: your goal as a real estate investor is to convince the bank to sell for less that is owed as payment in full. Of course, this concept is easy - buy the foreclosure from the bank at a big discount, sell the real estate, and make money! So how does it work?
Success with short sales can be accomplished in the following steps:
Step 1: Do your research.
Many new real estate investors make the mistake of waiting until some subscription service sends you the list. The disadvantage is that a ton of other investors are also getting the list. If your first contact is to send a letter, forget it. Your letter will be lost in the huge pile the homeowner is getting from all sorts of other investors, credit repair etc. 99% of the time these go directly into the trash or a big basket unread. If you go directly to their door you've got a chance.
So if you're going to mail, be the first to act when the default notices are printed in the local newspaper. Or be the first at your courthouse, if that's where they're filed first. The key to finding investment-worthy properties is to act quickly. Be disciplined and mail out the letters the very same day-in fact take them to the post office. In this business, the early bird really does catch the worm.
Tip for Success: If you don't have a company that publishes your notices of default, check with local title companies or bankruptcy attorneys to see if they offer these services; you need somebody familiar with the subject that visits the courthouse often.
Step 2: Develop your marketing strategy.
When you have located foreclosures, make sure your timing is swift. Mail your initial letters of approach to the homeowner the same day you discover the property. Placing ads in your local papers also helps to generate leads and find homeowners eager to avoid the credit penalties involved with foreclosing.
Tip for Success: A typical advertisement strategy taught in real estate training is to get listed in real estate or credit section of the classifieds. These ads typically have a bold, to the point headline, such as "Avoid Foreclosure" or "Stop Foreclosure, Today!" If you are targeting a specific property type, or reaching for higher market values, specify this in your ad. (Instead of simply "Avoid Foreclosure," add your target market to the bottom of the ad. Example: "Avoid Foreclosure, call 1-800-555-1212. 500K and up." You'll make more money in real estate by reaching for high-value properties, and an ad like this shows your prospects that you specialize in helping those with higher value homes avoid foreclosure.
Step 3: Work with the homeowner.
You can't get anywhere without the cooperation, and often gratitude, of the homeowner. The homeowner you are working with has obviously run out of options, but you'll need their trust and confidence if you plan to short sale mortgages. Remember, in these situations, you are often looked at as the "rescuer". Make sure you explain the homeowner's part in the process thoroughly. Once they deiced to allow you to work with them, there is important paperwork you need them to fill out and sign:
1. an "Authorization to Release" form that gives you permission to contact the lenders and the foreclosing attorneys.
2. a sales contract - signed but leave the purchase price blank. You may need to change the numbers as you negotiate with the bank
3. a financial statement - to show they can't afford to make the payments
4. a hardship letter - to explain in personal terms what happened.
Tip for Success: Remember that this is a stressful time for the homeowner. It's easy to get caught in the excitement of a prospective short sale profit. You can get them to make a decision when you are able to convince them that this is the right option for them Emphasize the benefits of working with you, and then ask for them to take action. Make sure to let them know that once your contract is signed, and the bank accepts it; they'll be free to move on with their life.
Step 4: Negotiate with the bank.
Although banks don't enjoy taking a loss, it is a simple fact of the lending business that short sales are a necessary evil for lenders. Indeed owning the property (a non-performing asset) is even more expensive than selling it for a loss. Consider:
Banks use short sales to drop unwanted property quickly without having to deal with the REO office and go through the long process of putting the home back on the market. When you speak with the Loss Mitigation department, remember, this property is actually costing them money! Federal regulations require somewhere between $300,000 and $800,000 (or more!) to be held in reserve by lenders, which is many times over the actual price of the bad debt.
When you call the bank and ask for the Loss Mitigation Department (the department that handles properties that are in foreclosure) tell the person handling the account that you are trying to help Mr. X with his foreclosure and you are willing to buy the property from him, but due to the condition of the property/declining values/etc. you are only willing to pay X amount. This is where your negotiations begin.
Be firm and polite, but don't ever make threats to not buy or be forceful in your approach. Loss mitigators are often busy and overworked, and they want to see you as somebody who is minimizing the damage - and hassle - of the bad debt.
Tip for Success: Larger banks are the easiest to deal with when working with short sales and foreclosures. This is because the larger banks have more resource, more experience, and more loans! While there are some larger banks that don't work with short sales at all, other banks, such as Wells Fargo or Fairbanks Capital, tend to work with a much larger volume of short sales.
Once you have worked with enough short sales, you'll find that you have inside contacts at some of the larger banks; be friendly, ask them about their day, Develop a rapport. Sometimes, they'll open up about problems they're facing or current trends, which of course, you'll need to keep on top of!
You don't have to be a real estate pro to see the potential for making money with short sales, and now you definitely have some great tools to get started. Great deals in real estate are out there, and with today's market, your potential for profit is limitless. Just keep in mind: do your research, market your services, and treat the homeowners and lenders with respect. When you use this approach with short sales, you can make a win-win for everybody, especially the officers at your own bank when you cash in on your profit!
In the next article, we'll discuss the tricks and tips in convincing the bank to take a big discount on the short sale.
Best of Success,
Richard Odessey
Foreclosures at a 52-year High
With foreclosures at a 52-year high, there are thousands of deals available on the market, if you know where to find them and how to secure them. The first challenge you'll face once you locate the property is that most of these homeowners are mortgaged to the hilt. They have no equity, and big loan payments. In fact, many actually owe more than the property is worth!
Most investors will walk away from these deals because they see no obvious profit. That's because they don't know about the Short Sale.
WHAT IS A SHORT SALE?
The concept behind the short sale is simple: your goal as a real estate investor is to convince the bank to sell for less that is owed as payment in full. Of course, this concept is easy - buy the foreclosure from the bank at a big discount, sell the real estate, and make money! So how does it work?
Success with short sales can be accomplished in the following steps:
Step 1: Do your research.
Many new real estate investors make the mistake of waiting until some subscription service sends you the list. The disadvantage is that a ton of other investors are also getting the list. If your first contact is to send a letter, forget it. Your letter will be lost in the huge pile the homeowner is getting from all sorts of other investors, credit repair etc. 99% of the time these go directly into the trash or a big basket unread. If you go directly to their door you've got a chance.
So if you're going to mail, be the first to act when the default notices are printed in the local newspaper. Or be the first at your courthouse, if that's where they're filed first. The key to finding investment-worthy properties is to act quickly. Be disciplined and mail out the letters the very same day-in fact take them to the post office. In this business, the early bird really does catch the worm.
Tip for Success: If you don't have a company that publishes your notices of default, check with local title companies or bankruptcy attorneys to see if they offer these services; you need somebody familiar with the subject that visits the courthouse often.
Step 2: Develop your marketing strategy.
When you have located foreclosures, make sure your timing is swift. Mail your initial letters of approach to the homeowner the same day you discover the property. Placing ads in your local papers also helps to generate leads and find homeowners eager to avoid the credit penalties involved with foreclosing.
Tip for Success: A typical advertisement strategy taught in real estate training is to get listed in real estate or credit section of the classifieds. These ads typically have a bold, to the point headline, such as "Avoid Foreclosure" or "Stop Foreclosure, Today!" If you are targeting a specific property type, or reaching for higher market values, specify this in your ad. (Instead of simply "Avoid Foreclosure," add your target market to the bottom of the ad. Example: "Avoid Foreclosure, call 1-800-555-1212. 500K and up." You'll make more money in real estate by reaching for high-value properties, and an ad like this shows your prospects that you specialize in helping those with higher value homes avoid foreclosure.
Step 3: Work with the homeowner.
You can't get anywhere without the cooperation, and often gratitude, of the homeowner. The homeowner you are working with has obviously run out of options, but you'll need their trust and confidence if you plan to short sale mortgages. Remember, in these situations, you are often looked at as the "rescuer". Make sure you explain the homeowner's part in the process thoroughly. Once they deiced to allow you to work with them, there is important paperwork you need them to fill out and sign:
1. an "Authorization to Release" form that gives you permission to contact the lenders and the foreclosing attorneys.
2. a sales contract - signed but leave the purchase price blank. You may need to change the numbers as you negotiate with the bank
3. a financial statement - to show they can't afford to make the payments
4. a hardship letter - to explain in personal terms what happened.
Tip for Success: Remember that this is a stressful time for the homeowner. It's easy to get caught in the excitement of a prospective short sale profit. You can get them to make a decision when you are able to convince them that this is the right option for them Emphasize the benefits of working with you, and then ask for them to take action. Make sure to let them know that once your contract is signed, and the bank accepts it; they'll be free to move on with their life.
Step 4: Negotiate with the bank.
Although banks don't enjoy taking a loss, it is a simple fact of the lending business that short sales are a necessary evil for lenders. Indeed owning the property (a non-performing asset) is even more expensive than selling it for a loss. Consider:
Banks use short sales to drop unwanted property quickly without having to deal with the REO office and go through the long process of putting the home back on the market. When you speak with the Loss Mitigation department, remember, this property is actually costing them money! Federal regulations require somewhere between $300,000 and $800,000 (or more!) to be held in reserve by lenders, which is many times over the actual price of the bad debt.
When you call the bank and ask for the Loss Mitigation Department (the department that handles properties that are in foreclosure) tell the person handling the account that you are trying to help Mr. X with his foreclosure and you are willing to buy the property from him, but due to the condition of the property/declining values/etc. you are only willing to pay X amount. This is where your negotiations begin.
Be firm and polite, but don't ever make threats to not buy or be forceful in your approach. Loss mitigators are often busy and overworked, and they want to see you as somebody who is minimizing the damage - and hassle - of the bad debt.
Tip for Success: Larger banks are the easiest to deal with when working with short sales and foreclosures. This is because the larger banks have more resource, more experience, and more loans! While there are some larger banks that don't work with short sales at all, other banks, such as Wells Fargo or Fairbanks Capital, tend to work with a much larger volume of short sales.
Once you have worked with enough short sales, you'll find that you have inside contacts at some of the larger banks; be friendly, ask them about their day, Develop a rapport. Sometimes, they'll open up about problems they're facing or current trends, which of course, you'll need to keep on top of!
You don't have to be a real estate pro to see the potential for making money with short sales, and now you definitely have some great tools to get started. Great deals in real estate are out there, and with today's market, your potential for profit is limitless. Just keep in mind: do your research, market your services, and treat the homeowners and lenders with respect. When you use this approach with short sales, you can make a win-win for everybody, especially the officers at your own bank when you cash in on your profit!
In the next article, we'll discuss the tricks and tips in convincing the bank to take a big discount on the short sale.
Best of Success,
Richard Odessey
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