Posts Tagged ‘Successful Entrepreneur’

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Starting a Business on Credit: The Forbidden Financier

Thursday, April 4th, 2013

If you search for entrepreneurship advice online, it won’t take long to find experts shouting to avoid credit cards. They may cite the Ewing Marion Kauffman Foundation, which found that every $1,000 of credit card debt increases the probability that a firm will fail by 2.2%, or financial radio show host Dave Ramsey, who claims credits cards are the scourge of American finance.

They probably won’t mention a pair of Stanford Ph.D. students that spread funding for their pet project across three credit cards or the designer that developed small plastic guitars while paying with small plastic credit cards. Those entrepreneurs went on to create Google and Guitar Hero, respectively, and if those companies’ successes are any indication, using credit cards to fund startups can’t be all bad.

Credit Cards

Experts aren’t foolish enough to advise against credit dependence, but if you use them responsibly, credit cards serve as a valuable tools for growth. Consider these advantages to taking out a credit card for business.

Rewards

Pessimists hear “credit card” and think of compounding interesting rates, late payment penalties and plummeting credit scores. All of these things are potential consequences when owning a credit card, but that’s not the whole story. Rewards are a consumer’s chance to gain from the credit card industry. From airline miles to supply store discounts to cash bonuses, you need not look far to find rewards that offer a significant boost to your bottom line if you make payments on time. Things go south when you get behind on your payments, but credit card rewards add value to your business.

Credit Score

It would be one thing if card cards only served as cash advancements, but using plastic responsibly contributes to an important financial statistic: credit score. According to a post in the American Express OPEN forum by financial consultant Mike Periu, personal credit is a major point of interest for investors and lenders. You’re probably savvy enough to know that financing a business solely on credit isn’t wise, but building credit could open opportunities for outside investors. Lenders expect owners to have a FICO score of at least 700, according to Openforum.com.

Using a card to start a business puts your credit score on the line. Miss a payment, and you’ll see the score drop. Stay current, on the other hand, and your rising score will open opportunities to new investors.

Potential

In the end, financing a small business or startup with a credit card isn’t about rewards or your credit score. It’s about your dream and the chance to create something of value. The experts are right. Credit cards aren’t the best way to finance a business. You don’t always have thousands of dollars saved up, and there aren’t always venture capitalists waiting to write you a check. Credit cards afford you the chance to gamble on yourself.

If you believe in your business idea, don’t ignore credit cards as a possible financing tool. Who knows? You could start the next Google or Guitar Hero.

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Posted in Entrepreneur, Financial Intelligence, Investing, small business | No Comments »

Goal Setting As An Entrepreneur

Wednesday, January 16th, 2013

Every entrepreneur has a vision. Some visions are better than others, but even bad visions can turn into something special. If the entrepreneur pays attention to market conditions and measures the company’s progress compared to the vision, many opportunities will be created.  This explains why entrepreneurs must be flexible. The ability to adapt to the marketplace is an essential ingredient in entrepreneurial pursuits.

As Naija Ecash explains in a recently published post Who is the Boss, a large number of baby boomers are retiring from their present jobs and starting new businesses with the knowledge they accrued as an employee. This makes for a competitive environment where the most fit entrepreneurs will survive and flourish.

As diverse as their personalities may be, all successful entrepreneurs share certain qualities; a vision, a plan and research. These three considerations are interwoven into the culture of the endeavor and can serve as pillars for many years.

But, there is one more quality that successful entrepreneurs share. That is the ability to set ambitious but attainable goals. Having a dynamic vision, a solid research-driven business model and the commitment to reach goals is the measure of success and is the quality that makes some enterprises durable for many years.

Proper goal setting is a positive activity that can right the ship, maintain the current profitable course or expand the business. In a small business, goals are often set by the owner. In medium businesses, company goals are often set by a committee with the founding entrepreneur’s input.

According to Entrepreneur.com, at its simplest, a goal is just something you aim for. But goals are powerful contributors to successful business growth in several ways. To begin with, the process of setting goals forces you to think through what you want from your business and how growth may, or may not, provide that. This process helps suggest directions for pursuing that growth, which can greatly improve your chances of achieving those goals.”

When setting business goals, the entrepreneur should follow the following disciplines:

Specificity – Set specific, quantitative goals, not general goals. Selling more widgets is no a specific goals. Selling 10,000 more widgets than last year is a specific goal.

Be Realistically Optimistic – Being positive is a quality that encourages the entrepreneur’s staff. Being optimistic means setting goals that will increase profitability and efficiency. Follow up with a means to the end.

Set Short and Long-Term Goals – The reason we set goals is because we want to improve operations. Set your long-term goals, identify the milestones needed to get there and define them as short-term goals.     

Set Action Steps – For the driven entrepreneur, short and long-term goals should be reached through a series of company milestones. After you have identified the milestones, set a course of action to accomplish each step on the road to long-term goals.

For establishing realistic, attainable goals, there are several considerations and practices for which every entrepreneur must consider.

Keeping An Accurate Scorecard – Your short-term goals will be accompanies by your action plan. Be diligent and disciplines about tracking your progress. If the numbers are ahead of schedule, don’t be afraid to raise the bar. If the numbers on your scorecard are lagging, you have some work to do. Never give up on a goal as long as it is part of a larger plan. Never forget your quantitative target.

Visualize Your Goal – Successful entrepreneurs visualize the business after the goals are achieved. This visualization is often shared with co-workers and employees. Good workers respond to a visual, quantified challenge.

Verbalize the Goal – The entrepreneur should be able to verbalize the goal and the process to get there. If you cannot verbalize the goal, how can you present it to employees.

Entrepreneurs realize that success comes at a price. Very often the entrepreneur’s biggest investment is their time. When setting goals, be realistic about the time required to accomplish to cross the goal line.

Author Bio:

Lewis Edward is one of the owners of The Office Providers. He loves writing on various online publications about serviced offices, general business matters, office space for rent and much more.

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Posted in Entrepreneur, Guest Post, small business, Tips & Tricks | No Comments »

Swim, Bike, Run: How Starting a Business is Like a Triathalon

Thursday, December 27th, 2012

Halfway through the triathtlon’s final leg, a 26.2-mile run, your body begins to break down. By now, you can’t even remember why you decided to do this in the first place — your weekly hour-long bike seems far superior to this misery, but now even that may be in question. In some small cavern of your mind, behind the voices telling you to quit, you remember the thought the birthed this idea: “I want to push myself, and I think I have the potential to do this.”

Business Challenge

That same thought leads to entrepreneurial minds to leave their cushy nine-to-five jobs and launch businesses of their own. Much like running a triathlon, the rigors of running a small business can discourage owners from the vision that drove their actions. But those who are able to push through the seemingly insurmountable struggles will receive a hefty payoff at the finish line.

Preparation

No matter how inspired you feel, it’s almost impossible to finish a triathlon without significant training. You know how to swim, bike and run, but unless you condition your body to perform all three activities efficiently, you don’t stand a chance. At first, training is rewarding. After a while, it becomes a nuisance. As you approach the race, it’s downright frustrating.

Starting a small business follows a similar curve. In its infancy, all the funding requests and paperwork seem like wheels turning, but that sentiment usually wears off. Still, thorough preparation prepares small businesses for the struggles of the marketplace. Whether you’re registering your business as an LLC through SBA.gov or setting up a meeting with Capital Processing Network to arrange credit card equipment, small preparations that happen long before a business opens can determine whether or not it succeeds when the doors open.

Stamina

Short of breath, thirsty and weak in the knees, you never thought it would be this difficult. Thoughts of crossing the finish line are long gone. You’re just focused on making the next stroke, peddle or step.

In 2010, more than 550,000 small businesses decided to join the race, but more than 660,000 took their last step, according to SBA.gov. No amount of encouragement will change the fact that more than half of small businesses in the United States fail within five years. Success will find those who know how to keep going. It may be reverting to your college diet or working weekends, but small business success is rarely found without struggle.

Addicting Success

Triathletes describe the feeling of finishing a race as immense pain coupled with sincere gratification. After months of training and hours of agony, most have a similar sentiment: Let’s do it again.

Small business success may not have a finish line, but when owners are able to take a step back and declare that they’ve met goals, they should take a cue from these inspired athletes. Reaching goals and financial success in small business is an ongoing process. If you’re lucky enough to make it to your finish line, enjoy it, say thanks and get to setting new goals. That’s the mark of successful entrepreneur.

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Posted in Entrepreneur, small business | 1 Comment »

Earning Employees’ Loyalty

Tuesday, March 2nd, 2010

Earning Employees’ Loyalty

Why are employees referred to by companies as being the greatest asset? The answer is simple, machines, equipment, tools etc no matter how automated they are still need human beings to operate them. A seasoned human resources manager understands that the success of the company is dependent more on the loyalty of the workforce to the vision of the company. One of my colleagues who will fondly call Bossman, gave me a write-up he photocopied from a Nigerian daily. After reading it, I was prompted to write this article, Earning Employees’ Loyalty.

A business survival is dependent on getting customers who will patronize her goods or services. Growth is dependent on how loyal the customers become to the product or service of the company. Getting the right customer is a critical step in building a loyalty based business system, but it is only the first critical step. Once a company has loyal customers and it begins to enjoy steady supply of revenue, it is time to put a strategy in place to re-invest a good portion of the surplus to getting and retaining loyal employees.

Just as it takes quite some effort to build personal relationship with customers, so also it takes effort to build relationship with employees. Loyal employees have greater potential to learn and increase job performance.

Why Earn Employees’ Loyalty

Loyal employee will save you money. They save you money by reducing recruiting and induction costs. That money can then be use for some other productive ventures.

Seasoned Human Resource Managers do not like high rate of employee turnover because it is counter productive. It is not just about the financial cost of induction and training, but the distruption that constant changing in the workforce can have on the growth of the organization.

Even though some organizations claim that people are their greates asset, few actually act it. It is important not just to know the cost of your employee, overhead cost, but also the worth of your employee, their potential, the value they add to the organization.

As an entrepreneur going places, your business must learn to attract the best possible employees, hold the employees, recognize them, motivate and reward them.

Earning Employees’ Loyalty Requires Planning

You can’t earn employee loyalty just by sitting back and wishing it will happen. You must have the right mindset about the value of employee. You must define in definite terms what you consider as loyalty. Then you need to put in place strategies, tactics, practices and policies that will enhance measurement of employee performance and degree of loyalty to the organization. All these require effort and determination. If you don’t have a good Human Resource Manager, you may need to outsource to a competent Human Resource consultant.

The right place to start is during recruitment. Ensure that you recruit peole who share the organizations philosophy. Employees who personal goals and visions are in agreement with the vision of your business. Never recruit base on cost or professional competence alone. A happy employee will always be more committed and loyal than one that hates the job he/she is doing.

Treating people fairly should be the hallmark of your corporate loyalty system. If you follow the Golden Rule: Treat Your Employee The Way You Would Like To Be Treated. Let your fairness extends to employee compensation. Never feel that extra compensation to employee is undue overhead burden on the business. Look at your workforce as your partners in progress. Align Employees interest with that of the business and strike a balance that will be win-win for both the business and the employee. If you consciously work on strategies to ensure that employees earn more compensation, they will get committed to the business.

Finally, ensure that your compensation system is not lopsided in favor of the executives only. Your compensation plan should be fair ensuring that non-executive employee get adequate compensation. Nothing wanes employees’ loyalty like the feeling that your business is operating like the Animal Farm. A situation where some employee are considered and treated as being more important than the others. Let the process of career growth be plain for all to see and understand. Promotion should be based on merit and performance not personal sentiments.

Just as customers’ loyalty will keep your business revenue flowing, so also employees’ loyalty will keep the engine room of your business working smoothly and at lower maintenance cost. Even if you forget all that have been said in this article, Earning Employees’ Loyalty, don’t forget the Golden Rule – Treat your employees the way you will like to be treated.

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Posted in small business | 6 Comments »

When A Client Goofs, how do you handle it?

Wednesday, September 23rd, 2009

When a client goofs, how do you handle it?

Every successful entrepreneur understand that the phrase “The Client is always right” is a mere political statement to boost the ego of the client. Often times the client is ignorant and dead wrong. But who dare say that to his face. Since the client is the one holding the purse, he has to be praised like one of those monarchs of old and tactically guided to make the right decision. I guess that is why another phrase says the “client is King”. Else, he will get offended and go to the competitor. I’ll share with you a life-story from my friend, Leke who works in a construction company. I believe his story will teach you one or two useful lessons as an entrepreneur on what to do when a client goofs (by the way to goof is to make a silly mistake). Here is an excerpt of what he sent to me, though edited to reduce the length, the gist remains the same.

Yesterday, I had to combat with the mess created by an ignorant client. He earlier requested for a proposal on a project he want my company to execute. We sent a detailed proposal and gave three different options with different cost implications. In his own wisdom, he decided to create an entirely new fourth option by mixing features from two different options. Economically, it sounded like a good idea, but from professional experience we advised that it was too risky and if anything goes wrong, he will end up with a bill higher than any of the three options initially sent to him.

Did he listen? No, he argued and claimed that he was better off with his idea and we should go ahead because he was certain that it will work out fine. From his argument, it was obvious that he was more interested in the cost reduction being offered by his new option. He totally discounted the risk factor that ought to be built into the new option. After a long time of trying to persuade him to change his mind, we consented to his wish but requested that he put the decision in writing to be signed by all. That was done and there was warm hand-shake after the deal was sealed. However, I was very uncomfortable and I told my boss so.

Twenty four hours after the deal was sealed, the project started and everyone were busy working towards delivery on schedule. However, just about 60% into project completion, there was a hitch. A firm handling a particular aspect of the project has suddenly pulled out, claiming they cannot meet up with their promise due to some technical fault in their equipment (they never mobilized to site). That was a stupid thing to say after receiving mobilization fees, and of course they were part of the project design and planning. I will like you to note that in our initial proposal, we ensured that all parties involved in the project were capable firms and they were having enough stake in the project to warrant full commitment.

Unfortunately, the new option the client created introduced a new firm who we didn’t know much about (a competent firm was removed with the excuse that their charges was too high). During the negotiation meeting I pointed out the risk of using a firm that is not known, but the client was vouching for the new firm’s competency (that to me was a dumb thing to do). Well, the firm’s failure was at a critical moment, the entire project was getting messed up. A colossal loss was staring the client in the face and my company’s corporate reputation was at stake too.

I was summoned by my boss and asked to give a quick review of the project. Was I furious? You could actually feel the heat emanating from my face. After narrating the whole incidence all over again and showing evidences that the client was warned but he refused to take my advice, I expected my boss to write a stinker to the client telling him to go clean up his mess. My boss did otherwise.

He reminded me that the client remains one of our major clients even though he has made a stupid decision that resulted in loss of fund and time. So, I shouldn’t be upset and rub the blame deep on the client. Instead, I should note that it is at such a critical time like this that a business relationship with the client can be further strengthened. He told me plainly that I have no fault whatsoever and my team has acted in line with our company policy, however, I’ve got to clean up the mess created by the client. He told me to go back to the drawing board with the assumption that the mistake was mine since that is the only way my creative mind will agree to bring forth a solution. I didn’t like it, but I knew he was right, so I went back to my team and we started brainstorming on how to salvage the situation with as little fund as possible.

Kudo’s to my team member for their cooperation. We came up with ideas I never thought of before and the whole mess was cleared up. Then came another shocker. I wanted to pass the bill for the repair to the client, but my boss stopped me and instructed that it should be shared 50:50. So, the client was not only saved from a colossal loss, but was actually getting free consultancy from my company while paying only half of the cost of repair. It took some time before my brain could accept that, I was really upset and wanted to tell my boss it wasn’t fair and I personally consider it stupid. Even if the client is important, must we be held accountable for his mess?

Well, it was a good thing I held my tongue. I would have needed to apologize later to my boss. Today, we receive a thank you note from the client and a fresh request for a quote for an entirely new project. The client followed that up with a telephone call promising to always adhere by our professional advice. Looking back now, I understand why my boss, took the decisions he took. Maybe that is why he is the boss and I still report to him. I just wanted to share this with you.

Please extend my warm greetings to…………

I believe the story said it all. Even if your client goofed, it is not wise to rub the mess on his nose. Here are the lessons I got from the story.

• That the client is considered a king is no assurance that he will act wisely.

• When the client goofs, you need to handle the mess created carefully.

• Relationship is more important than short-term profit.

• Never show your anger to a client else you lose them to the competitors.

That’s it. When next you feel like boxing a client for goofing, remember that he holds the purse, so you must treat him like a king even when he is acting plain stupid. I’ll love to know how you handle difficult clients especially after they have created a mess by ignoring your professional advice. Please share your story in the comment section. You can get future updates to this post When the client goofs by subscribing to my RSS feed. Cheers.

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Posted in Entrepreneur, small business | 2 Comments »

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