World Business Web

Business will be dull whether you like it or not, so get used to it! Sometimes, if the cause is within your control, you could do something about it. At other times, when things are outside your control, there may be nothing you can do. Fortunately for you, this unusual article is about the things you can do when business is dull.

The highs and lows of business

In everything in life, there will be highs and lows. Business likewise, is no exception. There will be high sales periods as well as low sales periods, both periods are necessary for maintaining balance in business. Both are necessary forms of feedback and any serious minded entrepreneur should focus on making the most of both periods whether highs or lows rather than choosing one over the other. This is a fact of life and its better you get used to it and learn how to make the most of it.

As humans, it is only natural to think in dichotomies; positive and negative, good and bad, black and white, high and low, hot and cold, pain and pleasure and all others. The truth is this; we need both shades of dichotomies to maintain balance here on earth. Those things we refer to as unpleasant are actually the ones that make us better human beings.

After all, we are creatures of feelings, and the unpleasant ones tend to drive home the point faster than the pleasant ones. In other words, we learn better from our mistakes than from our victories. The same principle applies to the business world. You cannot have one side and reject the other; both are necessary and have their benefits.

Somehow, entrepreneurs don’t seem to have any problem dealing with high sales periods; after all, we don’t ever get tired of having more. But when it comes to the low sales periods, all hell seem to break lose. This unusual article is about knowing what to do when business is dull or slow. It will help you make the most of the low sales periods every business usually encounters every once in a while. It is very important to know that some low sales periods are self inflicted and others are not. I have decided to write this because one of the businesses I run is currently in this phase and I am becoming a better entrepreneur as a result.

Strategic Actions To Take During Low Sales Periods

1. Diagnose

When things don’t seem to be working out well in terms of revenue for your business, it is an indicator that something, somewhere, somehow is wrong. So, the first step to take is to trace the source of the problem. Meaning, take the pain to find out what is responsible for the low sales you are currently experiencing in your business.

What I have seen most entrepreneurs do when they are experiencing low sales is to lash out frantically looking for a ‘quick fix’ solution to the problem of low sales. I refer to this kind of response as taking wrong actions. In other cases, they simply respond by doing nothing believing that “this little affliction is but for a moment.” I refer to this kind of response as inaction. Read the rest of this entry »

As with any business before starting your internet business enterprise you should have a business plan. If you were to start a conventional business, the chances are you will need some money to get it off the ground. When it is an online business, there are usually very small start up expenses, so people have a tendency to start a business without having any plan in place.

You need to think about yourself as the bank and ask some questions before you invest in your new company. With implementing a typical business plan, you can give yourself purpose and direction, this way you can minimize your chances of failure.

Before you sign up in any online business, answer the following questions. Some will not apply to you, so omit them, but by trying to do this simple exercise you can have a better chance of being focused when you do make a decision on your business.

You are in the role of both business owner and financer, so be as sincere as you can.

1. What niche are you going to be in? Is it a product or are you providing a service.

2. What is your purpose for being in business? Explain your companies goals and objectives. As a home-based business you do not want to explain your personal goals, separate yourself from your company. You want to have a goal of becoming a leader in customer service or supplying the most reliable gadget for a reasonable price.

3. What is your company philosophy? What does the company consider crucial.

4. Who is your market? What sort of people or company will be involved in your product or service and how do you meet their requirements.

5. Is there growth in your industry? Are there changes that could be happening that will influence your company? Is there a method to benefit from this change?

6. What assets does your company possess? What is it that will allow your company to succeed? What are your competitions strengths and how will it affect you?

7. What weaknesses do you perceive in your company? How can you rectify these weaknesses? Is there a flaw in your competition that you can use to help your company?

Even though this is not a comprehensive business plan, it is the smallest requirement to take into a bank. You should be able to answer these questions before you start an online business. Far too many new marketers jump at the first online opportunity and have no idea what their business is.

Act toward the Internet no different than the way you would be expected to deal with a conventional business. Act like a bank and ask yourself some crucial questions to bring you one step closer to having a successful business.

People often ask “What makes a good business plan?” Or, “How do I make my plan attractive to lenders and investors?”.

The simple answer is that lenders and investors (I’ll call them “readers” from here on out) are looking for good deals. A good deal is one that offers the reader a reasonable rate of return for the risk assumed. The complete answer is that you should write a plan that a reader will want to read and then get it to reader(s) who are looking for your type of project and levels of risk and return. This article deals with the first part of the equation – how to write a business plan that readers will want to read.

Readers want plans that clearly, accurately and completely allow them to make an initial determination about the project. Here are the steps needed to write that plan:

To borrow from the real estate industry, the three most important things about a business plan are research, research and research. While other things are important (even critical), ultimately your plan will live or die on the quality and completeness of your information. For that matter, you’re about to risk your time and financial future on a project – how much information do you want to have? Step one:

1. Become expert in your project. Learn everything possible about:

a. The customers to whom you will sell (your market).

b. The competition.

c. The actual costs of operating your business (get quotes).

d. The actual results of similar projects.

e. Your industry.

f. The project’s physical location(s) and it’s impact (if any) on the project.

g. The people who will be key to the project.
If you’ve followed the above, you’ve now got a mound of research – sticky notes, web pages, reports, quotes, etc., etc. But, what does it all mean? Step two:

2. Analyze. (Hopefully) when you first got the idea for your project there was a sense of excitement and a feeling that this is a sure winner. Now is the time to see if your feelings were well founded. With a critical eye, do a SWOT (strengths, weaknesses, opportunities, threats) analysis on your project. Determine what you are able to do to capitalize on the S and O and minimize the W and T.

Steps one and two may have changed somewhat your sure winner feelings – which is good. (If not, you either have hit upon the next sliced bread or you need to redo the preceding steps). Presuming that your research and analysis shows a worthwhile use of your time and money (and that of your readers) move to step three:

3. Forecast. This is where the rubber meets the road. Using your research and analysis you will now tell your readers that “this is what will happen to the money”. You’ll do it with accounting forecasts called pro forma statements. Provide either three or five years of statements with (generally) the first year done monthly, the second and third done quarterly and (if included) the last two years done annually. In all events, include:

a. Operating statements.

b. Cash flow forecasts.

c. Balance sheets.

Optionally include:

d. Various ratios (loan to value, debt service coverage, etc.)
In addition to the above, you should usually include a Source and Use of Funds showing where the source of the initial capital and on what it will be spent.

By this point you’re either sure you have a winner (differing from a sure winner in that you recognize the obstacles but are prepared to work through them) or you are going back to the drawing board to rethink your project. If you have a winner, step four is:

4. Write the plan. Obviously, you need to be able to use good grammar and spelling. You should be clear, concise and complete. Fill your plan with compelling facts gleaned from your research. Do not avoid the W and T from your SWOT analysis, rather, describe in detail how you will deal with them. Avoid platitudes and your own opinions – everyone knows that you like the idea, readers need facts to determine if they like it. Try to keep your answers as short as possible while still giving complete information. With the exception of the Executive Summary, keep your answers somewhat dry and factual – short, sweet and to the point.

The Executive Summary, on the other hand, is where you sell the sizzle. It is here that you make the claim that yours is a dynamic project that deserves full consideration. You need to compel your reader to read your plan and tell them why you are excited about the project.

You’ve now done the lions share of the work leaving only step five:

5. Review and revise. The review should be first by the author(s) and then by trusted advisors – the more people that you can get to review your plan the more likely you are to find any problems before they are found by a reader.

Follow the preceding steps and you will have a business plan that will get read and, hopefully, funded.