Your business plan is typically the first impression potential lenders of investors get about your business idea. Even with a great product, team, and customers, and you are unable to convey to properly convey your image, it could be the last impression if your plan has some of the following, common mistakes.
Lenders and investors review hundreds of business plan every year and with every plan, lenders and investors become more cynical because the same mistakes pop up with regular frequency. With so much competition for a limited amount of capital, it is imperative to not make these mistakes.
1. Financials
Unrealistic Financial Projections - Simply saying that you are going to do $100,000 in sales is not enough nor can you simply say there is no way of knowing. Everyone knows there is no way to accurately come up with financial projections over the next three years, especially in a start-up. But, what is required in your plan is that reasonable assumptions are made and supported with research. By incorporating a detailed list of assumptions and how you arrived at your numbers, the lender/investor can judge your analysis and decision making process. If you are projecting to generate high sales outside of industry norms, explaining how you arrived at this conclusion is a must. Lenders and investors have seen many, many plans that claim sales are going through the roof once funded and as a result are very jaded at statements like this. Financial data that is inconsistent with industry averages and overly aggressive sales figures will raise flags. Explain every number.
Confusing Cash with Profits - Revenues do not always equal cash. For example, suppose you make a sale this month for $100 that cost $50 to produce. Assuming your buyer doesn’t pay for 30-60 and even 90 days if dealing with state or federal sources (and assuming they all pay), the effect on your cash flow is significant. Suppliers and employees still have to be paid for their work while you are waiting on payment from the buyer.
While you may not have a significant portion of sales coming from receivables, the timing of cash flows is critical for developing a financial strategy as cash flow is much more important than profits. Profits are an accounting concept while cash is money in the bank. If you don’t believe me try paying your bills with profits.
No Adjustment for Seasonality - All businesses are seasonal to some extent, some more significant than others. Seasonality refers to the percentage of sales that are made in a month. For example, most retailers have huge November and December sales and lousy January and February sales. Did you make enough cash during the good months to cover the slow months to cover salaries, rents and lights?
If You Build It They Will Come - Be careful in assuming once your doors open people will be streaming in to buy. You have a new, relatively unheard of business. This is a time when your business is particularly vulnerable as most of new owner’s cash reserves have typically been used to open the store. If sales projections are off during the first couple of months and you don’t have enough working capital to keep the lights on, you may be quickly going out of business.
Insufficient financial projections - Basic financial projections consist of four elements: Income Statements, Profit & Loss, Balance Sheets, and Cash Flow Statements.
For most businesses a three-year projection is sufficient, but if yours is a capital intensive one and will take longer to show profitability then use five. Actual figures are a must if you can get them and any number in the projections needs to be in the business plan narrative. If you are purchasing an existing business use the historical financials to show support for your sales figures.
No Quotes - Any significant expenses should have a quote accompanied in the appendix, especially for construction or remodeling as this is an area where most entrepreneurs slip as they do it themselves and greatly underestimate the costs.
2. Marketing
Failing to relieve the customer’s pain - Businesses are rewarded to make consumer’s pain go away. Pain can include; my car stopped working, my doggie is sick or my tax returns are too hard to prepare.
If your business plan can’t show how you are relieving the customer’s pain, then the chances for success in the marketplace is extremely limited.
Remember pain equals market opportunity. The greater the pain, the greater number of customer’s with this pain and the better you can relieve the pain equals greater market potential.
One Billion Customers Served - Claiming everyone needs your product/service will send a strong message to the reviewer that you don’t know your market and remove any credibility to your plan. In the good old days the shotgun approach to marketing could work as there were limited channels for advertisement. Today with unlimited outlets and more narrowly defined markets, this approach does not fly.
While it’s true everyone eats, not everyone will eat at your restaurant, nor could you effectively advertise to everyone. By researching the segments that are most likely to use your product/service and showing how your message will get to them will ultimately make your endeavor more successful. Having clearly defined target markets will show you have done your homework and be the cornerstone of a marketing strategy that can succeed.
We have no competition - Use this statement if your want your plan rejected. Every business has competition. While there may not be a direct competitor, meaning one that offers the same or similar product, there is always an indirect competitor.
Saying there is no competition tells the reviewer that you have either not done any market research or there is not a market for your product.
3. Organization
Writing For The Wrong Audience - A plan for a lender should be written differently than one for an investor. Banks are interested in seeing the likelihood that debts be repaid and investors are interested in the upside profit potential. Be sure to write your plan to your audience. For both, keep to the facts, keep it clear and keep it simple. If you don’t feel you have the writing abilities to make your plan shine, then get help.
Poor spelling and grammar - Leaving spelling and grammatical errors in your plan only tells the reviewer that you are not paying attention to details and may not pay enough attention to the business. Use spelling and grammar checkers and let others review your plan to make sure there are no errors.
Too repetitive - Many times, plans will cover the same points over and over. A well-written plan should cover key points only twice: once in the executive summary then again in greater detail in the narrative of the plan.
Remove the Jargon - Using simple language is imperative to getting a technical business funded. Don’t think that by using complex terms that lenders/investors will be so impressed with your knowledge that they will whip open the checkbook. Businesses that can’t be understood don’t get funded. If you can’t explain your business to a sixth grader your chances of funding are in jeopardy.
Investors are really only interested in your technology if it solves a problem that people will pay for, is better than the competition, can be protected through patents and can reasonably go to market without spending a lot of money.
Keep the technical details out of the business plan and in the white papers.
Appearance matters - Make sure your plan looks professional. Use professional printing, binding, keeping fonts consistent and easy to read. The more money being requested means investing more time in making sure your plan will stand out from the crowd. Be careful that you don’t go overboard and give the impression that the plan is all style and no substance.
Length - A long business plan does not make a better business plan. All of the industry and marketing research won’t save a flawed plan. Too many plans have been immediately rejected because they are too long. Lenders and investors favor entrepreneurs who can efficiently demonstrate the ability to efficiently get to the point.
An executive summary should be no more than 1-3 pages. Ideally it should only be one page but some complex plans require more. An ideal business plan is 20-30 pages, including financials. Remember less is more!
Use operating plans, white papers and marketing plans for the in-depth details.
Fluffing - Using phrases like "unmatched in the industry;" "narrow window of opportunity;" or "ground floor" are empty phrases filled with hype. If anything, the cynical reviewer will be turned off by the hype and trash your plan. Stick with laying out the facts – what is the problem, how will you solve the problem, how big is the market, how will consumers buy it and what is your competitive advantage. If the opportunity is there the lender/investor will be able to make the decision for themselves.
Overvaluing the business idea - What gives a business value is not the idea but the execution of the idea. A great idea is a start, but almost everyone has had a great idea at some point in their lives. How you will execute this idea is what sets apart a real business from the dreamers.
4. Execution Mistakes
Waiting too long - Funding a business takes a long time. Expect three months at a minimum after finishing your business plan to get funding. Unless you have sufficient capital, other sources of income and can be funded in-house at a bank, this number may be reduced. Bank financing for business with less than two years of operating history are typically funded through an SBA guarantee, which requires additional time, patience and paperwork. Financing through investors is usually an even longer process as they have a lot of people competing for their money and they tend to do significant due diligence to secure their investment. Waiting until you need the money is a sure way to keep your business from launching.
Unreasonable time lines - Many business owners underestimate the timelines for completing milestones. Its human nature to think we can do things faster than is possible. When getting a business started there will be several tasks you could not have anticipated and the some tasks you think will be easy which will end up taking much longer. It is best to overestimate and finish early, rather than scramble and execute your opening poorly.
Failing to seek outside review - When preparing your plan, be sure that you have at least a few people review it before sending it out. Preferably look for people in your industry or who have a specialization in sales, distribution, etc that could lend a fresh set of eyes and find any flaws in the plan. Being so close to the action can keep you from being objective and this additional scrutiny may save you countless headaches and money down the road.
Perfecting - It can be easy to spend countless hours perfecting your plan and ultimately never launching. Remember, your plan will never be perfect and in practice should be continually updated as you learn more about the business, market and customers. Don’t make your plan an academic practice, finish it and get in front of investors and lenders. Use this feedback to see if your plan really needs the additional perfection.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9180.shtml
Showing posts with label Profit. Show all posts
Showing posts with label Profit. Show all posts
Monday, 10 March 2008
Friday, 22 June 2007
The Disney Difference: How One Man Rose Above Bankruptcy And Failure To Building A Multi-billion $$
Try to imagine a world without Walt Disney. A world without his magic, optimism and childlike fantasy. Walt Disney pioneered the fields of animation, and transformed the entertainment world. He did more to touch the hearts, minds, and emotions of millions of Americans than any other person in the past century.
The Walt Disney Company - now a mega-empire whose profits (yes, profits!) are $1.3 billion - was the creation of a high school drop out who suffered bankruptcy, risked it all 4 times and suffered repeated financial and business disasters. How did one man overcome the greatest of challenges to become a legend ... a folk hero ... a master of enterprise?
Walt Disney’s creative and business magic can be summarized in one word: Imagineering. The term, trademarked by Disney in 1967, combines the words "imagination" and "engineering."
Today, Walt Disney’s Imagineering is the master planning, creative development, design, engineering, production, project management and research and development arm of The Walt Disney Company. A powerful insight into the Imagineering process is provided by one of Walt Disney’s co-workers who pointed out “… there were actually three different Walts: the dreamer, the realist and the spoiler (or critic). You never knew which one was coming to a meeting.”
Through the modeling technologies of NeuroLinguistic Programming (NLP), you too can cultivate the same business genius of Walt Disney. You too can learn Disney’s Imagineering process to make your boldest visions into reality.
Applying the Disney Difference in Your Business:
The Benefits of the Imagineering Process
Whether you are a soloist business owner or the CEO of a multi-billion dollar corporation, Imagineering is a simple yet powerful process that can help you:
•Be successful at the “inner game” of reaching future goals
•Build powerful teams, strategic partnerships and alliances
•Maximize the return and minimize the risk in new “virgin” situations – such as launching a new product, expanding to new markets or acquiring a business
•Lead and manage change throughout your organization
•Develop clear compelling plans that inspire you/your team to action
•Communicate and work more effectively with diverse groups of people
•Ignite your creativity and problem solving capabilities
The Imagineering Process: An Overview
Whether you are an individual or a team, Imagineering involves the coordination of three “hats” or roles. According to Robert Dilts, NLP pioneer who modeled the Imagineering process, all three roles are critical to effective problem solving and transforming visions into reality.
The Dreamer
The dreamer’s role is to provide the visionary big picture … with no boundaries, limitations or restraints.
The Realist
The realist’s role is to evaluate what is realistic, think constructively and organize action plans.
The Critic
The critic’s role is to test the plan, look for potential problems, difficulties and consequences. That is, what could go wrong, what is missing.
Very few individuals, teams or organizations are strong in all three roles or capabilities. What happens when one or two of these roles are missing? Do any of these sound like you or your organization?
•A Dreamer without a Realist gets stuck in fantasy, a “some day” mentality.
•A Realist without a Dreamer or Critic is like a robot. They are task masters. They are driven by “to do” lists.
•A Critic and a Dreamer without a Realist get caught up in perpetual conflict.
•A Dreamer and Realist without a Critic are an R&D department – lots of prototypes but lack quality standards for success.
•A Critic without a Dreamer or Realist is a Spoiler. They stop themselves even before they get started.
•A Realist and Critic without a Dreamer are a Bureaucracy.
To make your dreams come true … with ease, precision and passion, it is critical to master and synthesize all three Imagineering roles. Below is a peek how I work with individuals, teams and organizations in modeling Disney’s Imagineering to create extraordinary business results.
Imagineering Your Business Success:
The Process for Transforming Your Dreams into Reality
Your ability to transform your business goals into reality requires mastery of the following phases of the Imagineering process.
The Dreamer: Envisioning Your Future
Walt Disney’s genius always started with a dream. He would see clearly in his own mind the vision of what he wanted – whether it was a theme park, a cartoon character, a movie or any of his other creative endeavors.
As the Dreamer, you want to think about your long term future, address the big picture and generate many alternatives for reaching your goal. The primary focus is on the “what” of your idea or vision.
To model the Dreamer in Walt Disney, you must ask yourself such questions as:
•What do I want in an ideal world?
•What is the purpose of this project or goal?
•What are the benefits?
•What will be the impact once my goal is achieved?
•What alternative strategies will help me get there?
Key Points: Always state the goal in positive terms and establish the purpose and payoffs of reaching your goal. Think big … very big.
The Realist: Defining the Plan
The purpose of the Realist is to turn the dream into a workable plan. While wearing the Realist hat, you want to “act as if” the dream is possible and identify steps, time frames and milestones for getting there.
Your focus needs to be more action-oriented, on the “how” -- ie., procedures and operations -- for implementing your plan or idea.
To model the Realist in Walt Disney, you must ask yourself such questions as:
•How specifically will the idea be implemented? What will be the first step? second step? third step? By when?
•How will I know when the goal has been achieved?
•How will I get the resources (people, money, skills, etc.) I need to reach my goal?
Key Points: Create a “storyboard” of your plan by finding simple images to represent the steps required for reaching your goal or dream. Disney developed the very powerful process of “storyboarding” in 1928 and is now used by many successful businesses, such as GE.
The Critic:: Identifying Potential Problems
The purpose of the Critic is to evaluate the proposed plan and look for potential problems and ‘missing links.” The Critic role must follow the Dreamer and the Realist in this process.
The Critic identifies external factors or individuals that may influence the outcome of the plan (either positively or negatively). The primary purpose of the Critic is to focus on “what if” concerns, along with solutions to avoid them.
To model the Critic in Walt Disney, you must ask yourself such questions as:
•What if I can’t find the necessary resources or funds to implement my plan?
•What if my competitors _____ ?
•What if I don’t meet the plan’s milestones? How will that effect costs? Time and resource requirements?
•What if certain people object to my plan or can negatively impact its success? How will I handle that?
Key Points: While most people and organizations look at critics as negative people, their role is essential to your future success. You want them on your team. For the Critic role to be most effective, allow the critic to present their concerns only in the last step, after the dream and plans have been formulated.
Summary:
One man – Walt Disney – not only built one of the most successful US businesses of all time, this one man also left a magical legacy spanning almost a century and will continue for many generations to come.
How has one man accomplished so much? The answer is his Imagineering process – his secret for transforming ambitious, creative visions into extraordinary realities. By following Walt Disney’s cycle of Dreamer, Realist and Critic, you too will realize a compelling business future and a clear path that will take you there.
--------------------
Article sourced from: http://www.articlecity.com/articles/business_and_finance/article_7981.shtml
The Walt Disney Company - now a mega-empire whose profits (yes, profits!) are $1.3 billion - was the creation of a high school drop out who suffered bankruptcy, risked it all 4 times and suffered repeated financial and business disasters. How did one man overcome the greatest of challenges to become a legend ... a folk hero ... a master of enterprise?
Walt Disney’s creative and business magic can be summarized in one word: Imagineering. The term, trademarked by Disney in 1967, combines the words "imagination" and "engineering."
Today, Walt Disney’s Imagineering is the master planning, creative development, design, engineering, production, project management and research and development arm of The Walt Disney Company. A powerful insight into the Imagineering process is provided by one of Walt Disney’s co-workers who pointed out “… there were actually three different Walts: the dreamer, the realist and the spoiler (or critic). You never knew which one was coming to a meeting.”
Through the modeling technologies of NeuroLinguistic Programming (NLP), you too can cultivate the same business genius of Walt Disney. You too can learn Disney’s Imagineering process to make your boldest visions into reality.
Applying the Disney Difference in Your Business:
The Benefits of the Imagineering Process
Whether you are a soloist business owner or the CEO of a multi-billion dollar corporation, Imagineering is a simple yet powerful process that can help you:
•Be successful at the “inner game” of reaching future goals
•Build powerful teams, strategic partnerships and alliances
•Maximize the return and minimize the risk in new “virgin” situations – such as launching a new product, expanding to new markets or acquiring a business
•Lead and manage change throughout your organization
•Develop clear compelling plans that inspire you/your team to action
•Communicate and work more effectively with diverse groups of people
•Ignite your creativity and problem solving capabilities
The Imagineering Process: An Overview
Whether you are an individual or a team, Imagineering involves the coordination of three “hats” or roles. According to Robert Dilts, NLP pioneer who modeled the Imagineering process, all three roles are critical to effective problem solving and transforming visions into reality.
The Dreamer
The dreamer’s role is to provide the visionary big picture … with no boundaries, limitations or restraints.
The Realist
The realist’s role is to evaluate what is realistic, think constructively and organize action plans.
The Critic
The critic’s role is to test the plan, look for potential problems, difficulties and consequences. That is, what could go wrong, what is missing.
Very few individuals, teams or organizations are strong in all three roles or capabilities. What happens when one or two of these roles are missing? Do any of these sound like you or your organization?
•A Dreamer without a Realist gets stuck in fantasy, a “some day” mentality.
•A Realist without a Dreamer or Critic is like a robot. They are task masters. They are driven by “to do” lists.
•A Critic and a Dreamer without a Realist get caught up in perpetual conflict.
•A Dreamer and Realist without a Critic are an R&D department – lots of prototypes but lack quality standards for success.
•A Critic without a Dreamer or Realist is a Spoiler. They stop themselves even before they get started.
•A Realist and Critic without a Dreamer are a Bureaucracy.
To make your dreams come true … with ease, precision and passion, it is critical to master and synthesize all three Imagineering roles. Below is a peek how I work with individuals, teams and organizations in modeling Disney’s Imagineering to create extraordinary business results.
Imagineering Your Business Success:
The Process for Transforming Your Dreams into Reality
Your ability to transform your business goals into reality requires mastery of the following phases of the Imagineering process.
The Dreamer: Envisioning Your Future
Walt Disney’s genius always started with a dream. He would see clearly in his own mind the vision of what he wanted – whether it was a theme park, a cartoon character, a movie or any of his other creative endeavors.
As the Dreamer, you want to think about your long term future, address the big picture and generate many alternatives for reaching your goal. The primary focus is on the “what” of your idea or vision.
To model the Dreamer in Walt Disney, you must ask yourself such questions as:
•What do I want in an ideal world?
•What is the purpose of this project or goal?
•What are the benefits?
•What will be the impact once my goal is achieved?
•What alternative strategies will help me get there?
Key Points: Always state the goal in positive terms and establish the purpose and payoffs of reaching your goal. Think big … very big.
The Realist: Defining the Plan
The purpose of the Realist is to turn the dream into a workable plan. While wearing the Realist hat, you want to “act as if” the dream is possible and identify steps, time frames and milestones for getting there.
Your focus needs to be more action-oriented, on the “how” -- ie., procedures and operations -- for implementing your plan or idea.
To model the Realist in Walt Disney, you must ask yourself such questions as:
•How specifically will the idea be implemented? What will be the first step? second step? third step? By when?
•How will I know when the goal has been achieved?
•How will I get the resources (people, money, skills, etc.) I need to reach my goal?
Key Points: Create a “storyboard” of your plan by finding simple images to represent the steps required for reaching your goal or dream. Disney developed the very powerful process of “storyboarding” in 1928 and is now used by many successful businesses, such as GE.
The Critic:: Identifying Potential Problems
The purpose of the Critic is to evaluate the proposed plan and look for potential problems and ‘missing links.” The Critic role must follow the Dreamer and the Realist in this process.
The Critic identifies external factors or individuals that may influence the outcome of the plan (either positively or negatively). The primary purpose of the Critic is to focus on “what if” concerns, along with solutions to avoid them.
To model the Critic in Walt Disney, you must ask yourself such questions as:
•What if I can’t find the necessary resources or funds to implement my plan?
•What if my competitors _____ ?
•What if I don’t meet the plan’s milestones? How will that effect costs? Time and resource requirements?
•What if certain people object to my plan or can negatively impact its success? How will I handle that?
Key Points: While most people and organizations look at critics as negative people, their role is essential to your future success. You want them on your team. For the Critic role to be most effective, allow the critic to present their concerns only in the last step, after the dream and plans have been formulated.
Summary:
One man – Walt Disney – not only built one of the most successful US businesses of all time, this one man also left a magical legacy spanning almost a century and will continue for many generations to come.
How has one man accomplished so much? The answer is his Imagineering process – his secret for transforming ambitious, creative visions into extraordinary realities. By following Walt Disney’s cycle of Dreamer, Realist and Critic, you too will realize a compelling business future and a clear path that will take you there.
--------------------
Article sourced from: http://www.articlecity.com/articles/business_and_finance/article_7981.shtml
Tuesday, 12 June 2007
Getting the Most Return from Your Sales Time Investment (ROI)
Another good read on investing from Article City...
--------------------
Getting the Most Return from Your Sales Time Investment (ROI)
by: Joe Leech
Let's face it: you are probably working for far less than you need to. And the sad thing is, you may not even be aware of it or the options you have! As of now, we're going to change that for you, and possibly share with you not only a thought but a vehicle that can change your financial life.
We are going to show you how to get much more out of your sales time investment.
This probably applies more to the part time, home based business person than the professional...but we have seen, met, and talked with professionals who really are under- valuing their return on time investment. I know.. we are using that "time investment" word alot all ready. But you MUST consider it just as you do a cash or money investment.
In fact, it's even more important because once spent or invested, you can't ever get that particular moment or minute back. It's gone. You can always invest more money, but you only have so much irreplaceable time. Your sales time investment is one of the most precious ones you can ever make.
As we look at business models, we find on one end, the model that proposes high volume but low profit per sale.
Walmart has certainly shown this works, and many, many, many supermarkets work this same way. It will work if you have the ability to create large volumes of sales. The question is: Do you. If you are a individual sales rep or a small business, just how much of an opportunity do you have to create really large volumes. The appeal to the small business person is to do this by creating some type of a multi-level (also and probably incorrectly referred to as a pyramid) sales organization. In the ideal world, IF you can do this, you can create volume. But this could take years to accomplish, and still never guarantee any income or security because (1)The company behind it could go out of business, be taken over.. or any number of things, (2) The pay plan could change, or (3) The group suddenly dissolve, particularly if or when a heavy hitter or group leader decides to switch to another business and takes his distributors or sales force with him. Did you make a good sales time investment if you chose this model?
Of course you still have the ability to sell the product or service yourself, but (1) Can you do volume, and (2) Is the profit per personal sale worth your time?
The second business model, at the other end of the spectrum, is one that provides a relatively high profit or earning per sale. Sometimes we think of real estate people and car sales people in this category, as well as sales people of specialized capital equipment. But that's not the majority of us.
The downside here is that if we are thinking about selling a high ticket/high profit item, we have to ask (1) Is there a large market and prospect base? and if we are thinking in terms of an ability for a part time person--possibly a "stay at home mom", can this high ticket, high profit product or service be first mastered in terms of the technology, and second, is the customer prospect base readily accessible?
In most cases, the answer to those two questions is "no, not available".
But if it is or was, then here's a fact that can be virtually carved in stone:
IT TAKES NO MORE TIME OR SKILLS TO SELL THE HIGH PROFIT PACKAGE THAN IT DOES TO SELL THE MASS PRODUCT WITH ONLY PENNIES OR DIMES IN PROFIT!
Think about that! This is ALL relative to your sales time investment, and once more: It's the MOST IMPORTANT investment y ou have to make.
Ask yourself: "Am I working for pennies or dimes when instead with the right vehicle I could be working for dollars?"
If the answer is yes, and this is so true of particularly home based business entrepreneurs who are involved in sale of nutritional supplements, skin care, fad gadgets, etc., then ask yourself, "Am I doing this because I want to earn a nice income, and do it as quickly as possible... or am I kidding myself about that goal and I just want to get products wholesale or discounted and have some fun?"
Nothing wrong with that, by the way, if you have an hones assessment of what you are doing and why.
But..... If your goal is in the area of $4000-$5000 a month or more, and you also don't want to spend all your waking hours "working your business", then it's time to change.
As your article writer, I can tell you this is an article written from the school of hard knocks and one that really had us so emotionally involved with the businesses. Rah rah rah; recognition, pins, etc. Amway. Free Life. Primerica.
Herbal Life. Been there, done that. Made some money? Yes, but far, far, far less than in other options. And that's just the part time side of things we did to supplement our "real" job. Made some money, but had no security, and worked for far less than we could have been doing. Plus we just sold our time for money there. No residual income.. but that's the subject for another article.
We hope this has helped you focus some thinking and our resource block will point you to one tool that will let you change your life.
--------------------
Article sourced from: http://www.articlecity.com/articles/business_and_finance/article_8365.shtml
--------------------
Getting the Most Return from Your Sales Time Investment (ROI)
by: Joe Leech
Let's face it: you are probably working for far less than you need to. And the sad thing is, you may not even be aware of it or the options you have! As of now, we're going to change that for you, and possibly share with you not only a thought but a vehicle that can change your financial life.
We are going to show you how to get much more out of your sales time investment.
This probably applies more to the part time, home based business person than the professional...but we have seen, met, and talked with professionals who really are under- valuing their return on time investment. I know.. we are using that "time investment" word alot all ready. But you MUST consider it just as you do a cash or money investment.
In fact, it's even more important because once spent or invested, you can't ever get that particular moment or minute back. It's gone. You can always invest more money, but you only have so much irreplaceable time. Your sales time investment is one of the most precious ones you can ever make.
As we look at business models, we find on one end, the model that proposes high volume but low profit per sale.
Walmart has certainly shown this works, and many, many, many supermarkets work this same way. It will work if you have the ability to create large volumes of sales. The question is: Do you. If you are a individual sales rep or a small business, just how much of an opportunity do you have to create really large volumes. The appeal to the small business person is to do this by creating some type of a multi-level (also and probably incorrectly referred to as a pyramid) sales organization. In the ideal world, IF you can do this, you can create volume. But this could take years to accomplish, and still never guarantee any income or security because (1)The company behind it could go out of business, be taken over.. or any number of things, (2) The pay plan could change, or (3) The group suddenly dissolve, particularly if or when a heavy hitter or group leader decides to switch to another business and takes his distributors or sales force with him. Did you make a good sales time investment if you chose this model?
Of course you still have the ability to sell the product or service yourself, but (1) Can you do volume, and (2) Is the profit per personal sale worth your time?
The second business model, at the other end of the spectrum, is one that provides a relatively high profit or earning per sale. Sometimes we think of real estate people and car sales people in this category, as well as sales people of specialized capital equipment. But that's not the majority of us.
The downside here is that if we are thinking about selling a high ticket/high profit item, we have to ask (1) Is there a large market and prospect base? and if we are thinking in terms of an ability for a part time person--possibly a "stay at home mom", can this high ticket, high profit product or service be first mastered in terms of the technology, and second, is the customer prospect base readily accessible?
In most cases, the answer to those two questions is "no, not available".
But if it is or was, then here's a fact that can be virtually carved in stone:
IT TAKES NO MORE TIME OR SKILLS TO SELL THE HIGH PROFIT PACKAGE THAN IT DOES TO SELL THE MASS PRODUCT WITH ONLY PENNIES OR DIMES IN PROFIT!
Think about that! This is ALL relative to your sales time investment, and once more: It's the MOST IMPORTANT investment y ou have to make.
Ask yourself: "Am I working for pennies or dimes when instead with the right vehicle I could be working for dollars?"
If the answer is yes, and this is so true of particularly home based business entrepreneurs who are involved in sale of nutritional supplements, skin care, fad gadgets, etc., then ask yourself, "Am I doing this because I want to earn a nice income, and do it as quickly as possible... or am I kidding myself about that goal and I just want to get products wholesale or discounted and have some fun?"
Nothing wrong with that, by the way, if you have an hones assessment of what you are doing and why.
But..... If your goal is in the area of $4000-$5000 a month or more, and you also don't want to spend all your waking hours "working your business", then it's time to change.
As your article writer, I can tell you this is an article written from the school of hard knocks and one that really had us so emotionally involved with the businesses. Rah rah rah; recognition, pins, etc. Amway. Free Life. Primerica.
Herbal Life. Been there, done that. Made some money? Yes, but far, far, far less than in other options. And that's just the part time side of things we did to supplement our "real" job. Made some money, but had no security, and worked for far less than we could have been doing. Plus we just sold our time for money there. No residual income.. but that's the subject for another article.
We hope this has helped you focus some thinking and our resource block will point you to one tool that will let you change your life.
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Article sourced from: http://www.articlecity.com/articles/business_and_finance/article_8365.shtml
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