Kathy, a skilled massage therapist, called me to discuss what she needed to know to start her own massage therapy clinic. She had been in the industry for over ten years, and was very skilled at working with her clients.

She worked for another clinic and felt she was ready to start a business of her own. However, like many want-to-be entrepreneurs, she possessed the technical skillsmassage therapybut possessed little business management experience, and no self-employment experience.

For many want-to-be entrepreneurs, discovering why businesses fail is a smart research project. It helps to uncover personal weaknesses, as well as begin to build up inherent strengths before investing in becoming self-employed.

It also helps them better understand the dynamics of the industry they will be competing. For example, if competition is intense because of a large number of massage therapists in a geographic area, we can expect that there will be less market share per clinic, downward price pressure, and lower profit potential; this makes for difficult going, especially in the start-up phase of the business.

Following are 10 reasons why small businesses fail to thrive. If you have an existing business, it might help to determine why your business is not growing.

1. Mistaking a business for a hobby. Just because you love something does not mean you can successfully convert it into a business. Too often we feel others share our passion, and we bank starting a new business on it. Research your business idea and make sure it is viable.

2. Poor planning. Yes, you must have a business plan. It can be a 3-page plan for the simplest of businesses or a 40+-page plan for a more complex business opportunity. The point is you are prepared to focus on your business’ goals and vision, and you have a good idea of what you need to do to put your plan into action. By going through a business planning exercise, you also may have unearthed what problems may arise, and how you are going to handle them, if they do. In addition, financially can you launch the business? It takes a lot of time to build a business; 60% of business start-ups fail within six months after opening. Lack of cash flow and undercapitalization is the culprit.

3. Entrepreneurial excitement. Entrepreneurs often get excited about new ideas, but are unable to determine if they have a “true opportunity”. Part of an effective business strategy (here is the business plan, again) is determining which markets you will and will not serve, as well as what products you will or will not offer. Before deciding to undertake a new business activity ask yourself, “Do I have the time and skill to implement this?”

4. Risking everything on one endeavor. Too often, small business owners will have just one product, one service, or one big client. However, what if this one thing disappears? Diversification will allow you to ride the flow of ebbs and tides in business.

5. Poor record keeping and financial controls. You must review your revenue and expense records each month, and understand what they mean! Accounting is the language of business. If you do not know how to speak it, get help from someone who does.

6. Poor cash management. A good rule of thumb is that you can live for one to two years without income when getting started because new businesses are usually slow to get off the ground. If you have created a business plan with a realistic budget, you will already have determined what I have just written!

If your plan shows you earning a high income in the first six months, it may be a good idea to go back and review your budgets.

7. Poor time management. Putting off tasks you do not enjoy will sink your business fast! We get into a business because we love massage therapy. However, have we thought about all the other things that go along with running a business, like bookkeeping, banking, sales, and marketing activities, talking with accountants, attorneys, dealing with customer problems, collecting receivables, and slow cash flow? Getting help with administrative tasks that eat up your time is a sure-fire way to spend time doing what you do bestdeveloping new ideas and revenue for your business.

8. Ineffective marketing. Learn the basics of marketing and track the success or failure of each technique you use. Dump ones that are not working for you in three months time.

9. Ineffective sales techniques. Once you have generated interest in a client, how are you going to convert them into a sale? Understand the basics of selling; take a class, read a book; get some professional help.

10. Entrepreneurial burnout. Owning your own business requires a huge investment of time, money, energy, and emotion. Are you ready to ride the rollercoaster of the highs and lows associated with each of these items? I can guarantee you, it will happen! Motivation and creativity can suffer in the most challenging times, and a pessimistic attitude may prevail.

Be sure to schedule time for yourself. Take time off from your business. It will help you manage the ups and downs of entrepreneurship, and give you fresh perspectives.

As Kathy and I ended our counseling session, she made a list of areas where she needed to grow, and created a task plan. With planning and an objective look at both your personal and your business’ strengths and weaknesses, you can be successful.

© 2006, 2008. Bonita Richter and Profit Strategies. All rights reserved.

The Debt solution for the individual customers and small business is the biggest challenge after recession.

Small business and individuals customers are facing tough time today.

Individual
customers and small businessman are not able to make regular payments
like salaries, payment to creditors, suppliers etc. The entire
operation of a small time business man today is standing still due to
the financial crisis. They are looking forward for relief services as
much as any financial institution in distress.

Individual
customers and small business owners should start planning the budget
more accurately. Based on the budget one should plan the debt payment.
Usage of credit card and other such products should be avoided.

The
customer should talk to their creditors and ask them to forgive a
portion of the debt and they would make the payment for the rest.

Before
filing for bankruptcy or to evade harassment at the hands of the
creditors the customer should talk to a debt settlement company and get
his debt settled at the earliest. The rules of settlement for unsecured
debts are the same in case of small business debts and personal
unsecured debts. In a business venture if the unsecured debts are $
10,000 or more the business owner can as much look for debt
consolidation services as an individual. Debt Settlement Company helps
small business owners to eliminate 55 % or more of their unsecured
debts.

In case of unsecured debts as there is no collateral
attached to it. In case of non payment there is no fixed asset which
the financial institution can claim and sell to reclaim their money.
Financial institutions tend to regain their money in the first few
months of lending at a very high interest rate.Business owners should
look for good debt settlement companies through the debt settlement
network.

Therefore selection of good settlement company must be
after proper research and reference check. It can result in drastic
reduction of debt for the customers.

If
you want to get out of debt and hire a debt settlement company for debt
negotiation then I have an important piece of advice. Do not go
directly to a particular debt settlement company but rather first go to
a debt relief network who is affiliated with several legitimate debt
companies. In order to be in the debt relief network, the debt
settlement companies must prove a track record of successfully
negotiating and eliminating debt. This way you can be assured that you
will find a legitimate debt settlement company.

Free Debt Advice.

Fear of starting a business can be overwhelming but is achievable without a lot of risk. This is a guide to starting a small business using ideas from the Internet.

Thinking about starting a business? Here are some hints:

Getting into business can be overwhelming but is achievable without a lot of risk. This is a guide to starting a small business. One of the great things available when starting a business is the Internet.

Even if you are still at the idea stage or have taken some small steps to get started, finding advice will be an essential part to your success! In this guide to starting a small business, there are some items that will improve the odds of success:

1.Recruit a Team of People.

Studies have shown that if you employ staff in your business you have a greater chance to survive the start up years. If you can afford to hire staff do it without hesitation.

2.Startup Capital.

Have start up capital equal to at least 6 months of trading. Undercapitalization is a major contributor to failure in business. You need cash to cover the expenses you incur while you build sales and cash flow.

3.Training.

Get education and learn business skills. Passion and desire alone won’t get you through. You might be the smartest kid on the block and have the best product in the world, but if you have no business skills, you’re destined to fail.

4.Become A Frugal Mogul.

You’ve heard the story of the golden goose. Well in business, keep costs low and don’t take cash from your business until it is mature enough to lay ‘golden eggs’ [metaphorically speaking]. Businesses that begin this way and then expand once matured have a higher success rate.

Free Counseling and Advice

There are plenty of small business centres to help you get started. I have used: ww.sdi.qld.gov.au/virtual/index.cfm.

I recommend: Use the free services local government and chambers of commerce offer. Even major banks have websites dedicated to helping small business. Alternatively you can post a question to me on my website and I will provide an answer you can bank on.

Using Microsoft

Here is something fresh and new to help small business. The Microsoft ‘Startup Center’ lists the key tasks you can access to start your business. Even though it is a self promoter it still has good information.

I recommend: Start at this address: ww.microsoft.com/SMALLBUSINESS/startup-toolkit/default.aspx?pid= home page. Use the tabs at the top of the page. You will find advice on selecting a business structure and other valuable information. Ensure this information is relevant to your state laws and conditions. You can also download a free business plan template here: ttp://office.microsoft.com/en-us/templates/TC010175201033.aspx?pid=CT101172331033.

Tips & Tactics

Some last points to help you on your journey

The reasons business fail in the first 5 years are competition, mismanagement, high rent and insurance costs, high debt, inability to get financing, loss of clients, difficulty with collections and lack of profitable sales.

This guide to starting a small business still advocates you must study your chosen market before spending a cent. Even though the odds to have a great small business are good you still need to do your homework.

In today’s business world what are good small business opportunities? The answer is new businesses that can provide products or services to a sizable market of customers who want to buy. One way to move forward is to get involved in a marketplace that is already established and offer products or services in that market in a unique way so that customers want to start buying from you.

Another alternative is to identify unusual small business opportunities in smaller niche markets. These smaller markets are ones suited to the resources of a small business, do not compete with larger businesses and are big enough to make a profit.

The key to success is that your products or services must connect with your target audience. The problem often faced by new entrepreneurs when getting involved in small business opportunities is that they target a market that is too broad or a niche market that is already heavily exploited. .

The Search For Small Business Opportunities.

A lot of successful small home based business opportunities begin with an entrepreneur’s unique area of expertise. They look at what they are good at, things that they enjoy and use their skills and resources to transform an idea into a real business.

In today’s economy, the best new business to start is an online business, as the start-up costs are costs considerably lower than any physical offline business costs.The internet is the most effective marketing tool in today’s digital world and all new small business opportunities need to have some sort of online presence to remain competitive. The internet allows you to easily expand your business beyond the confines of your physical location.

Starting A Small Business Opportunity.

There are many websites online that help people get started with small business opportunities. The internet is a worldwide marketplace where people are buying and selling online constantly. There are physical products bought online that get delivered to the customer’s door and digital products which the customer can download to their computer right after purchase and start using immediately.

There is a boom in small business opportunities within the digital products and services sector. Just think of all the online film, music and information services that are available online. People will pay for information products that they can download online and there may well be a market out there who will pay for your current skills and expertise.

If you want a successful journey in small business growth, there are many ways to go about it. In our hurry up world, where we can confuse activity with accomplishment, the best way to move forward is to slow down and not to go faster. Go too fast and it is easy to make mistakes. Slow down and book your journey to success. Booking your journey is about reading books that will help improve you and subsequently, your business.

Mistakes will cost you time. Think about this. Once you have spent some time on something that time is irreplaceable. It is gone. We can spend more money but we can’t spend more time. Time management work is essential to success. Small business books are a proven way to accelerate your success track. And, they are time well spent. Yes, you can read about systems, accounting, marketing, sales and cash flow. All of this is good and can help. But the best books are the ones that help you create pathways for personal growth.

The little secret of small business running successfully is the personal growth of the owner, founder or one of the principals. If they don’t grow in their thinking and continue with a limited vision, then the business won’t grow. The key is to go to work on yourself. Once you become more, you can attract more in your business. Too often, we go to work on others and want more, yet we don’t have more to offer.

As the owner of a business you can have more business by offering better service, better quality or expand your services to name a few. It all starts with you. If you become a better server and bring more quality into your own life you will attract people who offer more. The same is true for your business. Yes, it all starts with you. As Napoleon Hill said in Think And Grow Rich, “What the mind can conceive and believe, it can achieve.

Owning your own business can be a tiring effort on a treadmill of never ending work and challenges. Or, it can be an adventure in overcoming challenges that can lead you into a life abundance, freedom and satisfaction. Go to work on yourself and start conceiving and believing in what you can achieve.

The choice is yours. Think about it. If an entrepreneur successful in business has an unfulfilling life what does he have? He has an unhappy life. More business isn’t going to make him any happier.

To have small business successful, the owner must be successful in personal growth. There is no one answer. Yet, books can cause you to slow down and reflect and evaluate are a great way to move you forward to the success, freedom and abundance you desire.

Do you want that successful journey in small business? Take the first step and book it.

Having extraordinary skills and talent in a business area, being hardworking and determined, persistent, having great ideas and full of energy is a fantastic mix for a successful business career. But all those exquisite qualities mean nothing if the end result is not represented in the bottom line.

The financial section of the business plan is where all the operational items included in the rest of the business plan come together. There are three essential elements to a properly thought through and well constructed business plan. Those elements are a forecast profit and loss account stating the income and expenditure, a cash flow statement that determines the liquidity and a sensitivity analysis that indicates the risks and opportunities within the business plan.

The forecast profit and loss account should be prepared on a monthly basis for the first year with an annual projection for the second year. The first year of every new start up business can be difficult due to financing and funding growth from a standing start which is why the first financial year should be detailed.

The forecast profit and loss account is the financial calculation of all the sales, purchases, expenditure and prices contained within the other areas of the business plan. In addition full account should also be taken of the business administration costs. All the figures in the business plan income and expenditure account should be fully supported from the physical projections contained in the other sections and derived from those sections.

From the sales section multiply the sales volume of each product by the considered selling prices. Keep to a minimum sundry additional income that might be expected. The resultant financial calculation produces the expected monthly sales turnover.

Using the information in the production or operations section of the business plan and if included the purchasing section the sales volume should be evaluated at the expected purchase cost of the products and services. This produces a cost of sales figure which when deducted from the sales turnover provides a forecast gross profit figure each month.

The business plan should include notes and comments of all other main cost items including projections of staff requirements. Together with administration and overhead costs a monthly projection of the expected running costs of the business start up can be produced. The business running costs are an important area to forecast in detail as while sales prices and costs may be determined with some accuracy errors in the business running costs could cause a good business to fail.

The monthly forecast profit and loss account is complete by entering the sales turnover, deducting the cost of sales and the business running costs, overheads, to produce a net monthly profit. The bottom line may start in a monthly loss until volumes grow but should indicate a satisfactory profit. If a loss is indicated do not manipulate the numbers to show a profit which would be hiding the truth, instead go back to the sales and costs sections and consider what action is required to justifiably increase gross profit margins or reduce overhead costs.

Cash flow is often critical to a small business plan and a lack of capital or liquidity to carry out the ambitions and projections of the small business owner is a principal cause of small businesses going into liquidation before those business aspirations are achieved. The cash flow statement is based upon the volumes and prices included in the business plan and stated in such a way as to indicate the financial resources required.

Cash flow is different to the profit and loss account as the profit and loss account only states the different between sales sold and costs incurred. The cash flow statement takes account of both the profits made plus volume changes of purchases and stock, one off payments, financing debtor balances offset by creditor balances and shows how liquid and solvent a business is.

Producing cash flow statement tends to come within the province of accountants. A simple cash flow statement can be produced by starting with the net profit or loss each month, deducting the cost of stock which has not been sold yet including both raw materials and finished goods stock and also deducting any one off payments such as bills that have to be prepaid and the cost of paying for fixed asset purchases.

In addition when a new business starts up the amount owed to suppliers, creditors, is zero and the amount owed by customers, debtors, is zero. During the year these balances will change each month in proportion to the financial terms and conditions of the business and the movement of these balances need to be entered on the cash flow statement. An increase in debtors reduces the cash flow liquidity and an increase in creditors increases cash flow liquidity.

The third element of the financial section is an analysis of the whole business plan and the projections in what is called a sensitivity analysis. A technical accounting area for the majority of non accountants but nevertheless an important area as it is the financial sensitivity analysis that should indicate both the increased financial opportunities and the financial risks carried within the business plan.

All major areas within the business start up plan such as sales volume, sales prices, important cost elements and other factors that may have an impact on the business should be evaluated. For each item set an upper limit and lower limit based upon potential market conditions and risks.

Make a financial evaluate of each upper and lower limit for every item and determine the impact each would have on the profit and loss account and the cash flow statement. Also combine the financial effect of several factors to assess the impact of a combination of events on the small business. A lower sales volume may be uncomfortable for a small business but combined with lower sales prices and higher costs the risk could be severe.

The financial section of a business plan should be accurate and reflect the projected financial performance of the start up business. It is also important it is honest and evaluates the risks involved so that should any of those risks become reality urgent management action can be taken to limit the financial effect. In practice some of those risks will happen and being forewarned can be the difference between survival and failure with liquidity being the most dangerous risk of all.

Customer referral program ideas
continue to evolve as business is done in different manners than it was when
our parents were young.  This is
definitely a positive change for business owners in today’s digital age. With
an endless list of new ideas and channels to bring referrals in from, it can
simply be a matter of finding the right program for your business. Sometimes it
can be of huge benefit to combine several program ideas into one
custom-tailored strategy for your company.

10 Creative Customer Referral Program Ideas

Coming up with your own customer
referral program ideas is part of the creativity required to grow your business
and brand. This is an area where the most creative ideas shine.

1. Give
away a display type of item with your business’s name or website URL clearly
visible. Display items include calendars, picture frames and other similar
items that are easily viewed by others in proximity to them.

2. Offer
rebates on your highest priced products or services. Encourage the
understanding of how volume discounts at the top-end are being passed down as
savings to the consumer.

3. Create
your own event from a more obscure holiday. Be prepared to not receive
wide-reaching results in your first year of celebration, but repeated
celebrations and planned events will begin to grow a pool of its own referrals.

4. Offer
a free service relevant to your business occasionally. A car wash should offer
a free wax, a child care center can offer a free week for every 20 paid. Get
creative and find a way to benefit your consumers without taking too much from
your own bottom line.

5. Have
gift cards created with your business or company name and URL on them and hand
them out at conferences or events. Networking with other businesses can often
lead to more customer referral program ideas.

6. Go
green. Create recyclable grocer bags or gift boxes that sport your brand logo
to show you are environmentally friendly. As these items are reused or passed
on, they are still passively advertising for you.

7. Have a commonly used item
packaged with your brand logo on them. Whether you choose soap, sunscreen or
even a car air freshener, giving these out to your preferred customers can help
bring in referrals. Be sure to give your preferred customers more than one so
they can pass them around to their friends as well.

8. Offer discounted products or
services that consumers can use on their next visit. Create a coupon or receipt
that is double-printed so that one copy can be given to a friend or family
member to try at the discounted rate.

9. Celebrate a customer
appreciation day where current customers receive benefits on the spot in the
form of gifts or entertainments and prospective customers can receive discounts
for making their first purchases, thereby becoming a current customer for next
year’s appreciation event.

10. Award consumers for sending
you referrals, for catching typos or errors on your website, or anything that
initiates improvement within your business.