Five ingredients you'll absolutely need for success

For any entrepreneur starting up in business, there are five ingredients needed for success:

1. An idea for a product or service that customers are willing to buy at a sufficiently high price to allow for a big margin above cost.


Whether the idea is original, borrowed, or bought, the idea is the heart of any business through all stages of its life. If there is no idea, there is no business.


The idea is what will keep you fired up, and give you pride. Plus, the idea is the most fun part of business. So go with an idea you can get excited about.


2. The ability to provide the product or service.


Is it possible for you perform the service or provide the product to a high enough standard so that you can get return business and referrals to new clients?


Make sure you get the relevant education and experience in the same industry as your intended enterprise.


Research your product or service and benchmark the competition to see how they do it and how you can do it better.


3. Personal contacts for acquiring information and other resources.


Networking is an essential skill for most business people, but especially for entrepreneurs. The strong association between the entrepreneur as a person and his or her business, demands entrepreneurs get out into the world and create and maintain business relationships.


Active networking and participation in network partnerships can help you meet people and build mutually beneficial business relationships.


For a start-up or small business, networking can provide a lifeline of support and help generate business for your company through benefits such as:


• benchmarking opportunities against competitors and similar-sized businesses


• comparing and discussing issues of common interest, for example supply networks, customer service and legal and regulatory developments.


• developing ideas, innovation and knowledge of best practice.


• rasing your business profile by becoming an established networking member.


• expanding markets by generating business contacts such as customers, suppliers and partners.


• overseas partnerships, through international exhibitions and conferences.



4. Money to keep the business going during the start-up phase.


Don't think you'll start making money right away. What do you do till the cash starts flowing? And where can you get the upfront money your startup will need?


A possible source of money is "angels". They are successful entrepreneurs who are willing to risk money in a new venture if it promises a good return. Find rich people in your area and have an excellent business plan ready. This will take time and networking. Another possible source is government funds.


If all sources decline to participate, you have the option of "boot-strapping", which means starting small and growing carefully on the cash flow your business generates.




5. Sufficient customer orders to cover all costs and expenses and to provide a profit.

Ensure there is a demand for your product or service. Try and pick a growing industry, as opposed to one that is crowded with suppliers. Take advantage of major trends. Establish reliable connections with vendors who will be supplying your materials so that you can cope with any increase in demand to your business.


Many entrepreneurs have tried to start businesses without giving enough attention to each of these requirements, their businesses have failed.

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USING SWOT Analysis in improving your business

Strengths - Weaknesses - Opportunities - Threats A

SWOT analysis

A SWOT analysis is a strategic planning tool used to evaluate a business or a business venture or any other situation that requires a decision. A SWOT analysis evaluates the Strengths, Weaknesses, Opportunities, and Threats of the project (in this article we will look at evaluating a business).

Performing SWOT

Once you have completed the analysis you want to be in a position where you can determine a strategy for the future to improve your company's overall performance (or maintain it if you are happy with your final analysis).

Strengths

Determine your company's strong points. Consider these from an internal perspective, and externally from the point of view of your customers and people in your market. These strengths are your company's resources and capabilities that can be used as a basis for developing a competitive advantage.

• What advantages does your company have?

• What do you do better than anyone else?

• What unique or lowest-cost resources do you have access to?

• What do people in your market see as your strengths?

A strength could be:

• Your specialist marketing expertise

• A new, innovative product or service

• Location of your business

• Quality processes and procedures

• Any other aspect of your business that adds value to your product or service

Weaknesses

In some cases, a weakness may be the flip side of a strength, or a weakness may be viewed as a lack of certain strengths. Again, consider this from an internal and external basis.

• What could you improve?

• What should you avoid?

• What are people in your market likely to se as weaknesses?

A weakness could be:

• Lack of marketing expertise

• Undifferentiated product or services

• Location of your business

• Poor quality goods or services

• Damaged reputation

Opportunities

A useful approach to looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities for profit and growth. Or alternatively, look at your weaknesses and see whether you could open up any opportunities by eliminating them.

• Where are the good opportunities facing you?

• What are the interesting trends you are aware of?

An opportunity could be:

• A developing market such as the Internet

• Mergers, joint ventures or strategic alliances

• Moving into new market segments that offer improved profits

• A new international market

• A market vacated by an inefficient competitor

Threats

Changes in the external environment may present threats to your company. A threat is a major unfavorable situation in a company's environment. They are key impediments to the company's current or desired position.

• What obstacles do you face?

• What is your competition doing?

• Are the required specifications for your job, products or services changing?

• Is changing technology threatening your position?

• Could any of your weaknesses seriously threaten your business?

A threat could be:

• A new competitor in your home market

• Price wars with competitors

• A competitor has a new, innovative product or service

• Competitors have superior access to channels of distribution

• Taxation is introduced on your product or service

Example SWOT analysis (in brief) - Ingrace Infotainment

Strengths - Ingrace Infotainment is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.

Weaknesses - Ingrace Infotainment is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.

Opportunities - To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe, or the Greater China Region.

Threats - Being number one means that they are the target of competition, locally and globally.

Summary

SWOT analysis is a framework for analyzing your company's strengths, weaknesses, and the opportunities and threats that it may face.

This will help to use your strengths to provide an insight to your business opportunities. Also it will allow you to see any weaknesses in your business that can cause immediate threats.

The Quiet Millionaire

Book Review - The Quiet Millionaire

The Quiet Millionaire is a book that contains a wealth of information on personal finance topics. With forty plus years of professional experience as a personal and business financial advisor, Brett Wilder shares with us his expertise on how to accumulate and keep our wealth.
This book’s theme is tied very closely to the title of the book – The Quiet Millionaire. Instead of writing about how to be frugal or the secret to picking the right stock at the right time, this book focuses on how the average population can carefully plan and be a millionaire with time, patience and good probability.

One of the first Brett advices is to discover who the real you is and what you really want out of life, while making sure we plan for money to be our servant instead of being our master.
Next, he explains to us the seven major obstacles to Financial Success:1. Undisciplined Spending2. Materialistic Thinking3. Burdensome Costly Debt4. Taxes5. Inflation6. Poorly Structured Investment Portfolios7. Unforeseen Life-Changing, Financially Devastating EventsThis sets up the rest of the book where he tackles all sorts of topics such as cash flow, investing, taxes, and retirement.

Cash FlowThe key to having a positive cash flow involves knowing where our money is going. This includes creating a budget, in which personal finance software such as Quicken or Microsoft Money can help. Other tips include having a plan to determine cash flow requirements to fund future goals and objectives and paying ourselves first with automatic savings deductions.
InvestingBrett is a big advocate of low cost index funds. He believes in the long run, most people will end up leaving money on the table by trading individual stocks because many of us let our emotions get in the way. This is great advice for so many people because this totally takes the maintenance work required for stock picking out of the equation and just let the money work for us.
TaxesIn order to minimize taxes paid, we should actively plan for tax reductions. This means proactively perform intelligent tax reduction to maximize our after-tax dollars throughout the entire year.

RetirementOnce we retire, the primary focus should be to protect and preserve our wealth instead of trying to accumulate and grow it. One of the advices given is to establish a lifetime gift-giving program to reduce the value of his/her estate and transfer it to someone else over time without incurring taxes.

Target AudienceThe book is for people who have a good income stream and would like the extra help to accumulate and keep their wealth through time. People looking for the secret to getting rich quickly are not going to find what they are looking for in this book.

Last WordsFrom the cover and title to the content, this book is about substance. There is nothing fancy in this book, just straight forward personal finance information that we can all benefit.

Making Angel Investors Notice You

People often say that money makes the world go round. This age-old line can never be truer in the case of business owners for without money, they would cease to be.

Right from the start, regardless of size and industry, businesses are all about making money. However, in order to make one, you also have to part with some, and parting can only be done if you have sufficient capital with you to spend. But what if you only have the idea but don’t have the financial strength? Then you go to angel investors.

With so many would-be business owners as well as businessmen who need help in expanding their businesses looking for angel investors, you might feel that it would be hard on your part to secure the help of even one “angel”. There are actually some ways by which you can get them to notice you.

One of the tips that could help you find angel investors is that you should have a business plan. As basic as it may seem, some business owners forget to come up with a convincing business plan that they end up losing the interest of angel investors. Your business plan should completely detail how much you think your would earn over a certain period, what your expenses would be, what your products and services would be, and how you would secure your clients. These details would help angel investors to see if your business is something that they would like to be involved in.

Make sure also that you focus your search on an angel investor network that specializes in your field. Keep in mind that most angel investors would prefer businesses that they already have an experience in. They are also most likely to go for businesses located within their area so that they can easily monitor just how their investment is doing.

Lastly, make sure that you also throw in some of your money into your business. You cannot expect an angel investor network to fully cover up all capital that you would need. Remember that angel investors would take time in raising the needed capital. They would also like to see that they are not the only ones who are risking their money in your business. It gives them confidence to know that you also have risks involved in the business.