Who Are You Trying to Kid With That Business Plan?

A lot of people dream of starting their own business. They have heard of the “unlimited opportunities” and the “complete freedom” and the “not having a boss”. If you are one of those who have that dream and believe it really can come true then I have something to say to you “WAKE UP!”When you start your own business you don’t have ‘complete freedom’. As a matter of fact there’s a really good chance that you will have less freedom, a lot less freedom. To be successful you will most likely be working seven days a week and you will be working longer hours and you will be working for a lot less money (at least in the beginning). Does it still sound like something you really want to do?As far as ‘not having a boss’ goes, well I hate to be the one to break this to you but you will always have a boss. If you don’t do what the customers want then you will go out of business and if you are lucky enough to borrow money to start and run your business then your banker/investors will be telling you a lot about how you are going to run your business. Okay so maybe they aren’t your ‘boss’ but they are still the ones who will tell your what you must do. And that’s what your current boss does now. Does it still sound good?Of course you can be stubborn and do what you want instead of what the customers want and there’s a word for business owners that do that. They are called employees because they went out of business and had to go back to work for someone else. Still interested in starting your own business?I’m going to assume at this point if you are still reading, that you are interested in starting your own business. Don’t get me wrong, I have started lots of companies and had a lot of success. Over a period of ten years I actually sold two of my companies to a Fortune 50 company for a LOT of money. At that time a lot of my friends commented on how lucky I was for that to happen. I just smiled and didn’t respond to those types of comments. You see, they only saw the end result of a lot of really hard work and a lot of really long hours working seven days a week. They didn’t see the failed marriage, the teetering on the brink of not being able make my payment to the bank. They didn’t see me working for free with no salary at all for weeks and weeks. They didn’t see me having to take money from my personal checking account in order to meet payroll. Yep, I sure was lucky.When you start your own business you don’t see things like those I just mentioned. If you are serious about starting your own business then you have heard that you must have a ‘business plan’ to take to the investors. Well, I have looked at lots and lots of business plans over the years and for the most part they were all worthless. People who want to start a business tend to see the world through rose colored glasses. For example when they get to the part on the business plan where they are to assess the competition nearly everyone completely under estimates not only the number of competitors but the strength of the competitors too. People who are convinced that they want to go into business for themselves tend to operate with blinders on. I’ve seen people come up with some really outlandish things in the ‘Competition Analysis’ of a business plan.Failure to properly analyze the competition is one of the most common flaws I see in start-up business plans. Here’s an example: I had a gentlemen come to me (as a potential investor) with the idea of starting his own Lexus repair shop. He had been a mechanic for over 15 years and had all of the ‘industry certifications’ and had been through all sorts of courses and schools on how to diagnose and repair just about anything related to Lexus automobiles. He had no experience in how to “run” a repair shop but that’s the subject of another article.Here’s how brief recap of how the conversation about competition went:Me: “What about your competition, who are they? Him: “There really isn’t any”. Me: “What? How do people get their cars repaired now?” Him: “Nearly everyone takes their cars to one of the local dealerships for repairs. I can do it a lot cheaper than the dealerships because I will not have all their overhead.” Me: “So there are no independent shops that work on Lexus?” Him: “There are some independent shops but they are so small that I wouldn’t consider them real competitors.” Me: “So why are they so small?” Him: “I think their prices are too high.” Me: “Are their prices lower than the dealerships who are doing the majority of the work now?” Him: “Yes. The independent shops are almost always a lot cheaper than the dealerships.” Me: “So maybe the independents are so small because people who own a Lexus are not swayed by lower prices. After all they paid a lot for their car. Maybe they are not as price conscious as you think.” Him: “I can do the same work for 30% to 40% cheaper, how could they not be interested in that?”Can you see what’s going on here. This guy was convinced he could do it better, faster and cheaper than anyone else. Yet the facts as he presented them showed that the customers he wanted to go after were not easily persuaded by the “cheaper price” argument which happened to be what he wanted to use as his unique selling proposition.One of my favorite sayings when talking to people about their business plans is “Don’t confuse me with the facts because my mind is already made up.” A business plan is supposed to get people to think. To do an unemotional analysis to see if there really is a viable opportunity there. But too many of them will do all sorts of mental gymnastics to justify their position. I don’t care what type of business you are thinking about starting, there is competition out there. Don’t kid yourself.Another big problem I see in business plans is a lack of management experience. Here’s another real world example. I had a ‘friend of a friend’ ask me to meet with a friend of theirs. It was a woman who had the idea of starting her own “cookie bakery”. She didn’t have the funds necessary and was coming to me as a potential investor. I agreed to meet with her. One of the very first questions I asked was “Where did you come up with the idea of starting your own bakery”? She said that for years she had baked cookies and she had lots and lots of people tell her she should start her own bakery. These people (mostly friends and family) said she baked the best cookies they had ever tasted. She had brought some to our meeting and to her credit, they were very good.When I asked her about her experience in running a bakery she told me she had never actually worked in a bakery. As a matter of fact, she had been a secretary up until the birth of her second child and had taken 6 years off. Now that the child was going to school, she was ready to “go into business for myself”.Out of respect for the friend who had asked me to meet with her I didn’t quickly end the meeting as I normally would have. Instead I took some time and asked her some questions. My goal was to try to get her to stop being emotional and to only analyze the facts. A few of the questions were:”Have you picked out a location?”
“Do you have any idea what the lease will be?”
“How much will it cost to renovate to get it ready?”
“How much equipment will it take?”
“Can you lease it or do you have to buy it?”
“Where are you going to get your customers?”
“How much is the insurance going to be?”
“What about liability insurance in case someone claims your cookies made them sick?”
“Where are you going to get your customers?”
“How are you going to advertise?”
“How about utilities?”
“How much will it cost you to make a single cookie?”She stumbled through most of her answers and in exasperation said “You don’t seem excited about this idea”. She said she was really excited about the idea and was hoping I would get excited to. I told her I get excited when the companies I have invested in are making a lot of profit.The meeting was going nowhere and I couldn’t get through all of her emotions so I told her to get all of the information together then total up the monthly expenses with no salary for herself and come back and tell me how many cookies she needed to sell everyday just to pay the bills. She told me that as the owner she should get a salary. I agreed and said your salary will be paid from the profits so your income is virtually unlimited. Just put the numbers together and give me a call when you can tell me how many cookies you have to sell everyday just to pay the bills.Guess what? I never heard back from her. I was the one who rained on her parade with a harsh dose of reality.It takes a lot of courage to go into business for yourself. It’s not for the faint of heart and requires a 100% commitment. And in the beginning it requires you to take a realistic look at the facts without deluding yourself. If you are going to present your business plan to anyone else with the hopes of having them invest in your new venture, you better be ready for some really tough questions. The best way to prepare yourself for those types of questions is to not kid yourself when working up your business plan. As a final note don’t EVER tell a potential investor that there is no competition. They know better.

Payday Advance – Looking at Both Sides of the Coin

The guy who invented the concept of “payday advance” was either a genius, or a product of the saying: “Necessity breeds invention”.Whoever he was, it’s a pretty great idea. Theoretically, if you find yourself strapped for cash between paydays, all you have to do is go online and find the nearest payday advance company in your area, for example, if you’re living in Ontario, then you’d be well-assured that there are many companies offering payday a in Ontario, whether it’s on-site on the loaning premises, or even online. Once you’ve given them your information, you’re pretty much in the money, if you excuse the pun.Now, doesn’t that sound so great? One minute, you’re up to your elbows in debt, or you’re tearing your hair out worrying about where you’re going to get some extra cash, then less than a couple of hours later, you’re walking out of your bank or loaning company premises, with a big grin on your face and a wad of cash in your hands.Hold your horses though! Like everything else, payday advances, especially online ones, do have their pros and cons. For the sake of argument, both sides will be presented here:ProsFast – In less than an hour, you’ll be approved and have cash on hand.Easy – All you have to do is send some basic information, and wait for them to assess you.Safe – No more dreading whether or not some mugger is waiting for you once you have the cash in hand such as when you leave the loan premises, which are less safe than at the bank.Minimal Paperwork – Online payday advance companies will require very little to no paperwork from you, unlike other companies that requires faxing your information to them, then waiting for them to manually check each piece of information given to them.No Time and Geographical Restrictions – Since many companies use online checking systems, you can virtually send your information to them anytime, anywhere.Impersonal, yet Service-Oriented – Since it’s online, you’ll still deal with professionals, but you’ll also be avoiding those awkward moments that you encounter if you’re going to borrow money from family or friends.However, there are also a few cons that come along with this deal, so stop and take a while to consider these things.ConsHigher interest rates – Of course, you always have to keep in mind that this IS a business, after all. The company will still charge you higher interest rates than if you get a loan from friends or family, who most likely will not charge any interest at all.Scams – This is the biggest danger that you face in doing business with online payday advance companies. There are so many out there that will just get your sensitive information such as identity and credit card information, and use them, or worse, sell them on the black market. Suddenly, you get a bill for a cruise to the Bahamas you never went on, or a down payment for a car you never bought. So be careful!Can only solve short-term problems – Remember, higher interest rates will result in much higher bills over time. So if your money problems are recurring, or long-term, don’t use online payday loans over and over again.In the end, it will still be up to you whether or not using payday loans is right for you. Be sure to go over all the pros and cons, and think about your individual situation, and you’re sure to make the most sound financial decision you can make.Money Loans Company – Payday Loans and Cash Advance
20 Eglinton Ave. East
Toronto, Ontario, Canada
M4P 1A9
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Financial Worries Before Christmas

Money Worries
Christmas is a wonderful time of year for so many people. We get to spend time with family and friends, share stories, moments, food, and love.

But for a great number of people, the festive season also brings with it worry, stress and uncertainty. I’m talking of course about the financial struggle Christmas can impose.

Almost every year since 2008 the American consumer has increased spending on holiday gifts.

And according to a study by the National Retail Federation, Americans were projected to spend more money on gifts in 2019 than they ever have before.

Keeping up with this need to spend such a large amount of money for the Christmas holidays is totally unsustainable for some. And not only that, but the stress and anxiety to ‘fit in’ with the popular trend are deeply concerning.

So is the answer more borrowing and more debt?

Or is there a better way to solve your Christmas Financial worries?

Mindset Shift
One of the easiest ways to avoid this dramatic overspending is to fundamentally shift the way you think about Christmas. The festive period can be thought of as more than just an abhorrent first world splurge on consumer goods.

Remember the reason we celebrate Christmas in the first place and what it actually means for your family. It’s time to come together and reflect on the year that has passed. Lavish gifts are not required to get the full joy of this experience.

It is more difficult to implement this tectonic shift in thinking when you have children. Of course, you need to be mindful of their expectations, their friendship groups, and the limited number of years they have to enjoy the magic of the holiday from a child’s perspective.

But you can still achieve all of this by spending more frugally and making a conscious effort to not drain your savings.

Recommended article: 12 Days Of Spectacular Frugal Christmas Tips

Plan Ahead
Personal finances can be managed much more effectively with more time. Therefore, planning your Christmas and the gifts you buy is a great way to avoid excessive spending. The earlier you begin this process, the better you are able to spend within the framework of your budget.

And more often than not, with the use of tools such as cashback, the more money you are able to save. And saving money is the key to well managed personal finances. It is when we go beyond our budget that we run into problems.

I suggest you start thinking about a specific Christmas budget months before the event. Also, start segregating your savings so that you know you can afford what you need to spend.

After all, everyone wants to be able to enjoy the holidays as much as is feasibly possible. But under no circumstances should you splurge and think paying back at a later date is a good idea.

Recommended article: 13 Wonderfully Awesome Christmas Gift Ideas For Men

Long Term Plan
With long term planning in place and a new mindset instilled, your Christmas personal finances should be on the right path for years to come.

Christmas can be an amazing reflective experience and many people I know actually forgo gift-giving altogether. They use their time to help those less fortunate.

if we could all adopt this sort of mentality when thinking about Christmas, it would alleviate the financial pressures on everybody. This is not something that will happen overnight, but the change is already beginning to occur.

Being on this side of the Christmas financial equation could save you a fortune over the years, and make your Christmas experience less stressful and far more altruistic.