Startups Need Defined Goals. And Deadlines.

Startups Need Defined Goals.  And Deadlines.
Contributors:
Lucille Wesnofske, Director
Small Business Development Center at
Farmingdale State College
Doug Boyce, Director,
Small Business Development Center at Binghamton University

Sitting on the fence is not living on the edge.  For start-up businesses, the clock begins to tick as the idea begins to form.  One of the most difficult processes for any start-up businessperson is turning an imaginary concept into an action plan.  “How do I get from A to B?” is the common question.  And, by the time a would-be entrepreneur has made the decision to go for it; the dream may have become obsolete either through technological advances or even new local competition.  If the decision is to proceed, there are goals that must be defined.

In the United States, about 675,000 new businesses are created each year.  Unfortunately, more than 80% of start-up businesses do not make it to the fifth year.  The primary reason is lack of planning.  Dreams evolve into goals with the development of a business plan.  This concept of business plan can not be overly stressed.  It is a road map, a timeline and a deadline.  It is a feasibility study in which dreams are broken down to nuts and bolts.  It is a working document which requires periodic review and revision as the business progresses.  Too many entrepreneurs fail to develop and follow specific short and long term realistic goals – the business plan. 

Most successful entrepreneurs are self-motivated, energetic, creative, visionary, profit–oriented, above average in communication skills and controlling.  Although these characteristics have a positive impact during the conception and birth phases of development, several can become negatives if not recognized for what they are.  Entrepreneurs have a tendency to need to be in control and many have difficulty in delegating.  They go into business and quickly lose focus as they become all things rather than concentrating on core competencies. It is important that a full self assessment of skills be done to help recognize what areas are weak and will need outside help.  i.e.  The entrepreneur may be strong in marketing and weak in finance.   Staffing needs should be identified.

Competition is always underestimated.  A startup businessperson may not realize how difficult it is to convince customers to change vendors or how deeply entrenched competitors are in the marketplace.  An analysis of the market will help determine if there is sufficient unfulfilled need.  A product or service must have a “unique selling proposition” that differentiates it from the competition.  The startup businessperson must answer the question “Why should I do business with you rather than your competitors?” 

Other considerations in setting realistic goals should be: prior experience in the type of business being started; family requirements and expected support; the economic outlook for the industry as a whole, and the personal sacrifices the startup businessperson is willing to make.

Finally, of all other things considered, cash flow is the most vital component of any startup.  Few new businesses are properly capitalized and most do not realize a profit through the first or even second years.  Capital sources can vary from personal equity, to friends and family, to lending institutions.  Lack of oversight or sloppy control of expenses can choke any startup business and prior to raising outside capital, an accurate assessment of capital needs is required.  Planning cash flow needs and sources should warrant a separate section of any startup businessperson’s plan.

Wesnofske is Director of the Small Business Development Center at
Farmingdale State College and can be reached at
SBDC@farmingdale.edu or 631-420-2765


Boyce is Director of the Small Business Development Center at Binghamton University and can be reached at sbdc@binghamton.edu or 607 777-4024

Control, Don't Cut Costs

 Control, Don’t Cut Costs
By Gregory Bavaro

In these times of economic woe, controlling costs is essential to the survival of your business.  When sales are down and expenses are up, we as entrepreneurs are forced to take a closer look at how we can run our businesses more efficiently.  This simple analysis can do so much more than get you through this recession; it can create a windfall of profits when the economy rebounds.

Many “old school” business owners, all too often, focus on cutting costs.  This can be detrimental to your business, and it is important to know and understand the difference between cutting costs and controlling them.  When costs are cut, quality and service are sacrificed and your customers suffer.  As a result, you lose customers.  Loss of customers equals loss of sales forcing you to cut more costs and creating a vicious downward spiral ending in another store available for rent.  However, if costs are simply controlled, you are able to maintain the same service and quality your customers know and expect while spending less to do so.

Easier said than done, right?  Wrong!  It’s simple.  Open up your checkbook or general ledger, whether you use Quickbooks or a composition notebook; take a look at your expenses.  Start with your biggest numbers.  If you are in a service business it will probably be your payroll, utilities, and rent.  What can you do about these?  You’re already short-handed, and neither the local utilities nor your landlord want to negotiate. 

First, stop letting your business run you for a moment and take a look around.  Is your business really short-handed or is it just you?  Look at your staff.  Are all of your hourly employees really necessary at all times they are present or can their shifts be staggered so they only overlap during peak hours?  What about your salaried personnel?  Are they managing their time properly or are they robbing you blind?  (I could virtually guarantee that time is the most pilfered asset in your business.)  Take a look at their computers (hint: check their internet history).  I’m sure there are plenty of more productive tasks they could have been performing instead of all that online shopping and personal emailing.  In addition, this might not be the right time to dole out raises.  You’d be surprised at how well you staff will handle a pay freeze when tens of thousands of jobs a month are being cut nationwide.
Concerning utilities, rates may not be negotiable, but you’d be surprised how helpful the local gas or electric company can be when you express interest in an onsite consultation on preserving energy.  They will send an expert out to your location and inform you as to how your energy costs can be drastically reduced.  In addition to the money you will save, your customers will be thrilled to hear you’ve “gone green” to help save the environment! (Make sure you capitalize on that one too!)  With regard to your rent, contrary to popular belief, most landlords are reasonable businesspeople.  They would much rather renegotiate a lease to retain a reliable tenant and continue receiving rent than sit with a vacant space.

If you’re a seller of products as opposed to services, take a look at your suppliers.  If you can buy from other suppliers, through co-ops or direct from manufacturers, do it!  There is no doubt that keeping your suppliers honest will save you more than any volume discount.  It doesn’t matter how many “rebates” and “discounts” you’re receiving, that is just your suppliers’ way of saying, “thanks for paying too much for the products you’ve been buying.”  It is important that the products you are purchasing are less expensive, not cheaper.  Also, eliminate items that aren’t selling. 

Simplify your operation and trim the fat, too.  In every business there are some luxuries you just don’t need and now is the time to find them.  If it doesn’t generate income or improve your service, you don’t need it.  Assess the services you pay for.  Can any of them be performed by your employees?  Some people enjoy cleaning, landscaping, and even doing repairs.  If there is someone in your organization who can help out with some of these tasks, not only can it save your business money, but it can also make employees feel more secure in their position.  If an employee can pick up a couple of extra hours performing a task they enjoy, it can break up the monotony and boost morale. 

The list goes on and on, and controlling costs becomes addictive.  Stay in discount hotels while traveling and compare airfares and car rentals.  Join business associations to receive group discounts on insurance.  Sublet any unused space you may have.  Cater meetings in-house instead of in fancy restaurants.  Shop shipping rates, webhosting, etc.

Controlling just your top three or four expenses can keep you out of the red and in the black right now.  As your competition falls by the wayside and your business grows, you will soon be rolling in the green. 

Tips For Successful Cold Calling

Being successful in sales as in most things, requires two key ingredients- a good attitude and positive energy. We have all heard the expression attitude is everything. That saying could not be more true then when engaging a prospect in a sales process. No one likes working with people who have a negative attitude. Attitude is contagious; if you are upbeat and positive this will help create positive, upbeat relationships with your prospects.

 It is, however,  difficult  to be positive and upbeat day after day when you are in sales. After all sales is rejection and hearing ”NO” all day can wear on even the broadest shoulders.

If you are a telephone sales warrior, there are ways to help keep your energy and attitude upbeat and positive throughout  the day. Kensington Company & Affiliates offers these three tips to help keep your head in the game:

Make your difficult calls first:   If you have challenging or difficult calls that you need to make, make them early in the day. I think of those calls much like the dreaded visit to the dentist. If you have a dentist appointment in the afternoon, you spend most of the morning feeling anxious and unfocused. Make those challenging calls early in the day when you’re full of positive energy and then you can quickly put them behind you and move on with your day. . 

Break up your cold calling:  The law of numbers says you are going to hear more “No’s” then ““Yes’s” when calling. And that’s only when you actually get someone on the other end of line vs. the endless voicemails you leave all day.…. Break up the cold calling,  and reach out to prospects that you know are tracking in your process so you can get some engaging conversations into the mix. You will have rejuvenated energy after speaking with a live voice that is appreciative of the information that you are passing along.

Motion creates emotion: Stand up, get out of your chair, pace the floor,  do what ever you need to do to get your blood flowing. No one wants to speak to someone who has no pulse, no energy and no passion. If you are half dead on the phone, you are creating a situation for the prospect on the other end of the line to reciprocate that low energy. Be upbeat, it is contagious and your prospect will instantly feel that energy.

You have the power to change your attitude and energy. They are easy simple steps that can be embraced and brought into your sales process that will help keep momentum moving.

Displaced Corporate Executives Find Solutions To Their Career Transition

Everyday in the news we hear about the high rate of unemployment and see segments on people who have been struggling for years to find work.  We see people who at one time earned six figures, but now are grateful for a minimum wage job.  Job fairs are crowded as people desperately try to set up interviews in the hopes that someone will hire them.

Instead of searching for someone to hire them the answer may be to hire themselves! There are many people for whom owning their own business may be the perfect opportunity to change their lives.  For them, buying a franchise may be the answer.

Most people think of  businesses like McDonalds or Dunkin Donuts when they think about a franchise. These are great opportunities for some, but there are so many more options available. Displaced executives have a plethora of opportunities to sort through to find one which will match their skill set as well as their optimal work week.

Franchises such as McDonalds or Dunkin Donuts require large start up capital and will require managing a staff who works seven days per week.  There are other franchise opportunities that will allow the owner to work regular business hours and perhaps manage just a small staff.  Opportunities are available in diverse industry's.  There are franchises who do taxes, paint homes/offices, clean homes/offices, education,  or child care. The list goes on and on.

has been in the franchising business for over 15 years. Our free consultation is designed to help you answer the questions which will help guide you to the best franchise choice.  The process of choosing and buying a franchise can be long, arduous, and confusing.  Kensington Company and Affiliates allows you to gain from their experience and remove the headaches.

If you are unemployed, underemployed, or just wanting a change, you owe it to yourself to learn about franchising from the franchise experts at Kensington Company and Affiliates.  This may be the start to the best life you never knew you wanted!

Should I Franchise My Business

Please enjoy the following informative article written for Kensington Company & Affiliates.

 

Should I Franchise My Business?

By Harold Kestenbaum, Esq.

Entrepreneurs often ask themselves the question:  Do I want to expand my business?  If the answer is yes, then the question becomes, what is the most efficient way of doing this?  Should I open my own units with my capital and my human resources, or should I let someone else use their capital and human resources and I will supply the systems, intellectual property and training?  Those are the key questions facing the entrepreneur who is anxious to expand but who wants to do it in the most cost effective manner.  The answer to this vexing question is that the business owner should seriously consider franchising his/her business model as the best way to expand.  Then the question becomes, is my business even a candidate for franchising?  The answer can be found below, as I have set out the four basic questions that the business owner must answer:

Have a successful model.  It is impossible to create a franchise program without having at least one successful operation, a pilot, if you will.  It is not feasible to think that if your core business loses money and is unsuccessful, that a franchisee will be any different.  It is imperative that your franchisees be successful, otherwise franchising does not work.

Make sure your business model is replicable.  You must be able to build clones of your operation, otherwise the system will not work.  Have you ever seen a McDonalds without the infamous golden arches?  That is just one example, but it goes beyond the look.  It is the method of operation that must be duplicated.

Attain capital for your franchise.  You must have capital in order to roll out the franchise program.  You cannot believe that franchising will cure your cash flow issues, you need to have money in order to roll out the program.  Do not view the program as a way to fund an undercapitalized business model.

Prove your model works!  The concept that you are trying to franchise must lucrative.  You must demonstrate that your concept works before you try to offer it to the public as a franchise.  If the business model is a failure, your franchisees will inevitably fail as well.  Franchising can be a wonderful business model, but your initial model must work first, otherwise franchising will not be possible.

These simple tenets will aid the business owner in determining whether the franchise model is the proper vehicle.  Once that determination has been made, the business owner should enlist the assistance of seasoned franchise professionals who will assist in developing the franchise program.  Franchising is a vehicle for growth using the capital and human resources of someone else (the franchisee).  How great is that?  It is simple, yet complex.  The franchising relationship goes much deeper than building the unit and collecting royalties.  It is a starting place for companies that want to grow but do not have the internal capital or human resources, like Starbucks, to do it by themselves.  Franchising is not for every company, but for those who meet the criteria set out above, it is the most efficient method to expand with a minimal amount of cost.


Harold L. Kestenbaum, Esq.
Gordon & Rees, LLP
Ph: (516) 745-0099
Website:  www.franchiseatty.com

How Do I Know What Business Is Right For Me?

Kensington Company & Affiliates would like to share the following article written by Elaine Iucci.

HOW DO I KNOW WHAT BUSINESS IS RIGHT FOR ME?

    Having the desire to become an Entrepreneur is the beginning steps down an exciting path of business ownership. But most people do not have enough knowledge to know where to go from there. As you drive along Main Street in your home town, you will notice the many different businesses there, and how vast your options may be.
   
Now that you have made the decision to go into business for yourself, you need to start narrowing the field of options. Manufacturing, Service, Retail or Internet are some of the categories these companies fall into. But what strengths do YOU bring to the table? A successful business acquisition is not only a result of identifying a company that has been run well and profitably for many years and now you will take over its ownership as if nothing would change. NO! You need to think about your strengths and weaknesses and how they come to play with each potential business opportunity. Can you ADD something to the existing business? Will it fit your lifestyle? What is your comfort level for down payment, working capital and how much money do you really need to earn to live? As Business Intermediaries, we work to help you answer these questions and narrow the field of opportunity.

Often I speak to a potential Buyer who is looking for a business where the owner is retiring or may be ill and does not have family members to take over the operations. They may be skeptical if the owner has only owned the business for a few years or is too young. Yes, it is important to have an understanding of WHY the current owner is planning to sell.  But assuming that the retiree offers a better opportunity couldn’t be further from the truth. Each business opportunity comes with its own unique situation. There are plusses and minuses to each that have to be carefully weighed. Would you really want to buy a business where the owner has not reinvested in their company in years, and yet still wants to be paid for every paperclip and past relationship they ever had? Would you not find value in a company that a young entrepreneur found, built up and fine tuned and now wishes to move on to a new challenge or project? There are many opportunities where a Company has been run well and a retirement situation is a huge opportunity, but there are many other good opportunities beyond this scenario. It is important to keep your eyes wide open as well as your options. Evaluate each Business on its own benefits and weaknesses and see where you can compliment or enhance the current operation.

Once you have narrowed the field of opportunity and have identified a Business for acquisition, you will need to employ the skills of professionals to assist you. You will need an Attorney to consult and eventually negotiate an Asset Purchase Agreement. You may choose to work with a professional Accountant to review the financials of the Company.

The road to Entrepreneurism is an exciting path, but can also be challenging. By taking the right steps early and throughout your journey, it can lead to the lifestyle and success that you desire.

Meet The Franchisor Seminar!

November 8th, 2011  Meet the Franchisor Seminar  Dinner Presentation 6:00pm-9:00pm The Kensington Company, a regional affiliate of FranNet is hosting a Meet the Franchisor Workshop and Seminar Presentation on November 8th 2011 at the Four Points by Sheraton Hotel in Plainview, NY.  The Kensington Company is working with various community organizations to put together this exciting and free event to help aspiring entrepreneurs and displaced business professionals learn about some incredible low cost, recession resistant, franchise companies in a safe, secure and educational manor. We have selected 6 franchisors from our prescreened inventory of top franchise concepts to participate in this event. The franchisors who will be presenting have all been selected based upon the success of their business models and the resiliency of their models to succeed in this down economy.  In addition to these franchisor presentations, there will be additional short educational presentations: How to find and research a franchise company that can be a fit for your unique business goals and objectives. How to finance your business utilizing new funding methods. Attendees will also enjoy a FREE Dinner  and will have the opportunity to… Dine with executives from the hottest “Recession Resistant” franchise companies expanding on Long Island. If… You are in a Career Transition or considering one You want the Freedom and Control of owning your own business You have been or might be Downsized or Outplaced You are looking for Financial Security and Independence Then this event is for you!!!!  You will… Learn how to Find a Business that is Right for YOU Learn how to Finance Your Business Have one on one time with Top National Franchise Executives