Category Failure

Entries 14 Total

Lifestyle Businesses Benefit From Online Collaboration

Nov 22, ’10 11:20 AM
Author newsdemon Categories Comments, DIY Business, Failure, Health Check, Web Technology

Teamwork

Many people assume, quite wrongly, that if you are a lifestyle business there is no need for online collaboration, in any sense. But, online collaboration can be a great way to increase the efficiency of your lifestyle business whilst at the same time providing your customers with exactly what they are looking for. There are two main areas in which online collaboration can greatly benefit small businesses; these are by using the Internet to collaborate with other businesses in your field, increasing the offerings you can provide to customers without costly expansion, and by using online software to collaborate with other businesses you may outsource to, such as bookkeepers, accountants or VAs.

A lifestyle business can benefit a lot from online collaboration. For example, a small business selling jam with a website can collaborate with a cake maker and offer link exchange and promotional offers. A small online dress shop can offer a discount shoe voucher to its customers and the shoe shop can offer the reverse, thereby, offering benefits to the customers while promoting each other’s business. This also increases differentiation between yours and other businesses; increasing the reasons for customers to choose your business over a competitors

You also need to watch closely what you invest in. While starting, it may not be possible to hire employees to manage your accounting, so collaborating using small business software online may is a significantly more cost-effective investment. Online software gives you a lot of flexibility and allows you to manage your office online without investing in expensive computer software and office supplies.

As businesses change and small businesses outsource in order to keep costs down, online collaboration keeps all parties in the loop, without all having to meet and rent expensive office space. Online collaboration works for small businesses and freelancers, as a great means to keep costs down, whilst at the same time increasing business efficiency, ultimately saving your business time and money.

Moreover, if you are a freelancer, or a VA, accountant or bookkeeper, online collaboration with your clients really could give you a fantastic competitive edge over your competitors. Giving you the ability to collaborate with all your clients in one place will mean you can offer a better standard of service to all your customers while being able to keep detailed records and great customer service.

Whether you are a small business or a freelancer, online collaboration could move your business forward.

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The worst business start-up mistakes

Jan 29, ’09 10:21 PM
Author newsdemon Categories Disaster Plan, Entrepreneur, Failure, Start-Up

Although many people decide to try and realise their dream of starting their own business, unfortunately it often turns into a nightmare for them. It is estimated that around a third of new small businesses fail within two years and that figure rises to more than 50% over five years. The problem that many face is making simple mistakes due to their inexperience and unfortunately these turn out to be extremely costly, resulting in the business failing before it ever really had a chance to grow. This article examines five of the worst rookie errors that a business owner can make. 

The most common mistake is to underestimate the level of capital that will be needed in order to safeguard against miscalculations or economic slowdown. It takes time for a business to build and for the first few months you may only achieve a small number of sales. In order to keep the business afloat during this difficult period it is advisable to have around three times the amount of capital that you expect will be needed. 

Another problem that small businesses have is mainly due to the attitude of the business owner. If he or she is stuck in the mindset that the business is too small to aggressively compete with and win customers from larger competitors then it will always suffer from a lack of drive and self-belief. 

It is also generally a big mistake to think that you can save money by under-investing in technology. This applies to all aspects of your business – for example you could save around a thousand dollars by purchasing a very cheap computer for the office. However, this hardware would be far more likely to break down often and cost you money in terms of hours wasted. One of the greatest advantages of being a small business is the ease in which you can quickly implement new technology into the way you work, whereas any change for a large company is a lengthy and expensive process. 

Also, it is important not to lose focus of your main priority as a small business: making money. Being creative is wonderful but you must be able to monetise your ideas or sadly they are useless to you. Every business needs someone dedicated to sales (even if it is just you) to make sure that customers keep coming through the door. 

Finally, do not lose focus of the direction in which you are headed. It is easy to become distracted or head off on an unprofitable tangent. Make sure that you have a clear vision of where your business is ultimately going and make specific plans with achievable goals to steer you in the right direction. 

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Small Business Lists – 5 Positive Effects of Failure

Jul 14, ’08 3:48 PM
Author newsdemon Categories Business Checklists, Failure, handle problems

If you have suffered a business set-back, here are some reasons why it may be helpful in the long-term.  

  • Learning Experience – Failure is often a necessary step on the path to success. Without failure it can be hard to make any substantial improvements.
  • Unrealistic Expectations – Often something which is perceived a failure is only looked upon that way because you (or possibly your customers) have incorrect preconceived expectations about an outcome. If you err on the side of optimistic realism in future then you are far less likely to be underwhelmed by your performance.
  • Unobtainable Perfection – It is important to realise that whatever you do will never be perfect.
  • Overcoming Fear – The fear of failure is a natural psychological barrier which must be overcome by learning how to manage it.
  • Focus on the Present – It is easy to get carried away with plans and future scenarios, but a small failure will often cause you to totally re-evaluate what you are doing and prevent a greater problem from occurring.

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Do you have concern for your business or only for yourself?

Apr 25, ’08 4:12 PM
Author Stefan Töpfer (Editor) Categories Employment, Entrepreneur, Failure, Green/Eco-Friendly, Outsourcing, avoid growing pain, be eco-friendly, be successful, bootstrap, do a reality check, find funding, outsource effectively, plan cash-flow

I had an interesting conversation about my view that management control over employees is a myth. I have believed for some time now that an office is often a total waste of money and completely unnecessary. Most of the time I’m told it’s OK when you work by yourself, but not if you have employees, as they need to be supervised and somehow “controlled”.

I have now been working for almost ten years from home, and most of my staff works from home too. Apart from being an eco-friendly way to work, it saves people time and frustration to travel in and around London to come to an office, where we all sit in cubicles or offices. In the days of broadband internet, Skype and OnlineOffice, there is no need for an office, even to have meetings.

Offices, like cars are are often nothing else but status symbols – what other reason can there be for a small business to have an office? If that is true then how is the office helping with your business, it’s a big expense. Seriously, if you do not have clients coming thru your office doors several times every day, why have the office. Even if you have, do really all your people need to be in the office every day? I guess not!

We are in an economic downturn, what is more important – your ego or your business – ask yourself that every time you walk into your office. I’m sure there a good reasons for some micro businesses to have offices, even so I currently can’t think of any, but I’m convinced in most cases a healthy bootstrapping and outsourcing mentality would be more beneficial for your business.

Unless the first business goal is to feed your egomania, you need to have a good hard look at your cost structure to survive in these times. — ST.

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Which intention did you have for your small business?

Apr 25, ’08 4:12 PM
Author Stefan Töpfer (Editor) Categories Failure, Work/Life Balance, be successful, do a SWOT plan, do a reality check, handle problems, not to do it!

I recently spoke with one of my readers about his small business, when she all of a sudden declared she felt like a business failure. I was somewhat surprised by her statement as I thought she had established a nice little business, was making enough money and had a good work/life balance. She explained that someone had started in her line of business and his business had grown faster and she felt she could not compete with this business, she still worked form home while this competitor had already opened the third shop in the the state. She almost declared herself a failure. I asked her what her intention had been for her business when she started.

She began to explain, that she wanted to work from home since she wanted to be home for her child and still have an income and not lose touch with the work she loved. It was always clear to her that she could only spend about 10 – 20 hours of work per week, but that would give her the income and the professional life she needed, while getting her work/life balance right.

As she was telling me about her business, she began to lighten up – as she realized she had done exactly what she set out to do – far from a failure she was a success. She had made the same mistake we all make from time to time, she had compared herself to a business that clearly had different goals. Sometimes our ego gets the better of us or in cases like this the worst of us, which is why I believe it important to write your goals down on a piece of paper and look at it each week, to help you to focus and realign your actions with your goals.

Any business is only a failure when it is literately failing, like running out of money failing, if that is not the case you are a successful business. Looking at the competition is all about seeing what is happening in the market and learning from the comparison how to achieve your vision and goals, not to limit yourself to what your competition is doing.

The vision for your business should go beyond comparing yourself to your competition, comparing yourself will often limit your vision. — ST.

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The Week Ender: Waiting for small business success?

Jan 11, ’08 11:44 AM
Author Stefan Töpfer (Editor) Categories Failure, The Week Ender, Work/Life Balance, be successful

What is business success? I guess it can be different things to different people, for some it may be the big pay day when they sell the business. For others it may be getting your business to tick over, generate a good income and still have time for your family. Have you asked yourself what business success means for you? It is a question worth asking and answering for yourself!

It occurs to me that being successful in business, whatever your precise small business goal may be, means one thing – Leadership! The simple fact however is that leaders will fail more often than others, so failure has to be part of your way to success. The sooner you accept this, the sooner you will get there.

        Success Is A Staircase of Failures.

Failure is a prize you need to pay for being successful, a leader will know that. If you look at what leaders do, you will understand that failure is an essential part of the course and not such a big problem as society at large will have you believe. The reason for this is quite simply the fact that any problem, in this case being successful, has not a single simple answer. Different strategies will have to be tested and some will not work. This is where you see the difference between a gambler and a leader, or risk-taker.

If you are running a small business, home business or any other micro business, you are probably already successful. Because, here is the thing, it is not the big pay day that is your success, but what gets you to your big pay day is success.

Being a successful small business owner requires commitment, passion and risk-taking, or as some would call it a pioneering spirit. So, don’t complain if the stepping stones to success bruise your feet. Have a great weekend. ST.

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Q & A: What protection does a limited liability company offer to small business owners?

Oct 29, ’07 7:16 AM
Author Stefan Töpfer (Editor) Categories Failure, How to ..., Question & Answer, grow your business, handle problems, plan your business

This question was emailed the other day, and I must say, in my mind this is only half the question – but first things first. Sooner or later you will think about doing a little more business, protecting yourself more, and that will bring you to the question of changing business and trading environment All small business, micro business, sole traders, freelancers and home businesses can be run in the form of limited liability companies.

A limited liability company – LLC in the US, Ltd. in the UK – is a legal entity, like a different person, so you, the business owner is not direct liable for any debt. The company is to be conducted by laws governing limited liability companies, and providing you do, your company has “limited” liability.

The protection a limited company offers is that when the business fails, and you have to close it down, the company is only liable with it’s assets, i.e any positive bank balance, inventory and other assets.

What does a limited company not protect you from? That is the second part of the question you need to know about.

Answer: Any loans or other arrangements you have made, and signed a personal guarantee for, i.e. a bank loan, or over-draft.

Which brings me back to my favorite topics of planning, credit-control and bootstrapping. If you do not sign any personal guarantees for your limited company, you personally can be shielded from any fall-out in the business – apart from loosing the business of cause.

Think twice before signing a personal guarantee and losing your limited liability. ST.

Disclaimer: As with any of my readers questions, I do not have all the answers and here on my blog I can only give you some ideas, since I know very little about your small business. If any of you can add anything here do so for the benefit of my reader, who asked the question and everybody else, leave a comment below – I’d be most grateful.

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Bookkeeping for Small Business

Oct 12, ’07 6:33 AM
Author Stefan Töpfer (Editor) Categories Accounting, Entrepreneur, Failure, Health Check, Marketing/PR, Outsourcing, Small Business / SOHO, Software as a Service, Work/Life Balance, avoid growing pain, be eco-friendly, be successful, bootstrap, do a SWOT plan, do a reality check, do bookkeeping., do cost cutting, do credit control, grow your business, handle problems, lower overheads, market and sell, outsource effectively, plan cash-flow, plan your business, use online IT

I have discussed before that it is important for small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants, to do a minimum of business planning, but does it stop there?

Not really, you need to keep up to date with your bookkeeping, to complete the business planning process. You may ask why, if you have done the planning, why not get your bookkeeping done once a year for your tax return?

The answer to this question is the business planning process never ends. Remember I have been talking about going back to your plan at least once a month. In order to fine-tune your small business planning you need to actual information how your business performed in the last month. The only way to do that is to do your bookkeeping or accounting.

By doing that you will be able to compare your predicted numbers in your cash-flow with the actual number your business has generated. This in turn will help you to update or modify your cash-flow plan for the future. More important than that, you will learn new things about your business:

  • You may have higher (good) or lower (bad) sales, than you expected?
  • Your cost in your business may be higher (bad) or lower (better) than you expected?
  • Your cash-flow may be better or worse do to the above two points?
  • You may need to outsource some business processes to lower your fixed cost structure, to make your business more recession proof or just more profitable?
  • You may need to ramp up your sales and marketing activities for your small business products or services?
  • You may also have to adjust your SWOT analysis and your business goals?

You will be surprised how creative you can be, once you know about and understand a problem in your business plan. It may not even be a problem at that time, you may just need to adjust the way you do things, and you may have avoided a small or big problem in the future.

In my opinion strict cost control and bootstrapping are not like nice to have features, they are essential for your small business survival. Often the difference between failure and success is just a little planning and checking the “plan” – doing a reality check. There is no excuse not to do it, all the tools are available for free, for anyone.

If you feel the initial process of business planning is too much for you, than get your accountant or bookkeeper to help you to set your cash-flow fore-casting, SWOT analysis with you, doing it online will give you strategic advantages, like you can work with your accountant or bookkeeper in real time in different places, this lowers your cost, no time wasted and is good for the environment.

I would like to make one more point here, the aim of all this planning is not to get it spot on – no, the aim is to understand what is happening in your business, that is why you should be doing it.

Among other things, it will give you a measure of certainty, security and confidence, if you understand what is happening in your business. So, how confident are you about the future of your business? Why not take the weekend and have a planning session, it is like playing monopoly, only this game will secure your future. ST.

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Small Business Failure – Reason: Funding

Aug 30, ’07 8:17 AM
Author Stefan Töpfer (Editor) Categories Entrepreneur, Failure, Finance, Health Check, Marketing/PR, Outsourcing, Sales, Start-Up, be successful, bootstrap, do a SWOT plan, do a reality check, do cost cutting, find funding, grow your business, handle problems, lower overheads, market and sell, outsource effectively, plan cash-flow, start-up in business

Funding issues are really only a problem if you do not use “bootstrapping techniques” – so I’m not that comfortable talking about this issue, since I believe everyone should start their small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal business on a shoestring.

Anyway here are the small business health check questions you need to ask yourself:

  • What do I need the money for? Can’t you find a customer how will buy the product or service, before you even have it? It can be done you know!
  • Do I have enough securities for a bank loan or overdraft? I always like the analogy of a bank will give you an umbrella (money) and when it rains (problems) they need the umbrella themselves – what than is the umbrella good for!
  • Should I be looking for an external investor? You could find external investors who will tell you how to run your business, but know even less about your small business than you do?
  • Do I have the detailed business plan needed to find investors? You will need a detailed business plan – which frankly may not be worth the paper it’s written on – which will be used against you when things don’t work out.
  • Do I have the time to wait until a decision is made? You could be looking a 12 – 18 month before you have funding, do you have that time? Why not deal with customers today and get started on a shoestring.
  • What if they say NO? This is my favorite one – are you happy to give up on your business idea if everyone things is bad or worse (?)…. if you are don’t start a business, because you are not ready and whatever you do do not borrow any money from anyone.

If you read this and think this is all b*** s*** – and you may be right, of course – let me know why you think you need to borrow money? Maybe we could come up with an idea that would allow you to start your small business, without having to borrow money and loosing some of the control in your small business.

You can see other reasons for small business and personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants failures in my Health Check Category, if you can add to this list please do so, I would welcome your comments.

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Small Business Failure – Reason: Management Control

Aug 28, ’07 12:41 PM
Author Stefan Töpfer (Editor) Categories Business Ideas, Development, Employment, Entrepreneur, Failure, Health Check, Lifestyle, Marketing/PR, Relationships, Sales, Small Business / SOHO, Start-Up, avoid growing pain, do a SWOT plan, do a reality check, do bookkeeping., do credit control, grow your business, handle problems, lower overheads, market and sell, motivate your staff, not to do it!, plan cash-flow, plan your business, recruit the right people, start-up in business

The typical scenario is you work hard all week, have no live and at the end of it all little money to show for it. This is often a sure sign of loss of management control in a small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal businesses.

The small business health-check questions for this episode are:

  • Do I know what is going on in my business in all areas or have I abdicated some responsibility to staff? You can pick and choose what you do work-wise everyday, you can not pick and choose what you should know about and make decisions about – this is your business, not your staffs business – act like it.
  • Am I running my business or is it running “itself”? No business is running itself, other than into the ground!
  • Do you know how your cash-flow is doing? Done this one before, yet it always comes back to this, check it out.
  • Do you have an overview of your small business fixed costs and sales, are you happy with the situation? I guess you could always do better, but if you do not know the details you can not improve your situation.
  • Is your vision in line with your small business targets? You need a vision for your business, that will allow you to develop your small business strategy and plan, so you know where you are going – don’t just drift along.
  • Have you asked your staff lately? Have a power-meeting with your staff once a week, to see how they are feeling about your small business, last week or the next few weeks. It will motivate them and give you a new insight in how others see your small business.

The central message here is to be involved in ALL areas of your business ALL of the time – in a management capacity. When I hire people I always hire people who do something better than I, but you have to stay involved.

You can see other reasons for small business and personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants failures in my Health Check Category, if you can add to this list please do so, I would welcome your comments.

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