Being your own boss

Discovering a real need

You might be a great potential entrepreneur but you still need to spell out exactly what it is you plan to do, who needs it, and how it will make money. A good starting point is to look around and see if anyone is dissatisfied with their present suppliers. Unhappy customers are fertile ground for new businesses to work in.

One dissatisfied customer is not enough to start a business for. Check out and make sure that unhappiness is reasonably widespread, as that will give you a feel for how many customers might be prepared to defect. Once you have an idea of the size of the potential market you can quickly see if your business idea is a money making proposition.

The easiest way to fill an endurable need is to tap into one or more of these triggers:

Cost reduction and economy. Anything that saves customers money is always an attractive proposition. Lastminute.com’s appeal is that it acts as a ‘warehouse’ for unsold hotel rooms and airline tickets that you can have at a heavy discount.

Fear and security. Products that protect customers from any danger, however obscure, are enduringly appealing. In 1998, two months after Long-Term Capital Management (LTCM), one of America’s largest hedge funds, was rescued by the Federal Reserve at a cost of $2 billion, Ian and Susan Jenkins launched the first issue of their magazine, EuroHedge. In the aftermath of the collapse of LTCM, which nearly brought down the US financial system single-handedly, there were 35 hedge funds in Europe, about which little was known, and investors were rightly fearful for their investments. EuroHedge provided information and protection to a nervous market and five years after it was launched the Jenkins’s sold the magazine for £16.5 million.

Greed. Anything that offers the prospect of making exceptional returns is always a winner. Competitors’ Companion, a magazine aimed at helping anyone become a regular competition winner, was an immediate success. The proposition was simple. Subscribe and you get your money back if you don’t win a competition prize worth at least your subscription. The magazine provided details of every competition being run that week, details of how to enter, the factual answers to all the questions and pointers on how to answer any tiebreakers. They also provided the inspiration to ensure success with this sentence: You have to enter competitions in order to have a chance of winning them.

Niche markets. Big markets are usually the habitat of big business –encroach on their territory at your peril. New businesses thrive in markets that are too small to even be an appetite wetter to established firms. These market niches are often easy prey to new entrants as they have usually been neglected, ignored or ill-served in the past.

Differentiation. Consumers can be a pretty fickle bunch. Just dangle something, faster, brighter or just plain newer and you can usually grab their attention. Your difference doesn’t have to be profound or even high-tech to capture a slice of the market. Book buyers rushed in droves to Waterstones’ for no more profound a reason than that their doors remained open in the evenings and on Sundays, when most other established bookshops were firmly closed.

The Pros and Cons of starting up a business

Many people start their business adventure dreaming of riches and freedom. And while both are certainly possible, the first thing to understand is that there are trade-offs when you decide to start a business. Difficult bosses, annoying co-workers, peculiar policies, demands upon your time, and limits on how much money you can make are traded for independence, creativity, opportunity, and power. But by the same token, you also swap a regular paycheck and benefits for no paycheck and no benefits. A life of security, comfort, and regularity is traded for one of uncertainty.

There are definitely pros and cons to starting your own business. To be more precise, the benefits of starting a business include:

• Control. Even if you like your boss and your job, the possibility remains that you can be laid off at any time. That boss you like so much can be transferred. Your company can go bankrupt. So one advantage of starting your own business is that you are more in control of your work and career. And while that may be comforting, you should also realize that with that control will come increased responsibility and a new set of demands. As the boss, the buck must stop with you. You are the one who has to meet payroll. You are the one who has to make sure that clients and customers are happy. You are the one who must hire and fire the employees. It is not always easy, and you can bet that there will certainly be times when you will look fondly back on your days as an employee, when you had far less responsibility and control.

• Money. Many people choose to start their own business for the simple reason that they think that they are worth more money than they are making or they want the chance to provide a better life for their family. There is usually a limit to how much money you can make when you are an employee. The good news is that when you are the employer, the entrepreneur, the boss, there are far fewer limits. That can be a good or bad thing; you may make a fortune, or you may go bust. If this kind of uncertainty appeals to you, good, because it is what you will be getting if you start your own business.

• Creativity and independence. If you feel stagnant in your current job, you won’t feel stagnant for long if you start a business. Running your own business may require you to be the marketing wizard, salesman, bookkeeper, secretary, and president all rolled into one. It is a hectic life. But you may not mind that. It’s kind of like the Calvin and Hobbes cartoon in which Calvin’s mother tells him to make his bed. Calvin decides to build a robot to make the bed for him. When Hobbes asks, “ Isn't making the robot more work than making the bed?” Calvin answers, “It’s only work if someone makes you do it!” The same holds true when the business is yours—it often doesn't feel like work because no one is making you do it.

• Freedom. Working at your own business gives you the flexibility to decide when and where you will work. You decide your hours and place of business. The freedom that comes with being your own boss, where no one can tell you what to do or how to do it, may be the best thing about being an entrepreneur.

But there are also downsides to starting your own business:

• Uncertainty. As indicated, the life of an entrepreneur is not necessarily an easy one. Is it fun? Yes. Is it challenging, exciting, and spontaneous? You bet. But it is not easy. The hardest part of being in business for yourself is that there is no steady source of income; a paycheck does not come every two weeks.

• Risk. What is an entrepreneur? An entrepreneur is someone who is willing to take a risk with money to make money. Not all entrepreneurial ventures are successful. The willingness to take a smart, calculated risk is the hallmark of a smart entrepreneur. But even calculated risks are still risks. You could make a million or you could go bankrupt.

• Lack of structure. Many people like the structure of working for someone else. They know what is expected of them and what they need to accomplish each day. This is not true when you work for yourself. The work is very unpredictable. You need to consider carefully both the risks and rewards of entrepreneurship before deciding to jump in. It is easy to become infatuated with the idea of owning your own business. But if you are going to do it right, if you are going to be successful, you need to take emotion out of the equation. You have to begin to think like a businessman, consider the risks, and make an informed, intelligent, calculated decision.

Business Plan - why write one?

Here are some of the specific and immediate benefits you will derive from writing your business plan.

1. Helps You Get Money

Most lenders or investors require a written business plan before they will consider your proposal seriously. Even some landlords require a sound business plan before they will lease you space. Before making a commitment to you, they want to see that you have thought through critical issues facing you as a business owner and that you really understand your business. They also want to make sure your business has a good chance of succeeding. In my experience, about 35% to 40% of the people currently in business do not know how money flows through their business. Writing a business plan with this book teaches you where money comes from and where it goes. Is it any wonder that your backers want to see your plan before they consider your financial request?

There are as many potential lenders and investors as there are prospective business owners. If you have a thoroughly thought out business and financial plan that demonstrates a good likelihood of success and you are persistent, you will find the money you need. Of course, it may take longer than you expect and require more work than you expect, but you will ultimately be successful if you believe in your business.

2. Helps You Decide to Proceed or Stop

One major theme of the book may surprise you. It’s as simple as it is important. You, as the prospective business owner, are the most important person you must convince of the soundness of your proposal. Therefore, much of the work you are asked to do here serves a dual purpose. It is designed to provide answers to all the questions that prospective lenders and investors will ask.

But it will also teach you how money flows through your business, what the strengths and weaknesses in your business concept are and what your realistic chances of success are. The detailed planning process you may have known maybe nothing is in a small business—but it should help you uncover and correct flaws in your business concept. If this analysis demonstrates that your idea won’t work, you’ll be able to avoid starting or expanding your business. This is extremely important. It should go without saying that a great many businesspeople owe their ultimate success to an earlier decision not to start a business with built in problems.

3. Lets You Improve Your Business Concept

Writing a plan allows you to see how changing parts of the plan increases profits or accomplishes other goals. You can tinker with individual parts of your business with no cash outlay. If you’re using a computer spreadsheet to make financial projections, you can try out different alternatives even more quickly. This ability to fine tune your plans and business design increases your chances of success.

For example, let’s say that your idea is to start a business importing Korean leather jackets. Everything looks great on the first pass through your plan. Then you read an article about the declining exchange ratio of U.S. dollars to Korean currency. After doing some homework about exchange rate fluctuations, you decide to increase your profit margin on the jackets to cover anticipated declines in dollar purchasing power. This change shows you that your prices are still competitive with other jackets and that your average profits will increase. And you are now covered

for any likely decline in exchange rates.

4. Improves Your Odds of Success

One way of looking at business is that it’s a gamble. You open or expand a business and gamble your and the bank’s or investor’s money. If you’re right, you make a profit and pay back the loans and everyone’s happy. But if your estimate is wrong, you and the bank or investors can lose money and experience the discomfort that comes from failure. (Of course, a bank probably is protected because it has title to the collateral you put up to get the loan.

Writing a business plan helps beat the odds. Most new, small businesses don’t last very long. And, most small businesses don’t have a business plan. Is that only a coincidence, or is there a connection between these two seemingly unconnected facts? My suggestion is this: Let someone else prove the connection wrong. Why not be prudent and improve your odds by writing a plan?

5. Helps You Keep on Track

Many business owners spend countless hours handling emergencies, simply because they haven’t learned how to plan ahead. This book helps you anticipate problems and solve them before they become disasters.

A written business plan gives you a clear course toward the future and makes your decision making easier. Some problems and opportunities may represent a change of direction worth following, while others may be distractions that referring to your business plan will enable you to avoid. The black and white of your written business plan will help you face facts if things don’t work out as expected. For example, if you planned to be making a living three months after start-up, and six months later you’re going into the hole at the rate of $100 per day, your business plan should help you see that changes are necessary. It’s all too easy to delude yourself into keeping a business going that will never meet its goals if you approach things with a “just another month or two and I’ll be there” attitude, rather than comparing your results to your goals.

Starting up a Business 101 - IV

Business? See whether you relate to any of the following most common reasons people give for starting up in business:

·         Being able to make your own decisions

·         Having a business to leave to your children

·         Creating employment for the family

·         Being able to capitalise on specialist skills

·         Earning your own money when you want

·         Having flexible working hours

·         Wanting to take a calculated risk

·         Reducing stress and worry

·         Having satisfaction of creating something truly of your own

·         Being your own boss

·         Working without having to rely on others

The two central themes connecting all these reasons seem to revolve around gaining personal satisfaction, which can be seen as making work as much fun as any other aspect of life, and creating wealth, which is essential if an enterprise is going to last any length of time.

Even when your personality fits and your goals are realistic, you have to make sure that the business you’re starting is a good fit for your abilities.

Business Assets

Safeguarding Your Business Assets

When you think of your business assets, you probably think first and foremost of your equipment or machinery, company cars, and so on. It’s important to make sure that all those assets are looked after and insured, as well as protected by alarms and locks to cut down the risk of damage or loss. However, if you’re in the business of inventing things or coming up with new ideas or you have logos or symbols that are a vital part of your business brand or image, those intangibles can be valuable assets. You can take care of most material assets, such as premises and computers, with insurance, but assets that fall under the heading of intellectual property are a lot harder to protect but even more damaging to lose.

Protecting your name

A rose by any other name may smell as sweet, but would your business be as successful if it was called something else? If you’ve worked hard to build a good reputation and your customers keep returning and sending referrals, your name is vitally important. For that reason, you don’t want anyone else using it and perhaps tarnishing it by selling inferior goods or services to the ones you provide. If someone is in competition with you and tries to use the same or a similar name as yours, you can take them to court and claim that they’re passing off their products as yours.

Of course, the last thing you want is to get involved in costly court proceedings, and you have to be sure that you have a good case. For example, the other company may not realize that another company with the same or similar name is doing a similar line of business. Try to negotiate before taking court action, but don’t wait too long before taking action or your good reputation may be lost.

Starting up a Business 101 - Employees

Taking on Employees

One of the most important decisions for any business owner – whether he’s a sole trader, in a partnership, or operating as a limited company – is when to take on employees. One minute everything is ticking along nicely, and then suddenly you have too much work to cope with and you need help. You have to make sure that you don’t do anything to contravene those rights, or you may find that your employees can make a claim against you at an employment tribunal. If the tribunal finds in favour of your employee, you can then face a bill for compensation.

Right from the moment you decide to take on a staff member, you have to stay on the right side of the law. If you need to talk things over with someone before taking the first steps, an adviser at Business is a good place to start.

Business ethics

Business ethics is a form of the art of applied ethics that examines ethical rules and principles within a commercial context, the various moral or ethical problems that can arise in a business setting and any special duties or obligations that apply to persons who are engaged in commerce.

Business ethics can be both a normative and a descriptive discipline. As a corporate practice and a career specialization, the field is primarily normative. In academia descriptive approaches are also taken. The range and quantity of business ethical issues reflects the degree to which business is perceived to be at odds with non-economic social values. Historically, interest in business ethics accelerated dramatically during the 1980s and 1990s, both within major corporations and within academia. For example, today most major corporate websites lay emphasis on commitment to promoting non-economic social values under a variety of headings (e.g. ethics codes, social responsibility charters). In some cases, corporations have redefined their core values in the light of business ethical considerations (e.g. BP's "beyond petroleum" environmental tilt)

In today's business environment, the belief that organizations, both for-profit and not-for-profit, have ethical responsibilities to their stakeholders – owners, employees, customers, communities, etc. – has gained widespread acceptance. In higher education, and particularly in institutions dedicated to a classical liberal arts education, the belief that instruction in philosophy and theology is foundational to the development of individual morality is likewise well-established. What is not so clear, however, is the nature of the relationship between individual morality and business ethics, a topic of increasing currency in a society marked by increasing levels of business-social overlap. It determines whether and how morals, ethics and business success are connected, and also to explore the idea that that an education grounded in theology and philosophy is a source of competitive advantage in the job market.

In order to be successful in a specific business venture on an entrepreneur’s point of view, one needs to understand the importance of learning and putting into practice of proper of ethics in business management.  Being geared or focused to a business undertaking to being productive needs a management structure that is based on what is right and what is ethical.

An ideal overview on ideal standards of what is ethical and what is moral in terms of business management should be undertaken.  These ethical standards must coincide on what kind of business one is into.  A careful analysis and comparison must be established between the relationship and differences of the business and morality.  The underlying ethics based on the business should be carefully classified.

Through these ethical standards drawn, it will somehow act as a backbone or basis of business management or how to go about the effective running of a business venture.  A careful consideration is setting these ethical standards must be raised and should be based on a more general ethical standard viewpoint.  Practices and ethical standards of large organizations on the different facets and aspects of businesses and markets must be viewed and carefully studied.  In this regard, standardized ethics and codes of ethics of various professions should also be studied.  Through these, one should be able to draw an idea of how to apply the same to one’s current business undertaking.

The basic principles or business ethics being implemented by society through our government such as the proper and legal trade practices, must also be learned as well the government’s existing policies, procedures, guidelines and operating standards in business practice and management must also be taken into consideration as well as the important role of the government and the non-governmental organizations, in the implementation of the same.

The course study hones the student and the entrepreneur to carefully draw the proper ethical standards of business management based on that what is deeply rooted on the mores of the society, its implementing codes or guidelines on various business aspects and markets.

Through the above, one is drawn to methodically structure and organize or simply just adopt these ethics in business management for a more standardized and productive business venture that is both advantageous to the entrepreneur and to the well being of our society. 

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