Are You Missing The Point About Online Business?

Starting an online business can be an exciting prospect.

However, there are many components to consider and it is all too easy to stray off-target.

Even with a well prepared business strategy mistakes or oversights can be made. The most dogmatic of online business developers are fallible to the odd slip here and there.

With this in mind, here are 5 things beginning online business owners should be aware of as they embark on a maiden voyage to carving out their own profitable online niche.

Have you forgotten..?

1. A Business Plan: No one should even consider creating a new business without some form of business strategy in mind. It is not enough to simply have some idea of what action will be taken or what sort of steps should be followed in order to achieve a potential goal. A business plan should have a clear mission statement, actionable steps, achievable timelines, checkpoints, and a one-year target. All these aspects should be clearly documented and combined into an actual physical plan, not some sketchy idea in the back of one’s mind.

2. Branding: All successful businesses have a name or logo everyone remembers. These businesses did not achieve this by pure luck. The brand establishment was a direct result of planning, working on progressive awareness and skillful advertising. New business developers must have a brand in mind before they start their online journey. Establishing this brand is a priority from the very beginning and website development, search engine optimization, online and off-line advertising, plus consumer interaction should all be undertaken with brand establishment in mind.

3. Search Engine Optimization (SEO): As every experienced online business owner knows, gaining and maintaining a good search engine ranking is a long-term strategy. However, SEO is a tactic that needs to be considered from the very beginning. SEO should begin when designing a website and preparing content. Initially, there are many things to consider, such as:

The correct use of meta tags

Using anchor text within images

Search engine friendly navigational architecture

Use of keywords in headings

Correctly placing keywords and synonyms in content

Making sure SEO is correct from the very beginning is far easier than having to redesign a website and re-edit content at a later date. Any additional content, added to the site at a later date, should continue to follow the same SEO principles used when the site was created. This also applies to using keyword anchors when creating links to and from the site.

4. Advertising: Promoting the site will normally happen once the website has been created and products/services have been finalized. There are many forms of advertising techniques available i.e. textual search engine ads, banner advertising, off-line advertising, and reciprocal link exchanges. Remember that advertising is not purely about sales lead generation. It is also about building brand awareness. How a business chooses to advertise depends on the size of the business and its market/target audience. The business should already have chosen relevant keywords when working on SEO and these keywords should be used in advertising/links whenever possible.

5. Quality and Integrity: It is said that any business is only as good as his reputation and a business hoping to achieve long-term success should begin by offering quality products/services and treating customers with respect and honesty. It is always good practice, once the website is built and advertising is in place, to take a step back and see what the business is saying. Is the website believable? Are adverts fair and honest? Would you buy from your own site? A great benchmark of quality and integrity is to ask friends or family, who are not connected with the business, for impartial feedback and opinions. Do they consider your site reputable? If the answer is yes, you’re heading on the right track.

The above 5 points can help to keep an online business heading in the right direction, but they should not be seen as the only factors to consider. It could be said that points 2, 3, and 4 would fit into the business plan mentioned in point number 1.

While this may be true, a good business plan will incorporate all factors of business strategy both present and future and it is easy to forget key factors.

Therefore, all the points in the above check list are worthy of mention in their own right. Remember to create a sound business plan, and keep the plan in mind as you progress and continue to perform regular quality checks once your business strategies are in play.

The Point of Budgeting In Small Business

Too many small businesses operate without budgets. And many small businesses that do have budgets aren’t getting as much out of them as they could. We’ve seen it time and again.

It isn’t because the mechanics are difficult to manage. Everyone knows the basics of how budgets work: you track money coming in, you track money going out, and you do your best to plan for the future. In fact, the very simplicity of that formula is what leads some small-business owners to consider budgets not worth the trouble.

Therefore, what we’ll discuss here isn’t what budgeting entails, because if you don’t already know that, you can find it out with ease. We’re more interested in why you should budget in the first place. Our suggestion, to put it plainly, is that budgeting is a way to amplify the very creativity and adaptability that allow small businesses to thrive.

Budgets’ Reputation

You don’t become an entrepreneur because you have a burning love of spreadsheets. At least, not usually. Being an entrepreneur isn’t supposed to be about budgeting. It isn’t supposed to be about paging through endless columns of variable costs or putting caps on spending. It’s supposed to be about having the freedom to blend innovation and risk-taking with passion and expertise. It’s supposed to be about removing barriers, not building them.

That being the case, small-business owners often see budgets as antithetical to the very spirit of entrepreneurship. According to this perspective, budgets impose stifling limitations. They’re artifacts of mega-corporate culture devised by clammy-handed people in windowless rooms with poor lighting. They may be necessary evils for sprawling, inhuman conglomerates, but when it comes to organizations that rely on individual personalities and individual decision-making, budgets are more burdensome than helpful.

You might say the constraints imposed by budgeting make small businesses less nimble. Since nimbleness is one of their main advantages over larger rivals, budgets actually decrease small businesses’ ability to compete.

Or so the story goes.

Some of it is accurate. For instance, it’s true that passion and innovation go hand in hand with entrepreneurship. It’s true that small businesses should strive to leverage their size into a competitive advantage. And it’s true that budgeting for small businesses is much different from budgeting for colossal corporations.

What’s not true is that budgets impose constraints. Budgets don’t actually impose anything. They merely describe constraints that are already present. Perhaps more importantly, they describe a business’s ability to cope with and even manipulate constraints placed on it by forces internal and external.

Constraints and Entrepreneurial Creativity

If you’re an entrepreneur, you’re aware that your business doesn’t operate in a vacuum. It’s part of a staggeringly complex system. For instance, you have your relatively immediate concerns, such as your employees and your local government. You also have your relatively big-picture concerns, such as national debt and foreign trade policy. No matter what, when you start a small business you’re going to be hemmed in by laws, regulations, and unavoidable economic realities, all of which will have a major impact on how you operate.

In other words, no small business starts out in a position of unfettered freedom. The very conditions that allow small businesses to exist also impose a variety of constraints. Working capital, interest rates, the minimum wage, the minimum competitive salary for professional employees-there are countless factors that limit what you can do and how much money it takes to do it.

You can acknowledge the reality of these factors, but if you don’t have a budget, then you might not know the exact ways they’re affecting you. What particular constraints does a business in your industry have to deal with? Are there some that have a disproportionate impact on you because of the way your business functions? Can you make changes to reduce their impact? Are there constraints that you handle in an especially productive way? Can you turn this productivity into an advantage over your competitors? Do you approach some constraints the way everyone else does, even though you could be doing a better job with them?

These are the sort of questions a budget helps you answer. It doesn’t create limitations that weren’t there before. Rather, it gives you a way to assess the pre-existing limitations that every small business in your industry has to deal with. The more thorough your assessment of those limitations, the greater your ability to work within them, work around them, or in some cases, make them work for you.

Making limitations work for you is where entrepreneurial creativity comes into play. If you have enough details on your business’s limitations, then you’ll be better able to turn those limitations into innovations. A budget will help you marshal your creative energies and find the opportunities for profit embedded in the market’s constraints. It tells you exactly what assets you have to work with, and helps you map out how those assets can be put to the most productive use given the rules of the industry.

After all, most of the market-based constraints you experience will be shared by your competitors, who also have limited amounts of money and freedom. Which of you comes out on top won’t be determined by who has the fewest constraints, but by who does the best job of manipulating common constraints to find the possibilities they hide.

Speed, Spontaneity, and Profit

Small businesses, precisely because they’re small, tend to be better than their larger competitors at taking quick, decisive action. It’s one of their vital advantages. By the same token, it’s one of the challenges that all entrepreneurs are bound to face. You’ll be forced to react on a moment’s notice to emerging opportunities or perils in the market-that’s a given.

What’s less certain is the profitability of your reactions. Obviously, acting or adapting fast doesn’t do much good if it yields a loss.

So what information will you use to make your quick decisions? Do you have a detailed, practical breakdown of your business’s strengths and weaknesses? Do you know exactly how many resources you can afford to redeploy at a moment’s notice? Do you know how efficiently different aspects of your business tend to use the resources you devote to them? Are certain aspects of your business already strained? Are certain aspects flush with the potential for expansion?

A budget gives you a diagnostic readout of your organization. It tells you how much stress the business can handle and which areas can handle it. Hence, it helps you decide whether acting conservatively or aggressively in the short term will enhance your performance over the long term. Without a budget, you’ll be relying too much on guesswork, and many of your quick decisions may be needlessly risky.

Supply-chain Relationships

A budget not only helps you assess yourself, but also helps you assess your relationships with other entities, like vendors and subcontractors. This will be especially important when the market is in flux.

As you know, successful entrepreneurship entails evaluating the vast array of forces that constitutes the market and determining where-for someone in your industry, someone with your passion and expertise-the opportunities and roadblocks lie. But no one can predict with any certainty how the market will behave tomorrow. There will be surprises. Sudden chances and sudden setbacks.

We’ve already noted that the way you respond to these inevitable surprises will play a critical role in the profitability-or survival-of your business, and that your ability to make the right call at the right time will be drastically greater if you have a budget in place. This is not only because a budget tells you about your own resources, but also because a budget helps you deal with other organizations that affect you.

Let’s say you experience a sharp increase in demand for your product. It’s good news, but it brings up questions: Do you have enough working capital to provide your product to a large number of new customers/clients? What are the current resources of each division of your business? How many more resources does each division need if it’s going to ramp up its activities? How efficiently does each division tend to use its resources?

These are all internal questions that may well lead to others, such as: What do your vendor accounts look like? How much new inventory can you afford to purchase? What type of sales will you need if you’re going to pay off the new purchases on time? Can you afford to hire subcontractors to help with the push?

And, of equal or greater importance: What’s your plan for a downturn in demand? Will you find yourself in a precarious position with your vendors? Will you be able to keep promises to new customers? Will you be able to pay your subcontractors for the hours they’ve put in?

Indeed, budgeting can provide invaluable support for all your relationships. As noted on Inc.com, “your suppliers are in all likelihood mapping out their expectations for the year and you can help them do so by providing your outlook. As a best practice, you should share your budget and the variety of scenarios you might face to see whether they can handle each level of demand” (Field 2010).

Since your business is one element in a network of other businesses, it’s important for you to be able to communicate both your capacities and your expectations to the people you rely on. A budget serves as a tool for facilitating such communication. It gives you a concrete way of describing not only where you stand, but also where you will stand in a given scenario. Thus, it helps foster strong partnerships and avoid uncomfortable conversations.

This doesn’t mean sharing every detail of your budget, nor does it mean sharing some details with everyone. It simply means that guarding your budget like a state secret takes away some of its efficacy. You can use select portions of your budget to assist you in negotiating with critical partners-i.e., you can be prudent about the information you divulge without being obscure. How much do your current business partners know about your budget? Is it enough for them to understand your capacities and your needs?

The Bank

Speaking of business relationships: you don’t want to mess around with the bank. Plain and simple. This is a relationship that should be as friendly and open as possible. And what do bankers like? Budgets. As the American Bankers Association (ABA) says, “You are flying in the dark financially if you don’t have a budget for all income and expenses.”

Come to them without a budget, and bankers are going to feel like you’re wasting their time. They’re certainly not going to be interested in loaning you money (or more money). “Prepare for your financial review with your banker,” says ABA. “Have current inventories, cash flows and balance sheets ready.”

When your banker asks you how your debt is structured, and whether you have an imbalance between long- and short-term debt, what are you going answer? Trust us: if you show up to that meeting with a budget, you’ll be glad you did.

Flexibility

Just as the market’s unpredictability makes budgets useful, it also makes them fallible. A budget is like any plan: it will contain inaccurate predictions and require ongoing revision. That’s simply a condition of commerce; some academic models are predicated on entrepreneurs having perfect foresight, but we all know that’s not the case. Businesspeople, even the world’s most celebrated financial prognosticators, get it wrong sometimes.

That doesn’t render planning completely useless. Even if your plans don’t entirely match the way reality unfolds, they serve as benchmarks against which you can assess your progress. They record where you wanted to go, where you actually went, and why the two didn’t coincide. In that way, they indicate which areas of your business are performing well, and which need to be modified in order to meet next quarter’s goals.

When it comes to small-business planning, certainty is off the table. Nothing is guaranteed, including budgets. But setting expectations and monitoring progress remain indispensable to long-term survival. They help small-business owners analyze why they’re drifting off course, and also help them formulate corrective measures.

How do you see a budget? As a static report that turns old news into flimsy predictions? Or as a series of living documents that records how you adapt to change?

Personnel

Thorough budgeting calls for a great deal of effort, and many small-business owners can’t spare the necessary time or energy. Frankly, while the minutiae of budgeting are of interest to the entrepreneur, they are not the entrepreneur’s main job. If they were, then a good head for numbers and a background in financial analysis would be prerequisites for entrepreneurship. Yet plenty of small-business owners have succeeded without an affinity for mathematics or statistics. Entrepreneurs don’t all begin as certified public accountants.

That being the case, most small-business owners hire a bookkeeper. A bookkeeper collects and organizes your financial information, which, again, is time-consuming and requires close attention to detail. Too much time and too much attention for small-business owners to sacrifice. But even if you’re not involved with gathering and sorting your financial information, you needn’t remain aloof from it. To get the most benefit from budgeting, you’ll want to be accustomed to reading your financial statements and locating important data in your financial system. When you meet with your bookkeeper, are you talking about his or her methods? Is he or she showing you how your financial information is organized? Are you able to navigate your bookkeeping software on your own, so as to pull up specific pieces of data without your bookkeeper’s assistance?

Proper bookkeeping is important, but it rarely goes far enough in the analysis department. You’ll notice that the bulk of our discussion has revolved around using budgets to orient yourself in the market-i.e., using them to take advantage of opportunities and to minimize risks. That requires more than tabulating numbers; it requires interpreting them. It requires fitting your numbers into a larger picture.

Is there anyone in your organization besides you who (1) monitors your finances on the close-in, detailed level, and (2) relates the details of your finances to your big-picture performance? If not, chances are you’d benefit from a dedicated financial person. Someone whose duties involve painting a comprehensive picture of your financial universe-more comprehensive, that is, than the picture you’re able to paint on your own, simply because you have other things to do.

As with most aspects of running a small business, getting the most out of budgeting requires skillful delegation. If a budget is going to inform your decisions at major turning points, then it’s a good idea to have someone to consult with, someone who’s been looking at the same numbers as you while also looking at the same problems.

Takeaway

The value of a budget doesn’t rest on the accuracy of its predictions or the stringency of its cost-cutting. Instead, the value of a budget rests on how well it articulates your business’s financial strengths and weaknesses. A budget exists to help you balance risk against opportunity, to help you determine whether aggressive or conservative action is the right thing for the moment. It also exists to help you communicate with your business partners-to, in other words, cultivate healthy, mutually beneficial relationships with the organizations you rely on.

Above all, a budget exists to de-mystify, or express in concrete terms, the limitations imposed on your business by the market. Thorough budgeting, especially when undertaken with the right personnel, can enhance your creative initiatives and merge adaptability with profit. In short, budgeting is a way to sharpen, not blunt, a small business’s advantages.

Beyond the Tipping Point: What Makes a Successful Business Relationship Tip

What makes businesses successful?

This is a question that is often asked. It is also a question for which there are innumerable answers. Here are some…

A great idea or innovation? Yes.

An inspiring leader? Yes, that helps immensely.

The right timing in the market? Surely.

The right people? Yes, your team, your clients, your suppliers and your champions will all be key.

Admittedly, there is no one answer. However, for those who are familiar with Malcolm Gladwells’ The Tipping Point there are certainly key factors that determine success. According to Gladwell the tipping point is a signal of a key moment that unifies isolated events into a significant focus and trend. In the context of business, and let’s be more specific here, your business, the tipping point is about all that has gone before regarding you and your business coming together at a defined point in time and space when the “universe aligns” and your business finds and begins to truly fulfill its purpose and potential. In your market, you “arrive”.

This tipping point is often where people will proclaim you became an overnight success. We will likely all know someone or of someone in business who was or is such a wonder. We often forget the road that has been travelled to have that success breakthrough. Usually, there has been an investment of blood, sweat, tears and dogged determination through various challenges, ups, downs and failures.

Your success is determined by the size of your Comfort Zone. Your tipping point arises in and around that point of transformation at the edge of your Comfort Zone. It is at this point where change and transformation happens. You must embrace it. Do that and growth happens. After all, change is inevitable; growth is optional.

At this point of transformation, core to the concept of a tipping point, there is one key and common aspect that is notable…

Relationships

Relationships ultimately mean people. We often cannot breach our Comfort Zone without the assistance of others. That means relationships. And… You get the relationships and, therefore, the people you deserve. For your business or organization to become the success you desire you need to focus on what makes for a great relationship.

A consistent, simple and effective approach to improve your existing relationships and to ensure your future relationships are fruitful is to actually write out in detail the profile of your ideal relationship – whether that is with your own people, your clients, your suppliers and your other stakeholders. That exercise will give you clarity and focus regarding with whom you prefer to engage. Inevitably, just from that focus such relationships will begin to arise more easily and frequently. What you think about you bring about.

Now here is a further distinction on the importance of relationships when it comes to the success of your business and organisation.

We know that organizations are founded and led by people. For an organization to be a success they require a thriving relationship with other organizations and, therefore, people. A relationship with another organization will have originated as a result of an initial key relationship with a person…

A Tipping Person.

Think Napoleon Hill, Steve Jobs, Warren Buffet, Bill Gates, Bob Proctor, Richard Branson, Simon Cowell or that successful business person you know. Their success and/or that of their organizations has been determined by a tipping person or persons. Gladwell describes such persons as the Connector, the Maven and the Salesman.

Admittedly, that person can be a friend or foe, an ally or adversary, a champion or a competitor. Either way that person is a catalyst for your success. Where that person is more adversarial, that “relationship” often spring-boarded them to a positive relationship with another key favourable person.

So, no matter your business – small, medium, large – your success is determined by the quality of your relationships – specific relationships or, rather…

Relation-tips

Picking up on Gladwell’s principle, to reach this relation-tip will likely mean you have had to kiss a few frogs to get there. Everyone who happens in your life is moving you toward your goals and progresses your journey of success. Certainly, from experience, some of those frogs may even be of no apparent value however, in the words of Ann Landers

The true measure of a man is how he treats someone who is of no value to him.

An approach of kindness and a willingness to help all who cross your path will stand you in good stead. A key lesson learned here is that, in the words of a business friend of mine,

“Every dud knows a stud!”

That is, you never know who they know and to whom they would be willing to introduce you – it just may be to that key relation-tip. That key relationship tips the balance in favour of you and your organization and your success manifests more assuredly – it is that breakthrough or watershed point where everything goes from strength to strength.

Such a relation-tip implies that people are definitely getting along. When that happens, then people will come along, they will follow – businesses, people, clients, customers and suppliers. When that happens your success increases, often at a more accelerated rate than ever before.

Whilst you may have undertaken that exercise mentioned above of describing in detail the profile of your ideal business relationships, there are some contributing factors that will attract and retain that key relation-tip that will cascade your success.

1. Vision

If you do not know where you are going it is unlikely many people and businesses will come alongside and want to join you on your directionless journey. As Proverb 29:18 reads, Where there is no vision people perish. To succeed you must lead; to lead you must see; when you see you must share it. When you do, the right people begin to show up.

2. Values

Knowing your values and using them as a filter for all your relationships will pay dividends. A relation-tip is beneficial and often one that is long-term. Most, if not all, significant, synergistic long-term relationships are founded upon similar core values. When you broadcast openly your values you will attract people and organizations of similar values.

3. Passion

Passion is attractive. Passion raises the energy and magnetises relationships who share the passion. Passion is contagious. Be contagious.

4. Empathy

Empathy is essential to create and build rapport; it is a keystone for building long-term relationships. Consider the Oxford Dictionary definition of rapport:

“a close and harmonious relationship in which the people or groups concerned understand each other’s feelings or ideas and communicate well.”

5. Communication

The ability to communicate effectively and efficiently externally and internally – with yourself, your people, your clients, your suppliers and your market is essential. Without communication there is no relationship. Remember that communication is the response you get. To get your relation-tip you must excel at communication.

6. Friendliness

People and organizations alike prefer to associate with people they like and people like them. Your success is dependent on relationships. Move in circles where your ideal client moves; hang around those people and organizations you emulate. Great relationships are often great friendships. To attract such friends you must first be one. The application of the Golden Rule applies here – Do unto others as you would have them do unto you.

7. Action

Taking action will keep you moving forward and will lead you to learn more lessons, refine your approach and engage with more people. The more action you take the more attractive you become because action creates attention. Success will not happen without action. Relationships are kinetic not inert.

Whilst these seven contributing factors are important for a relation-tip, the list is not exhaustive. You will likely be able to add to it. Go ahead.

In summary, success is dependent on relationships. Along your journey of success there will be a tipping point that occurs because of a key relationship. That key relationship, whether it is with another organization or business, starts with a key person – a tipping person. That tipping person becomes a pivotal point in your success and that of your business or organization. That tipping person is a relation-tip. To accelerate the manifestation of that key relation-tip and, thereby, your success integrate, establish and openly display the seven attraction attributes. Your success is looming.