Tuesday, April 6, 2010

Over 50 New Entrepreneur Success Secret #2

Secret #2 Thinking Like a Corporation Doesn't Turn Your Business into Corporate Success

Study and observation bring out two distinct ways of thinking about business that can be beneficial for a corporation with a number of employees and a downfall for your start-up. Today, I’m going to share with you those two arenas and how you can avoid making these mistakes in your business.

I want to start with perhaps the most confusing and most time-consuming thought patterns that is useful at an intermediate level of business while really jamming things up early on. And the topic is accounting practices.

Start by understanding that modern business accounting practices serve a variety of purposes. These practices support acquiring hard-good business assets such as machines, vehicles, and buildings with as little tax implication as possible. In addition, these number-crunching techniques are designed to make it easier to obtain these items while off-setting the money spent on the purchase.

Likewise, modern business account practices are designed to off set growth and profit in ways to reduce tax liability. Are these things useful? Of course they are—when you have a business that is actually making you a decent amount of money AND you want to get more out of your business for less tax and more outcome.

So, what can you do? Develop the habit of watching and managing the cash flow of your fledgling business. With the advent of online banking this is easy and near-instantaneous. And that’s a very good thing! Thanks for formal accounting practices, this can be a tricky thing for someone without the training to find in all those numbers. Since this is perhaps the single most important real-money number you need, a checkbook ledger attitude gives you a great foundation to succeed.

You see, what really matters in your business is how much money you get to take home. How much money comes in matter, but if you never get to pay yourself anything, you do not have a business. Some of my clients have heard this definition before.

Until your business is paying you, what you really have is a very successful hobby. A hobby that pays for itself is a brilliant idea. A business actually not only pays the bills for it’s own existence, it also pays you for the time and effort you put into it. A start-up operation does need some time to reach this level; profit rarely happens right away. In my programs I teach you how to reach the level of being profitable faster and with a lower investment. To even have an idea of how that works, you need to watch and understand how cash flows in and out of your business.

Your ability to re-frame your thinking in another arena also contributes to your success. When it comes to branding and advertising, your ability to NOT think corporate directly influences your success at this stage.

Image and branding are a huge investment for a corporation. If that includes a product instead of a service, that investment and need for control is of mammoth proportions. And you’re going to hear a lot of business advice about designing a logo, developing your brand, and unifying your message. Understand I’m not against these business practices—at the right time! Most of the start-ups I’ve worked with and people I’ve coached are not ready for these investments during the first 6-18 months. Some people need even longer to prepare for this type of thing.

What you need the most at the very beginning are paying clients! You need to be out there talking to potential clients, meeting them, hanging out where they hang out, and more. At this stage of the game, your brand, your message starts and ends with you. You don’t need a fancy logo or website at this point. You need face-time with the appropriate people. Since you are the best ambassador for your business, clean, basic, professional looking materials are far more important than anything you can have custom designed.

Why is that?

I’ve watched literally 100s of businesses and professionals spend a one or two thousand dollars in their first year of business only to spend even more 12-24 months later on re-designs and upgrades. At the very beginning they could only make educated guesses about who their best clients would be and what kind of materials those people would like. Its painful to spend early and then need to spend again during the first few years of business to better represent your business to your best clients.

So just don’t do it. Seriously, don’t. Stop now. Get that new business making some money and have some consistent clients before diving into that arena. You’ve got access to lots of affordable, temporary shortcuts (VistaPrint.com is just one).

If you can adjust your success-concepts when it comes to money and advertising from corporate reality to start-up mentality, you’ll increase your chance of success. The opportunity to make money faster with less investment is also a huge plus.

Coming next: Secret #3 Save your money and spend your time at the beginning.

Wishing you Success & Heart,

Heidi Sue

© Copyright 2009-2010 Heidi Sue Roth. All Rights Reserved.

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