Thinking of starting a business? You may want to consider this:

Starting and growing a business can be very daunting. The financial investment and commitment required will likely leave most up to their necks in debt, and it doesn’t help that about 30% of businesses fail in the first year and over 70% will fail by their tenth year. Before rushing to invest significant time and money into a business, you may find it prudent to consider the following:

Create a business plan.
An important step to evaluating the legitimacy of your idea, you should put together a business plan. It doesn’t have to be 50 pages long, but it should be more than an idea expressed on a napkin. A basic business plan should summarize the business you would like to start, and include an overview of the functions and strategies vital for your business to succeed. The overview should include how you plan on operating your business, and how you plan on making money (i.e. what are your revenue streams). Also, what is your marketing and sales strategy, and can you provide a projected financial statement for the first five years? This information is will help you and potential investors understand the fundamentals of your business.

Determine the market size.
Whether you are selling toothbrushes or starting a social network, you need to understand how large the market is that your product can appeal to. How much money does your market generate each year? Is your market projected to growth or shrink in the next five years? This information, coupled with the information found in the section discussing your competition below, will help you quantity the potential value of your business.

Know who your competitors are.
Before entering any market, you should know who your competitors are. Learn about their business and operating models, and what they charge for their products. What does the market share between competitors look like? If you discover that one competitor is weaker than the others, you could target their customers first. Understanding your competitors will help you position your product within the market to compete against established companies.

Differentiate yourself in the market.
Is your product or service unique? It should be. What makes you unique in comparison to your competitors? If it’s not your product or service, does your support or convenience differentiate you? If your business is too similar to those of your competitors, you could end up engaged in a price war, which will likely not end well for a new business.

Why now? Understand trends.
Is this the right time for you to launch your business? Your product or idea may be great, but is the market ready for what you are trying to sell? One of the best ways to figure this out is to talk to potential customers. Ask as many people as you can to educate yourself as to the needs or desires of your target consumer and how your product or service will help satiate those needs or desires. If your business targets a particular industry such as the restaurant industry, visit restaurants in your area and ask them about your idea. Be careful though, you will want to safeguard your idea before sharing it with the public. If your idea is patentable, you can protect it by submitting a patent application to your country’s patent office.

Understand your customer base.
Who are you going to sell to? Understanding the demographics of your customers helps to identify their values, spending habits, and consumer behavior. This knowledge will help you measure the sales potential of your idea and allow you to formulate a plan to market your product.

Sales skills are vital.
Can you successfully convey to a potential consumer why they should buy your product in 60 seconds? How about 30 seconds? In order to accomplish this, you need to understand your product very well and have excellent communication skills to convince consumers why they should buy your product.

Having great sales skills is more than just dealing with consumers. Arguably one of the toughest aspects of starting and growing a business is managing negotiations and closing deals. If you are building a product, how confident are in negotiating the best price for your materials or manufacturing so that your costs will be reduced? If there is an outstanding contract waiting to be signed by a vendor or potential customer, what skills do you have to persuade them to sign sooner?

You are only as good as your team.
During an interview at the Yale Graduate Writing Center, CEO and Founder of SumZero, Divya Narendra, said, “[I]t’s much better to own a small piece of a big pie than a big piece of nothing.” When building your team, this is an important message to convey. Many companies start with a small team of two or three people and each of these people can be equally important as the other in executing the business strategy. Especially if you are trying to raise money later on, your team members may endure as much scrutiny as your business plan. Initially, you may want to source the brightest and smartest people you can find, and afterward, you can bring young stars on board and help them develop into their potential. Watch Divya discuss business proposals here.

Are you ready to make the leap?
One of the greatest advantages of being an entrepreneur is that you are your own boss and can set your own hours. You just have to decide which 14 hours out of each day you would like to spend working and building your business. That’s right, 14 hours. As the founder of Guitar Hero, Charles Huang, discussed, sales of Guitar Hero were barely able to pay employee salaries for the first two years. However, in those two years they built partnerships in the market and developed their brand. Those were the toughest two years in Guitar Hero’s history, which subsequently ended up grossing over $5 billion in sales and was purchased by Activision. Watch his interview here.

Starting and running a business is a serious commitment, and it may take upwards of two or three years before it starts paying back. If you have any additional questions about starting a business, contact us using the form here.

Healthy Monday: beat the cubicle trap

sedentary lifestyle, sitting is killing you, sitting, office jobMondays are already hard enough without having to be reminded about the potentially lethal effects of sitting at your desk at work. But today, and hopefully every other day hereafter, you can work to foster a healthier lifestyle and negate the dangerous effects of a sedentary lifestyle.

Living a healthier lifestyle may seem impossible for those of you required to sit behind a desk all day, but there is hope. All you have to do is follow one simple rule; MOVE! If you move, or complete any action that requires some sort of movement, regardless of how many degrees removed it may be, you can help reduce your risk of obesity, heart disease, diabetes, and more. What does move mean? It means to walk, fidget, tap your feet, stretch, flex your muscles, take the stairs, and do absolutely anything that requires you to increase your physical motion.


Video: A Crash Course In Beating The Cubicle Trap

Credit: Jonathan Makiri, Maggie Starbard, Music by: Die Drei Lenore


These little activities add up, and they matter! In the “Magic Underwear” study, Dr. Levine coined the term NEAT, which stands for Non-Exercise Activity Thermogenesis which comprise of all the little activities. Discussing the NEAT results with a participant, a huge spike was pointed out in the chart that tracked the calorie-burning rate. “What’s that?” asked the participant. “That’s when you bent over to tie your shoes,” the doctor said. “It took your body more energy than just sitting still.”

Ok, you can only tie your shoes so many times during day – what else can you do? If you drive to work, park in the farthest spot in the lot from the front door, and do the same when you go to the movies or the mall. If your office and the bathroom are on different floors, take the stairs, not the elevator. If your office is on the 17th floor, walk up two flights of stairs and then take the elevator the rest of the way. When printing, use the printer that is farthest away. While sitting and working on your computer, move your neck from side to side.

While physical exercise will clearly burn more calories than bending over to tie your shoes, many of us with sedentary careers don’t have the luxury to exercise enough to make a difference in our lives. As reported, exercising for 30 minutes a day does not negate the deadly effects of sitting. So this Monday, and every other day, don’t forget to MOVE!

Facebook: STEAL THESE IDEAS!

If you haven’t read Part 1, “Facebook stock: Can the bleeding be stopped?”, click here.

What does Facebook have to do to stop the bleeding? Focus on their strategy is key, with the ultimate goal of making users spend more money. Facebook can use the three principles below to help achieve this:

  1. FOCUS on user engagement.
  2. FOCUS on businesses.
  3. FOCUS on building more ways for users and businesses to connect.

 

1. FOCUS on user engagement:

In order to be a successful company, you need to build a product people like. Facebook started off well, but its decisions lately regarding site design and customer experience have put it in deep waters. According to a survey from the from the American Customer Satisfaction Index, “Timeline” Facebook’s new user interface has caused the company to have its lowest level in customer satisfaction. Facebook’s scored 61, while the average for the social media industry was 69. Using information gathered from a report by EyeTrackShop, users have too much to look at when viewing Facebook’s Timeline compared to its predecessor. Not only are users spending more time searching for information and missing information, but also see advertisements 45% less. Talk about lost income.

87% of viewers saw the advertisements on the old profile page, while 44% are noticing them on Timeline.

Areas that were looked at most are shown in red on the heat map. In the Timeline, viewers concentrated less on advertisements than they previously did.

Secondly, according to Facebook, the company had 543 million users who were active on Facebook mobile applications in June 2012, and those users visited more frequently than website users. If that is the case, then can Facebook explain this?

For a company worth $100 billion, you would think they could create a mobile app with sufficient ratings.


2. FOCUS on businesses:

If the company can’t provide a good app for the place most of its users use Facebook, you think Facebook would spend some time developing an app to help businesses manage their pages. Think again – Facebook drops the ball:

This is the trend for everything that has come out of Facebook labs. Facebook’s App Platform: awful. Facebook’s WordPress Plugin, which would help them tie 15% of the world’s top one million sites into their platform, is equally as insufficient as the rest of their products.

What does the company need? More money to hire more creative developers? Or a boss with a better focus?


3. FOCUS on building more ways for users and businesses to connect:

After Facebook fixes its elementary problems such as focusing on user engagement, including site design, customer experience, and mobile application design, the company can then and only then devote resources to connect businesses and consumers more. With over 500 million people accessing the site a day, Facebook can:

  • Facebook “store” with one-click purchases: Someone’s birthday is today; would you like to buy them a gift card? Do it through Facebook, the site many people use to remember birthdays. The Facebook store can then offer other digital (and only digital) products for purchase. The transactions and receipts will be managed completely through the platform.
  • More diverse ads: With an optimized interface, users can be inclined to spend more time viewing ads, and Facebook can adapt their advertisement program to show a larger variety. Ads can be available in different sizes, or different types, such as animated ads, or include hover over technology that is prevalent in many online advertisements today.
  • Business stores: Facebook pages, which was a total disaster when it came to the Timeline redesign since it hid tabs and lowered their engagement by 53%, should provide businesses the ability to create their own online store, accessible through their Facebook page. Facebook takes a cut, companies are happy because their products are available one step closer to the consumers, and consumers have easy access to thousands of products.

 

STEAL THIS IDEA: CabMate app

Live in a city without a car? Looking for an affordable way to get home after public transportation closes? If you use cabs, even a couple times a week, it can get expense quick. To save money, you end up taking a ride home with someone whom you shouldn’t be with in the first place. Well, no need to seduce your way into someone’s car anymore! Not if you use the CabMate* app.

CabMate will work like other location-based friend finder apps, such as Sociabo, except in this instance, you are not looking for friends, but instead looking for another person to share a cab with.

Hypothetically, the way CabMate would work is, if you are looking for a cab to a certain destination, you enter the destination into the app. Then, you also enter (1) your current location manually, or have the app find you, and (2) the time you are looking to take a cab. Other people looking for a cab will be able to enter the location they are looking to travel to, and the time they are planning on leaving. Using the location service available in smartphones, CabMate will then automatically locate the person looking for a cab and find the best match for them based on the time they set. The person who is searching for a cab (rather than creating the event) can also manually enter the location in case they will be at a different location when they plan on taking the cab.

Once the individual(s) have found the right cab, they can “assign” that slot to themselves. With the assigned slot, the individual who created the event will receive a notification, and expect their cabmate(s) to be waiting at the predetermined location to take the cab with other individuals and share the cab fee.

The person creating the cab event will also be able to add the number of people that can fit in the cab, and once a slot is taken, that number automatically decrease until it hits zero, and the event would then close automatically.

For optimal results, using a “store finder” location system, like when you check into a location through Facebook will help organize and set randevú points for the individuals looking to share a cab.

As for the icing on the cake with regards to functionality, cabmates will be able to rate each other based on two criteria: did they show up and would you recommend them as a cabmate?

This app will not only save individuals money, but it will also allow the chance for others to be meet new people, in an entirely entertaining way.

*CabMate is not a real app, but would be a damn good one and a money maker if anyone knows how to make it. Contact me through Facebook if you want to discuss business models and how to make money through this.

Make money in the stock market.

Investing in stocks is a gamble, that’s why individuals aren’t allowed to invest using credit cards. Just like gambling, many have lost their life savings investing, while some have become the world’s newest millionaires.

Losing all your money or becoming extremely wealthy are the exception, not the rule – but you can become the next winner in the stock market without making it your day job. How? Easy; there are certain occasions in a company’s lifecycle that make your bet almost as certain as the sun coming up in the morning.

The most important rule, and lesson in this article is in a safe bet, a stock price will only increase if its profits as a company increase. Plain and simple. No change in profit, no change in stock price. Lower profit, lower stock price.

When do most companies make more profit?

Companies make more profit when their revenues increase compared to their costs. This normally happens when a company is growing and attaining new customers, increase their sales, or reduce their costs. Companies have a point in their lifecycle known as the “growth period”. During this period, a company’s profits are increasing significantly as they enter new markets, or their current markets aren’t saturated and they had little to no profits in recent history (a startup). A great example of this is GM. Back in February 2012, GM posted “record sales”. In reality, their sales, compared to their rivals for the most part of a the last decade were nonexistent, so it didn’t take much to attain “record sales”. Anyway, as a result, their stock price went up 9% during trading in the same day. (Today their stock price is lower than what it was on that day as they struggle to compete in the market, again)

Once a company’s market becomes saturated, you will see their profits stabilize which will result in extremely slow growth, if any for their stock price. These are “safe bets” or long-term investments. Wal-Mart is a great example of this. Their profits have been slowly increasing over the past twenty years and investing in them is, at its worst, as good as investing in the bank, with a great opportunity to make some good money with enough patience.

When do companies announce how much profit they have made?

The financial year is divided into quarters. At the end of each quarter, all public companies, which are the ones traded on the stock market, are required by law to file their earnings. The four days a year that a company announces their earnings are often the most volatile days for the company all year.

But, there are two very important, and slightly confusing caveats. First, the expectations set by the S&P. The S&P is the body that sets ratings for governments and organizations based on forward-looking opinions about credit risk, MUST be beaten in order to see a jump in profit.

In layman’s terms, the S&P sets an expectation for each quarter, for each publicly traded company. If the company beats the S&P’s expectation, that’s where you make your money. For instance, if the S&P sets an earnings expectation of $0.05/share, and the company shows an earning of $0.10, you are going to make some good money.

The second caveat is the economy of the company from a macro level, and the current state of the economy as a whole. If a company beat expectations, but is stuck under a tremendous amount of debt or investors do not have enough confidence in the economy, you will not see much change in stock price, simply moderate gains or losses.

Key earnings announcements coming up:

— Thursday: Google Inc., Microsoft Corp., Advanced Micro Devices Inc., Verizon Communications Inc.

— July 24: Apple Inc., AT&T Inc., Netflix Inc.

— July 25: Zynga Inc.

— July 26: Facebook Inc., Sprint Nextel Corp., Amazon.com Inc.

— July 27: Samsung Electronics Co.

— Aug. 1: Comcast Corp.

— Aug. 2: Sony Corp., LinkedIn Corp.

— Aug. 15: Cisco Systems Inc.

— Aug. 21: Dell Inc.

— Aug. ?: Groupon

— Aug. 22: Hewlett-Packard Co.

— Sept. 27: Research in Motion Ltd.

A Successful Company Blog, on a Low Budget

Follow this business plan and implement a successful company blog at a low budget. Enjoy:

A successful blog will yield great results for any company. It can help companies gain awareness and branding online, increase visibility, improve SEO ranking, and also help develop organizations as thoughts leaders in their respective industry.

But if a blog is not managed properly, or not maintained – its consequences can be devastating. Aside from having a poor website, there is no larger deterrent to suspend pursuing a company than finding a company blog that is not regularly updated.

Maintaining a blog is difficult and expensive. It requires several resources that are hard to come by such as thought leaders, analysts, writers, editors, and a web developer to integrate the blog in your website. Hiring the right resources can cost an organization $100,000 to $200,000 a year.

But what if is it possible to have a successful company blog for $5,000 a year, without adding any additional resources? Impossible? Nothing is impossible.

So how can companies run a successful blog for such a low cost?

The answer is, use your most valuable assets, your employees. In 2012, much if not most people in the developed world are proactively using social media networks such as Facebook, LinkedIn, and Twitter. What social media has given these people, who include your employees, is a stage to write on. Using words or video, everyone that uses social media networks are expressing thoughts and opinions through social networks. In essence, these people have all become bloggers. The degrees and topics may vary, but you will be surprised to find that just about 1 out of 50 people can contribute to your company blog.  With a successful internal campaign that is discussed below, companies can find these employees, and encourage them to contribute. But before we get into the marketing plan, let’s discuss why this wouldn’t have worked in the past:

In 2007, there were approximately 50 million Facebook users. That is 6% of the total number of Facebook users in the world today. In the same year, the population of New York (18 million) was double the number of active LinkedIn accounts. As a population, social media was new to us. We were not accustomed to sharing our ideas and thoughts online, but now we are. We have learned to communicate through online mediums, which had turned us all into bloggers in 2012. Today’s numbers: over 800 million active Facebook users, 200 million LinkedIn users, and Twitter is on track for 500 million during March 2012. These bloggers are everywhere around us, even within your organization!

The Plan:

The goal of this initiative is not only to create a successful blog for the organization, but also to keep costs down. That means there are no new positions being created, no salaries being added to the payroll. Since employees are already blogging, there is no need for them to be blogging during work hours. All will stay constant, with the exception of the company using the employees’ blog posts and rebranding them as their own, while still giving credit and back links to the employees’ sites.

Phase 1: Discover your company bloggers

  • Create a “company blogger” initiative within your organization:
    • Initiative to be communicated to employees via email.
    • Create an internal marketing campaign with posters around the office.
    • Requirements:
      • Employee must already be blogging.
      • Blog content may be business and personal, as long as there is a healthy balance between both, and blog posts are professional.
      • At least 3 months of consistent writing that can be reviewed.
        • Minimum one relevant business post every two weeks is required.
    • Incentive to employees:
      • Be an official company blogger with name/profile posted on company website.
      • Articles will be linked back to blogger site if applicable.
      • Bloggers able to build their brands as company markets the blog articles worldwide.

Phase 2: Review and prepare bloggers

  • If less than four bloggers are interested, it’s best to scrap this idea right away. Again, there is nothing worse than a blog that isn’t regularly updated.
  • If four or more bloggers are interested:
    • Review bloggers’ past relevant business articles.
    • Define requirements for company blog:
      • Two types of blog posts:
        • Newsworthy blog post: 150-450 words
        • White paper/Case Study blog post: 1,000-1,500
      • Posts must:
        • Discuss company products and news.
        • Discuss industry trends and news.
        • News about competitors.
          • No bashing of competitors.
        • No proprietary information to be disclosed online.
          • Determined by organization.

Phase 3: Test bloggers and implement blog technology

  • Now that the criteria have been set and bloggers have accepted, test bloggers for one month and review their articles. Provide feedback to bloggers.
  • During this month, implement and test blog technology for your website. Build and begin to apply marketing plan for blog.
    • Enable social sharing for posts.
    • Enable Facebook comments.
    • Create RSS feeds and social tools to follow blog.
    • List of categories for blog.
    • Build list of all directories and relevant industry sites that posts can be forwarded to.

Phase 4: Go live!

  • There is nothing left to do, start publishing posts submitted by blogger employees!