Common Steps to Becoming an Entrepreneur

There are two main ways to become an entrepreneur. The first way is through franchising a company that already exists, and the second way is by building your own company from the ground up as a start up company. Franchises are usually expensive from the start because the entrepreneur has to pay several thousands of dollars in order to purchase the right to go into business for themselves under an existing companies marketing and entrepreneurial strategies. Franchisees receive everything that they need to succeed from the original business owner once they pay the franchise fee. Furthermore they receive training, advertisements, staff, logos, uniforms, a storefront and various other business tools that they must adhere to as a part of their entrepreneurial endeavor.

When it comes to creating a start up business from scratch, most of the aforementioned business tools are a direct result of the business owner making a conscious effort to incorporate them into his or her overall business plan. Which leads me to one of the most important steps to becoming an entrepreneur, that is writing a business plan. A business plan does not have to be really long, actually brevity and conciseness are highly valued. Over the years, the business plan will change, it may get longer due to new additions that the owner has decided to implement, or the owner may decide that some of the plans are no longer ideal for the direction in which the company is now headed. Nonetheless, the business plan is a vital tool for the start up entrepreneur, it is like his roadmap for his business goals, as well as his compass to encourage other people who see the business to see where he is going and encourage them to head in the same direction.

Another step as an entrepreneur to a start up company is deciding on the name, logo, and marketing strategy for your company. I have learned that small business owners have to constantly market their company in order to be successful. Marketing is not a step that business owners should put to the side or wait until they feel they can afford a marketing specialist. They must take matters into their own hands immediately and begin marketing as soon as, and sometimes even before they open their business in order to get customers.

 

The more customers one has the more help one may need to keep up with all of the business. This may mean planning to hire employees to help with the demand of your product or service. Once you hire employees, you will be responsible for getting them trained on the company operates, how to provide great customer service, and making sure that the employees are paid on time and in full. These are just a few steps that most entrepreneurs of start up companies can look forward to eventually.

The Elevator Pitch & Entrepreneurs

The elevator pitch is important to all people who are in the business of selling, but to entrepreneurs the elevator pitch is fundamental. It can be the key to opportunity in 60 seconds literally found on an elevator. Most entrepreneurs already have a mission and vision for their business plan. The elevator pitch is where you want to introduce not only yourself, but your company to a complete stranger. If you had to introduce yourself, you would want to put your best foot forward, without boring the person. Something in your speech should spark interest in the listener to urge him or her to learn more about you.

The same principle applies to the elevator speech, you want to give the listener enough information about your business to understand what it does, who it serves, and why there is a need for your company. If you give the listener surprising facts about what you do and who  you target as it relates to your company, that’s an even better way to grab their attention and get them to ask you more questions.

Once you have them asking more questions the hard part is over, you can help them learn more about your business by extending the conversation right then and there, or giving them a direct response with helpful tips that may require them to visit your website, or you can hand them a business card, and exchange information in order to follow up with them over the phone.

One of the best things about the elevator pitch is that it acts a door opener. Once you have developed, practiced, and polished your elevator speech, it can help you attract new customers just about anywhere you have 60 seconds to spare.

Ways to Market Your Small Business (Publicity)

There are several ways a small business owner can get attention for his or her company. Marketing, advertising, and publicity are key when it comes to a business being recognized. Marketing has to do with a business doing market research to find out their markets preferences in order to better advertise to the target group. Advertising is the actual print, audiovisual, or graphic presentation used to catch a consumer’s attention. Advertising can be done by newspaper, magazine, television, or radio. Small businesses often advertise in newspapers because they are usually the least expensive. Radio advertisements are used often as well, more so  than television advertisements, due to the expensive prices that can occur after promoting a business to television viewers.

Nonetheless, when it comes to paying for advertising, nothing beats good old fashioned, positive publicity. Publicity is advertisement that the company does not have to pay for directly. Publicity can occur when a company is doing a charitable deed, or when a company has caught the attention of the local media.

As long as the publicity is positive, it helps project a positive perception of the company onto potential consumers. Not to mention that it can help current consumers feel good about their decision to invest in your company.

 

The Road to Success for a New Small Business

Over the past few month’s I have come to learn a lot about business and entrepreneurship. One thing that stands out most is the fact that in order for your business to be successful, you have to be different from the competitors. For example, your company has to have some type of niche that the other companies just don’t get too. Or, maybe your company doesn’t have a specific niche in its service or product, maybe your company, chooses to market to a specific target group in a certain region that the competitors have not yet marketed to. This is what helps a small business to be successful in its early stages.

After the business, is doing well and thriving from their target market, the business will usually build up a list of faithful clientele who like the product or service and are willing to give repeat business. Maintaining sales from repeat customers is crucial in small business success. These are the customers who will not only bring in money to your company, but will more than likely bring in new business by word of mouth.

Word of mouth business is when your customers share their positive experiences with people in their network, and encourage those people to check out your business. Your job as a small business owner, is to have staff in place and products and supplies ready to meet the demands of new business that may come your way as a result of  “word of mouth marketing.” One must always be ready to make money.

Another helpful tip on the road to success in small business is to try to be innovative and creative. With currently technology, updates are being made to equipment on a daily basis. Major companies spend thousands of dollars to come up with the newest additions to their technology to keep customers interested in the company itself and coming back to purchase the innovative products. This not only applies to companies that sell physical products, but to companies that offer services as well. Small businesses owners who sell services should constantly think of innovative ways to help their customers enjoy their experience with your service even more. This includes getting customer verbal and written feedback, paying for market research and development, and learning from other industry leaders to find out what works and doesn’t work for them. All of these are tips that as a new small business owner you will be sure to encounter along your journey.

What are the pros and cons of JIT inventory control?

JIT Inventory stands for “Just in Time” Inventory. Just In Time Inventory is an inventory system in which companies order just enough of the supply that they need from their suppliers, no more no less. JIT Inventory is useful for several reasons which I will highlight below. However, it is also important to note that there are some cons with this system that I will point out as well. Nonetheless, there are ways in which business owners can combat the cons of this system, especially if they believe this will be the best inventory system for their type of business.

Some businesses that use the JIT Inventory System include: McDonald’s, Dell, and Wal-mart. The JIT system is beneficial to these companies because:

  • By using the JIT inventory system, McDonald’s and Dell are able to make customer orders, when they order.
Ex. Instead of trying to sell customers pre-made burgers or computers that get old quickly, these companies prefer to make it right when the customer orders, and not before.
  • Companies are able to satisfy customers order the way the specific way any individual customer may request.
Ex. Because the company does not pre-make their final product, they are able to allow the customer the opportunity to custom tailor their order the way the customer wants it to be made.
  • JIT inventory allows orders to be satisfied quicker.
Ex. If companies are in the habit of producing products generically, it would probably take them longer to produce a product that is tailored individually. If the company is already in the habit of producing custom tailored orders, it does not take them as long comply with the request, and thus they are able to earn money quicker, because they are able to meet individual requests quicker.
  • JIT inventory allows the company to satisfy orders at a lower cost to the company and to the customer.
Ex. Because companies that use JIT complete orders right when their customers order, instead of before their customers order, they only make enough complete orders to satisfy the exact amount of demand that they have for that particular product. Thus they do not end up wasting a lot of product, because what they only make enough orders for what they will sell. The company orders supplies, only when they know they are about to run out and need to restock, even then, they only order a small amount of supply. Because the company is not wasting their supplies, they are able to keep their prices low for customers.
  • JIT Inventory allows customer satisfaction to be increased overall.
Some Con’s to the JIT Inventory System:
Companies who are dependent on one main supplier can be easily set at a disadvantage because:
  • The supplier could drive up the cost of your supplies because there is no other resource available for you to get your supply needs met.
  • If the supplier has a disruption in their company, it could cause a disruption in your company because they cannot meet your needs due to issues within their company.
Ways to Combat the Aforementioned Issues:
In order to try to prevent the cons of JIT Inventory System from affecting your company, business owners could keep the following tips in mind when deciding how to go about securing Just In Time Inventory:
  • Businesses could try to secure more than one companies that supply their needs at competitive prices.
  • If a business decides to go into contractual agreement with a supplier, the business should try to keep the sign short term contracts, in order to keep the supplier doing all that they can to keep your business, instead of vice versa, in which the company feels as though they can do whatever they feel to  because you’re locked into a long term agreement.
If all else fails, companies can always manufacturer of their own supplies so that they do not have to depend on outside sources for their supplies, and thus decrease the risks associated with the JIT Inventory System.
Sources:
“McDonald’s A Guide to the Benefits of JIT”

Inventory Management Review

Charles Atkinson on Inventory Management

Website: http://www.inventorymanagementreview.org/justintime/

11/8/2005

Date Retrieved: 5/6/2011

“The Risks of Being Just In Time”

By: Nick Koletic

10/17/2005

Website: http://www.inventorymanagementreview.org/2005/10/the_risks_of_be.html

Date Retrieved: 5/6/2011

Explain the impact of fraud and why it impacts small businesses to a greater extent than large businesses. What should the owners or managers do to prevent from fraud from happening in the first place?

In the article titled, “Small Businesses Face More Fraud in Downturn,” Simona Covel explains how several small business owners came face to face with fraud within their own company. Small businesses that do not have a checks and balance system in place for employees who handle money are subject to become victims of fraud, especially during these tough economics times. During the economy’s downturn, employees may feel under pressure more often to keep up with their bill payments on time, and to just survive with gas prices steadily rising, and with inflation on consumer products. Employees who have access to company cash and credit accounts can easily dip into a company’s money if they know that no one is paying close attention to their actions or keeping close account of transactions and purchases made by them.

Simona Covel had the opportunity to interview three business owners who all had one thing in common. They had allowed one person in their company too much power.   Simona’s article mentions several helpful tips from worthy sources to help business owners pay attention to employees, and whether their business could be in jeopardy of fraud.

Tips mentioned in the article include:

Being alert to employees who live above their means; employees who guard accounting software, and those who never take vacations. Simona’s source, Mr. Sklar, who is an accountant, also states that business owners should also review every canceled check and look at the signature on the back of them. Furthermore, Mr. Sklar says that business owners should review bank statements every month and check for unusual transfers.

To check out the article mentioned in this post visit:

The Wall Street Journal

“Small Businesses Face More Fraud in Downturn”

By: Simona Covel

Website: http://online.wsj.com/article/SB123501158460619143.html

Discuss the advantages and disadvantages of buying a business as opposed to starting one from scratch. What two ways can one buy a business and which one is preferable? Why?

There are many advantages and disadvantages that can come with buying a business as compared to starting one from scratch. I will answer this question in regard to my personal choice of business which is the movie and media industry:

Advantages:

Some advantages of buying a film company instead of starting one on my own would be that I already have the equipment and facility that I need, and possibly employees who are well trained with the equipment and the way in which the business runs.

The business may already have a strong customer base that will probably transfer over once someone new buys the company, as long as the same quality or better service is provided.

The business has already been established and may be making a profit. It should not take as long to start a profit when you buy a company that is already up and running versus taking all the time and steps needed to even get the company established, not to mention marketed to the public.

Disadvantages:

If the facility or equipment is really old, you may have to immediately invest in renovations and equipment updates before you can carry 0n with the business or profit.

It may be harder to mold the company into your own idea or vision because the old vision and mission of the company are still instilled in employees and customers of the past who you are still dealing with.

Even though there are some disadvantages that can come with buying a business as compared to starting a business from scratch, I believe that it is important for a person to make the best decision for them. Depending on the individual, you may be able to turn those negatives into positives when it comes to buying a business.