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The Number One Reason For Business Failure!
by: Hans Hasselfors
Ralph Waldo Emerson said, "Build a better mousetrap, and the world will beat a path to your door."

But when you're starting your own business, there's no guarantee that your "mousetrap" is going to survive, especially in today's fast-paced business world.

Nearly half of all small businesses fail within the first two years of operation. The number one reason for business failure is inadequate planning. The second reason is under-capitalization.

So before you mortgage your house, or go into debt financing your business, you need to know if your business is going to do more than survive -- you want to know if it's good enough to thrive! Here are three things successful businesses that have stayed in business for five years or longer have in common:

1. The idea. A successful business start-up always starts with an idea. Something that makes your business stand out from all the rest. So how do you know if you've got a good idea?

You've probably got a good idea if you can answer yes to any of the following questions: Does your idea provide the solution to a significant problem for your target market? Does it satisfy a need or want? Does it create an opportunity?

The most successful businesses either fix problems (either real or perceived), or they increase your customer's pleasure. They create a repeat need for a product or service among the target market.

2. The market. Your chances of survival are better if you can answer the following questions with a yes: Is there already a market for your product or service? (It's much easier to fill a need than trying to create an entirely new market.) Can your target market afford to buy your products or services? (If they can't afford it, it doesn't matter how great it is, you won't sell any!) Will your target market perceive your product or service as valuable? (If they want it, but don't think it's worth what you're selling it for, you won't make any sales.)

3. Your ability. Do you have the people, the resources and the knowledge to be able to consistently provide your products or services to your target market? Can you maintain a competitive advantage? Do you have enough manpower? Can you purchase the supplies and materials you need over the long run?

Your first step always is to create a solid business plan. Your business plan is more than an essay on "Why I deserve to get funding for my idea" however. Don't spend all the time creating a business plan and then toss it in the bottom drawer of your desk. Your business plan should be a living, breathing roadmap that helps you make sure you're on course and reaching the goals that you set for your business.

The second step to business survival is getting enough financing. Although the term "bootstrap entrepreneur" describes most small business owners, having enough capital to be able to keep your business afloat is vital to your survival.

When you're creating your financial analysis of your business, make sure you're being realistic about costs and expenditures, so that you give yourself the cushion you need to succeed.

If finding financing is a problem, either because you don't have enough credit or equity, or there are other problems, take the time to look into the resources that are available in your community. There are a wide variety of grants and loans (including microloans) for entrepreneurs, if you know where to look.

Some great resources will be:
-The Small Business Administration
-Local Small Business Development Centers
-Women's Organizations
-Local University or Community College
-Chamber of Commerce
-SCORE (The Association for Retired Executives)
-Nonprofit organizations that work on economic development in your area

Use other successful business models as a guide. When you're getting started, look around. What businesses are successful? Why? What is it they're doing that is working? What attributes do you admire, and why? You stand a better chance of succeeding if you're modeling someone who is already successful.

Find a mentor. Most entrepreneurs have great skills and abilities, but no one does everything well. You probably already know what your strengths and weaknesses are. (If not, there are many resources and tools that can help you figure it out!) Rather than ignoring your weaknesses, find a mentor who can help you either build your skills in your weaker areas, or offer advice for getting what you need.

If you take the time to plan to succeed, you could be creating a legacy that will be enjoyed by future generations, and that other entrepreneurs will look at as a model for building their own businesses.

About the author:
Hans Hasselfors is a successful home business entrepreneur and internet marketing consultant. Get the net working for you. Join a community of like-minded authors and publishers and make your living online. Become a member of our article directory. http://www.SubmitYourNewArticle.com


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Business Plans - What Do They Include?
 by: Kevin Erickson

Ok... so you've finally reached that stage in the development of your home business to get started. You've done the research, you have a game plan and you're ready to go except for one small detail... you need money. Whether it comes from a loan or from investors it doesn't matter but you need a good dose of seed money to put all your hard work and planning into action. However, regardless of who hears your money pitch before they give you a dime they will want see your business plan.

Business Plan - What Is It?

A good way to think of a business plan is that's it's a document that provide answers to the type of questions anyone who may provide financing would like to know about your home business. You will not get outside funding without one, because the people giving you the funding will insist on one because it helps them to know that you’ve thought through what you’re proposing to do. A business plan says to them... "I’ve considered this from every angle, and here’s what I’ve come up with".

Business Plan - What Does It Include?

What is your product or service? This is the first question every business plan should answer. You must explain in the clear, concise language what in the world you plan to produce or what service you plan to provide. You will also want to include why you've chosen this particular product or service.

Who are Your Customers? After you've explained your product or service, the next step is to identify who you plan to sell your product or service too and why. The demographics (age, sex, language, country, state or city, income, etc.) You need to clearly identify your customers in order to properly target your advertising, packaging, pricing, et.

What Makes You Different? You need to identify the "primary factors" that will make your business different than other businesses you'll be competing with. What niche are you filling that they are not or what do you plan to do to fill a particular void in the market that you've identified?

What are Your Expenses? Your start-up expenses include any equipment that you need before you can get up-and-running, while your day-to-day expenses are staff costs and supplies.

Following is a Simplified Example of Business Plan

This a a simplified and shortened version of a business plan. In the real world... each one of the following sections would be 1 - 2 pages in length. That being said... in most instances it's better to be as brief as possible. Only add information if your potential backers request it. It's a bad idea to go into too much detail in your plan. You’re not trying to explain everything down to the nth detail, just the basics of the business and why they should give you the money you need to launch it. And always focus on profit.

Catering Plus

Nature of Business: The business will be a home-based catering company, producing luxury food for special occasions such as birthdays and weddings. We will provide a comprehensive catering service, while specializing in high end customized cakes, which have a higher profit margin than other foods.

Target Market: Our catering business will be aimed at middle-class customers who desire a top-of-the-line catering but must operate on a budget. Our initial market area will consist of Mytown and the affluent area of Theretown.

Key Factors: We will only use commerical grade ingredients purchased from wholesalers and provide top quality design and service. This will allow us to provide food that looks tastes great, while keeping costs as low as possible.

Expenses: Beause I will be using my kitchen and making the food myself, there are only two real expenses: The purchase of an industrial grade mixer and then the day-to-day cost of supplies. I've attached a suppliers’ letter listing prices. Our research has shown that this supplier offers the best value for start-ups.

To wrap it up, you should include a breakdown of both projected profit and loss per month (in graph form)for the first year in business. Show one-time and day-to-day expenses versus projected profit to indicate how you will pay-off your loan. Your business plan should show you making enough of a profit each month to live on – if it doesn’t, then it may be considered unfeasible.

Study a Few Real-World Business Plans

The best way to get a real a feel for the dos and do nots of a business plans is to find real-world plans that have already been approved and study them. A good place to start is the internet. Once you’ve studied a few, you will get a better feel for how much work will be involved in putting your business plan together. Remember, until your business exists for real, the business plan is the only tool you have to sell prospective backers on how great your business is going to be



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