Showing posts with label cash flow. Show all posts
Showing posts with label cash flow. Show all posts

Friday, January 24, 2014

Serious Notes Before You Start Full Time Business

Serious Notes Before You Start Full Time Business

There are a lot of people who are not really clear on why they would want to start their own business. The main reason that most people want to start their own business is for the money. Over the long term you are probably going to make more money running your business than you will working for somebody else. Of course there are some people who choose to start their own business simply because they hate the idea of working for somebody else. One of the real attractions for a lot of people when starting a business is the fact that their time is their own.

Before get into full time business, here is serious notes to take:

1) Are you mentally ready? 

Are you prepare to work extra hard, accepting the challenge, take risks, to sacrifice time for yourself and family. If your business fails, you still have to put food on the table. 
Do you have to pay back the loan taken? 
Do you have a plan B?

The biggest sacrifice that you are going to have to make when you start your own business is going to be financial. It is recommended that individuals have enough available cash or a stream of alternative cash flow to live for at least one year, if not longer.

There are lots of people who really like the idea of running their own business. Unfortunately a lot of those people don't really think about what is involved in starting a business. It is important that you think about this before you rush into starting your own business.

2) For company partnerships – majority cannot last.

How well you know your partners is more important than how long. 
Before you start, do a detail profile of your partner or partners.
List down and study their integrity, strength, weakness, habits, personality or their spouses if they are influential or involve behind the scene. Give an overall score. If you can get 60% or more in favor, then go ahead. Do your homework.

3) Business Accounting

First, you have to do a Profit & Loss Account.
Revenue less Overhead Expenses = Profit or (Loss)
Overhead Expenses are generally fixed and that is easy to be accounted for.
The difficult part is the Revenue. You can only do a forecast.
Do not be naïve, there are too many factors which can affect your business.
In this case, you must know your competitors well. What are your “value added” against them?
If you cannot find many “value added” then you better think again.
a) Open a restaurant.
Do you have one or more specialties in your menu?
How tasty are your food? Is your pricing right for the targeted customers?
Your customers are the ones that determine your specialties, the right pricing and not you.
You have to do food testing and survey with a big group.
Do your homework.
b) Open a retail ICT Shop.
If you are only doing trading of ICT gadgets, likely you will not survive.
Models are changing too fast and margin too low. So what are your “value added”?
If you provide repair services and having a network of corporate clients, then you are different. 

4) Capital

All new companies take time to grow to be profitable. After paying the initial business set up,
how many months of operating cost can your capital sustain? 

Many first timers cannot get through this initial stage. One good example is the food business. 
It is sad to see so many new restaurants closed shop within 6 months. They cannot even recover the renovation cost.

5) Market research

Why do market research? Market research will allow you to make sure that there are actually people out there who are looking to buy your product. Far too many people start businesses without doing this and it rarely works out well for them, it is a step that you can't afford to neglect.
The easiest way to do market research to see if people are buying what you are offering is to to look and see if anybody is offering something similar. The vast majority of them simply offer a variation on something that is already available.
You also have to determine if your product solves a problem that they have or if it is merely something that they would like to have, this will affect your marketing strategy. As a general rule the more original your product the more market research you need to do.

There is a lot more to market research than finding out if people are interested in the product that you are selling. The far bigger challenge is finding out who those people are. It is also important that you know who else is selling products in your market so that you can create a plan to set your product apart. Good market research will save you from wasting a lot of time and money on a bad idea.

Are you ready for full time business?


Tuesday, May 21, 2013

13 Books to Improve Financial Knowledge (A Guide to Financial Freedom)

1. The Millionaire Next Door: The Surprising Secrets of America's Wealthy
  • Book by William D. Danko
  • The book The Millionaire Next Door: The Surprising Secrets of America's Wealthy is by Thomas J. Stanley and William D. Danko. This book is a compilation of research done by the two authors in the profiles of 'millionaires'. Wikipedia

 “Whatever your income, always live below your means.
2. The Millionaire Mindset
  • Book by Gerry Robert
  • Why is it that when some poor soul wins the lottery he is often right back in the poor house within ten years? It’s because he never changed his thinking. He never acquired a Millionaire Mindset. Why is it that so many people work endlessly to grow a business or climb the corporate ladder but still struggle year after year? The Millionaire Mindset reveals how you can finally break the cycle of poverty consciousness and take control of your life. You will see the power that your conditioning has on your current results, and you’ll gain a powerful system for reversing that early programming. Mr. Robert leads you through a process of understanding yourself, your thinking, your goals, your finances, your time and your abilities. These are all common-sense strategies that have worked for the people who have attended Gerry Robert’s popular seminars. They will work for you. We can say this confidently because of the thousands of people who use these strategies daily. Not only that, but these very strategies have taught Gerry Robert how to raise himself from poverty to earning a multi-million-dollar income. The Millionaire Mindset gives you a treasure chest of practical strategies that will guarantee success for anyone.  atlasbooks 
“It’s sad that people who work for money their whole lives so often end up with little or nothing to show for their efforts.”

3. Think and Grow Rich
  • Book by Napoleon Hill
  • Think and Grow Rich is a 1937 motivational personal development and self-help book by Napoleon Hill and inspired by a suggestion from Scottish-American businessman Andrew Carnegie. Wikipedia
4. Richest Man In Babylon
  • Book by George Samuel Clason
  • The Richest Man in Babylon is a book by George Samuel Clason which dispenses financial advice through a collection of parables set in ancient Babylon. Wikipedia
   Better a little caution than a great regret.

5. Wink And Grow Rich 
  • By Roger Hamilton
  • A step by step guide to making a lot of money (even during a recession).
  • This is a parable; a story which holds the ‘keys' to wealth, but first you have to find the keys. They are hidden in this book.
  • Roger Hamilton is one of the best speakers on earth. He owns 11 businesses and runs none of them. He simply tours the globe teaching people the secrets of wealth.
  Your well is in your words.
6. Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money - That the Poor and the Middle Class Do Not!
  • Book by Robert Kiyosaki
  • Rich Dad Poor Dad is a book by Robert Kiyosaki. 
  • It advocates financial independence through investing, real estate, owning businesses, and increasing one's financial intelligence. Wikipedia 
“In school we learn that mistakes are bad, and we are punished for making them. Yet, if you look at the way humans are designed to learn, we learn by making mistakes. We learn to walk by falling down. If we never fell down, we would never walk.” 

7. Rich Dad's CASHFLOW Quadrant: Rich Dad's Guide to Financial Freedom
 “Can you personally make a better hamburger then McDonald’s?”
So far 100% of the people I have talked with have talked with about their new idea have said “yes”. They can all prepare, cook, and serve a better quality hamburger then McDonald’s.
At this point , I ask them the next question: “Can you personally build a better business system than McDonald’s?
Some people see the difference immediately, and some do not. And I would say the difference is whether the person is fixated on the left side of the Quadrant, which is focused on the idea of the better burger, or on the right side of the quadrant, which is focused on the system of business.
I do my best to explain that there are a lot of entrepreneur out there offering far superior products or services than are offered by the mega-rich multinational corporations, just as there are billions of people who can make a better burger than McDonald’s But only McDonald’s has the system that has served billions of burgers.

8. The Millionaire Mind
  • Book by Thomas J. Stanley
  • The Millionaire Mind Published February 1, 2000 by Thomas J. Stanley, draws from the authors' research of America's affluent to examine the ideas, beliefs and practices of the segment of the financial elite that use little or no consumer credit. Wikipedia
“The number one reason most people don't get what they want is that they don't know what they want.”

9. The Only Investment Guide You'll Ever Need
  • Book by Andrew Tobias
  • For more than twenty-five years, The Only Investment Guide You'll Ever Need has been America's favorite finance guide, winning the allegiance of more than a million readers across the country. Now this indispensable book has been fully revised and updated-covering all the new tax laws-and reorganized with a new user-friendly design. Concise, witty, and truly understandable, Andrew Tobias shows you how to use your money to your best advantage-no matter how much or how little you have.
    o How to spend smarter-and save $1,000 or more
    o When to invest in stocks, and how
    o The ins and outs of investing on the Internet
    o Tax strategies, from tuition to retirement
    o Whom-if anyone-you can trust to manage your money
    and much, much more.
 “If a monkey can invest as well as a professional, or nearly so, it stands to reason that you can too.
10. The Intelligent Investor
  • Book by Benjamin Graham
  • The Intelligent Investor by Benjamin Graham, first published in 1949, is a widely acclaimed book on value investing, an investment approach Graham began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd. Wikipedia 
    “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.”
11. Your Money or Your Life
  •  Book by Dominguez and Robin.
  •  A classic, and one of the foundation books for the simplicity movement. The authors play off the concept “time is money” in a very literal sense. They encourage readers to sort out priorities, to cut expenses, and then to seek passive income in pursuit of financial independence. A little New Age-y in spots. An excellent book.
12.  The Total Money Makeover
  • Book by Dave Ramsey. 
  • Ramsey is an anti-credit zealot. He made a $4 million fortune by his mid-twenties, and then lost it to bankruptcy. Now he runs a personal finance empire. He takes a lot of criticism for his support of the Debt Snowball, which he describes in detail here, but the thing is: his methods work. If you are struggling with debt, there is no better starting place than this book. Ramsey’s advice is permeated with his Christianity, but you can get a lot out of this book even if you’re not religious.
13.  The Wealthy Barber
  • Book by David Chilton. 
  • This book offers good, general personal finance advice in the guise of a novel. Several friends meet once a month at the barber shop where the titular character dispenses wisdom on saving, investing, buying a house, and so on. The advice here is excellent, often backed by clear examples. The book’s conversational tone may appeal to some who might otherwise be turned off by personal finance. 
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