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There has never been a more exciting time to start your own business! New businesses are springing up every day all across the country. Whether these new ventures are inspired by women re-entering the job market, young people starting their careers at home-based businesses, previously employed middle managers, or just regular folks looking to earn some extra cash on the side, everyone is finding themselves caught up in the entrepreneurial spirit.

What has led to this entrepreneurial boom? First, there has been a sharp increase in downsizing at both large corporations and medium-sized businesses. As you may be aware, many of the larger corporations in the United States, like IBM and General Motors, have been laying off workers in record numbers, and the end is not yet in sight. Nearly one-third of companies surveyed by major outplacement firms say they are considering cutting their work force in 1996 by as much as 30 percent.

As companies are learning to be leaner and meaner, career-minded professionals cannot expect job security the way they could in the past. In today's economy, chances are good that you will probably not stay at one company throughout your professional career. And a growing number of people feel that the best way to prevent an almost inevitable layoff is to take the skills they have and open up shop for themselves.

Changes in government programs and tax benefits for minority-owned businesses provide still more clues why entrepreneurship is on the rise. And despite affirmative action programs, it is still a statistically proven fact that there is a lack of opportunity for women and minorities within medium- to large-sized companies. Thus, thousands of women and minorities are recognizing that their earning potential is much higher "on their own" than it would be in the corporate world, and that there is no "glass ceiling" to deal with when you are your own boss. In addition, it is now easier for minorities and women to get financing to start new ventures, either through local banks or government programs.

The success rate is good for new minority and women-owned startups. In a report released in December 1995, the U.S. Census Bureau stated that women owned 34.1 percent of all non-farm businesses in 1992, and that woman-owned firms earned an average of $246,000 annually. More than 50 percent of minority-owned firms hit the million-dollar mark in sales in 1993-and nearly half of these businesses were launched at a cost of $25,000 or less.

Other population groups are jumping on the entrepreneurial bandwagon as well. Burgeoning technological advances have opened up new opportunities for the physically challenged. In the past, these people were limited in their professional choices by their physical handicaps. Affordable computers, the Internet, and greater public acceptance of home offices have opened up a wide range of opportunities for those with physical limitations, and many have launched successful ventures as a result. An exceptionally high percentage of the businesses profiled in this book are terrific opportunities for the physically or developmentally challenged to earn an income equal to that of any other working professional.

The concept of the home office continues to rise in popularity. Many entrepreneurs have even been able to start new ventures while still employed at another firm, thus increasing their capital and minimizing their day-to-day financial risk. With an answering machine, a second phone line, a computer, some letterhead, and business cards, many home-based businesses can literally run themselves while you keep your day job, leaving you to fill orders or talk to clients on your off time. A few years ago, this type of business practice would not have been considered acceptable. But now, many new businesses are getting off the ground just this way. And if you do choose to quit your day job and work at home full-time, a fax machine, modem, and Internet access can help keep you connected to the outside world during business hours, too.

All of these cultural changes working together have created an atmosphere of opportunity in the entrepreneurial environment. It's now up to you. Making the decision to be an entrepreneur was the hard part. All you have to do is choose the type of business that meets your financial, emotional, and intellectual requirements, and get going! 
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Think of your business plan as a production line. What goes in at the start are raw material and unfinished assemblies. In our case, the raw materials include:

  Talent and initiative from your employees
  Market position
  The company's creditworthiness
  The firm's earning capacity
  Assessment of changes in the marketplace 

The unfinished assemblies include ideas and concepts that people want to try. These are the most valuable parts of the plan. They can take the company where it needs to go.

As with most assembly lines, what goes in at the front end probably doesn't resemble the completed product. The planning process refines, changes, and adopts these original input items. It uses them all. During this process, we'll

  Assess all your firm's resources: financial, technological, and human, to name a few.
  Identify where your company needs to go in order to prosper.
  Sometimes work backwards from a target to determine what specific departmental goals are needed. 

In the end we'll have a workable business plan that's far more than just a written document. We'll understand the changes in property, plant, equipment, management, technology, financial structure, and capital resources needed to reach our targets. Everyone responsible for executing the business plan will know what's expected of him or her and when it's due. We'll establish milestones where we need coordination between different departments to accomplish a particular goal. We'll be able to see progress toward those intermediate goals-definite, quantified progress, reported regularly. We'll make midcourse changes in time to avoid jeopardizing the larger goals.

The structure of this business plan is like nothing you've seen before. This one is a nuts-and-bolts, how-to-get-it-done-without-fail tool kit. We're going to grab your company and take it where it needs to go. You won't find much of the theoretical strategizing so many other planning books carry on about. That's fine for larger companies that can wait five years or more for results.

Instead, what happens to your company during the next twelve months concerns us. If you can hit your short-range targets year after year, the longer term will take care of itself. Chapter 2 introduces the planning structure we'll employ for your company. It identifies the various techniques and methods used in the process. By the end you'll have an idea of how each part of the planning process builds on what went before. Further, you'll understand how the business plan ties all the various functions in your business tie together.

The way we structure this process, the action of planning is just as important as the written product (sometimes more so). The planning structure builds relationships between departments that did not exist before. The design and implementation of departmental goals cements communication between people and their departments. The need for coordination between efforts that appeared unrelated becomes obvious.

A successful business plan requires the cooperation of each department in the company. Don't worry about resistance. There are some specific things we'll do to ensure the commitment of even the most diehard antiplanners.

Demanding Results
Our orientation in this action plan is results-driven. That's probably not a foreign concept for most small-business owners and managers. Their very survival depends on results-usually daily. But there's a twist. The results we're demanding come from your employees. These are the people responsible for implementing the business plan. For the company to prosper for any length of time, the group must commit to the plan's success. The group must understand the single thing that each person must do above all else to make the company successfully hit its targets.

Finally, the group must be the body that evaluates its own performance and rewards or punishes its members. Peer influence is far more persuasive than any single reward offered by a manager. It's made even more potent when the group becomes a team seeking a set of common goals. Of course we'll demand results. Those results are concrete targets-mostly quantifiable, but always clearly understood by everyone involved. Assign specific individuals responsibility for attaining these results. Their commitment comes from their participation in establishing worthwhile goals that they're responsible for reaching.

Let's walk through the structure of this hands-on, no-excuses way to hammer out and execute a business plan.

This probably requires the most soul-searching you've done in some time. We want an honest appraisal of your company's present status. Include each aspect of the company you deem critical to its success. Consider such things as:

  Distribution channels
  Market share and influence
  Customer loyalty
  Technological innovations and advantages
  Management talent
  Employee capabilities
  Manufacturing capacity and equipment

The role of each of these attributes in furthering our goals does not concern us now. Indeed, we haven't established our goals yet. Instead, we want an honest appraisal of where we stand today.

Using this information and comparing it with the company's goals-once we establish them-we will see a gap emerging between where we are and where we want to be. It's that gap that much of our business plan deals with. Closing that gap is our goal.

From the beginning we'll work to create clearly defined goals for your business plan. These goals begin at the top of the company and work their way down. Some are longer range-twelve-month time horizons. Other subgoals needed to reach the larger targets are intermediate range-say six months. Some are just three months out or even less. These are usually extremely critical things that must happen before work can proceed on the next step of a larger goal.

Unlike those of some planning exercises you may have experienced, our goals are brutally precise. They are the product of the firm's planners recognizing the specific targets the company must meet during the next twelve months if it is to prosper. It's easier for those who implement the plan to communicate precise goals rather than fuzzy, broad goals.

That's just what we want-clarity. Since our time frame is short, there's no room for anyone wasting time doing something that doesn't specifically help us get where we want to go. To this end, there are two questions we ask when establishing company goals:

  Where do we want to go in terms of products, customers, profits, return on investment?
  What changes do we have to make in each department to get us there? 

Differences from Larger Companies
The business planning needs of small companies are very different from those of their larger counterparts. First of all, small firms lack the resources and influence of large companies. Second, smaller companies worry more about survival today than conquering the world tomorrow. That's why our approach deliberately omits

Statements of philosophy and the mission of the company
Creation of a strategic plan that's consistent with management's philosophy

These are of little use to us in guiding the company over the next year to a specific end point. Now, this isn't to say that we should stick our heads in the sand and ignore a longer-term look at our future. However, that activity is probably better done once we've gotten the firm under control and understand how to make short-term changes that enhance profitability. Certainly, if this is your first planning exercise, the approach we're using gets tangible results using real targets that are achievable. It's comparable to walking before trying to run.

Attainable Goals
Have you ever seen people give up before they start because the task intimidated them? That's something we don't want to have happen here. Recognize that there may be too large a gap between the goals you come up with and the firm's current position. There may come a time when you say, There's no way we can accomplish all that this year.

It takes a smart manager to recognize that the chasm is too wide to jump in a single leap. Instead, he or she must reassess the goals, and maybe scale them back. A somewhat less ambitious set of targets results. However, they are realistic targets that everyone believes in. The outcome is greater commitment and higher probability of success than if you tried to ram unnecessarily burdensome goals down everyone's throat.

The trick to setting attainable goals is to strike a balance between targets that represent a realistic reach and those that are so far out that they'll certainly cause failure. On the one hand, we've identified something worth shooting for, and we'll reward our team appropriately. On the other hand, people view impossible goals as negative even when they are sweetened with better rewards. People would rather have a reasonable chance of receiving a bucket that's 90 percent full than no chance of receiving one that's overflowing.

Once you've identified your current position and arrived at the targets for your company, it's time to figure out how to bridge the gap between the two. The technicians call this process reverse engineering. In essence, we're taking the end result and working backwards to determine the steps we need to get there.

Analyzing Success Factors
You'll find that your business plan leaves the foggy world of strategies and mission philosophy very quickly. Instead, what makes the company move toward specific goals interests us.

Let's say that your firm's overriding target for the next year is to reach a 10 percent return on capital. There's nothing wrong with that goal. It's quantifiable. There's no question how to determine whether you've reached it (amount available for owner distribution / capital = return on capital). Even better, we can track progress toward it each month. Now, here's where the factors needed to reach this target begin to emerge.

Let's say that two things need to happen if we are to reach our 10 percent target:

Sales must increase by $1,000,000.
Production costs must decrease by $500,000.

The plan separates factors critical to each of these targets into a series of subgoals. In our example, the plan might spread the sales increase over several different products and among the quotas of different members of the sales staff. To decrease production costs, the firm might have to acquire some new machinery. Outright purchase would require more capital. That would take us in the wrong direction. Instead, the answer might be to lease the equipment. There are many other possible sales enhancements and production cost cutting measures, but you get the idea.

See how concrete solutions begin to appear once we know exactly where we want to go? The road map to get there isn't difficult to create. Each step of the way we've identified specific targets and goals that we must meet by a certain time and assigned to certain people as their responsibility.

Analyzing success factors is an exercise that consists of merely working back from a definite goal to see just how you're going to accomplish it. 


Your reputation’s online, even if your business isn’t. Take control of how the online world views your business, and protect your bottom line.

Before the Internet connected the entire world, your business reputation was something that you built, not managed. Fallout from the customer complaints you couldn’t fix was of limited scope. Today, the Internet acts like a lens that magnifies every blemish, perceived insult and mistake—and then broadcasts it with a bullhorn.

Consumers turn to the Web to research practically everything before they buy, and one blistering review on Yelp can go viral and undo everything you’ve worked to achieve. Worse, its affects can haunt your bottom line for years. Managing your reputation is something you can’t afford to ignore.

Consider this. Blogs, forums and anonymous review sites can give consumers a strong voice, which is not a bad thing per se. But they can also attract commenters and reviewers who may be acting at the behest of your competitors. Unless you actively monitor and manage your business reputation, you clear the way for other people to step in and tell the story. And it’s pretty much guaranteed that the story won’t have a happy ending.

In an article on Small Business Computing, Michael Zammuto, president of Brand.com, offers small business owners advice on how to protect their online reputation.

Don’t Ignore the Internet

Online research is king, and small business owners simply don’t recognize its importance. Even a business that has nothing to do with the online world can find its reputation smeared across the Internet. Your business may not rely on the Internet, but your customers—and your competitors—go online. What are they saying about you?

The first step is to do a bit of online research yourself. Google both your name and your company’s name to see what comes up. Chances are you’ll be surprised at the results.

Know What You Can Control

When potential customers ask to know more about your business, it may seem sensible to refer them to online review sites. Don’t do it. Simply stated, you can’t control what people say about you on those sites. “A business will never buy a billboard and let others write on it,” says Zammuto.

A better course of action: focus on improving your ranking in Google search results. Post articles with informative, useful content that helps your customers. Share your expertise and make yourself a trusted resource for your customers. It may take a bit longer, but the results will be worth your effort.

Guard Your Own Reputation

You could pay a reputation management company, or you can save a bunch of money and use free tools and services to help you track your company’s reputation. Google Alerts, TweetBeep, Naymz, Social Mention, and MonitorThis are but a few examples.

If you choose to hire a reputation management company, avoid any company that creates multiple Twitter accounts and microsites to flood the Web with good feedback and positive content about your company. Google frowns upon those dubious tactics, and you risk a precipitous fall to the bottom of the search results rankings.


What do you want to invest in: stocks, bonds, mutual funds? Do you want to open an IRA or buy an annuity? Does your employer offer a 401K? Remember, every investment involves some degree of risk. Most securities are not insured by the Federal government if they lose money or fail, even if you purchase them through a bank or credit union that offers Federally insured savings accounts. Make sure you have answers to all of these questions before you invest:

  Define your goals. Ask yourself "Why am I investing money?" Maybe you want to save money to purchase a house or to save for retirement. Maybe you would like to have money to pay for your child's education, or just to have a financial cushion to handle unexpected expenses or a loss of income.

  How quickly can you get your money back? Stocks, bonds, and shares in mutual funds can usually be sold at any time, but there is no guarantee you will get back all the money you paid for them. Other investments, such as limited partnerships, often restrict your ability to cash out your holdings.

  What can you expect to earn on your money? While bonds generally promise a fixed return, earnings on most other securities go up and down with market changes. Also, keep in mind that just because an investment has done well in the past, there is no guarantee it will do well in the future.

  What type of earnings can you expect? Will you get income in the form of interest, dividends or rent? Some investments, such as stocks and real estate, have the potential for earnings and growth in value. What is the potential for earnings over time?

  How much risk is involved? With any investment, there is always the risk that you won't get your money back or the earnings promised. There is usually a trade-off between risk and reward: the higher the potential return, the greater the risk. The federal government insures bank savings accounts and backs up U.S. Treasury securities (including savings bonds). Other investment options are not protected.

Are your investments diversified? Some investments perform better than others in certain situations. For example, when interest rates go up, bond prices tend to go down. One industry may struggle while another prospers. Putting your money in a variety of investment options can help to reduce your risk.

Are there any tax advantages to a particular investment? U.S. Savings Bonds are exempt from state and local taxes. Municipal bonds are exempt from federal income tax and, sometimes, state income tax as well. For special goals, such as paying for college and retirement, tax-deferred investments are available that let you postpone or even eliminate payment of income taxes.
Premium Work Gloves

It’s not enough to just have a Web site, you need to make sure your customers can find it—and use it. Get these tips from EconomicDevelopmentCouncil.com on marketing your small business online.

  Get your Web site listed on major search engines, such as Google or Yahoo! Two sites, Search Engine Watch at www.searchenginewatch.com and the Web Marketing Info Center at www.wilsonweb.com/webmarket, offer guidance.

  Join a “banner exchange,” and trade advertising banners with other Web sites. Look under “banner exchange” on search engines.

  Visit sites similar to or related to yours and offer to exchange links with them.

  Write useful articles for other sites and include your Web address.

  Get more online marketing help from such sites as www.zdnet.com/eweek/, workz.com and www.bcentral.com.

Get these tips from EconomicDevelopmentCouncil.com
 on whether or not your small business is ready to make agreements electronically...

  Take note: Federal Law now makes electronic contracts and electronic signatures as legal and enforceable as those on paper.

  Consider what advantages e-contracts might have for your business. Some companies will be able to conduct their business entirely on line, often with great savings.

  Be aware that if you start using e-contracts, you have to let customers know whether paper contracts are available and what fees might apply for the paper agreements.

  Proceed with caution. The law does not define what an electronic signature is, and e-signature technology is still evolving.

  Visit these Web sites for more information: the American Bar Association , or www.nolo.com, a site that specializes in legal issues.

Methods of communicating in business have changed over the years. Get a few tips from EconomicDevelopmentCouncil.com on managing successful virtual relationships with your small business customers.

Make sure you’re up to speed. Good hardware, software and training are the tools you need to make virtual relationships work.

Structure your workday so information can be easily shared, discussed and exchanged.

Don’t let the technology get in the way. If email technology isn’t working, quickly default to the phone or a letter.

Remember, people do business with people─not machines. Always keep up with your networking contacts.

You’ll need another set of skills when you use nontraditional means to communicate: writing must be concise and thoughts must be closely linked.

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