One of the best start-up tips I have ever received (and now have given to others) is to focus on a specific niche when starting a new business.  This is simply dynamite advice.  Here are five reasons why you should focus on as narrow a niche as possible when you start your business:

Market Dominance – If you want to build an insanely profitable business you need to be able to set the trends for your industry (or at a minimum set the trends for your local market).  The smaller the market niche the easier it is to communicate with them.  Frequency and depth of communication builds trust.  Trust leads to long-term relationships.  Long-term relationships lead to market dominance.

Perceived Expertise – In a narrow niche you can pitch stories to every trade magazine.  You can also cost effectively advertise extensively in places where the key people in your niche hang out.  Again, frequency builds trust.  In a narrow niche you have less ground to cover in order to appear “everywhere”.

Price – Specialists command big dollars.  Who do you think makes more money a heart surgeon or a general practitioner?  If you are an expert in one field, with a little work you can become one of the “go to” people in your field.  If you do that, the big money follows.

Focus – Starting a business can drive you crazy if you are not focused.  Too many people go broke trying to be everything to everyone in their new business.  Working in a specific niche will allow you to keep focused on the group of people who will buy your product or service.

Competitive Threats – In a niche you get to know all the players quickly.  If there is a new entry into your area of expertise, you know it as soon as it happens and you can crush them – or at least work hard to keep them from stealing your market share.

There are many more reasons focusing on a niche at start-up is a good idea.  These five should be enough of a reason to get you to think twice about creating a business for the masses.

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Start-up Journal has 9 Tips for a successful Home Business Start-up.  Here they are with my comments (in green):

1. Start with research. Explore business structures on Web sites such as SBA.gov from the Small Business Administration. Seek feedback on your business plan from seasoned volunteers at SCORE, Counselors to America’s Small Business.  This is good advice.  Decide on a  business structure and make sure it is sound.  Get some feedback on your business plan.  Here’s the tough part – take the feedback you receive with a grain of salt.  Don’t let ANYTHING deter you in the pursuit of your dream.  Do your homework but don’t get discouraged.
    
2. Do a detailed analysis of costs to figure out how much money you’ll need. Forecast three scenarios: a best-case, realistic and worst-case financial picture. This is an area where I don’t think you should spend a lot of time.  Do some rough estimates but keep in mind that everything is going to take twice as long as you think and it will probably cost three times as much.  With that said, move forward.  Beware paralysis by analysis. 
    
3. Overcome distractions and designate a space in the house for business activity.“Carve out a space where you actually go,” said Charles Matthews, executive director of the University of Cincinnati’s Center for Entrepreneurship in Ohio. The kitchen table doesn’t cut it, he said. “Select a location that’s exclusively devoted to your business. It doesn’t have to be huge but it has to be effective and efficient, especially if you have clients visit your office.”  I agree 100%.  I work from home and for a long time I tried working from the couch.  Not good.  Set yourself up in an office.  Believe me – it makes a big difference.
    
4. Be your first investor and keep funding sources close to home at first.Start with family, friends and home equity before seeking angel investors or venture capital, Monosoff said. “You have to believe in what you’re doing with conviction, and you have to invest in yourself with education and time and money before you can expect other people to support what you’re doing.”  This advice is garbage.  Only use your own money if you can’t get any money from someone else.  If you use all of your own money and the business fails you have no job and no money.  If you use someone else’s money and the business fails you need to find a job and somebody is angry with you, but at least you can eat.  Also keep in mind that many successful entrepreneurs have survived – even thrived–after financial setbacks – even bankruptcy. Its not the end of the world.  Your credit rating will improve even if it is badly damaged – I know from experience.  Seriously, if you can get someone else to put up the cash without giving up too much equity, do it.  If that doesn’t work, borrow as much as possible – unsecured.  After that, move to family and friends. As a last resort use your own money and be very, very careful  and think long and hard before you bet the house.
    
5. Consider entering contests and business-plan competitions that can help fund and guide your business.  Sure, if you’ve got nothing better to do. 
    
6. If you have trouble securing a bank loan, consider applying to the SBA or microlending organizations. Monosoff recommends sites such as MicroenterpriseWorks.org, and CountMeIn.org, which are run by nonprofit organizations that offer loans up to $25,000, plus coaching, she said. “To have that combination of the funding to give you the seed money and the mentoring is just invaluable.”  Now they’re talking.  Do this first – before you call your family and friends.
    
7. Outsource high-level business functions such as accounting if you don’t have the background or time to do a competent job. “A lot of accountants and attorneys will give you a consultation for free,” Monosoff said. “Be sure to ask that before you go.” Ask for and check references before turning over the bookkeeping, Nemeth added.  Good advice.  Get an attorney, an accountant and an insurance agent – and check references.   
    
8. Ask family for support or consider hiring someone to do the domestic work if you feel overwhelmed. Relinquishing tasks such as child care, housecleaning, cooking and grocery shopping can help you carve out time to focus on the business. If you can’t afford to pay for help, look for programs offering free activities for kids in your area. Contact your local Chamber of Commerce.  This is also an area that many people overlook.  You can’t change diapers and make sales calls at the same time.  Believe me, in the end both tasks will stink.
9. Have an exit strategy.Can you sell the business, pieces of it, or license the product if you no longer want or can afford to continue? It is good to think about this in the beginning because it will help you focus on building equity in the business.  I see too many entrepreneurs who start a business and just end up buying themselves a job.  They work hard and they don’t build a valuable asset.  If you think about your exit strategy from the beginning you will always be focused on building a saleable asset.

So here’s my take on this list.  Numbers 1, 3, 8 and 9 are good tips that you may not have thought about. I disagree with Number 4.  Number 5 is just foolish unless you’re a college student.  Numbers 2,6 and 7should be common sense.

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A recently released study of top woman-led businesses shows female leaders are coming into their own in Florida.

The survey, which was conducted by Florida International University’s Center for leadership revealed that more than half of women-owned firms in the state are substantial in size – boasting revenue of $10 million or more.

The study also revealed that most women say they start companies to gain more control over their lives. 

‘’You don’t need to punch the clock; you don’t have to answer to anyone else; you definitely have more control over your life,'’ says Norka Munilla, president of Thunder Electrical Contractors, quoted in the Miami Herald.

I suspect that if you asked men why they went into business a good portion of them would say the same thing.  For many people, starting a business is a way to gain more control of their lives.

It is encouraging to see women in Florida taking a role in helping to shape the economy.

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During the past few years I have interviewed hundreds of entrepreneurs.  Each of them has had interesting advice to offer to people who are just starting out.  There are three things that just about every entrepreneur has said, in one way or another.  I have included these three items for your review. 

Click Here to Read the Entire Post

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CNNMoney.com has a good list of Six Ways to Keep Your Business Alive.  They are:

Go mental. One of the most important elements to starting a successful business is being mentally prepared. Of course, skills, actions and good old-fashioned luck are also important factors, but it all begins with the right frame of mind.

Virtual reality. Although there will be many ups and downs, a light does exist at the end of the tunnel, and it is bright. By visualizing success, your actions will become more confident. And increased confidence breeds success.

It’s all about sacrifice. A big component of the “failure is not an option” mindset is knowing that certain personal or financial sacrifices will need to be made along the way in order to achieve your dream.

Risk is not a four-letter word. Keep in mind that success comes to those who recognize risk, are unafraid of it, and will execute on their ideas. If you are risk-averse, your chances of business survival will probably be slim.

A hungry dog hunts better. When clients or customers are few and far between and money is tight or nonexistent, successful past and future entrepreneurs will always find a way to drum up another sale.

A roadmap will lead you to success. A business plan, which is a written description of what you are going to do and how you are going to do it, is the entrepreneur’s roadmap. It forces you to think about the entire operation and come to terms with the businesses strengths and weaknesses. Entrepreneurs who do their homework increase their chances for business success.

These are all good tips.  Every one of them can help keep you going when times get lean.  The best time to add make use of these tips is right from the start.  As you get your business going you need to get into the right frame of mind.

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Before You Quit Your Day Job…

…Get a client.

It’s that simple.

Many entrepreneurs decide to go into business without any idea of who their clients will be and where they will come from.  This is a strategic error of epic proportion. 

There are a number of ways to test your business plan.  Focus groups, surveys, in-depth individual interviews can give you some thoughts on the preferences of your potential clients.  Desk research (reading reports, books and articles prepared by others) is always a good idea. 

There is only one way to make certain that your business model is viable and that people want to buy what you have to offer.  Go out and get yourself a client.  Do it now.  Do it before you make your entrepreneurial venture your sole source of income.

This process may be shocking (like jumping into the deep end of the pool to learn how to swim) but it will pay off.  Here are some of the benefits of soliciting a client (or clients) before running head first into your new business venture:

Click Here to Read the Entire Post

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Have you ever thought of starting a business with your spouse? 

Janine Popick at Inc.com offers this advice:

1. What type of personality do you each have? If both of you are “alpha” people, or strongly opinionated, be careful. If you are constantly in disagreement, it could leak over to your home life.

2. Do you bring complementary skills to the business? This is important because if you overlap too much, you potentially could find yourselves going up against each other too often (see the last bullet). However, if you each have your own “domain” to manage, chances are you’ll have some new things to talk about at the end if the day.

3. What happens now when you have disagreements? Be careful if you are the type of person to go to bed angry. If disagreements go unresolved, not only will it make your home life uncomfortable, the tension could make your hours — and your employees’ hours — at work unbearable.

4. Is it ok for one of you to be the leader as opposed to the other? If you can’t support a chief or your spouse can’t support you as the chief, beware. Having a leader in the company is important, especially if you have employees.

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The Marco Island Sun Times offers some excellent tips for researching a business before investing in it. Here are the keep points from the article:

According to lifestyle entrepreneur Heather Moore, like many who make any resolutions, people who are eager to start a home business are often filled with hope.

“Unfortunately, that can make them easy prey for con artists. The lure of easy money can serve as a difficult lesson for those who fall for it,” she said.

Moore teaches other women to have success in their businesses on their own terms. She worked in the cubicle world of corporate America for more than 10 years. Although she enjoyed her work very much, she was looking for something new, exciting and challenging and created www.women-in-biz.com.

Many scams are cleverly packaged, making it hard to determine the legitimate work opportunities from the fraudulent ones. Common cons include Nigerian letter schemes asking for money, pyramid schemes, and “work at home” offers that involve stuffing envelopes or assembling crafts.

Moore offers some tips to find a legitimate business:

• Go with recommendations from a trusted source. Moore’s Web site - www.women-in-biz.com - offers some proven business opportunities that have been carefully screened.
• Check the Better Business Bureau.
• Be wary of large start-up costs. If someone is trying to convince you to go into business with them or to start your own home business and they want you to hand over a small fortune, walk away.
• Don’t be afraid to ask questions. Never start any business without asking tons of questions first. If the business itself or salesperson cannot adequately and satisfactorily answer your questions, move on.
• Trust national brands. If you want to start a business with a company that has a trusted national brand, thousands of representatives and years of service under their belt, you’re less likely to run into a scam.

Thanks to Dane for pointing this article that originally appeared in the Marco Island Sun Times

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Yes, it’s possible.

Matt Byrd won $1500 in Las Vegas and he used it to invest in his future.

Sure this student at The University of Miami could have invested his winnings in a new computer or in beer at the local pub.  Instead he did his homework.  He uncovered a market for high-end foam memory mattresses sold direct to college students via the web.

The public demand combined with Byrd’s idea to offer the products at discounted prices (through on-line marketing with virtually zero overhead) lead to the beginnings of a profitable business. 

Byrd’s initial investment of $1500 has blossomed into a $3500/week business.  That’s not too bad for a full time student and part time entrepreneur.

Click here to read the full story in the Miami Herald.

The keys to Matt Byrd’s business successful start-up were:

• Finding a niche and focusing on it.
• Sticking to the business plan he developed based on research.
• No giving up when sales were sluggish at first.

It’s amazing how many people do not follow these three simple steps as they start their business.  A little planning goes a long way when money is tight at start-up.

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Seth has some great wisdom about when to start.  He says:

• The best time to start is when you’ve got enough money in the bank to support all contingencies.
• The best time to start is when the competition is far behind in technology, sophistication and market acceptance.
• The best time to start is when the competition isn’t too far behind, because then you’ll spend too long educating the market.
• The best time to start is when everything at home is stable and you can really focus.
• The best time to start is when you’re out of debt.
• The best time to start is when no one is already working on your idea.
• The best time to start is when your patent comes through.
• The best time to start is after you’ve got all your VC funding.
• The best time to start is when the political environment is more friendly than it is now.
• The best time to start is after you’ve got your degree.
• The best time to start is after you’ve worked all the kinks out of your plan.
• The best time to start is when you’re sure it’s going to work.
• The best time to start is after you’ve hired the key marketing person for the new division.
• The best time to start was last year. The best opportunities are already gone.
• The best time to start is before some pundit declares your segment passe. Too late.
• The best time to start is when the new generation of processors is shipping.
• The best time to start is when the geopolitical environment settles down.

Actually, as you’ve probably guessed, the best time to start was last year. The second best time to start is right now.

Simple and direct.  Seth knows his stuff.

Now get going.

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A couple of my clients have told me lately that they have arranged to trade services with other up-and-coming entrepreneurs. One is getting a few hours of computer installation support in exchange for PR, and the other is trading landscaping for graphic design work. This is an excellent way to obtain quality services in an affordable and productive way. Not only do you benefit from the products of the exchange, but you can also look forward the possibility of new clients if your counterpart is pleased with what she gets. Maybe the PR friend will put a link to your IT company on his site. Perhaps the graphic designer has clients in the market for a landscape architect she can refer to you.

This sort of connection also affords the opportunity for networking with other professionals with whom you can trade services or ideas. You can call on these entrepreneur peers for advice and assistance in overcoming common start-up problems. Contacts like these are invaluable to a new business owner. Embrace, cultivate, and nurture these relationships. They will pay off tenfold.

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Small business owners are forced to wear many hats.  There are times when six things demand your attention, you are feeling the pressure to crush your competitor and you are working your fortieth consecutive day.  This is when you need to take a “time out”. According to Luda Kopeikina at Projects at Work, three things can kill your business. 

Multitasking – In most business positions, multitasking is considered an essential skill. The problem with multitasking is that you never completely focus on anything. If you’ve ever tried to conduct a phone call and read an email at the same time, you know you will either miss comprehending parts of the conversation or parts of the email. You can’t fully concentrate on two things at once. Something always suffers.

Being competitive with others -Compete only with yourself. Push yourself to excel at your job, learn new skills, and develop new talents. The sky is the limit with what you can achieve. However, don’t compete against others. You have no control over how smart or ambitious or connected someone else is, so don’t waste your energy focusing on it. If you do, you will add unnecessary stress to your life and function at less than optimal capacity.

Working constantly– Through technology, we are better connected to our jobs now than ever before. This is both a blessing and a curse. Our work is with us all the time. Cell phones, pagers and laptops make it all too easy to work when we shouldn’t be. You need to save some mental, physical, and emotional resources to regenerate, think, and strategize for the future. A workaholic tendency prevents us from taking time to contemplate, focus our minds on critical issues, and use our full brain capacity to develop creative solutions. Our mind never gets a rest.

The paradox here is that these three qualities are often responsible for much of our success.  The key is balance.  When you find yourself going to extremes step back and take a brief break.  Remember why you started your business in the first place.  Focus on how it all began and remember that it was about your work life and being able to do things your way.  If you’ve become a slave to these three traits, then you have substituted one taskmaster (your former boss / job) for another. 

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Steven D. Strauss, small business expert, gives sound advice on starting your own business:

“I always say there’s two parts to any business: there’s the part you love and you’re passionate about…that you’re probably really good at. Then there’s everything else: the law, the taxes, the payroll, and the insurance. All that other stuff you have to know and have to do if you’re going to get to do the passionate part. But most small businesses are long on passion and short on the other stuff. So I recommend finding as much help as you can with the other stuff.”

If you are daunted by the prospect of striking out on your own because you don’t know the first thing about accounting, IT, and business law, do not let those concerns stop you. You do not have to be a whiz at everything to run a business successfully. You can and should hire people to help you with those aspects of your business. Your expenses for these services are fully tax deductible, and the work of a specialist will go much further than that of an overworked business owner trying to do everything herself.

A wise business owner once told me that he never hires anyone who isn’t smarter then he is. He wants employees who know their areas of expertise inside out and can teach him a thing or two about them. Behind every superachiever stands an army of support. People who appear to do it all usually, in actuality, do not. They have advisors, assistants, bookkeepers, and technicians supporting them every step of the way. Surrounding yourself with support provides not only logistical help—it provides encouragement, ideas, and connections to many other resources that you will no doubt need on your productive path to great success.

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Inc.com is having a “Best Lemonade Stand in America” contest for very young entrepreneurs. Here’s a cute slideshow offering simple advice on creating the best lemonade stand that we all can use.

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Business 2.0 says there has never been a better time to start a business.  Here’s the quote:

“In Delaware, the country’s incorporation capital, new business formation was up 19 percent last year, the highest one-year growth rate on record.

In other words, there’s never been a better time to start your own company. New technologies are creating new business opportunities on the Internet, on mobile phones, in consumer products, and in information services. At the same time, many of these technologies have radically reduced the costs associated with launching a new venture.”

Thanks to the Business Opportunities Weblog for Pointing us to this article.

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Even accountants need to sell.  Remember this if your thinking of starting your own firm. 

Here’s the quote from Startup Journal:

“The U.S. government’s Bureau of Labor Statistics expects employment of accountants to grow “faster than average” — or 18% to 26% — between 2004 and 2014. “In addition to openings resulting from growth, the need to replace accountants and auditors who retire, or transfer to other occupations, will produce numerous openings in this large occupation,” the bureau says in its most recent occupational outlook. And accountants with the CPA designation “should have excellent job prospects,” it adds.

But before you jump ship from a steady gig at an accounting firm, know what you’re jumping into.

“You really have to be motivated and like selling yourself” to start an independent tax practice, says Frank Salman, an accounting-practice consultant in Victorville, Calif. “Not everyone has that.” Often it’s best to first test the waters of self-employment by taking on some clients as side income to your current job — if your employer allows it.”

Good advice. 

Don’t leave without a few clients and expect to sell – all the time.

Thanks to the Business Opportunities Weblog for pointing us to this article.

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