Archive for February, 2008

Negotiation at Your Finger Tips

Published on February 26, 2008 in General, Money business and Tutorials. 0 Comments

“When a person with money meets a person with experience, the person with the experience winds up with the money and the person with the money ends up with the experience.” – Harvey Mackay

That illustrates the power of skillful negotiation.

Negotiation is defined as the process of conferring with another so as to arrive at the settlement of some matter. Negotiation is an art. It is a learnable art. Learning and taking action are poles apart. Practice makes it perfect.

The followings are crucial factors to keep in mind:

i. Prepare: Prior planning prevents poor performance. With proper planning and preparation, you can negotiate with confidence and power. Most successful negotiator spent 60-70% of their time preparing for the negotiation process. This is when you set your objectives: identify values, issues, and priorities. Determine what you are willing to give and what concession you need in return. Do your due diligence and gather as much information as you can. Create a strategic plan with supporting information and tactics.

ii. Probe: Once you have set your objectives and prioritized your needs, you are now ready to communicate with the other party face to face. Besides communicating your position, you need to be attentive and listen carefully to your opponent’s needs, and explore their positions. Use assertive language to imply authority and strength. Speak clearly and directly, to strengthen the position you represent. Assertive language is persuasive and it puts people forward.

iii. Propose: As both parties have shared their wants and need, you can begin to propose ideas to solve the differences. Keep all proposals conditional, flexible and brief. Rephrase rejected proposals in positive words. Do not reveal too much of your priorities as the opponents may use them against you.

iv. Trading Concession: Now that you have explored what is the premise of possible agreement, you are ready to move on to the trading concession. Keep in mind your bottom line objective, do not forget the priorities you have set earlier. If you are unsure or do not have enough information about your opponent proposals, ask, justify and lay them all out on the table. You cannot be assumptive while trading concession. Weigh the pros and cons of each concessions. Calculate the relative risk and return.

v. Close the deal: Stay calm and vigilant as the negotiation may have become tense at this point. Watch for any closing clues, words of indication, body language, such as uncrossing arms, open palms, leaning forward, etc.

Last but not least, once the deal is closed, you need to confirm exactly what has been agreed on and summarize all the details on paper.

Small Business Start-up - 10 Crucial Factors to Consider

Published on February 21, 2008 in Money business. 0 Comments

Recent study from the United States Bureau of Labor Statistics suggests that small businesses have the highest failure rate in the first two years. Most of these businesses have a 50/50 chances of surviving the first 5 years. This does not reflect the diminishing possibility of living the American Dream, but it is the results of ignoring the top 10 crucial factors in starting any business.

1. What is your WHY?
Most businesses were started for the wrong reasons. Many people decided to start their own business just because they did not like their current job. So instead of creating an enterprise, they ended up creating another job for themselves. Instead of working for other people, they have work for themselves.

2. Long term vision
Building a successful business is hard but not impossible. Most of the times, when we have to make certain changes in our lives, we are immediately faced with temporary setback. Some people can be bugged down easily by these challenges. A long term vision is required to keep you motivated over temporary defeat. Understand that everything happen for a reason. Embrace every experience and you will discover miracles.

3. Focus on adding value
We get paid in direct proportion to the value we created to the marketplace. People pay for product and services that can help them save time, energy, make more money and be more productive. How can you contribute to these wants? Ask yourself how you can create more value to your customers.

4. Working in versus working on the business
A business is not another job. A business is an enterprise that generates profits with or without you. You need to make a clear distinction between self-employed and business owner. A real business owner has a system that works for him, rather than him working in the system.

5. Lack of Capital
Money capital is the life blood of any business. Having sufficient liquid asset allows your organization to invest in resources that can help you to create more value to the marketplace.

6. Poor sales
Many business do not have cash for only two reason,poor sales and poor sales. You need to draw out a plan how to generate sales and revenue. You need your cash to operate for your business. Read books on sales, take home study courses. A great sales person can sell the most mediocre product in the world.

7. Poor Marketing
Most businesses have poor sales because they have poor marketing. The function of marketing is to make selling unnecessary. It is fundamental to the growth of your business. Study your market, the demographics and how they make their purchasing decision. You can have the greatest product on the planet, but with mediocre marketing skills, there will be no sales.

8. Poor Management
Management is a process which includes planning, organizing and leading. Set realistic goal. Take manageable risks. Control your expansion and monitor the revenue streams. Make appropriate changes when necessary such as decreasing expenses, increasing income, or seeking advice from professionals.

9. Poor timing
Timing is everything: Provide the right solution at the right time and to the right market and you will win big time. But you must do your homework. According to Brian Tracy, an hour of research can reduce your production cost of $10. Read everything you can about your industry, subscribe to periodicals, magazines, newsletters and etc. Make decisions very carefully. Gather all necessary information you need. Making decision without having enough information is no different that being ignorant.

10. Inconsistency
Perhaps consistency and persistency should be considered the most crucial skills for a new business manager. You must decide in advance the commitment you are willing to make for your business. Decide the amount of time and money capital you are willing to allocate to your business. You are now a leader of your organization. The destiny of your business lies in your hand.

“A journey of thousand miles starts with the first step.” – Chinese Proverb. Do it!

Top 10 Methods to Raise a Capital for Your Small Business

Published on February 19, 2008 in Money business. 0 Comments

Cash flow is the life blood for any business, whether it is profit or non-profit organizations, big or small business. It allows the organization to invest in resources to further grow the organization.

However, the lack of green is the most common reason why most small businesses fail. It is rare to hear any business that failed because the owner was too busy to take care of the business.

Raising money capital for you business may be hard, but it is not impossible. Before we dwell into ways to raise capital, it is vital for you, as the business owner, to determine a financing strategy.

Critical factors to consider are: What values must be created to generate the positive cash flow? How the value will be created? What is required to start, acquire or expand the business? Break down the potential risk and return.

The following are the top 10 ways to raising capital for a small business.

i. Part-time income: When no substantial amount of capital is required in the initial start up, you can create a part time income stream to fund your business venture. While doing that, you utilize the spare time to study the nuts and bolts of the industry you intend to get involved in.

ii. Love money: This is the money that come from people with whom you have establish your credibility, people who have known you for long time, or people closest to you such as relatives and family. It is advisable to have every detail of the loan in written agreement regardless of your relationship with them.

iii. Personal loan: If you have good credit standing or valuable property, you can get a personal loan from financial institution. Most financial institution will require you to have a business plan with projected revenue and financing strategy.

iv. Angel investors: These are individuals with money but no time or experience to run a business. They are usually self-employed professionals such as physicians, lawyers and etc. If you can show them how to get a reasonable return on their money in a reasonable amount of time, they will usually say yes. However, angel investors are usually very unhappy when the return is not as much as they expected.

v. Joint Venture Partner: You can utilize other people’s resources, or even credibility to get angel investors. Otherwise you can get them to contribute to your efforts in creating value to the market you serve.

vi. Personal Savings: This is self-explanatory.

vii. Line of Credit: This is also referred to as the maximum loan a bank will allow the borrower for one-year period. Most commonly used to seasonal financing such as inventory built-up and receivable financing. It could be unsecured but sometimes bank may require a pledge of inventory, receivables, equipment, or other acceptable assets.

viii. Private placement: This is a source of equity capital for private company that has decided not to go public. It is commonly used by company to raise a specific amount of capital in a short period of time. The company will offers stock to a few private investors, rather than announcing public offering.

ix. Capital reinvestment: Start small. Monitor the cash inflow and outflow of your organization very carefully. Instead of writing a paycheck to yourself to satisfy your instant gratification, reinvest the earned income into the business operation to generate more cash flow.

x. Public Offering: Commonly referred to as IPO, or Initial Public Offering. Company raises capital through federally registered and underwritten sales of the company’s shares. It is advisable for you to consult with lawyers and accountants with the recent regulations and statues that governs IPO.

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