Challenges of Starting a New Business by Chris Joseph, Demand Media

Starting a new business can lead to personal and financial rewards in the future, but you will likely face a number of challenges when starting out. The demands on your time may be greater than you anticipated, and enough money to keep things going can also be a problem. With some careful planning, you can anticipate some of these challenges and be able to overcome them.

Obtaining Financing

Due to difficult economic conditions as of 2010, it can be challenging for entrepreneurs to find a financial institution that will lend them the money to get started. This means you may have to explore alternative financing sources, such as borrowing from friends and relatives or using personal savings. A drawback to using your savings is that you may not have enough money to get you through the difficult early months or years.

Sticking It Out

Operating a business can be like a roller coaster ride, filled with ups and downs. In addition to the financial resources to get you through the lean times, you may also need plenty of emotional fortitude to persevere when things look bleak.

Managing Time

New business owners may feel they need to do everything themselves or spend too much time on things that don't help the business grow. When planning a new business, you should decide which tasks you should concentrate on personally and which ones you need to outsource or hire employees to perform. This will give you the time he needs to focus on vital business functions.

Obtaining Knowledge Quickly

Unless you already possess high expertise or are purchasing a franchise where you receive strong support from the franchisor, you'll likely need to learn much in a short period of time. Even if you have strong product knowledge, you may be weak in areas, such as marketing or managing employees.

Lack of Balance

During the start-up phase of your business, you may be so focused on making it a success that other areas of your life could suffer. Factors that include stress, overeating and a lack of exercise can cause your health to deteriorate, and you may neglect personal relationships. You will need to set aside time to make sure you have some form of balance in your life.

Chris Joseph writes for newspapers and online publications, covering business, technology, health, fitness and sports. He holds a Bachelor of Science in marketing from York College of Pennsylvania.

source: http://smallbusiness.chron.com/challenges-starting-new-business-4197.html

4 Common Challenges Entrepreneurs Face and How to Prepare For Them by Michael Zipursky

The road to entrepreneurial success can be a long and daunting one. In this article I’m going to share with you four challenges you’re likely to face so that you can be prepared for them, and can even embrace them, if they show their heads during your journey.

Challenge: Down in the Doldrums

According to several studies, entrepreneurs are more prone to depression and anxiety than the average company employee.

Rob Emrich in response to a Brad Feld blog post wrote: “I think there is correlation between the type of people who become entrepreneurs and those prone to depression. I also think most entrepreneurs know that the daily ups and downs and constant uncertainty can easily cause and reinforce a tendency toward depression.”

When you ask most seasoned entrepreneurs how to deal with this the response is almost always the same, “make sure you surround yourself with supportive people that will be there for you and can help you get to where you want to go.”

Challenge: Overestimating

Another challenge entrepreneurs face is overestimating their initial success. You might read an article about another entrepreneur and believe that just because they sold their company in 1 year and made millions that you can do the same. When I first startedFreshGigs.ca I overestimated what our sales would be in the initial months. Only after I spoke with a mentor at that had worked in the same industry did I get a realistic view of how to think about our sales growth.

Challenge: Focus

One of the biggest mistakes entrepreneurs make in their early days is trying to be all things to all people. They attempt to sell their product or service to too wide of a market. When you’re building your business, especially early on, it’s important that your marketing is grounded in a strong foundation with a clear focus on who your ideal clients are; and that you establish and work towards dominating that marketplace before moving on to others.

Entrepreneurs also face another challenge in this area. They focus on the wrong things. They spend too much time building their product without validating that the marketplace wants, needs and will actually pay for it.

Challenge: Passion and Purpose

Many entrepreneurs choose an oxymoronic approach to business. They decide to start their own company because they want unlimited income potential, to be their own boss and holder of their own destiny. Yet as they work on building their business they realize they lack passion for what they’re doing. If you’re going to be spending 10+ hours a day building your business, writing articles, doing research, and attending trade shows in the industry you’ve chosen, you’d be well served to ensure it’s one that you’re passionate about.

If you don’t enjoy the work you’re doing you’ll find it hard to get up off the ground the first time you get knocked down. And all entrepreneurs get knocked down at one time or another. The more passion and purpose you have for your business, the more motivated and energized you’ll be to work on it.

I can’t think of one entrepreneur that has been immune to these challenges. Know that you know to expect them you’ll be ready to deal with them and well positioned to stay on track and keep growing your business.

Michael Zipursky is a direct marketing consultant, author and founder of Business Consulting Buzz and FreshGigs.ca. His work has been featured in FOX Business, Marketing Magazine, KISSmetrics, Unbounce, Financial Times and HR Executive.

source: http://www.killerstartups.com/people/challenges-entrepreneurs-face/

5 Most Common Challenges Entrepreneurs Face and How to Overcome Them by Lynne

When you quit your day job to become an entrepreneur, you've also quit the rat race. Yes!  Ahhhhh but life is a continuous race, ain't it? Just when you think that everything is going to be alright when you have your own business, all of a sudden you find yourself in a different kind of race, a different set of challenges, a different level of tackling and handling them.

Whether you're a successful and well-established entrepreneur, one way or another, you might have encountered a few of the challenges I mentioned below:

1. Negative Mindset

The battle always starts in the mind! Our own fears, excuses, and just basically any thing that paralyzes us from moving forward to our destiny is cultivated in our mind. Feelings of inadequacy such as "I don't know if I can do this" or  "I am not qualified enough to start this happen" – these are often thoughts that entrepreneurs deal with. This can often come from our own low self-esteem, lack of support, or our upbringing.

How to Overcome:

a. Do not entertain the thoughts. Remember that whatever you focus on gets magnified. If you pay no attention to it, it will not linger. But for as long as you are nursing it, it will grow in your head and eventually overtake you!

b. Surround yourself with positive people. Birds of same feathers flock together is a popular saying but it is true. If you hang with negative people who criticize other people and put them down and do pity party, then before long, you will find yourself like one. See why it's important to surround yourself with positive people.

c. Empower yourself by reading inspirational articles, success stories, great books, movies and anything that will encourage you and motivate you. Attend seminars and workshops if you can!

2. Overwhelming Feelings

There is always a huge learning curve when you first start a business. Although you may have lots of experience in the corporate world in your field, it's totally different when you're the captain of your own ship. Now, you have to be the boss, the marketer, the secretary, the customer service person, the shipper, and the list goes on! But these overwhelming feelings surely do not only come to starting entrepreneurs. Some experienced and successful entrepreneurs tend to feel overwhelmed at times too so don't be discouraged.

How to Overcome:

a. Take short breaks in between your tasks. I find that taking 2 or 3 minute break away from my computer helps.

b. Pace yourself. Create a to-do list and make sure that you only put whatever you can handle within a realistic time frame on any given day.

c. Outsource some of your tasks. If you're growing too quick, hire a virtual assistant or a local person who doesn't mind coming over to your home office to help you out with some tasks. 

d. Make sure to set aside two days off. A business is a business, however, this time it is yours and you have the flexibility to create your own hours and set your days off without any problem. It is ideal to have a couple of days off or more if you can afford it to avoid possible quick burn out.

e. If you're suffering from information overload, here are some tips. Good read!

3. Lack of Support

Some entrepreneurs have been blessed to have supportive husbands, family, children, and friends. Some of this support group have the ability to help make the entrepreneur's business grow but some could only offer moral support…which, hey, it's more than you could ask for! While some of us are blessed like that, others lack both moral and business support.

How to Overcome:

a. Network with your local business organizations and find people that have the same vision and goal as you do.

b. Find a virtual group of people in Social Media that support and promote each other. (Shameless Plugging: Yes, this is what The Entrepreneur Chic Social Club is all about! Details coming soon! *Wink wink*)

c. Invest in a mentor or a business coach.

 

4. Growing a Business

The challenge in growing a business mostly lies in the lack of financial resources. Let's face it, money begets money. If you have the money, it's easier to put your product out there in hundreds of thousands of people just like the bigger brands, the Fortune 500 companies. You see them on TV, radio, billboards, social media, and sometimes maybe in your inbox!

Unfortunately, for most small business and starting entrepreneurs, this is not the case. You have to work hard to make money so you can use that to make more money! How ironic, isn't it? But that's where the challenge is! I really do believe that this area of having your own business teaches you a lot about persistence and creates such an experience for you that molds you as a business person.

How to Overcome:

a. Be patient. Growing a business takes time. The level of effort that you put in is directly equivalent to the level of result you're going to get but do not expect an overnight result. It's like planting a seed, it takes time to become a tree.

b. Learn as much as you could about marketing (including social marketing) for as long as your brain can handle without overloading it!

c. Research on ways you can acquire funding. Be creative! (perhaps you can do your own fundraising technique)

See if you might be qualified for a small business loan.

 

5. Feelings of Wanting to Give Up

Because a business takes time to grow and it usually takes a lot of effort to make it work, feelings of wanting to give up do come sometimes, especially when you're not seeing the results that you want when you want it. Perhaps your funds are already starting to get depleted or you're getting physically and mentally drained.

How to Overcome:

a. Do not entertain the thought.

b. If you're not seeing any results, evaluate your product, service, target market, and your marketing strategies. Perhaps your product isn't the right one for the group of people that you're presenting it to. Maybe it needs to have a lot of improvement in its presentation/packaging or price.

c. Take some time off. Sometimes stepping away gives you a better perspective of where things are at and ideas flow better when your mind is rested.

Remember that the most successful entrepreneurs aren't necessarily the most qualified ones! The difference of those who made it in the business and made it great is their persistence! Good things come to those who persevere!

source: http://www.entrepreneurchic.com/5-most-common-challenges-entrepreneurs-face-and-how-to-overcome-them/

12 Essential Questions You Need To Ask Before Launching A Big New Idea by JIM PRICE, UNIVERSITY OF MICHIGAN

Whether you’re launching a new product or service from within an existing enterprise, or you’re an entrepreneur noodling a new startup idea, I find that the same fundamental set of screening questions can help you shape your idea. 

I’ve assembled these questions into a 12-point framework I call the Launch Lens. 

As you screen new-business ideas, the Launch Lens gives you a quick way to focus your thinking and flesh out the concept.  First-pass, do your answers to the questions make you feel more excited about your business idea?  Or does the Lens uncover red flags that might give you pause about moving forward?  And if your idea passes a first-order screen and you decide to dive deeper, the framework gives you guidance as to where to focus your research and analysis as you develop your plan. 

Let’s zoom in on each ‘focal point’ of the Launch Lens:

1.       Who are your customers? 

What I mean here is to generically describe the types of customers (not to list your specific customers).

That is, what are the categories of consumers, businesses or other entities that will purchase and use your product or service? 

If you have a consumer product, is your target market Hispanic pre-teen girls in Southern California… or Baby Boomer men and women throughout North America… or music lovers over 30 with disposable income of $35,000 or higher… or whom?  Be as clear as possible. 

If you have a business-to-business product, is your target market warehouse operators of a certain size… small independent retail establishments…. software developers…. financial institutions… or whom? 

2.       What is your customers’ unmet need? 

To state this question another way, what is the customers’ “pain” that your product or service – you’ll be describing that in question #5 – is designed to ameliorate or address?  This could be a true and dramatic unmet need – for instance, for the inventors of the pacemaker, the customers’ unmet need was that their hearts were beating slowly or unpredictably, thereby endangering their lives.  On the other hand, for some businesses, the unmet need might be a less of a need than a want – for instance, for the founders of LoveThoseHotShoes.com, the “unmet need” might be the frustration of style-conscious women in their inability to learn about up-and-coming designers before they make it big, and to easily purchase those designers’ shoes at competitive prices.

3.       How are your customers addressing this need today, however poorly?

Even if your company has a novel new way of addressing a customer need, remember that those customers were addressing that need in some other fashion before you came along.  Say you had developed the first automatic dishwasher: your customers would have been addressing their need by hand-washing dishes.  Before the advent of the cell phone, individuals got along with a combination of landlines at home, in their offices, and in phone booths.  Before SMS texting, people got by with email.  Before email, people made due with phone calls and postal mail.

4.       To what extent are your customers hurt by not being able to meet this need effectively? 

If they’re business customers, does their inability to address their need optimally (i.e., using your company’s new solution) cause poorer product quality for them?  Does the pain delay their product launch by several weeks, thereby postponing profits?  Does the absence of your solution lead to more clinical errors?

If you’re targeting consumers, does the pain cause them to look unstylish at school, thereby causing loss of social status?  Fail to connect with friends due to the lack of your social networking app?

5.       What is your proposed solution (product, service, or combination)? 

Concisely describe your customer solution.  What product, service, or product/service combination will you be offering?  At first, you ought to be able to state this in a sentence or two.  But as you evolve your concept, you’ll want to make your solution ‘come to life’ in diagrams, mockups, and prototypes.

6.       How will your customers benefit, and can you quantify those benefits? 

What is your “compelling value proposition” (CVP)?  Can you quantify that CVP?  That is, how will your customer benefit by switching from the way “the way they’re dealing with it now” to addressing their need using your solution? 

If customers adopt your solution, explain exactly how they will be able to address their unmet need significantly better, faster, cheaper or cooler than they were formerly able to do so.  Be as specific as possible. 

7.       How will your business make money? 

In business parlance, what is your business model?

Note that a company may have multiple, different business models that complement one another.  For instance, a golf-oriented website may make money through a combination of:  (i) referral fees for providing teaching referrals to golf pros; (ii) transaction fees for online or mobile scheduling at golf courses and driving ranges; (iii) Google AdWords advertising; (iv) display advertising; (v) affiliate marketing, selling books, DVDs, golf apparel and so on on their site through Amazon and other retailers and receiving affiliate sales commissions.  And bear in mind that for such a company with multiple, complementary business models, there’s no requirement that all the revenue-generation methods be implemented at once.  In other words, you may consider “turning them on” one at a time as they make sense and as you have the time and resources.

8.       How big is your total addressable market? 

Theoretically, if every one of your potential customers were to purchase your product or service, at the asking price, from either you or your competitors, how much annual revenue would result?

While the total addressable market (TAM) is a purely theoretical number, it’s nonetheless important because it may quickly tell you whether your business idea is worth pursuing.  (If, for instance, you’re thinking of launching a local equipment rental business and you discover with quick analysis that only 900 households in the area have the disposable income to use your service, that’s quite different from finding a local potential market of 35,000 households.) 

Your addressable market’s size can be determined by asking yourself the following: If everyone in your specified geographic market – whether that be, the English-speaking world, a specific 2-county area, or all of Western Europe – who could potentially benefit from your product or service – or that of your direct competitors – were to do so, how many people or “unit sales” would that be per year?   If this is a product or service for which you are directly charging, multiply the unit sales by the asking price to see how much annual revenue that equates to.  In other words, it’s the answer to the question, How big would this market be if it were completely saturated? 

And note that if yours is an online play or mobile play, it may be more useful to estimate your market size in terms of number of potential units – online users, or mobile downloads – rather than dollars and cents.

9.       Who are your competitors, and how do you compare to them? 

Describe your competitive positioning and your competitive differentiation.  And remember (as we started addressing with question #3), even if you’re introducing a solution that you consider an industry-first, you will be asking your customers to change the way they’re currently doing things.  So, even if you think you have a novel, new solution to address your customers’ needs, your biggest competition as an entrepreneur may be “the way your customers are dealing with it now.” 

10.   How well does the business fit with your core competencies? 

Will this business leverage the skills and business competencies of the founding team?

This question applies equally well to entrepreneurial startups as it does to corporate new-business launches.  Entrepreneurs need to ask themselves, Is this something I’ll enjoy and be good at? For instance, if the business will entail extensive face-to-face interaction with consumers, is that something that you’re good at and that you’ll truly enjoy?  Or if the business will entail organizing and managing myriad details every day, is that something that someone on the founding team is truly gifted at doing and will enjoy?

For new corporate initiatives, this question applies in a different but equally important way.  Does the new-business concept take advantage of the organization’s established capabilities?  For instance, if an industrial corporation that sells its good primarily through distributors is contemplating launching a new series  of branded consumer products, one would have to ask if that the founding organization and its executives have the core competencies to do an excellent job of launching such a business.  Shouldn’t they seek new-business opportunities that have a better strategic fit with their competency profile?

11.   How can you involve customers in creating a superior solution? 

What is your customer involvement strategy?  Note that I’m posing this as a rhetorical question:  well-run startups all incorporate input from customers, and the very best really bring lead customers into the creative process of specifying, critiquing, modifying and improving the company’s product offerings.  What are your plans for involving customers?

12.   Can the business generate sustainably high profits? 

To dispense with the business-speak, let’s look at it this way:  With each customer sale, after covering all your costs, is there plenty of money left in the coffers?  And if so, do you believe you can maintain these high profit margins?  If not – if this looks like it may be a low-profit-margin business – why launch the company?  It’ll be far too much work for too little pay.  And if it looks good on a per-unit basis, how many units do you need to sell to cover your overhead?  Then, do you have a feel for how much money and lead-time you’ll need to bring your product to market? 

This is a somewhat straightforward discussion for a business that’s charging directly for its products or services.  But what if yours is a network-effect business (such as many online, social and mobile apps) that needs to build up a critical mass of users, members, downloads or traffic before it can begin to generate revenue – whether through transactions, ads or whatever other way you intend to monetize your service?   In that case, do you have a feel for what it will take to get you to the point of having built a thriving market that enables your business to start generating revenue?  How long will that take you and how much money will you spend to get there?      

These are obviously not just yes-or-no questions – answering these profitability questions properly requires that you “do the math.”  And generating high profits sustainably requires that you be able to build a sustainable competitive advantage.  What will be your business’s source of that long-term advantage?  What will be your durable competitive barriers-to-entry?     

Applying the Launch Lens Successfully

• The 5-minute test – When you first come up with an idea, apply the Launch Lens in a 5-minute screen:  try taking just 5 to 15 minutes to gin up ‘off-the-top-of-your-head,’ 1-sentence or bullet-point answers to each ‘focal point’ in the Launch Lens.  Then step back and ask yourself, Does this make any sense?  Are there any red flags or show-stoppers that would make me reject this idea out-of-hand?

• The 5-hour test – If your idea is still looking good, it may be worth “drilling down” on more detailed research on some of focal points – the 5-hour screen, if you will (which, if you like what you’re seeing, may become a 5-day screen). 

• The 5-day test – If it passes the 5-hour test, a still-deeper dive should involve getting out and talking to prospective customers, suppliers and the like to get first-hand validation of your concept. 

At the end of the day, the Launch Lens helps you reason through whether to act on a business idea or not – and if so how.  And if you proceed to launch, it’s great that your Launch Lens pre-screening has made it a lot more straightforward to build a financial model, pitch deck, executive summary or business plan – since you’ve already thought through the salient startup issues.   

Jim Price is a serial entrepreneur and Adjunct Lecturer of Entrepreneurial Studies at the Zell Lurie Institute at The University of Michigan Ross School of Business. ©2013 James D. Price. 

source: http://www.businessinsider.com/essential-startup-questions-2013-1?IR=T&

10 Personality Traits Every Successful Entrepreneur Has by Jim Price, Ross School of Business at The University of Michigan

Whether I'm out on the speaking circuit, working with startups, back in Ann Arbor teaching MBAs, or just socializing in a coffee shop, I'd say there's one question I'm hit with more than any other.

It comes in different forms, but the essence of the question is the same: "What does it take to be a successful entrepreneur?”

Over the years, my answer has evolved. But I’ve found myself settling on ten traits that are shared in common by virtually every truly successful entrepreneur I’ve met, observed or studied. The true rock stars are all:

1. Passionate

You need to be driven by a clear sense of purpose and passion. Typically, that passion comes from one of two sources: the topic of the business, or the game of business-building itself.

Why do you need passion? Simply because you’re likely to be working too hard, for too long, for too little pay with no guarantee that it’ll work out… so you need to be motivated by something intrinsic and not money-related.

2. Resilient

If you’re going to build a startup, you’ll need a spirit of determination coupled with a high pain tolerance. You’ll need to be willing and able to learn from your mistakes – to get knocked down repeatedly, get up, dust yourself off, and move forward with renewed motivation.

People will constantly tell you your baby’s ugly, that your business won’t work. Now, you should listen carefully and be open to constructive criticism. But after a while, having the door slammed in your face repeatedly can be withering, and the best entrepreneurs learn to feed off the negativity and actually gain strength from it.

3. Self-Possessed

You need a strong sense of self. You can’t be threatened by being surrounded by talented, driven people. To truly succeed, you’ll need the self-confidence to surround yourself with people “who don’t look like you”… that is, people with skills, background and domain knowledge that complement your own. And check your ego at the door: you shouldn’t be too proud to make coffee for the team, empty the waste baskets, or do the bank runs.

4. Decisive

You’ll need to develop a comfort-level with uncertainly and ambiguity. Entrepreneurs gather as much information as they can in a short period of time, and then MOVE, MOVE, MOVE!! The attitude is that it’s not going to be perfect… We only have 9% or so of the data from which to base our decision… but if we wait to have all the information, we’ll never get moving… and be mired in indecision. (Big organizations are really good at this – the mired thing – saying, We don’t have enough information, so let’s continue to study… form a committee or a task force)

5. Fearless

On the sliding scale from “risk-averse” to “risk-seeking,” it shouldn't surprise anyone that entrepreneurs tend to be closer to the latter. But you don’t need to be a nut-case, the sort who bungee-jumps without a helmet. Smart entrepreneurs develop an intuitive ability to sniff out and mitigate startup business risk. But you know you’re going to fall down, and feel comfortable with that fact and that you’re going to learn from your failures and adjust as you go.

6. Financially Prepared

You’ll need the right personal financial profile to make the leap. This doesn’t mean that only the rich can be entrepreneurs. But unless and until you’ve got the personal financial ‘runway’ (ability to go without a steady paycheck and subsidized benefits) of at least 18 to 24 months (ideally longer), you might hold off on quitting your day job.

Consider launching the startup as a side-business if that’s possible, while continuing to work the 8-to-5 shift to cover the bills. Or approach your boss about going part-time. Then, once your business generating cash flow, you can dial back on your hours, or submit your resignation and go full-time with your startup.

7. Flexible

I challenge you to find an entrepreneur running a startup four or more years old where that business doesn’t differ dramatically from the vision sketched out in their original business plan. The point is that the folks who stay on their feet are the ones who stay flexible and adjust to new information and changing circumstances.

8. Zoom Lens-Equipped

Can you ‘pan out’ to see a compelling big vision for your business, then ‘zoom in’ and focus on near-term startup goals? Successful entrepreneurs can facilely move back and forth between these two views. They’re able to articulate the big picture, while simultaneously managing and executing to the ‘zoom-in’ picture.

9. Able to Sell

Whether you’re a born extrovert or introvert, as a founder/CEO, you’ll find yourself always selling. You’ll be selling your vision to prospective partners and funding sources. You’ll be selling prospective recruits on why they should quit their day jobs and join this startup they’ve never heard of. You’ll be selling your products and services (yes, you’ll probably be personally closing at least the first few sales). You’ll be selling your employees on why they should remain calm and stay with the ship when the seas inevitably get rough.

You can’t delegate evangelism.

10. Balanced

You may not start out with a fool-proof gyroscope, but to survive as an entrepreneur, you’ll need that strong sense of perspective. How to maintain simple, clear focus. How to be at peace with, and learn from, a failure. Understanding that not all battles are worth winning, and when to walk away. Knowing that most in your startup aren’t as entrepreneurial as you – that this may be a very cool job for them, but it’s still a job. Knowing when to go home and give your loved ones a hug. When to go for a run.

This post originally appeared at Ross School of Business at The University of Michigan. Copyright 2014.

source: http://www.businessinsider.com/traits-of-successful-entrepreneurs-2013-2?IR=T&

25 Common Characteristics of Successful Entrepreneurs by James Stephenson

Regardless of your definition of success, there are, oddly enough, a great number of common characteristics that are shared by successful businesspeople. You can place a check beside each characteristic that you feel that you possess. This way, you can see how you stack up. Even if you don't have all of these characteristics, don't fret. Most can be learned with practice and by developing a winning attitude, especially if you set goals and apply yourself, through strategic planning, to reach those goals in incremental and measurable stages.

The Home Business Musts
Like any activity you pursue, there are certain musts that are required to be successful in a chosen activity. To legally operate a vehicle on public roadways, one must have a driver's license; to excel in sports, one must train and practice; to retire comfortably, one must become an informed investor and actively invest for retirement. If your goal is success in business, then the formula is no different. There are certain musts that have to be fully developed, implemented and managed for your business to succeed. There are many business musts, but this article contains I believe to be some of the more important musts that are required to start, operate and grow a profitable home business.

1. Do what you enjoy.
What you get out of your business in the form of personal satisfaction, financial gain, stability and enjoyment will be the sum of what you put into your business. So if you don't enjoy what you're doing, in all likelihood it's safe to assume that will be reflected in the success of your business--or subsequent lack of success. In fact, if you don't enjoy what you're doing, chances are you won't succeed.

2. Take what you do seriously.
You cannot expect to be effective and successful in business unless you truly believe in your business and in the goods and services that you sell. Far too many home business owners fail to take their own businesses seriously enough, getting easily sidetracked and not staying motivated and keeping their noses to the grindstone. They also fall prey to naysayers who don't take them seriously because they don't work from an office building, office park, storefront, or factory. Little do these skeptics, who rain on the home business owner's parade, know is that the number of people working from home, and making very good annual incomes, has grown by leaps and bounds in recent years.

3. Plan everything.
Planning every aspect of your home business is not only a must, but also builds habits that every home business owner should develop, implement, and maintain. The act of business planning is so important because it requires you to analyze each business situation, research and compile data, and make conclusions based mainly on the facts as revealed through the research. Business planning also serves a second function, which is having your goals and how you will achieve them, on paper. You can use the plan that you create both as map to take you from point A to Z and as a yardstick to measure the success of each individual plan or segment within the plan.

4. Manage money wisely.
The lifeblood of any business enterprise is cash flow. You need it to buy inventory, pay for services, promote and market your business, repair and replace tools and equipment, and pay yourself so that you can continue to work. Therefore, all home business owners must become wise money managers to ensure that the cash keeps flowing and the bills get paid. There are two aspects to wise money management.

1. The money you receive from clients in exchange for your goods and services you provide (income)
2. The money you spend on inventory, supplies, wages and other items required to keep your business operating. (expenses)

5. Ask for the sale.
A home business entrepreneur must always remember that marketing, advertising, or promotional activities are completely worthless, regardless of how clever, expensive, or perfectly targeted they are, unless one simple thing is accomplished--ask for the sale. This is not to say that being a great salesperson, advertising copywriting whiz or a public relations specialist isn't a tremendous asset to your business. However, all of these skills will be for naught if you do not actively ask people to buy what you are selling.

6. Remember it's all about the customer.
Your home business is not about the products or services that you sell. Your home business is not about the prices that you charge for your goods and services. Your home business is not about your competition and how to beat them. Your business is all about your customers, or clients, period. After all, your customers are the people that will ultimately decide if your business goes boom or bust. Everything you do in business must be customer focused, including your policies, warranties, payment options, operating hours, presentations, advertising and promotional campaigns and website. In addition, you must know who your customers are inside out and upside down.

7. Become a shameless self-promoter (without becoming obnoxious).

One of the greatest myths about personal or business success is that eventually your business, personal abilities, products or services will get discovered and be embraced by the masses that will beat a path to your door to buy what you are selling. But how can this happen if no one knows who you are, what you sell and why they should be buying?

Self-promotion is one of the most beneficial, yet most underutilized, marketing tools that the majority of home business owners have at their immediate disposal.

8. Project a positive business image.
You have but a passing moment to make a positive and memorable impression on people with whom you intend to do business. Home business owners must go out of their way and make a conscious effort to always project the most professional business image possible. The majority of home business owners do not have the advantage of elaborate offices or elegant storefronts and showrooms to wow prospects and impress customers. Instead, they must rely on imagination, creativity and attention to the smallest detail when creating and maintaining a professional image for their home business.

9. Get to know your customers.
One of the biggest features and often the most significant competitive edge the home based entrepreneur has over the larger competitors is the he can offer personalized attention. Call it high-tech backlash if you will, but customers are sick and tired of hearing that their information is somewhere in the computer and must be retrieved, or told to push a dozen digits to finally get to the right department only to end up with voice mail--from which they never receive a return phone call.

The home business owner can actually answer phone calls, get to know customers, provide personal attention and win over repeat business by doing so. It's a researched fact that most business (80 percent) will come from repeat customers rather than new customers. Therefore, along with trying to draw newcomers, the more you can do to woo your regular customers, the better off you will be in the long run and personalized attention is very much appreciated and remembered in the modern high tech world.

10. Level the playing field with technology.
You should avoid getting overly caught up in the high-tech world, but you should also know how to take advantage of using it. One of the most amazing aspects of the internet is that a one or two person business operating from a basement can have a superior website to a $50 million company, and nobody knows the difference. Make sure you're keeping up with the high-tech world as it suits your needs.. The best technology is that which helps you, not that which impresses your neighbors.

11. Build a top-notch business team.
No one person can build a successful business alone. It's a task that requires a team that is as committed as you to the business and its success. Your business team may include family members, friends, suppliers, business alliances, employees, sub-contractors, industry and business associations, local government and the community. Of course the most important team members will be your customers or clients. Any or all may have a say in how your business will function and a stake in your business future.

12. Become known as an expert.
When you have a problem that needs to be solved, do you seek just anyone's advice or do you seek an expert in the field to help solve your particular problem? Obviously, you want the most accurate information and assistance that you can get. You naturally seek an expert to help solve your problem. You call a plumber when the hot water tank leaks, a real estate agent when it's time to sell your home or a dentist when you have a toothache. Therefore, it only stands to reason that the more you become known for your expertise in your business, the more people will seek you out to tap into your expertise, creating more selling and referral opportunities. In effect, becoming known as an expert is another style of prospecting for new business, just in reverse. Instead of finding new and qualified people to sell to, these people seek you out for your expertise.

13. Create a competitive advantage.
A home business must have a clearly defined unique selling proposition. This is nothing more than a fancy way of asking the vital question, "Why will people choose to do business with you or purchase your product or service instead of doing business with a competitor and buying his product or service?" In other words, what one aspect or combination of aspects is going to separate your business from your competition? Will it be better service, a longer warranty, better selection, longer business hours, more flexible payment options, lowest price, personalized service, better customer service, better return and exchange policies or a combination of several of these?

14. Invest in yourself.Top entrepreneurs buy and read business and marketing books, magazines, reports, journals, newsletters, websites and industry publications, knowing that these resources will improve their understanding of business and marketing functions and skills. They join business associations and clubs, and they network with other skilled business people to learn their secrets of success and help define their own goals and objectives. Top entrepreneurs attend business and marketing seminars, workshops and training courses, even if they have already mastered the subject matter of the event. They do this because they know that education is an ongoing process. There are usually ways to do things better, in less time, with less effort. In short, top entrepreneurs never stop investing in the most powerful, effective and best business and marketing tool at their immediate disposal--themselves.

15. Be accessible.
We're living in a time when we all expect our fast food lunch at the drive-thru window to be ready in mere minutes, our dry cleaning to be ready for pick-up on the same day, our money to be available at the cash machine and our pizza delivered in 30 minutes or it's free. You see the pattern developing--you must make it as easy as you can for people to do business with you, regardless of the home business you operate.

You must remain cognizant of the fact that few people will work hard, go out of their way, or be inconvenienced just for the privilege of giving you their hard-earned money. The shoe is always on the other foot. Making it easy for people to do business with you means that you must be accessible and knowledgeable about your products and services. You must be able to provide customers with what they want, when they want it.

16. Build a rock-solid reputation.
A good reputation is unquestionably one of the home business owner's most tangible and marketable assets. You can't simply buy a good reputation; it's something that you earn by honoring your promises. If you promise to have the merchandise in the customer's hands by Wednesday, you have no excuse not to have it there. If you offer to repair something, you need to make good on your offer. Consistency in what you offer is the other key factor. If you cannot come through with the same level of service (and products) for clients on a regular basis, they have no reason to trust you . . . and without trust, you won't have a good reputation.

17. Sell benefits.
Pushing product features is for inexperienced or wannabe entrepreneurs. Selling the benefits associated with owning and using the products and services you carry is what sales professionals worldwide focus on to create buying excitement and to sell, sell more, and sell more frequently to their customers. Your advertising, sales presentations, printed marketing materials, product packaging, website, newsletters, trade show exhibit and signage are vital. Every time and every medium used to communicate with your target audience must always be selling the benefits associated with owning your product or using your service.

18. Get involved.Always go out of your way to get involved in the community that supports your business. You can do this in many ways, such as pitching in to help local charities or the food bank, becoming involved in organizing community events, and getting involved in local politics. You can join associations and clubs that concentrate on programs and policies designed to improve the local community. It's a fact that people like to do business with people they know, like and respect, and with people who do things to help them as members of the community.

19. Grab attention.
Small-business owners cannot waste time, money and energy on promotional activities aimed at building awareness solely through long-term, repeated exposure. If you do, chances are you will go broke long before this goal is accomplished. Instead, every promotional activity you engage in, must put money back in your pocket so that you can continue to grab more attention and grow your business.

20. Master the art of negotiations.
The ability to negotiate effectively is unquestionably a skill that every home business owner must make every effort to master. It's perhaps second in importance only to asking for the sale in terms of home business musts. In business, negotiation skills are used daily. Always remember that mastering the art of negotiation means that your skills are so finely tuned that you can always orchestrate a win-win situation. These win-win arrangements mean that everyone involved feels they have won, which is really the basis for building long-term and profitable business relationships.

21. Design Your workspace for success.
Carefully plan and design your home office workspace to ensure maximum personal performance and productivity and, if necessary, to project professionalism for visiting clients. If at all possible, resist the temptation to turn a corner of the living room or your bedroom into your office. Ideally, you'll want a separate room with a door that closes to keep business activities in and family members out, at least during prime business and revenue generating hours of the day. A den, spare bedroom, basement or converted garage are all ideal candidates for your new home office. If this is not possible, you'll have to find a means of converting a room with a partition or simply find hours to do the bulk of your work when nobody else is home.

22. Get and stay organized.
The key to staying organized is not about which type of file you have or whether you keep a stack or two of papers on your desk, but it's about managing your business. It's about having systems in place to do things. Therefore, you wan to establish a routine by which you can accomplish as much as possible in a given workday, whether that's three hours for a part-time business or seven or nine hours as a full-timer. In fact, you should develop systems and routines for just about every single business activity. Small things such as creating a to-do list at the end of each business day, or for the week, will help keep you on top of important tasks to tackle. Creating a single calendar to work from, not multiple sets for individual tasks or jobs, will also ensure that jobs are completed on schedule and appointments kept. Incorporating family and personal activities into your work calendar is also critical so that you work and plan from a single calendar.

23. Take time off.
The temptation to work around the clock is very real for some home business owners. After all, you don't have a manager telling you it's time to go home because they can't afford the overtime pay. Every person working from home must take time to establish a regular work schedule that includes time to stretch your legs and take lunch breaks, plus some days off and scheduled vacations. Create the schedule as soon as you have made the commitment to start a home business. Of course, your schedule will have to be flexible. You should, therefore, not fill every possible hour in the day. Give yourself a backup hour or two. All work and no play makes you burn out very fast and grumpy customer service is not what people want.

24. Limit the number of hats you wear.
It's difficult for most business owners not to take a hands-on approach. They try to do as much as possible and tackle as many tasks as possible in their business. The ability to multitask, in fact, is a common trait shared by successful entrepreneurs. However, once in a while you have to stand back and look beyond today to determine what's in the best interest of your business and yourself over the long run. Most highly successful entrepreneurs will tell you that from the time they started out, they knew what they were good at and what tasks to delegate to others.

25. Follow-up constantly.
Constant contact, follow-up, and follow-through with customers, prospects, and business alliances should be the mantra of every home business owner, new or established. Constant and consistent follow-up enables you to turn prospects into customers, increase the value of each sale and buying frequency from existing customers, and build stronger business relationships with suppliers and your core business team. Follow-up is especially important with your existing customer base, as the real work begins after the sale. It's easy to sell one product or service, but it takes work to retain customers and keep them coming back.

James Stephenson is an experienced home based consultant with more than 15 years of business and marketing experience.

source: http://www.entrepreneur.com/article/200730