Cash is the fuel that makes a business run. It is needed to pay salaries including your own, fund marketing programs to acquire and retain new customers, invest in equipment and facilities, pay rent, supplies and many more day-to-day activities. Most financial experts recommend three to six months of operating expenses, but using this for every business in every situation is misleading.
To determine how much cash you need, you must look at the following key areas.
How Much Cash Have You Been Using?
If you’re an established business owner, look at your monthly cash flow report (or go to the next paragraph if you’re a start-up). This report will provide an historical and seasonal perspective. Note the cash received from sales and the cash spent. The net of these two is often referred to as the “net burn rate.” For example, if you have $50,000 in sales and $30,000 in expenses, then your net burn is +$20,000
Your “gross burn rate” only takes cash expenditures into account; in our example, that’s $30,000 and is the more conservative amount, since it does not assume any sales are made. Historical spending patterns are a good starting point in considering future spending plans. Continue reading →
With all the news about people making a ton of money online, many aspiring entrepreneurs are excited at the prospect of starting an ecommerce store. However, many people don’t think through all the things that they need to consider before they even start the process of building an ecommerce site.
Here are eight things to consider before starting an online store.
1. What Products Are You Going to Sell?
One of the most important decisions is determining which products you will sell on your online store. Your best bet is to start small – with a few select products that are based around a specific niche, i.e. breastfeeding products, scuba diving gear, hiking products, travel gadgets, hemp products, etc. Start with a handful of products in that niche – you can always add more products to your store as you grow. Check out your competition and see who you’re up against.
Be sure to pick a niche that you’re personally interested in. If you’re not interested in what you’re selling, you will quickly lose your passion.
Also, look for unique products that can’t be bought at Target, Walmart or other big brand stores — you will never be able to compete with them on price or promotion.
For instance, when I had an ecommerce site, I searched for mom- or parent-invented products that weren’t available through mass market stores. Plus, these types of product manufacturers are typically more willing to work with you on terms and drop shipping (which we will talk about in a little bit.) You can also look for innovative products to sell on crowdfunding sources like Indiegogo or Kickstarter.
When you determine which niche products you’re going to sell, see if there are industry associations, trade websites or magazines. If so, join, follow and subscribe. Also, if there are product tradeshows around your product niche, attend these trade shows to discover new products, speak with the manufacturer reps directly and learn more about the industry in general. Often at the tradeshows you will be able to negotiate better pricing or drop shipping arrangements – especially if the manufacturer is launching a new product and they’re looking for new distributors. Continue reading →
The “gig economy” — the market for individuals providing services or working on projects on a freelance on-demand or short-term contract basis — has been a growing trend. While there are no official gig economy statistics available to measure its prominence, we can make some assumptions about its increasing popularity based on other available data.
According to information reported by the United States Census Bureau, the number of non-employer businesses, the group of individuals most likely to work on gig basis,was 24,331,403 in 2015. That’s 10% more than the 22,110,628 non-employer businesses in 2010.
And opportunity abounds for independent professionals who take on gig assignments. Many businesses outsource work to independent contractors and freelancers when their staffs are overwhelmed and to avoid the costs of benefits and ongoing payroll that come with hiring new employees.Continue reading →
One of the most challenging and rewarding parts of being a solopreneur is the need to be constantly learning. Of course, every day has its own lessons to teach—trial and error is the heartbeat of solopreneurship, after all. Sometimes, though, we need to turn to proven mentors and leaders who can offer wisdom from experiences that reach beyond our own.
When we run into these situations, books seem like the obvious first choice. Indeed, there’s a book out there for any problem you may encounter, whether procrastination, apathy, branding, or crippling self-doubt. Besides, shouldn’t we be reading like fiends anyway? It’s common knowledge that the most successful business leaders all share a ravenous appetite for good books.
But what solopreneur has time to read a book every week? Between brainstorming and producing and networking and marketing, it can be hard enough to make time to eat breakfast. Granted, reading is still a great habit to develop, but it may not be your primary mode of on-the-go education.
In the course of serving our nation, veterans learn valuable skills and self-discipline that they can carry through to their post-military careers. One professional path that many veterans take is entrepreneurship.
According to the most recent U.S. Census data, in 2012, the number of veteran-owned businesses was 2,521,682 (9 percent of all companies in the U.S.). Those businesses employed over 5 million people. Continue reading →
Good leaders know that inspiring people has a lot to do with focusing on the positive vs. the negative. Unfortunately, many of us are predisposed to focus on the negative and give it more worth or value than the positive. Alison Ledgerwood, a social psychologist does a great job in this TED talk showing us how that works.
Essentially, once we focus on the negative, we are much less likely to believe anything that proves otherwise. When asked how our day was we generally start with the negative. When asked how a project is going, we typically respond with what is not working. When asked how a team is performing, we often reply with explanations of how it’s not. Who knows why we do this? Preservation perhaps?
The end result is that we are discounting that which is good and leaving opportunities for happiness out in the cold.
Personally, I love this approach. I mentioned it recently to a group of entrepreneurs in the Emerging Leaders class here in Seattle and it seemed to fit in perfectly with what they are working on. They have all been in business for 3 or more years and are now creating new strategic growth plans for their businesses of the future. In order to do this without all the “constraints” that experience and beliefs dictate are “true,” we have to look at it as Day 1, and then consider – what will you do differently?
Think of it like Groundhog Day. You get to keep doing it over and over again but with a different template, different knowledge, and a different environment. If you were recreating your business, what would Day 1 look like now? Who’s to say you can’t give it a try? Continue reading →