Are You Passionate About Starting a Business?

Fear of the unknown causes most of us to hesitate in trying something new – particularly something as big as a new business venture. However, if we conduct sufficient research and eliminate as many of the unknowns as possible, we are better equipped and more informed to make an educated decision.

When starting up a new business, one of the most important questions to ask is whether or not you are passionate about what your business will do. There will be times when the going gets tough and if you’re not interested in the product or service that your business is offering, it will be less likely to succeed. You need a passion for what you’re doing and you will need the necessary time available to make such a great investment.

Find a consulting firm who can conduct the necessary research for you in order to eliminate many of the potential hazards. A good consulting firm will ensure that there is a target market for your product or service, along with the necessary demand that will be needed to sustain and grow your business. Essentially, they will prepare a business outline which will give a great indication of the likelihood of success or failure of your proposed business idea. They will try to ascertain the market; a realistic price for your product; a viable marketing scheme for your business; and discover your potential competition and what would set you apart from your competition.

It is imperative that you conduct the necessary research and due diligence.

Hiring a professional firm of small business consultants will aid you in taking care of the many practicalities that are so often overlooked in starting up a new business venture. A good consulting firm will assist you in creating a viable business plan that may be presented to the bank for financing purposes. Alternatively, other potential investors will want to see your proposed plans in order to determine the viability of their investment. Whichever way you choose to fund your venture, a preparation of a business plan will be key to pre-determining the possibility of success or failure in your efforts.

Implementing New Business Management Software – 7 Ways to Make it Smooth and Seamless

As a very small business or a business just getting started, you might be using an entry level accounting system where the investment in training and configuration is minimal because the product is fairly easy to use. Often these systems are ideal until your business begins adding more users and your business processes become more complex than what the system can support.

When a small business decides to implement a new accounting or business management system, it cannot shut its doors or stop day-to-day responsibilities to install, configure, and test a new system. Also, it cannot expect to start using a new system without investing time to consider potential improvements to existing business processes or train end users and migrate historical data.

This is where the role of your solution provider or consultant is critical. Top solution providers efficiently transition you from your old system to your new system with minimal downtime for your staff. In addition, your solution provider will continue supporting the solution for you as your business grows and evolves.

When choosing a new system, your choice of a solution provider should carry as much weight as the product itself. Here are a few things to look for when choosing a solution provider:

1. Understands Your Business and System Needs
A software provider should understand your business and business processes to interject which processes can be more efficient. The provider should listen to you, give good examples of how the system should work, and ask good questions, not just about software, but also how your people work, who they are, their skill sets, and how they would use the application.

2. Exhibits Exceptional Knowledge About Their Product(s)
It is a must for your software provider to thoroughly understand the functionalities, capabilities and intricacies of their solutions and coherently explain those to your end users so you optimize your investment and use the business management system to its fullest potential for your organization.

3. Knowledge of Other Products and Solutions
A good solution provider makes sure you understand what you are looking for and know ahead of time what the expected returns and benefits will be. If you do not know what you need to do well versus what a business management system does well, you can get trapped into buying a system because of something it does that is not important to you. System selection prepares the client for the sales cycle, gets their information together, and allows them to quickly eliminate inappropriate systems.

4. Proven Approach to Implementing
Entry level accounting systems can often be implemented by following the software vendor’s checklist. However, mid-level systems require more planning and testing because there are many different configuration options to make it adaptable to your business processes. The top solution providers have developed and can explain to you their approach to implementing the system. The approach should include options for functional design, pilot testing, data migration planning, a cut-over strategy and ongoing support.

5. Communication
When evaluating systems, many businesses are first introduced to a salesperson and may not have the opportunity to assess the communication skills of the consultants who will eventually be assigned to the project. A top solution provider will have an approach for communicating with the client regarding project status and budgets. Also, your solution provider is often preparing deliverables to you, including procedures documentation, end user training guides and more – a top solution provider can provide sample documents that demonstrate their ability to communicate in these areas.

6. System Cut-Over
When your company starts using the new business management system, your comfort level must be established by the solution provider. That can take anywhere from 30 days to six months, depending upon the client and how significant the changes are in IT and business processes. During this time, your solution provider should still pay attention to you, check in to make sure things are working the way they were expected, and provide any additional support and training your end users need.

7. Ongoing Support
Many businesses begin realizing a positive return on their investment in a new system within the first 12 to 18 months. The project and your relationship with your solution provider should not end there. As your business grows and evolves, you want some assurance that your solution provider is always looking after your business – recommending improvements to business processes, assessing new modules or tools and their impact on your business, or offering user groups where you can interact and share ideas with other end users. The top solution providers make these and other services available to you for as long as you own the system.

Climbing the Investment Ladder

Why is it that most investors never achieve the financial independence they deserve?

It’s not because they lack the drive or ambition or knowledge to become rich. The reason most investors fail is because of their mindset – the way they think about money and their relationship with it.

I have come to realise that there are only 5 basic types (or levels) of investors. While some make it to the top, and others drift from one level to the other, unfortunately most sit at one level for their entire life. They become stuck because of their mindset which prevents their financial success.

The good news is that with some insight, education and a bit of re-programming, you too can make it to the top. So let’s take a closer look at the different levels of investor;

Level 0 – The Spender

Level 0 investors are not really investors – they are spenders and borrowers and often end up with a high level of debt. They spend everything they earn and more, surviving from pay packet to pay packet and using credit cards when they run out of money. Their solution to financial issues is to spend their way out of them or take on more debt. The biggest problem is that as they earn more, they spend more.

They think more money will solve their problems, yet no matter how much they earn, they go deeper into debt. They fail to see that the real problem is not their level of income, but their bad money habits. It’s what they do with the money they earn. Today, they can’t survive on the type of income they would have only dreamed they could achieve five years ago. They are consumers who spend their money as soon as, or even before it comes in, rather than conserving it for the future.

Many high income earners fall into this category because they spend as much, or more, than they make. Some spenders look rich. They may even have big homes or fancy cars, but they also have huge loans that they have difficulty repaying.

Level 1 – The Saver

Most Australian who are not spenders will generally be savers. Their main investment is their house, which they aim to pay off over time. Sometimes they also save a little, but in general they save to consume, not invest.

They tend to be afraid of financial matters and are unwilling to take risks. They’re following the plan their parents followed – get a steady job, buy a house, pay it off and build a nest egg. The problem is saving, or owning your home outright, doesn’t make you rich.

If you think about it, saving doesn’t work because of;

· Inflation - What you save today won’t be worth the same in 20 years time;

· Income tax – The average Australian loses 30% to 40% of their income in taxes over their lifetime

· Spending - Many people spend a large chunk of their income on consumables: another car, a bigger TV, etc, all the while eating up much of the money they should put away for retirement.

Level 1 investors are what I would call financially illiterate and need to focus their efforts on building a solid base of financial and investment skills, upon which they can grow their financial future. They will get the most leverage by investing in a quality financial education and building a network of peers they can make the journey with.

Level 2 – The Passive Investor

Level 2 investors are aware of the need to invest, so they start learning about investment and begin accumulating assets.

While generally intelligent, Level 2 investors are still financially illiterate – they don’t really understand the rules of money. They have very little idea as to how or where to invest, so many blindly follow the advice of financial planners. These investors are usually taught to put their money into managed funds or blue chip shares because they are ‘safe’, and to spread risk by diversifying. Interestingly, most successful investors don’t diversify – they find a niche to specialise in.

The problem is (as we’ve recently witnessed with the global financial crisis), diversification doesn’t necessarily protect your portfolio.

Level 2 investors need to refine their financial and investing education and focus their efforts on choosing a specific wealth vehicle to master and begin taking control of their financial destiny.

Level 3 -The Active Investor

Level 3 investors realise they must take responsibility for their financial education and become actively involved in their investment decisions. They build a knowledge base of investment strategies and techniques and grow to understand and use the three marvels of wealth accumulation: compound interest, leverage and tax favoured investments to get their money working for them.

These investors actively participate in the management of their investments and concentrate on building their net worth.

Level 3 investors usually leverage the time and expertise of a network of industry professionals and upgrade their network of advisors and peers, often joining a Mastermind group of like minded people.

As this is the asset accumulation stage of their investment life, they need assets that generate wealth producing rates of return. That’s why many chose high growth, low yield investments such as residential real estate.

Level 3 investors must focus on actively making their assets more valuable before, during, or after they acquire them. Successful active investors grow the asset base faster by “manufacturing” capital growth by renovating or redeveloping their properties.

Level 4 – The Professional Investor

A very small group of investors move to the top rung of the ladder as a Level 4 investor. They are financially independent because they have a substantial asset base. Their property portfolio generates sufficient recurring passive income to pay for their lifestyle, plus keep growing their investment portfolio whether they work or not.

Level 4 investors are financial fluent and well educated in the world of investing. They tend to concentrate on optimising the performance of their investments, whilst at the same time minimising their risks. While they are still accumulating assets, they are now more interested in cashflow.

Professional investors realise the value of outsourcing much of the work for their investment business, with a team of accountants, property managers, solicitors and property strategists to assist them in managing and growing their portfolio.

Professional investors know that bad economic times provide some of the best opportunities for success, which means they get into the markets when others are getting out. They thrive in difficult times, not just survive.

Level 4 investors subscribe to investment newsletters, attend seminars, surround themselves with a great team of advisors and mentors, and are prepared to pay for solid advice – to increase their wealth and protect their assets.

Level 4 investors personally own very little in their own names, controlling everything through companies and trusts. By controlling the legal entities that own their assets, these investors gain considerable legal tax and asset protection benefits.

How far up the investment ladder are you? Where do you currently sit in this hierarchy of investors?

The bad news is that many investors are often stuck at an investor level that prevents their financial success. The good news is that with a little effort anyone can upgrade their skills and investor level.