8b. Preparing to do Business Online, IUH 2009-12, 2ND Ed, R513A

Author Notes: Reference Copy, links to Original Copy removed due to the Age of the Content. See the top Blog Menu for Copyright Concerns, Some Content Removed.

business
Dr. Don, Founder ICFO

8b. Preparing to do Business Online, IUH 2009-12, 2ND Ed, R513A

Perhaps the greatest contributor to our failure on or offline is our lack of personal preparation to do business. Offline business usually start with you, your passion, interest or perhaps a hobby. It is easy to recognize what your need to get started: Money or capital, home or rental/lease location, business cards, signage, etc. Online; it looks so cheap and easy, but soon you find it is not!

Entrepreneurs are not always business minded; most have little or no business experience. Both off and online businesses suffer the same problem with their owners. I believe it is reasonable to say that starting an online scam site is easier than a legitimate site. All you have to sell to get paid is satisfaction to someone’s need, whether you can deliver or not.

All legitimate business off or online, can run into problem with cash flow, management and other business ailments, so just because they fail does not mean that they were a scam.

With that said, this chapter concerns your personal capability to run a business and works fine both off and online businesses. You are given the opportunity to you to assess your strengths and weaknesses, assess your business potential and facilitate a personal plan of action. Your business will not grow and you will lose most of the potential growth or your business until you realize how important personal preparation is to you.

Be fair and honest with your assessments! Take notes and develop your personal Plan of Action for starting or growing a Success Business Online

PLANNING TO DO BUSINESS ONLINE?

Too many new users (newbies) think that doing business online is easy, and will solve their financial problem. According to the hype It Is! Just look, the start-up costs for doing offline as compared to starting online.

However, if you think you can jump into any business without being personally prepared, without a plan and a without a proper mindset to treat your online experience as a BUSINESS, instead of a HOBBY; then you are destined to join and be one of the 95% +/- failure rate statistics that may be found for both offline as well as online businesses. The statistics for Forex failures is even higher at 98%.

However, according to a Dr Jeff Cornwall of Belmont University “Ask an average group of people what the survival rate is for entrepreneurial ventures and the figures you usually get are 10-20%. The truth is much rosier than common wisdom assumes.

As reported by the National Dialogue on Entrepreneurship, a new study from the Bureau of Labor Statistics “examines the survival rates of new businesses started between 1998 and 2002. It finds that 66% of new establishments started in 1998 were still operating two years after they started; forty-four percent were still operating in 2002.”

The only sector that showed significantly lower rates was the dot.com group, which crashed during this time. Factoring that group out and we are getting closer to the 50% figure that most experts believe to be an accurate estimate. Studies that examine entrepreneurs who have had training and/or education in entrepreneurial skills consistently show a much higher success rate (as high as 80-90%).

While we are here to learn to avoid scams; we are also here to help you succeed. Take your time and see what skills you can improve. Those of you that have joined us, and are already successful online, great, we can use your help. Others, use this section to help determine your needs and to develop your plan of action. With proper planning, learning, mindset and treating your business as a business, you can significantly increase your potential for success. In following sections, we will help you to identify, understand and avoid the Scams. Avoiding Scams will further increase your opportunity for success, but using your resources where they can help you instead of filling the scammer’s pockets.

Business failures are difficult to track because the facts vary with the source and the way the numbers are gathered. For example, we can measure the number of Offline Businesses that start within a year or two and deduct those that do not renew their business license. However, no license is required for an Online Business.

While we can document the change in the number of bankruptcies, but just because a business did not renew their license does not mean the business went bankrupt. All we know is that the business may have closed for some reason; wrong business, wrong or obsolete product, timing, lost motivation, divorce and for that matter any reason will do. Online hobbies can be ceased at any time – no paper trail.

IF YOU ARE CONSIDERING A NEW BUSINESS?

  • Have You Evaluated, Researched and Really Understand Your Idea Or Opportunity? Have You Evaluated Your Personal Needs?
  • Does Your Idea or Product, Service Fulfill A Need? Do You Have Start-Up Capital And Reserves?
  • Can You Face and Make Decisions? Are You Ready To Stick With It?
  • Do You Have Adequate Skills, Resources, and Credit? Do You Know Where Get Assistance, Information?

GENERAL ASSUMPTIONS

Keep it simple and let us just accept the general numbers of 90% +/- failure rate and accept that that is after 5 years. Of these, the failure rate for online business is 50% within the first 6 months to a year, while offline the percentage is say 50% after 2 years.

Most of us understand that offline businesses require a greater investment to set up the business, licenses, location, furniture and equipment, etc. Offline businesses are lucky if they breakeven in months to a year, while most take longer, if at all.

These entrepreneurs must concern themselves about matters of government regulations, policies and politics, brick and motor location, capitalization, payrolls, risks, etc. Most of the offline business failures are a result of undercapitalization and miss-management., no plan.

Your capital investment for an online business is much less; but that does not mean or guarantee that you can or will be an overnight success, as others would have you believe. Unlike offline business, you are not so concerned about matters of government regulations, policies and politics, brick and motor location, capitalization, payrolls, etc.

As said before, those that have some basic business skills or background, training and an entrepreneur sprit have a much greater chance of success and are better suited for business. Add to that, those that have a plan; i.e., business, financial, and marketing plans have a significantly better chance of success. Offline entrepreneurs may have a passion, interest or idea, a product or service that they feel can be marketed online. Those that start online may also have an idea, product or service, but the majorities are just looking for extra money. They most likely become an affiliate of someone else’s product or service.

A fulltime commitment is better that a part-time effort for any business. Regardless of the type business, you undertake, you should understand your suitability to go into that business, assess your strengths and weaknesses, what are you needs, and what is your understanding of the risks.

The Scammers will tell you, you do not need money, or not that much, and that they will do everything or most of the work for you. Just sit back and collect your money. If you believe that, then you may as well stop reading further.

In business, we must understand ourselves, what is involved. Some of you want to be your own boss, or you have already started your business, some of you are retired, or work at home moms, whether online or offline. Maybe some you want a change of career or just want to supplement your income.

Look at the following and be honest with yourself. Many items are applicable to the offline business, but some for both. Consider them, i.e. what can you do, what do you know, what are your interests, can you do it online?

INVESTIGATE – WHY ARE YOU HERE?

IF YOU HAD A CHOICE, WHAT WOULD YOU RATHER BE DOING?

  • What concerns do you have? What is attractive to you?
  • What is your idea or marketplace opportunity?
  • What characteristics of an entrepreneur are important to you?
  • What skills and experiences do you have that will help you become successful?
  • What entrepreneurial skills and experiences do you lack at this point in time?
  • How many months can you live without income?

WHAT IS/ARE YOUR MOTIVATIONS?

  • I want to be my own boss
  • I have identified a new business idea or opportunity
  • I feel I can achieve more in my life through entrepreneurship
  • I believe my job opportunities are limited due to my age, skills and experience
  • I want a career that will align better with my personal values

HOW MUCH DO YOU KNOW ABOUT LEADERSHIP?

  • Planning Problem Solving Vision Innovation Leadership
  • Emotional Intelligence Delegation Communication
  • Self-Development Relationship Building Commercial Financial skills Personal Energy Ethics
  • Transparency

DO YOU HAVE A PASSION FOR BUSINESS?

  • How do you know if you have this passion?
  • Ask yourself. If you won the first prize in a competition, would you still want to be online and go into this business?
  • When you love your work, it becomes contagious, as everyone around you is infected.

BELIEVE IN YOURSELF AND BOOST YOUR SELF-CONFIDENCE

  • Have trust or faith in a person or thing.
  • Possess a feeling of assurance, especially of self-assurance.
  • The state or quality of being certain: I have every confidence in my idea and my ability to succeed.
  • Do you have a feeling of emotional security resulting from faith in one-self?
  • Confidence is a firm belief in one’s powers, abilities, or capacities
  • “You gain strength, courage and confidence by every experience in which you really stop to look fear in the face” (Eleanor Roosevelt).
  • Self-confidence, trust in one’s own self-sufficiency

Just think: What difference would it make in your life if you had an absolutely unshakable confidence in your ability to achieve anything you really put your mind to? What would you want and wish and hope for? What would you dare to dream if you believed in yourself with such deep conviction that you had no fears of failure whatsoever?

Most people start off with little or low self-confidence, but as a result of their own efforts, they become bold and brave and outgoing. And we’ve discovered that if you do the same things that other self- confident men and women do, you, too, will experience the same feelings and get the same results.

The key is to be true to yourself, to be true to the very best that is in you, and to live your life consistent with your highest values and aspirations. Brian Tracy

COMMITMENT

  • A pledge to do, an obligation
  • Something pledged, especially an engagement by contract involving financial obligation
  • The state of being bound emotionally or intellectually to a course of action or to another person or persons
  • “What one has, one ought to use: and whatever he does he should do with all his might” –Marcus T. Cicero
  • “A person with half volition goes backwards and forwards, but makes no progress on even the smoothest of roads” – Thomas Carlyle

HOW ABOUT ATTITUDE?

  • Your attitude is a frame of mind with which you approach a subject, a problem, a person or any circumstance.
  • It is positive, negative or indifferent.
  • The most important aspect of attitude is that you and you alone are in full control of it , the choice is totally yours,
  • Hence, if you choose to look at things in the positive light, then you will find that many doors will be opened to you because positive outlook presents you with a “can-do” attitude.

DO YOU HAVE A FEAR OF FAILURE?

  • If you are paralyzed by the fear of failure, you will remain inactive. No one wants to fail but when it happens, there is nothing to fear. Courage is not the absence of fear; it is moving forward through fear.
  • Walt Disney formed his first animation company in Kansas City in 1921. Flushed with success, he began to experiment with new storytelling techniques, his costs went up and then the distributor went bankrupt. He was forced to dissolve his company, at one point could not pay his rent, and was surviving by eating dog food. PopCrunch

Henry Ford. Unfortunately, he focused too much on the engineering and not enough on marketing, resulting in poor sales and bankruptcy. He was forced to leave the business in 1902 after investors threatened to withdraw their capital. FreeInfoSociety

It is the Kiasu syndrome, a self-defeating emotion that creates fear that gets in your way – FEAR of losing, One who is afraid to lose out to someone else, often to the point of selfishness; an over-cautious person; afraid of losing out to someone else, and therefore often behaving selfishly and disregarding others; dog in a manger

OVERCOMING YOUR FEARS

  • Use fear as a propellant.
  • The Dalai Lama: “Unless you have a strong feeling of self-confidence based on a strong self, it is difficult to do battle with negative emotions”.
  • It is the role of intelligence with the full awareness that is provided by education, to judge and accordingly utilize the potential for one’s benefit or well-being
  • ” We have nothing to fear, but fear itself”. U.S. President Franklin Delano Roosevelt
  • Your effective decisions are limited by your knowledge and understanding of business

USE YOUR FEAR AS A MOTIVATOR

  • On the positive side, fear can be a Motivating Factor.
  • “In this business, by the time you realize you are in trouble,
  • it is far too late to save yourself, unless you are running scared all the time.” Bill Gates
  • “Courage is doing what you’re afraid to do. There can be no courage unless you’re scared.” — Eddie Rickenbacker
  • If the fear is rational, it serves as a warning alarm about real risks you may be taking.
  • If you pay attention to it, apply some reason to it, and think it through objectively, you can keep yourself from taking foolish risks.
  • You can minimize the unavoidable risks. (Inc)

ARE YOU A PROCRASTINATOR?

  • Procrastination is to put off doing something, especially out of habitual carelessness or laziness, or to postpone or delay needlessly.
  • Some people just never get started. If you want to change your life, then you must take action.
  • No Guts – No Glory
  • Damn the torpedoes, full-speed ahead – Admiral David Glasgow Farragut, First Admiral of the United States Navy
  • The Early Bird Gets the Worm – Meaning: Success comes to those who prepare well and put in effort. John Ray’s a collection of English proverbs 1670, 1678
  • Nothing Succeeds like Success – Meaning: the idea that success breeds further success. Sir Arthur Helps, in Realmah, 1868
  • TIP: You got the idea! The Scammers love to use these same phrases: Take action now, Do it today, Last chance! Only 5 copies are left
  • You are right; even some legitimate marketers may use some of these techniques

ARE YOU READY TO ACCEPT THE RISK?

  • Are you well suited to running a company, what is your business experience? How much are you willing to stake, and what are the potential risks you will face? Will I be dedicated to this venture?
  • How much of my time and myself can I commit?
  • Can I manage the stress on myself and my family and friends at the start-up stage? How can I manage my time effectively?
  • Long hours will test your character in many ways. Can you handle that? Does your venture motivate you enough to make you go for it?
  • What is your MINDSET?

HOW MUCH DO YOU KNOW ABOUT THE FOLLOWING TOPICS?

  • Marketing – Types And Various Methods of Online Marketing, email, Traffic Sites, Lead Providers
  • Pricing – Selling EBooks, Or Reselling Books and Products? Regulations (Laws)
  • Spam Licensing
  • Record Keeping – Track Your Sites, IDs and Passwords Financing
  • Capital/ Other Expenditures – Desk, Computer, High-Speed Internet Provider, Printer, Supplies Technology – Keep Your Computer Running
  • Cash Flow Management – Some Sites Charge A Monthly Fee Competition – Big Boy Affiliate Marketing
  • Taxes Employees Benefits/Perks
  • Suppliers – Affiliate Products, Shipping, Payment, Legitimate Health Community – Online Communities and Groups
  • Social/Ethical Issues – Spam, Social Networking Scams
  • TIP: If you have taken the time to go through the preceding and have been fair and honest with yourself; then take the time to make a Plan of Action for Your Personal Development.
  • Take little steps, but DO take the first one.

STEPS TO A GREAT BUSINESS PLAN

We have discussed your personal Plan of Action for your Personal Development; now we need a Plan of Action for your Business. You can make a business out of your hobby, but you cannot treat your business like a hobby. Failure to plan is said to mean that you plan to fail.” Your banker, JV Partner, or sometimes a supplier usually requests business plans Even if you are not looking for a banker, Joint Venture partner, etc., it is wise to have some idea of a plan, what your product or service is, how you are going to market it, what milestones are your using, what is your budget, financial projections, etc. It should include your strengths and weaknesses, and your plan of action to improve your potential for success.

  • Write out your basic business concept.
  • Gather all the data you can on the feasibility and the specifics of your business concept. Focus and refine your concept based on the data you have compiled.
  • Outline the specifics of your business, using a “what, where, why, how” approach.
  • Put your plan into a compelling form so that it will not only give you insights and focus
  • Plan should become a valuable tool in dealing with business relationships that will be very important to you.
  • Keep it simple English, use graphics and tables

A SIMPLE BUSINESS PLAN [removed]

HOW TO SET UP YOUR BUSINESS PLAN

By setting up YOUR business plan, you are road mapping your way to success. It will help you to develop your business goals and strategies, as well as providing you with a better understanding of the marketplace. It will also highlight any business strengths or weaknesses that you may have, as well as provide you with an opportunity to take a close look at your competitors.

If you want, you can also include financial projections, historical data and growth expectations into your plan. With any good business plan, it should show who the target audience is, and just how the product or service that is to be provided will meet or exceed their needs and expectations.

ORGANIZING: BREAK IT DOWN INTO SECTIONS SUCH AS:

  • Business Summary – The product or service you want to provide.
  • Market Analysis – Research the product or service. Find out what the competitors are doing Product Positioning – How to make it more prominent compared to your competitors.
  • Market Strategy – How are you actually going to market it? Customer Analysis – Look at what the customer wants or needs.
  • Financial Analysis – What you need to invest in order to set up the business and to keep it going while it is just getting started
  • Overall Business Goals – What you hope to achieve in, say, a year’s time. HomeBusiness

The forgoing is another example of various online resources to help you, free. However, if you do not take the time to make and use a plan, at least prepare a schedule of things to do, and allocate the time for each task. Big jobs can be broken into daily tasks.

Thanks for Reading – 8b. Preparing to do Business Online, IUH 2009-12, 2ND Ed, R513A

Dr Don, Founder, ICFO

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