Sunday, March 3, 2013

Skills Required to Start your own Business: The Downside of Self-Employment

People who make time to take an in-depth course on self-employment and business management significantly increase their chances of success. The new business that is thrown together on a hope and a dream without being thoroughly researched, or that started without enough working capital, could sadly become a failure statistic.

When economies experience a downturn, self-employment usually increases as people look to making their own job to survive when they can’t find a traditional one. As economies stabilize, self-employment often decreases. In good economic times, those finding the entrepreneurial road a bumpy one return to the workforce and a regular paycheck.

Who do you think suffers from a failed business? Not just the family, but the whole economy. A failed business means fewer dollars circulating in the local, state, and national economy, with suppliers left with bad debts that they can ill afford. Business failure is often the cause of divorce, so the more you are aware of what you are up against, the better armed you will be.

Leaving the traditional workplace
With all these challenges facing aspiring entrepreneurs, why do so many people want to leave their traditional jobs? Here are the most common reasons - and the reality behind them.

More work, less pay
Wages have not kept pace with inflation in the last few years, and in some cases, workplace conditions have become unbearably stressful for many employees. Forced to take on increased workloads through layoffs, they have worked under these stressful conditions for long periods. The pressure to have material “stuff” and to keep up with the Joneses is media-driven and relentless. Just visit any shopping mall in the evenings and over the weekend and observe North American shopaholics in action.

There comes a point for many when the measly paycheck is not worth the job-related stress. People opt for self-employment with the vision of controlling their destiny and experiencing profitable returns. If your new business is well planned, you’ll profit only after a couple of years of hard work. If you don’t plan properly, you work harder than in a salaried position and make less money.

Stress-related illness and depression
More employees are now taking stress leave, which has been recognized by doctors and employers as a serious by-product of this new millennium. Heart attacks at an earlier age are often linked to work pressures. Marriage failures are on the increase, one factor being financial problems caused by cutbacks and layoffs.

Unemployment can lead to depression. I can relate, first-hand, to the feelings of worthlessness, futility, and good old self-pity. Many people hope that owning their own business will solve their stress problem. However, being your own boss involves a high level of stress, too. You have no corporate pensions and benefits, and in most cases, no future retirement plans, all good reasons for you to set practical goals for your business and plan it out in detail. Planning will help to reduce negative stress by taking the guesswork out of your new venture.

Unappreciative employers
These days, people with secure positions are considered the lucky few. Some employees are treated abominably. Verbal abuse, sexual harassment and low wages are common complaints in today’s workforce. Financial pressures of struggling businesses are passed on to employees who are not getting the rewards and positive strokes necessary for sustained job motivation. Some corporations are now aware of these effects on employees and are taking steps to increase employee motivation, but many are not. The time eventually comes when one says, “Enough! I’m quitting! I’ll start my own business! I don’t deserve to be treated like this.”
Layoffs, downsizing, or no work
The slowdown in the U.S. economy after 9/11 was felt for quite a few years. Many businesses did not survive, as is evident in the statistics on business start-ups and closures. In 2001 and 2002, business closures far exceeded business start-ups for the first time in many years, forcing many into self-employment. Government restructuring and changing technology both contribute to corporate downsizing. In these situations, many people turn to self-employment as an opportunity to generate income.

Fewer opportunities for youth
For educated young people, entrepreneurship is an exciting alternative to working for an employer for minimum wage when they have maximum qualifications. Young people have much to offer our economy with their new and innovative ideas, energy, and technological knowledge. There are many subsidized programs that encourage our youth to seek self-employment as a job alternative. However enthusiastic they may be, it is crucial for young people to be business-savvy before they make this important decision, because although they have great enthusiasm, they may lack the necessary experience.Young people often face the added frustrating challenge of not being taken seriously by adults and other business people.

Incompetent employers
Experienced employees often feel that their employers are not particularly competent. Some get tired of working under these conditions, feeling that they have the experience and ability to strike out on their own. However, being an expert in one area does not constitute expertise as a businessperson. When you switch from a job with one area of responsibility - such as head of human resources - to managing all aspects of your own business, it is quite a change of wardrobes.

Family juggling and home-based businesses
Operating a home-based business has become a popular way for people juggling family responsibilities to earn an income and attend to family needs. More women are operating from home and trying to achieve a balancing act. Many find themselves caught up in a constant struggle for time, are usually stressed, and are always “too busy.” It works for some, but it takes discipline and commitment to strive for that perfect balance. I haven’t quite found it yet.
Many baby boomers are also facing the responsibility of looking after aging parents in their home and choose self-employment as a way to juggle yet another family ball. Coping with my ninety-five-year-old mother, I can honestly say that it is quite a time-consuming responsibility.
Home-based businesses are also promoted as great tax write-offs, but they do have their disadvantages.

Leaving the boss behind
No one enjoys being told what to do. When you are your own boss, you, and you alone, are responsible for all decisions. There is a certain pride in the words, “I have my own business,” or “I am going into business for myself.” As much as you may not enjoy being told what to do, at least you had direction in your old job. As an entrepreneur, you are the one who makes all the decisions. What a responsibility! Who shoulders the blame when things go wrong? You, of course.
That’s a heavy load to place upon yourself, so let’s hope you are not a procrastinator, and that you have confidence in your business acumen. It can be lonely at the top.

Fingertip technology
With the advent of the home computer and continual new advances in technology, many new and exciting businesses can be operated from home or with a small capital outlay.With the Internet comes easier accessibility to information, clients, and, for many, a career. Webpage design and online business-to-business ventures didn't really exist ten years ago. The world is at your fingertips. Using technology to operate your business is essential these days, but if you are looking to start a Web-based business, tread carefully. Remember that many dot-coms are now not-dot-coms.

The baby boomer upsurge
North America is quickly becoming populated by geriatrics. Many corporations who downsize offer early severance packages to long-term employees, who at fifty-something don’t feel ready to put up their feet and plant petunias.To many, self-employment is an attractive option, particularly as they have the time and usually the buyout financial resources to explore this option. The downside is that many have been employees with attractive benefit packages for dozens of years, and the transition to becoming an entrepreneur is a difficult one.

Source: Business For Beginners, by Frances McGuckin.

Skills Required to Start your own Business: Branding

Developing your corporate image - or "branding"
Every facet of your operation needs to be branded with your distinct identity to let people know who you are and what you do. A combination of your name, logo, slogan, mission statement, and corporate theme should be used extensively throughout your marketing.
We all recognize large corporations’ branding - such as Kodak or Sears - but even a small, one-person business can brand themselves and become well known. Consult with a graphic designer to help you project a professional image, as first impressions are important and open doors for you. Let’s briefly look at the components of branding:

  • Name: Make your name work for you and tell people what you do.ABC Enterprises says nothing about you, whereas Professional Personnel Services does. It also projects a professional image.
  • Logo: A logo graphically expresses who you are. Although not necessary for a small business, it adds a professional touch and helps people identify your business.We all recognize those golden arches.
  • Slogan: A short slogan becomes an extension of your name, further describing what you do. Think of the many slogans you instantly associate with larger companies. Living in a rural area, I never forget our local septic tank company’s slogan, “Your Business Is Our Business.”
  • Mission statement: A short statement of your beliefs and goals describes your commitment to customers and commits you in writing to strive for those goals. Customers like to see mission statements because they silently imply “we care about you.” Splash your commitment onto all promotional materials, business cards, and your website, then frame the words on the office wall.
  • Corporate color theme: Choose a corporate color theme that remains consistent and is used on all correspondence, marketing materials, and signs. This cements your branding. Look around your community, in newspapers, and at advertisements to study various branding techniques.
Providing exceptional customer service
Customers can be demanding and impatient in our busy society. Some expect something for nothing and still complain, but mostly, people are easy to get along with if you take good care of them. For a small business, service is the one area where you have to excel to set yourself apart. 
Clients expect both service and competitive prices.We all know how fast negative comments spread on the grapevine, so an unhappy client will spread negativity ten times faster than a positive referral.Your task is to perfect every aspect of your service, so review these important service components:
  • Guarantees: Know what kind of guarantees you will offer and promote these in your marketing. Familiarize yourself with clients’ needs and expectations, and if you can’t meet them, tell customers before a sale rather than performing inadequately or selling them the wrong product.
  • Personal service: Remember, customers are always right, even when they are wrong, so don’t argue with them. Treat them as you expect to be treated. Remember names, faces, and family details. This shows that you are attentive and care.
  • Telephone manners: A sale can be lost or gained by that first call, so your communication skills must work overtime. Be polite, interested, friendly, and positive, and be available by phone. If your advertisements are on the radio at 7 p.m. every evening or the talk show you just appeared on is at 8 p.m., make sure your phone is answered at these times.
  • Employees: Your receptionist or traffic controller - which may initially be you - is the direct link between you and your customers. Customers will either come to you or be diverted to the competition, dependent on how they are initially treated. Your employees must believe in you and your business and be willing to happily service customers. Train them well and treat them fairly - they are an important component of your business.
  • Physical appearance: Your employees, premises or office, vehicles, and you should always be clean and presentable.
  • Follow-up: Contact customers after a sale to ask whether they are satisfied or if there were any problems. Honor time and price commitments, even if you have made a mistake. If promised delivery dates cannot be met, call your customer immediately, apologize, and reschedule.
Creating customer loyalty
Building a successful business means that you need repeat business. Unfortunately, for some, their loyalty lies with their bank accounts. You can’t blame people for watching their shrinking dollars, so how are you going to keep customers? Use simple strategies, including excellent service. Offer incentives, such as additional discounts for regular business, a company coffee mug, or chocolates at Christmas. Thank them for coming in and have a coffee pot and cookies available.

Show That You Care: Be good to your customers and they will refer you. When this happens, send a thank-you card. If you meet on the street or at a dinner party, warmly acknowledge them. Even if you charge a little more than competitors, they’ll become loyal to you. The fact that you took time out from your busy day to say thank you or to chat is not forgotten. It’s the small touches that make big impressions.

Think of simple ways to entice customers back. Our local bakery gives cookies to children. The deli gives a dozen buns free with orders over $9. The local independent supermarket always has free coffee available, along with drawing and suggestion boxes. Cashiers willingly pack and wheel your groceries to the car. Senior citizens get a 10 percent discount on Sundays and a free weekly grocery delivery service. These small stores have successfully sustained a strong customer base for twenty years.

Source: Business For Beginners, by Frances McGuckin.