K. MacKillop

Jan 162012
 

baseball with "China" stamped on itA great many startup “experts” now recommend that new entrepreneurs outsource as much of the noncore tasks as possible. The arguments sound logical – leave the work to the professionals; focus on your core competencies; don’t be distracted by accounting/marketing/whatever details. But there are a few problems with this advice that you should be aware of before you send your business out to be handled by others.

Consider the Source.
Much of the outsourcing advice comes from those who benefit from you choosing to outsource. For example, “free” websites with startup information are making money…from the ad clicks and paid advertisements of outsource professionals! Check out the ads on and around these sites…if they convince you to hire one of those advertisers to do your work, they earn a piece of your fee. It’s not always bad advice, but be aware that they aren’t really providing you valuable information for nothing in return.

Is an Outsourced Business Really Yours?
Being a business owner is all about taking control of your work life and financial future. How much of that control are you willing to hand out to others? The job of an entrepreneur is more than just being your own boss. You are also your own accountant, attorney, sales staff, secretary, and janitor. If you only really want to play one of these roles, you might be better off working for someone else. Turning over too much responsibility to outsiders can be a huge mistake, especially if you don’t know exactly what they are doing for your business!

What you don’t know...
Many new entrepreneurs do not have a strong background in finance and accounting, or just plain don’t like to deal with numbers. Some figure it would just be easier to have someone else handle the marketing. Many believe the legal paperwork is just too complicated to do for themselves. The thing is that all of these skill sets are part and parcel to owning and running a successful business. It’s OK that you don’t know everything right now, but the trick is to use the startup process to learn all you can. After all, how can you pick the right professional to outsource to if you don’t know what you are looking for? Don’t let anybody tell you that it’s a good idea to let some stranger make important decisions for YOUR business…you need to have your hand in everything, especially during the early stages.

The reality is that in business the bottom line is the bottom line…the whole point is to make money. Turning over all responsibility to an outsource professional can be an enormous, irreparable mistake. They can’t possibly understand your business like you do, they can’t make the best, most strategic decisions for growing your company, and as long as you pay them their fee, there isn’t much motivation to go the extra mile. Business owners, especially those who want to make some serious money, must master the money matters on their own before handing it off to an outsider.

About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643323

Dec 192011
 

unemployed man with a signThe latest figures show the unemployment rate in the US is near 10%…that’s one in ten people out of work! And, the future isn’t looking particularly bright. Recent reports estimate the lack of work will continue through 2011, at least. You can’t sit around and wait for big business or the government to turn the economy around, so it’s pretty much up to you to take control for yourself. How can you get your financial life back on track? Put yourself to work!

Starting a business of your own is the best and only way to take complete control of your work life. Working for yourself means no layoffs, no wage freezes, no begging for a day off, no hoping that the big bossman will grant you a meager year-end bonus. When you work for yourself, YOU set your income goals and work as hard (or not) as needed to reach those goals. YOU develop a company culture that fits your personality. YOU establish your own work hours. And YOU decide when it’s time to grow.

Of course, starting a business requires a good bit of time and effort, but at least the work you do is just for you. When you want to earn more income, you put in more work. When you want a little time off, you take the time you need. Because it’s all on you, you will do the work to control the risks and because you are taking control of your worklife, you are more likely to stay motivated.

For many new entrepreneurs, the toughest part of independence is taking the first step…or even figuring out what that first step would be. If you’re just not sure where to start, start here:

Define Your Goals
Take a look at where you are now and where you want to be. Write it all down and cover all areas of your life.

Make the Tough Decisions
If you are drowning in debt, decide how to handle it. If you hate your job, set a deadline to make the change. If you don’t have any startup cash, figure out how to raise it. Look at the gap between where you are and where you want to be and create a concrete plan to close up that gap. If it seems like it will take forever, don’t let that bother you. If you start today, you are one day closer to where you want to be!

Pick a Startup
Brainstorm business ideas, find a modified version of your own big idea, talk to your friends and family about startup opportunities. It really doesn’t matter where you start with your independence, just that you get started. Most wildly successful entrepreneur change direction a number of times before landing on the perfect opportunity. And, more opportunities seem to appear once you’ve taken the first step.

Educate Yourself
Entrepreneurship is its own separate profession. Becoming an expert requires that you learn the fundamentals of a bunch of other professions, including accounting, marketing, financial management, sales, logistics, even secretarial and janitorial duties. Beyond that, you will learn to incorporate all those basic skills and add the key ingredient to success – innovation. Innovation is finding a new, better way to get things done. It might be a change in the product, the sales process, or even in administrative functions, but innovations are the one factor that will make you a success. To be able to identify those innovations, you have to know the basics.

Watch for opportunity
Once you have taken the first leap into entrepreneurship (which might even just be making the decision to go out on your own!), you will begin to see opportunities all around you. Don’t be afraid to pursue multiple opportunities. As long as you manage your time well, having a bunch of hooks in the water will multiply your odds of catching some fish!


About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643374

Dec 052011
 

globe with the word "outsourcing"Outsourcing is a popular recommendation for new entrepreneurs. Many startup experts advise outsourcing everything except exactly the part of the business you really like to do. In most cases, this is really not very good advice. Once you start handing out responsibility for pieces of your business to outsiders, it isn’t long before it’s really not your business at all! And, if you are planning for your business to grow and last, you (as the owner) must know and understand what is going on with all areas of the company.

Still, there are times when outsourcing is a good idea. Here are a few circumstances that warrant looking for outside help for your startup:

Very Specialized Operations
Some businesses have such specialized operations that dealing with the other details of the business just don’t make good sense. For example, software development companies that will be looking for VC money often outsource the basic accounting and administrative tasks in order to keep focus on the development of the product. There are outsource professionals who specialize in these situations. In most cases, however, it is still a better option to have a partner involved in the business who knows about the fundamentals of business.

There’s Not Enough Time
As you dive into the startup process, you will quickly find yourself with less and less time to get everything done. If your startup is just you, outsourcing some tasks can be a good idea. The key is to know exactly what it is you want the outsourcer to do, have a plan for keeping track of their work, and do your due diligence in selecting the right outsourcer for your business’s needs.

You Know What You Want Done
While you need to know the basics of everything your business does, you’re probably not going to be an expert in all of it. When you have a specific project or task that is out of your skill set, hiring an outside professional can be the best idea. If you aren’t sure what to look for in the right professional, talk to several professionals in the industry before contracting with one. The more you know about the work they do, the better you will be able to select the right candidate to help with your business.

Crazy Growing Pains
Businesses tend to grow in step-change increments. That is, rather than slow, steady, easy-to-adapt-to growth, most successful businesses land one huge client, or launch an outrageously successful marketing campaign, or otherwise see a surge in sales activity. During these growth stages, it can be very difficult to keep up with the details, and the cash flow may not be sufficient to hire additional employees right away. In these cases, outsource professionals can be the greatest thing since sliced bread. Again, the trick is to know what you need and seek out the best outsourcer to get the job done.

Any time you hand off responsibility for any part of your business to an outsider, you are taking a risk. However, there are some times when it is absolutely the best thing to do.


About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643385

Nov 072011
 

man hoarding moneyOver the last few years, we have all been bombarded with images of the chaos caused by greed. With the destruction of the American economy, the outrageous unemployment rate, and the ridiculous number of working American drowning in debt, the poison of greed is a hot topic these days. Nobody wants to consider themselves greedy, especially when we all know someone struggling with no job and an impossible mortgage and debt payments. But is greed always a bad thing?

The problem with greed only comes with and excess of greed. The corporate crooks splashed across the front pages are the extreme worst of business owners and management. The scammers and cheaters lurking the internet for unsuspecting dreamers are the bottom feeders of society, but they have always been around (snake oil salesmen?). The greed found in these situations developed slowly, compromising one small piece of morality at a time until taking advantage of anyone and everyone seemed normal.

Greed, at these extreme levels, just encourages bad risk. You can see it in people who fall for get-rich-quick schemes, grant scams, and even respond to those Nigerian banking swindles. You can clearly see it in the management of the huge banks, in the ridiculous fees and outrageous interest charges. And, worse, you can see it in the Wall Street swaps of bad debt and doomed mortgages.

But not all greed is bad. In fact, some level of greed is necessary for progress. A healthy amount of greed encourages innovation and calculated risk. Innovation, or figuring out a better way to do things, is rarely motivated by anything but a bit of greed. Entrepreneurship is all about finding a better way to serve customers or solve a problem, and very few entrepreneurs aren’t in it, at least in part, for the money. Controlling risk is an essential factor in entrepreneurial success as well, so the motivation to do the homework before launching a new business is also basically also a bit of greed.

Some greed is necessary. The turnaround of the US economy will be on the backs of small business owners. It’s that little bit of greed that will encourage you to launch a new business, hire employees, expand to multiple locations, and get some cash circulating again. The trick, of course, is to decide when enough is enough and to draw a clear ethical line in everything you do. Just remember, that little part of you that wants to live without money worries and have your name on your own business cards is the good kind of greed…and the only thing that’s going to turn this economy around!


About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643349

Oct 242011
 

cash in a mouse trapThere is a common assumption that you have to raise money from outside sources to start a viable business. In fact, the vast majority of small businesses are launched solely on the owner’s dime and time. Some businesses seem to simply require outside investment, particularly if they call for expensive equipment, a substantial inventory, significant labor, or the like. However, most business ideas can be modified into smaller startups without high capital needs and built up to the ultimate company over time.

There are advantages and disadvantages to raising outside capital for a startup, and the decision whether to launch a full business idea or modify it to fit your own budget might come down to some of these factors.

Advantages of Raising External Funding

Money
Obviously, the number on advantage of raising capital is that you have money to spend. All of your initial ideas can be implemented and, if your plan is well-researched, you will have no problem staying afloat during the early stages of operations.

Value-Adding Investors
Some investors include their own expertise in the investment deal. In these cases, they are essentially paying you to be your mentor.

Sharing Responsibility and Risk
Bringing on partners redistributes the risk, and potentially the responsibilities, from entirely on your shoulders to the agreed upon proportions among you and the investors.

Presumption of Competence
Customers, vendors, and other investors may perceive your business idea as more viable simply because you have already secured a significant investment.

More Aggressive Projections
Knowing that you are starting with a sufficient bankroll to fulfill all of your best-case plans can be the motivation you need to swing for the fences and shoot for an out-of-the-park homerun.

Disadvantages of raising external funding:

Loss of Control
Once you split your equity with an investor, you have no capacity to fire them outright. Depending on the deal you make, every decision may require discussion with the other guy. And, the more you accept as investment, the more power they are likely to want and wield.

Limited Exit Strategies
In the same vein as above, once you partner with an investor, it is no longer up to you when and how you get out of the business. You can’t always just pass it on to your kids, or sell it to an interested entrepreneur, or even just close the doors.

Altered Focus
With plenty of cash in the bank pre-launch, your focus is more likely to be on spending money than making money…perhaps not the best culture for a burgeoning venture.

Overconfidence
Confidence in your idea and abilities is critical, unjustified overconfidence is just plain dangerous. Taking in an early influx of cash such that there is no struggle associated with your startup can develop a culture of squander and waste…a difficult attitude to overcome once the cash runs out.

Whether or not to seek out external funding, and how much to ask for, is a decision only the entrepreneur can make. Be sure to consider the long-term outcome of bringing on partners or taking out big loans. If you are comfortable with the downsides of external financing, you can get your idea to market that much faster. If not, it may take more time to get off the ground, but you will be in the pilot’s seat for the duration. Whatever you do, stay focused on the ultimate goal and do not let cash issues detract from what you are trying to do.

About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643273

Oct 102011
 

mature business woman smilingStarting a business is not for everyone. Aside from the perceived risks to your personal finances, lifestyle, and career, some folks just can’t cope with the thought of failure. Damaging one’s personal brand (basically, the ego) is a devastating thought for some, but one that can be managed before, during, and even after your entrepreneurial experience.

The primary concern for most non-entrepreneurs is that, if they fail, they will become known as the guy who couldn’t cut it on his own. They worry that others will view them as an utter failure and they will lose whatever credibility they had before. They figure it will be more difficult to find a job after a business failure because their old industry contacts will question their competence.

The reality is that going out on your own is one of the most difficult decisions one can make. You are putting yourself on the line for a shot at a better life. Most people will respect that, even if you fail. Those that don’t are probably envious because they don’t have the spine to do it themselves. For those who choose to think less of you for striving for independence, just remember that they likely have a tendency to cut everyone down for one thing or another – somehow it just makes them feel better about themselves.

Most people will be impressed at your willingness to try. In general, entrepreneurs hold high esteem in our society, even those that don’t quite succeed the first time out. Avoid the mistake of disappearing once you commit to your startup full-time. Keep in touch with your professional contacts, including employers, colleagues, and clients. Not only can these relationships provide references for your new venture, but they will keep you connected to the outside world. Most fear of failure is in our own heads, and maintaining communication with others who believe in your abilities and ideas can go a long way in mitigating the risk to your personal brand.

The trick to coping with possible failure comes down to how you handle it. For successful entrepreneurs, failure is good news – now they know what not to do. A vast majority of the most successful business owners failed multiple times before finding the right formula. Fortunately, much of the information they had to learn by trial and error is now readily available to help you succeed that much sooner.

If your first startup does fail, do not let it destroy your will for independence. If anything, a business failure should provide enough valuable lessons to send you eagerly back to the lab to get to work on the next idea. If you have to go back to work for someone else, the relationships you maintained during your startup should be good references for finding a decent job. Those that supported you likely respect the characteristics that make you an entrepreneur and see their value in the workplace.

The best defense against ego or personal brand damage is just not to fail. True entrepreneurs are rabidly risk-averse – they will do whatever it takes to remove risk from their ventures. The more work you put into the front end of your business idea, the more you increase your odds of success.


About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643332

Sep 262011
 

group of smiling peopleThe vast majority of new businesses are self-funded, but the second most common financing method is through friends and family. Typically, those closest to you are the most likely to believe in you and your startup idea, they know your capabilities, and they want to see you succeed. However, money issues have a tendency to cause rifts in even the closest relationships, so it is critical that you plan ahead and handle all friends and family deals as professionally as possible.

There are basically two options for securing friends and family financing – loans or equity stakes. Loans are basic – your friends or family front the money for your startup and you (the business) pays them back over time at a reasonable interest rate. Equity stakes provide the investor with a permanent piece of the company. They do not necessarily get back their original investment within a set time period, but they are entitled to a set share of the profits through the life of the business.

Most family & friends equity stake investments stem from a mutual admiration – they will risk their the money for startup because they are confident that you will succeed, you are willing to give up a portion of profits because you are happy to share with these particular folks. However, without a detailed plan in place, these relationships can devolve very quickly into anger and resentment and can be devastating to both your personal and professional success.

The trick to handling equity stake investments from those close to you is to clearly define what it means for each party. The investor must understand that they are putting their cash at risk. If the business fails, repayment is not an option (if they want a guaranteed repayment, it is a loan, not an equity stake). The amount of return they receive will depend on the agreed upon portion of ownership and the overall profitability of the company.

Think through exactly how much ownership you are willing to trade for the capital your family & friends will provide. In most cases, you will want to at least keep a 51% stake so you have ultimate control of the venture. But giving away nearly half the profits before you even start is not always the best idea, either. Do not let desperation to secure the cash push you into an unfair situation – if it is your idea, your work, and your time that are going to make the business successful, the value of the initial investment may be far less than it seems when you just really, really need the cash.

It is essential to work through all of the details with your equity investor before the deal is made. Will they have any decision-making power? When will they receive distributions for their share of the profits? How will those distributions be calculated? What if the business fails? What if it succeeds beyond your wildest expectations? Talk through every possibility and make it clear that business is business – investment in your startup should not be an emotional issue.

Money and relationships can be a difficult mix. The excitement of going out on your own should not cause personal problems with those closest to you. All the potential resentments and falling out can be avoided, however, by simply putting in the time and effort to handle the equity stake agreement as professionally as possible. Dealt with correctly from the start, creating financial partnerships with friends and family can be a win-win situation for everyone involved.


About the Author:
K. MacKillop, a serial entrepreneur, is founder of LaunchX and authors a small business startup blog. The LaunchX System is designed to help entrepreneurs start a business based on their own idea. It includes step-by-step business startup instructions, key software, business tools, and more — a complete business kit. Visit LaunchX.com to learn more about this revolutionary way to become an entrepreneur.

Article Source: http://EzineArticles.com/?expert=K._MacKillop
Article Source: http://EzineArticles.com/5643000