Throwback Time

Posted – August 8th. 2017 by Richard T. Mindler, Jr.
Here is a little something from January 13th. 2011.

Richard T. Mindler, Jr.

Richard T. Mindler, Jr.

Here we go again.

Richard T. Mindler, Jr.

 

Why Small Businesses Fail

Posted By:
Richard T. Mindler, Jr.

June 2nd. 2015

Why Small Businesses Fail

 

  1. Poor planning: Yes, you must have a business plan. It can be a simple three-page plan or a huge 40-page plan. The point is that you’ve looked at all the aspects of your business and are prepared to handle problems when they arise. Your business plan helps you to focus on your goals and your vision, as well as setting out plans to accomplishing them. And don’t get mellow – revisit and revise your business plan annually.
  2. Entrepreneurial excitement: Entrepreneurs often get excited about new ideas, but are unable to determine if they’re “true opportunities” and/or put them into practice. Test every new idea against your business plan and mission statement before deciding whether to undertake it or not, and ask yourself, Do I have the time and skill to implement this?
  3. Putting all your eggs in one basket: Too often, small business owners will have just one product, one service or one big client. They cling tight to this one thing because it brings in good revenue. But what if the one thing disappears? Variety and diversification will cushion you against the ebb and flow of business tides.
  4. Poor record keeping and financial controls: Yes, you have to keep financial and business records, you have to review your revenue and expense report each month, and you have to file taxes and other business-related filings. If you don’t know how to do these, or don’t want to, get help from someone who does.
  5. Lack of experience in running a business or in the industry you’re entering: There are so many hats you have to wear, from marketing and selling in order to run a business effectively. On top of that, you have to understand your industry, the skills required to offer your products and services, and the trends in the industry. If you don’t know about these basic skills, educate yourself. Talk to others who are successfully running their own businesses, talk to industry leaders, get a book, find a website, get a coach, do your homework. And keep increasing your business and industry skills by attending classes or reading new books every year.
  6. Poor money management: You need to be able to live for one to two years without income when getting started; often businesses are very slow to get off the ground. Also, you have to create and use a realistic business budget, and not constantly drain the business income on personal spending.
  7. Wrong location: If your business has a “bricks and mortar” location, you need to make sure that you are convenient to your customers, and near to your suppliers and your employees. Even something as simple as traffic patterns and parking can make or break your business.
  8. Competition: Customers will go where they can find the best products and services. It’s important for you to know who your competition is, what they have to offer, and what makes your own products or services better.
  9. Procrastination and poor time management: Putting off tasks that you don’t enjoy will sink your business faster than anything else. You can’t afford to waste time on unimportant tasks while critical tasks pile up. All tasks need to be done; if you don’t like to do them (or don’t want to spend your time doing them), hire someone to do them for you. If your time management and prioritizing skills are rusty, hire a small business coach or take a class to help you.
  10. Ineffective marketing: Learn the basics of marketing and make sure that you track the success or failure of each marketing technique you use, then dump those that aren’t working to help you figure out what’s not working.
  11. Ineffective sales techniques: Once you have a potential client, you have to know how to lead them down the sales path. If you don’t understand the basics of selling, get some education on it immediately. If a selling technique doesn’t work, try another one.
  12. Poor customer service: Once you have a customer, you have to keep them. There are two key points here – make sure you pay attention to what the customer wants (and how these wants can change over time), and make sure you provide quick return of phone calls and emails, proper billing, win-win problem solving and an overall pleasant demeanor.
  13. Entrepreneurial burnout: owning your own business requires a huge investment of time, money, energy and emotion. It’s easy to work long days and forget to take time off. But in the end, this only causes burnout where your motivation and creativity will suffer, and a pessimistic attitude prevails. You’ll find yourself unable to balance your business and personal life, and both will suffer. Schedule self-care time into your work week and be religious about taking time off from your business.
  14. Poor cash flow: Let’s face it — having enough cash on hand to pay your bills is crucial. And having enough cash on hand, or access to capital via a loan, to launch the next stage of your business growth is mandatory. Too many small business owners stall because they don’t have enough cash.Thanx, see you next time…
    rtm…

 

5 ways to sell your business at a peak price in 2014

Richard T. Mindler, Jr. – Posted 10-2-14

5 ways to sell your business at a peak price in 2014

 

The BizBuySell Insight Report, published by the online business marketplace BizBuySell, found that the number of small-business deals that closed in 2013 increased by 41.7 percent in the third quarter compared to the same quarter in 2012, with restaurants and retail businesses seeing the most action. The median sale price for small businesses in Q3 of 2013 was $180,000—up 2.9 percent from the same time the previous year, though a little below the median asking price of $199,000. On average, selling prices were equal to 2.19 percent of cash flow.
This does not apply to Broadcast companies, radio stations, TV stations or newspapers due to the supply, it’s just not there and have a price in a different market. (Much Higher)The healthy selling climate seems likely to continue—which is good news for those who are eager to retire or cash out. Among mergers-and-acquisitions insiders, 68 percent expected the market to pick up strength in the 12 months following September 2013, according to a survey released in October by the law firm Dykema, headquartered in Ann Arbor, Mich.

With interest rates still low, experts say many buyers should be able to access affordable financing. “You’ve got a pretty good window in 2014 where rates will begin to start to rise but still stay at historically low levels,” said Mitch Davidson, managing director of Post Capital Partners, a New York City private equity firm focused on the lower end of the middle market. “Debt finances a significant element of these transactions.”

(Read more: Where American entrepreneurs are striking next)

Of course, the market for any small business can be unpredictable, so owners shouldn’t sell just because there’s momentum now, say experts. There need to be other compelling reasons to put a business on the market, whether that’s the desire to move on to a new venture or to slow down.

“Market timing is always tricky, so I’m not sure that anybody should be waiting for just the right time to sell,” said Kevin O’Connell, a partner in the corporate department at Boston-based law firm Posternak Blankstein & Lund, who works in mergers and acquisitions.

If you are considering selling a business at some point in the near future, it is important to get it into shape to reap the maximum return on your investment. Here are five strategies experts recommend. The best part: None of these will be wasted efforts if you reconsider selling, because all will make your business stronger.

1. Get your books in order.

A recent Citibank Small Business Pulse report found that 25 percent of small-business owners expect to sell their company to a competitor or third party as an eventual exit strategy. But many business owners keep sloppy books, which can scare away buyers—especially sophisticated ones, like private equity firms. They want to see evidence of profit and actual or potential growth, said O’Connell.

To give buyers confidence, Davidson recommends getting audited financials for several recent years, which can be costly but makes a business more attractive. “It is a great investment to make,” he said.

Don’t put off getting your financials in shape, even if you’re planning to wait another year or two to sell. Often, small-business owners have to put their business on the market unexpectedly due to health problems, accidents or a family member who needs care, said Bill Watson, a former CPA. As owner of Advanced Business Group in Nashville, Tenn., he helps business owners build the value of their businesses and sell them. “Make sure you’re ready to sell at all times,” he advised.

(Read more: Buyout kings seek US partnerships as deal prices rise)

“Generally, if your business relies less on the owner, you get a higher selling price.” -Jock Purtle, broker, Digital Exits

2. Protect your intellectual property.

This can help you amp up the value of your business, but it’s not always a speedy process, so plan ahead. “If you need to get a patent for something, that’s something you need to consider very early in the process,” said Tatiana Melnik, an attorney in Tampa, Fla., who works with both start-ups and established businesses. “Spend the time trademarking your company name. Get copyright protection for whatever you are developing. All of that has value.”

Sometimes owners who do this discover that they have been infringing on the trademark of another business unwittingly. You’ll be much better off if you find out early and fix the situation before you’re in talks with a buyer. “A lot of times people don’t find out until they’re considering selling,” Melnik said.

3. Make sure the business isn’t dependent on you.

A business that depends heavily on the presence of one person to succeed—such as a creative services business where clients are paying for your personal talent or expertise—can be very difficult to sell to another buyer. “Generally, if your business relies less on the owner, you get a higher selling price,” said Jock Purtle, a broker of Internet businesses who runs Digital Exits, a Sydney, Australia–based firm that does 90 percent of its deals in the U.S. “If the operations are managed by staff or systems or technology and there’s less day-to-day importance of the owner, you’re going to get a higher price.”

(Read more: Start-ups take perks to new levels)

One of Purtle’s clients, Travis Jamison, founder of Supremacy SEO, located a buyer within about a month when he recently decided to sell an ecommerce store he launched to sell guides telling consumers how to “jail break” iPhones, a growing craze among the tech savvy. The process, which is legal but is discouraged by Apple because it can lead to problems like security vulnerabilities, lets the phones’ owners unlock the code so they can download apps from outside the iTunes store.

Jamison’s secret to finding a buyer quickly: “I built it to sell from the get-go,” the serial entrepreneur from Ashville, N.C., said on a call from Ho Chi Minh City in Vietnam, where he has been staying. From the time he started the business in February 2013, he used his expertise in search engine optimization to make sure the store ranked high in Google. He automated virtually every aspect of the business, from taking orders to providing outsourced customer service in the Philippines. And he hired an employee to run it while he travels around the world—a sign that someone else could run it. And he kept good written records on his procedures. “You want everything to be written down in a process,” he said. “Otherwise, there will be questions and uncertainty about it.”

Due to the terms of the deal, Jamison could not disclose the amount of the sale, but he said that the ease of running the ecommerce store made it very appealing to the entrepreneur who bought it.

(Read more: Getting a high sales price for your company)

4. Know what your business is worth.

One of the first steps Watson recommends to owners who seek his help in selling a business is to get several independent valuations done by reputable firms so his clients know where they stand. If they have the energy to make a push to increase the value of the business, he works with them to identify strategies that will help. Sometimes this may mean going after bigger contracts to increase the “sellable cash flow.” In other cases, it could mean making strategic investments in the business that will make it worth more.

“I had a client that needed a $60,000 computer upgrade,” he recalled. “They could have leased that product from someone, or they could go out and buy that product and depreciate it. As far as the cash they spent, it was about the same either way.” However, each route would have a different impact on the firm’s value. “On the market, if you lease it, it’s an expense of the business,” he said. “That $60,000 comes straight out of their cash flow. They increased value of $180,000 by buying the computer upgrade. It had a tremendous effect on their value.”

5. Don’t keep secrets.

“Buyers do not like surprises,” said Posternak Blankstein & Lund’s O’Connell. “Don’t hold back on that uncomfortable litigation that has been filed against you. Whatever skeleton you have in the closet, be prepared to talk about it early. The longer you wait, the more disappointed the buyer will be. The greater the likelihood you will spoil the deal.” If you’re involved in litigation, have toxic goo buried in the backyard or are grappling with employee unrest, you may need to resolve those problems to get the best selling price. Regardless of what the market does in 2014, it will be easier to sell a business that’s thriving.
Check back soon for more informative facts from- Richard T. Mindler, Jr.

Ten Point Plan to Get Rich Quick

https://twitter.com/rmindler

Richard T. Mindler, Jr.

 

My Ten Point Plan to Get Rich Quick as an Entrepreneur

The only point to entrepreneurship is to get rich, so I’ve outlined below the keys to getting there faster and easier.

  1. Ferrari 599 GTB Fiorano (French plate erased)....

    Ferrari 599 GTB Fiorano – Taken in France.
    Posted by : Richard T. Mindler, Jr.

    Get a nice ride.  First and foremost, you’ve got to look the part of a successful entrepreneur, so spend all the money you have and any money you can borrow on a really fast car, preferably something Italian.  You definitely want to have a car that’s faster than a venture capitalist’s Porsche; you need to command their respect.  Whatever you do, don’t save your money to invest in your business.  You should expect investors to put up all the money and take all the risk.

  2. Quit your job.  If you’re serious about entrepreneurship, quit your job.  Don’t wait until you have a business plan or even an idea.  Quit your job now.  What self-respecting entrepreneur has a job working for someone else?  The last thing you want to do is let your current employer help fund your new business.
  3. Quick, think of something easy.  Don’t waste any time developing a new technology or even developing a thoughtful plan.  Copy someone else.  Do something simple.  Whatever you do, don’t leverage your specific skill set and experience to create something new or something that you have a real passion for.  You want to get rich quick and doing something hard is going to take a long time.
  4. Yacht (Lady Mona K) in Skopelos

    Yacht (Lady Mona K) in Skopelos
    Posted by : Richard T. Mindler, Jr.

    Call it something cool.  Give your company a really high-tech sounding, made up name.  Be sure to describe your product in technological terms no one understands.  With just a little creativity you can make a sponge into a high tech product that will revolutionize one industry after another.  It’s all about the marketing.  Don’t waste a lot of money on research and development—you don’t have any money left.

  5. Go it aloneManagement teams are overrated.  The last thing you want is to have a team around you that will challenge your ideas and tell you when you’re wrong.  What a waste of time.  Your business plan is easy; you can do it all by yourself.  OK, maybe you’ll need to hire a virtual assistant in the Philippines for $4 per hour, but that’s it.  No one else.  You don’t want to build a team of experienced executives who can see problems you can’t.  You certainly don’t want young, passionate people from top schools who care more about changing the world than making a buck on your team.
  6. Don’t do anything that matters.  If it matters and it hasn’t been done, yet, it’s way too hard.  That’s someone else’s job and it’s going to take them a long time and a lot of money to pull it off.  Remember, it took Steve Jobs over a decade to make his first billion; you don’t have that kind of time.  We’re talking about making a quick buck here.  Focus!
  7. Ignore social issues.  There is no money in solving social problems, so be sure to steer clear of that whole arena.   Be careful, because if you wander into social entrepreneurship you’re likely to violate the last rule, too.  Double jeopardy.  Stay focused on the financial bottom line.  The only thing that matters is profit.
  8. Raise lots of money.  Now that you have a simple business idea that you can execute all by yourself and you’ve spent all of your money on an Italian sports car, you’re ready to raise money.  Whatever you do, don’t give up more than 10% of the company or control of the board.  You are the only thing needed for success.  Anyone’s money will do.  Caution: don’t ask friends and family for money—you’ll see them again.
  9. Go public.  As soon as you generate a few dollars in revenue, there are legions of financial advisors ready to help you take your company “to the next level” by taking your business public.  Don’t be concerned that these guys work for firms you’ve never heard of; they’re going to let you in on secrets that Goldman Sachs doesn’t understand.  This may involve something called a “reverse merger” into a corporate shell, but you don’t need to worry yourself with the details.  The equity line of credit they offer you will provide all the money you ever need.  The death spiral preferred will always be available if you need it.
  10. You’re rich!  You’ll own millions of shares in a publicly traded company with virtually no revenue, no prospects for profits, a regulatory burden that will cost $500,000 per year and of course you can’t sell any of your shares.
    Also, you know I’m joking, right! 🙂

    The Best way to get Rich Quick is get a Job…. I know, that’s a bad word to some!? :/  Stay well and stay Tuned! rtm…


  11. Follow me on Twitter!
    https://twitter.com/rmindler