How to Start a Small Business – Best Advice and ideas

The Entrepreneurial Process to Starting a Business from Scratch

Ajaero Tony Martins — Thu, 16 Feb 2012 10:16:25 +0000

Today, I will be sharing with you the step by step process every entrepreneur must undergo when starting a business from scratch. This process is called the “Entrepreneurial process.” This is the same process that brings into being; both great and small businesses.

“In the game of entrepreneurship, the process is more important than the goal. When you start building a business, you begin a journey, a process. This process has a beginning and an ending and between the beginning and end lays a lot of challenges. You will win only if you remain faithful to the process.” – Rich Dad

Entrepreneurship is a process; a journey, not a destination. You can never build a successful business without undergoing the entrepreneurial process and there’s no exemption to this rule. Bill Gates, Warren Buffett, Larry Ellison, Steve Jobs, Mike Adenuga, Oprah Winfrey and Aliko Dangote; the richest black man in the world all went through this process.

“The most important thing is to enjoy yourself and continue to work. Life is a journey, not a destination. That’s also true in business; your objectives keep moving.” – Thomas J. Burrell

Before I proceed to highlight the phases of the entrepreneurial process, I think it’s worthwhile I let you know that not all who start this process will end it. There’s no big deal about it; it’s the norm. Such is life. Many will quit along the way so it’s up to you to decide if you will be one of the losers or winners.

The Entrepreneurial Process to Building a Business from scratch

1. Experience the entrepreneurial seizure

The entrepreneurial process usually begins with the entrepreneurial seizure. I think I first heard the term “entrepreneurial seizure” from the book “E-Myth Revisited.” Every entrepreneur experiences this seizure and you can know you’ve been affected by it when you begin to ask yourself any of these questions:

Why can’t I be my own boss?

I am tired of this 9-5 job?

I work so hard but my boss doesn’t recognize me.

Why am I working for my boss when I can go out on my own?

I am gifted, why can’t I make money with my gift?

“It’s within everybody’s grasp to be a CEO.” – Martha Stewart

Once you begin to nurture these perceptions, the entrepreneurial process has begun. It’s in this phase that you will begin to question conventional wisdom. During this stage, the primary keywords on your lips would be: Why, how, what, when, who and where.

2. Plan the business

Any entrepreneur who makes it through the first stage usually begins to draw up a plan of a proposed business venture. In your spare time, you will fantasize, scheme and plot. You will imagine yourself being at the helm of affairs. You will begin to analyze the possibilities of going ahead with your business idea; once you have drawn a business plan, know that you’ve just completed the phase two of the entrepreneurial process.

“A plan is a bridge to your dreams. Your job is to make the plan or bridge real, so that your dreams will become real. If all you do is stand on the side of the bank and dream of the other side, your dreams will forever be just dreams. First make your plans real and then your dreams will come true.” – Rich Dad

3. Make mistakes and learn

In the process of planning your business, you are bound to make some mistakes. Your mind will begin to show you reasons why building a business is not for you. You will begin to see reasons why you need your job more than ever. You will also experience some disappointments that will make you almost quit.

“The size of your success is measured by the strength of your desire, the size of your dream and how you handle disappointment along the way.” – Rich Dad

The sad truth is that many entrepreneurs don’t go beyond this phase of the process; their dreams die in the planning phase. I have seen entrepreneurs with solid business plan; back out of the process simply because no one wants to invest in their idea. I have seen entrepreneurs rewrite their business plan, year in year out; because they are held back by the fear of failure.

“The biggest challenge you have is to challenge your own self doubt and your laziness. It is your self doubt and your laziness that defines and limit who you are.” – Rich Dad

That’s why this third phase is all about making mistakes and learning. Even if no one wants to invest in your idea, keep learning and improving on your plan. You might make a couple of mistakes but don’t quit. If you can boldly forge ahead despite disappointments, you will move on to the next phase of the process.

“Underneath every mistake in business is a valuable lesson. Unfortunately, many entrepreneurs miss these lessons because they lament and blame others over the mistakes.” – Ajaero Tony Martins

“Like success, failure is many things to many people. With positive mental attitude, failure is a learning experience, a rung on the ladder, and a plateau at which to get your thoughts in order to prepare to try again.” – W. Clement Stone

4. Start a Business

“Start small and dream big.” – Rich Dad

Many come up with bright ideas and write powerful business plans but only few ever dare to start a business. If you have gotten to this phase of the entrepreneurial process, I say congratulations.

“Starting a business is like building a ship and embarking on a voyage, armed with a plan, a map and a team. You will have to sail against storms, unpredictable weather and uncertainty. If your ship sinks, it’s either you quit or you swim back to shore, build a new ship and sail again.” – Ajaero Tony Martins

5. Sustain the business

Starting a business just the beginning of the game; sustaining that business is where the real challenge lies. This is where you fight to keep the business you have started afloat. You will have to handle competition, find customers, deal with critical business challenges, pay bills upon bills, deal with employees and so on. This is where the stress of running a business gets worst.

“Business, more than any other occupation, is a continual calculation, an instinctive exercise in foresight.” – Henry R. Luce

6. Make mistakes and learn

This is the phase where many new businesses go down. This phase is the reason why 99% of all small business startup fail in their first five years. At this point, silly business mistakes will be made that will result to loss of cash, customers or crucial employees. This is the point where you begin to regret why you ever started a business. If you are not strong hearted, you will let go the dream of building a business.

“Sometimes when you innovate, you make mistakes. It’s best to admit them quickly and get on with improving your other innovations.” – Steve Jobs

“A mistake is a signal that it is time to learn something new, something you don’t know before.” – Rich Dad

What smart entrepreneurs do at this phase is to seek new answers. They assess themselves to see the necessary entrepreneurial skills that is lacking. They attend seminars, read books on business and entrepreneurship, find a business mentor or form strategic alliances.

“One of the great things about being willing to try new things and make mistakes is that making mistakes keeps you humble. People who are humble learn more than people who are arrogant.” – Rich Dad

“There are no mistakes in life, just learning opportunities.” – Rich Dad

7. Stick to the process

“You can always quit, so why quit now.” – Rich Dad

After seeking new answers, this is the phase where you implement the answers found on your business. It’s the phase where you take the bull by the horn and refuse to call it quit. Only few entrepreneurs ever get to this phase because it takes a lot of time, resources and commitment to stay on this phase. Getting to this phase might take about three to ten years from the point of starting the business.

“I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.” – Aliko Dangote

8. Build a successful business

If you stick to the process without quitting, you will finally have the business of your dreams right in your hands. This is the phase where your business needs you no more because your presence or absence will have little impact on its growth. This is the phase where you celebrate your achievement. At this point, you can choose to either exit the business or stick with it. But regardless of the choice made, the money will keep flowing.

9. Count your wins or losses

Every successful entrepreneur usually comes to this phase. This is the phase where you reflect over the process of building a business; the business challenges you overcame, the games you won or lost and the business failures you have experienced. This is where you share your story of success or failure with others; it’s the phase where you decide if the entrepreneurial process was really worth undergoing.

10. Retire or repeat the process

This is the final phase of the entrepreneurial process. Less than 20% of all entrepreneurs that started the process get to this phase. At this phase, you are self made and you can choose to either retire or repeat the process. I said retire or repeat the process because I have seen entrepreneurs who start the process all over again even after building a successful business. Others will retire but come back to repeat the process because of the challenges and excitement it offers. So whatsoever choice you make is left for you to decide.

“I’m not afraid of turning 80 and I have lots of things to do. I don’t have time for dying.” – Ingvar Kamprad

These are the ten phases that make up the entrepreneurial process. Remember, not all who started this process makes it to the end. Will you make it to the end of the process? Only you can decide your fate.

How to Start a New Business: It Takes More than Just an Idea

Ajaero Tony Martins — Thu, 16 Feb 2012 10:15:18 +0000

I have got a brilliant idea that going to make me a lot of money! That’s the pitch I usually get from budding enthusiastic entrepreneurs. My questions now are:

“Is a brilliant idea all it takes to start a business? Does a smart business idea guarantee success when starting a business from scratch? Is a business idea the minimum, most important requisite for starting a business? Will a million dollar idea; see you through the entrepreneurial process of starting a business from scratch.” Well, you will find out further down this article.

Sometime ago, I went into a fast food outlet to honor an appointment and I met some youths in the lobby. From my observation, they were waiting to be interviewed for a job at the fast food. Just immediately, an idea cropped in my mind and I joined these young lads waiting to be employed. While in the waiting line, I started a conversation with a young man who should be in his mid 20s.

The young man, who turned out to be a graduate told me he had a passion for cooking. He told me he had a plan to set up a restaurant and based on the detailed plan he gave me; I knew this guy has something innovative up his sleeves and I loved it. He even had a name for his dream restaurant. I asked him what’s holding back the dream of starting a business from being made real and he said he has been trying to raise capital from his wealthy relations.

“There are fast ideas and slow ideas, just as there are fast trains and slow trains. When it comes to money, most people are on the slow train looking out the window watching the fast train pass them by. If you want to become rich quickly, your plan must include fast ideas.” – Robert Kiyosaki

In as much as I loved the young man’s idea; I nodded my head, shook his hand and bid him good luck. On my way to honor the appointment, I kept thinking about this young man. He was cool, smart, enthusiastic and had a brilliant idea backed by a university degree. I really loved the guy and his idea but it’s a pity; the world is filled with brilliant business ideas and I just wish I had told him that. But how would he take it? I am not writing this to discourage budding entrepreneurs from coming up with creative ideas. In fact, I am writing this to encourage you to think and come up with good business ideas. But most importantly, I want you to think beyond the idea because a business idea is just the starting point to starting a business.

“Dream more than others. Think practical.” – Howard Schultz

The world is filled with budding entrepreneurs carrying business plans and seeking investment capital. The sad news is that 85% of these entrepreneurs are never going to go beyond the initial planning stage and that’s the hard truth.

Now what does it takes to start a new business?

That may be the question on your mind. While I believe there is no conventional answer to this question; I will try to provide street smart answer but before I do, I suggest you ponder on the following questions:

Did the successful entrepreneurs and richest school dropout billionaires become ultimately rich because of their ideas? Did Rachael Ray start a restaurant business before harnessing her cooking potential? Did Debbi Field’s wait to raise millions of dollars in capital before starting her cookie business? Of the entire social networking platforms available; why did Facebook emerge the most popular thus, making its founder Mark Zuckerberg, the youngest billionaire in the world?

“A business idea is just another idea. But an idea backed by a strong feasibility, a thorough business plan and a smart team is no longer an idea. It’s now a solid business opportunity worth pursuing.” – Ajaero Tony Martins

In answer to the illustrations and questions asked above, I want you to know that Rachael Ray didn’t start a restaurant business before she began making millions from her cooking recipe. She simply took her business idea, struck a deal with a local television network and became a self made millionaire. No restaurant, no external funding and no million dollar infrastructure. All she had was just her cooking recipe and a television network joint venture; that was all.

Debbi Field’s did not wait for some investors or Venture Capitalists to invest in her passion for baking cookies. She simply looked for a good business location, baked some cookies with her own money and walked around her vicinity giving away free cookies.

Facebook was not the only social networking platform available online; in fact, MySpace has already been in business long before Facebook came on board. Was it Mark Zuckerberg’s idea that led to Facebook’s success? I don’t think so.

These three selected entrepreneurs all possessed average business ideas but they had something which other entrepreneurs lack. In this article, I am going to reveal to you five things you need to start a business and become successful other just than an idea. This write up will help reduce your over concentration on the business idea and shift it to developing the most necessary requirements to starting a business. Building a business around an idea requires everything you’ve got. You are the ultimate key to the realization and utilization of that business idea. To start a business and build the business of your dreams, you need a little of the following:

Five Things You Need to Start a New Business from Scratch

1. You need guts to start a business

“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week, but today. The true entrepreneur is a doer, not a dreamer.” – Nolan Bushnell

Launching a business out of the planning board require guts; quitting your job to start your own business require guts, believing in your business idea even when everyone says you are nuts requires guts and facing business challenges also require guts. That’s why I listed guts as number one. Guts, chutzpa, boldness, brevity, courage; they all mean the same thing. Without entrepreneurial guts, just forget about starting a business.

“You are nuts and you should be proud of it. Stick with what you believe in.” – Trip Hawkins

2. You need business skills to start a business

The next thing you need to make your business idea a reality is skills. What are you bringing to the table? This is the question you must answer when seeking joint ventures and business partnerships. Your possessed entrepreneurial skills are very important to the realization of your ideas because your skills can be a strength or competitive advantage for your business. Skills are a necessity when searching for a business team.

“The ability to sell is the number one skill in business. If you cannot sell, don’t bother thinking about becoming a business owner.” – Rich Dad

Have you heard the phrase that “entrepreneurs are generalists.” I think there is an atom of truth in that statement. Entrepreneurs are generalist, they need to know a little of everything that pertains to business. That’s where your business skills come in. As an entrepreneur, you need to know a little of accounting, investing, sales, marketing, operations and business management in general.

Before ever starting a business; be sure to hone your sales skills, marketing skills, communication skills, negotiation skills, accounting skills, leadership skills, people skills and every other entrepreneurial skills that’s required to succeed in business.

“Skills make you rich, not theories.” – Rich Dad

3. You need the right mindset to start a business

You probably must have heard this over and over again but I think it’s worth repeating. You can’t build a business if you lack the right mindset. Entrepreneurship is not really about starting or building a business.

Entrepreneurship is simply a change in perception or core value. It’s the process of developing your mindset from being job dependent to being financially independent. It’s a shift from being handicapped in the face of challenges to being a problem solver. In all, entrepreneurship is simply a change of mindset.

4. You need capital to start a business

I believe you know that no business idea is worth a pinch of salt without capital. I don’t want to stress much on this because I believe you know the significance of capital to any business. But in retrospect, I always advice my protégés not to be deterred by lack of capital. I encourage them to get creative when it comes to financing their small business startups; where there is a will, there will surely be a way.

“There are three components to starting a business. One is the right plan; two is the right team and three is the money. Rarely do these three components come together when starting a business. It’s the duty of an entrepreneur to grab one piece and start the business, the remaining two pieces will be found along the way. Finding the remaining two components may take a year or more than 10 years; the point is, start with what you have.” – Robert Kiyosaki

5. You need the right business management team

“Individuals don’t win in business, teams do.” – Sam Walton

Finally, you need the right business management team in place to build a business around your idea. For your business idea to leave the planning phase, it’s going to require the right business team. If you can assemble the right team to deliver on your plans, I bet you will find the venture capital because a strong business team is an essential ingredient to the process of raising capital from Venture capitalists.

Now how do you find the right team? I don’t know. How do you know you’ve found the right business team? Once again, I don’t know but what I do know is that the right team is a team that complements your weakness and adds value to your business. A good way to know you have the right team in place is that your business will take off like wild fire and gain grounds seamlessly with little or no effort on your part.

As a final note, these are the five things I believe are fundamental to either starting a business from scratch or building a successful business. So don’t get too excited because you feel you’ve got a creative idea up your sleeves; instead, start strategizing on ways to assemble the five elements listed above for your business. Remember, the world is filled with brilliant million dollar ideas waiting to be funded but the world lacks seasoned entrepreneurs. Take this lesson to heart and I will see you at the top.

8 Effective Small Business Marketing Strategies for Overcoming Competition

Ajaero Tony Martins — Thu, 16 Feb 2012 10:05:38 +0000

How stiff is the competition in your industry? How do you intend to stay ahead of competition in business? If I offer you effective small business marketing strategies that will help you outperform competition, will you be willing to try them out? If your answer to the last question is yes, then read on.

“You are in a war. You must plan to take the other guy down first and do it. Winning is not the best thing; it’s the only thing. If it were not, no one would keep score. To win the war, you must take charge. You must set the organization’s objectives, establish a chain of control, delegate, appraise performance, adjust and act.” – The Mafia Manager

In a previous article I wrote, I explained that competition is one of the business challenges faced by entrepreneurs when building a successful business from scratch. Business is a war; so also is marketing. A case of dog eat dog; and a game where winner takes all. Just like stated in the quotes above; winning is not the best thing, it’s the only thing. You must plan to take your competitors out before they do the same.

“In business, the competition will bite you if you keep running. If you stand still, they will swallow you.” – Victor Kiam

In this article, I am going to share with you eight effective small business marketing strategies and tactics that will help your business gain undue advantage and ultimately overcome competition. I am not sharing this guerrilla marketing tactics with you just to thrill you; I believe in action and corresponding results. These are not the regular marketing tactics you come across everyday; these guerrilla marketing tactics have been tested and proven.

“If you don’t have a competitive advantage, don’t compete.” – Jack Welch

I am an entrepreneur and I face stiff competition everyday; from the first day I launched, it’s been war. But I survived and my businesses are thriving and growing at an exponential rate. How did I survive competition? I didn’t survive by rolling dice and praying for luck; I survived competition by being tough and strategic in my marketing approach. It’s this same small business marketing strategies I used that I want to share with you today.

“Luck is not a factor. Hope is not a strategy and failure is not an option.” – Anonymous

“We have always had a pretty competitive ferocious battle with British Airways. It lasted about 14 years and we are very pleased to have survived it.” – Richard Branson

Now what gives me the confidence that these marketing tactics will work on your business? Sincerely, I can’t really guarantee these marketing tactics will work on your business but it was these same business marketing strategies that Richard Branson used to position Virgin Atlantic against British Airways. It was these same marketing tactics that Jeff Bezos implemented to position Amazon.com to compete favorably with Barnes and Noble. These same marketing tactics helped Facebook stay in the game against Google. So if this guerilla marketing tactics worked for these successful entrepreneurs when their businesses were in the startup phase, I believe it will work for you. If you are ready to outperform your competitor, then below are eight underground marketing tactics you can implement to stay ahead of competition.

“The competitor to be feared is one who never bothers about you at all but goes on making his own business better all the time.” – Henry Ford

8 Effective Small Business Marketing Strategies for Overcoming Competition

1. Develop a competitive strategy

Your mission to survive or stay ahead of competition begins with strategic planning. You must identify your competitor; spot out the competitor’s strengths and weaknesses, and plan your strategy based on the information gathered. Concentrate all your attacking effort on your competitor’s weaknesses while avoiding and defending against the strengths.

“The best thing to invest in your business is your time. To schedule, plan and use time effectively, know your turf and know your objectives. Assess the obstacles and opportunities, then devise your strategies.” – The Mafia Manager

When developing a competitive strategy, don’t do it alone, do it together with your business team. Your competitive strategy must not only include plans to defeat competition; it must also include plans that will strengthen the business from the inside as well as on the outside.

2. Focus on a niche

“Don’t try to be all things to all people. Concentrate on selling something unique that you know there is a need for, offer competitive pricing and good customer service.” – Lilian Vernon

Most businesses try to be everything to everyone; don’t join them. Find a niche market and serve that niche to the best of your effort. In every industry, there’s an under served, abandoned niche that the big corporations considers too small to be served. It’s up to you to find such niche and focus your entire marketing effort on it. Don’t spread your effort, concentrate and don’t try to be everything to everyone; be something to someone.

“And here is the prime condition of success, the great secret. Concentrate your energy, thoughts and capital exclusively upon the business in which you are engaged in. Having begun in one line, resolve to fight it out on that line; to lead in it. Adopt every improvement, have the best machinery and know the most about it.” – Andrew Carnegie

Richard Branson’s Virgin Atlantic was able to breakthrough because it focused on business men and students while British Airways strives to serve everyone. Facebook was able to breakthrough because it focused on youths. So if you are going to stay ahead of competition; then get focus.

3. Strive to be unique

What sets your business apart from the competition? What does your business name or product stand for in the heart of your customers? What’s your unique selling proposition? If you haven’t given these questions a thought, then I think you are making a grave mistake because creating a unique selling proposition begins with you answering these questions. To outsmart your competitors, you need to be unique. You need to find your strength, work on it and broadcast it to the world.

As an illustration, Aliko Dangote set his company apart with speedy delivery and uniform price. Wal-Mart became a brand with its unique pricing strategy; Apple became a brand with innovation and Virgin Atlantic grew because it offered first class service to an ignored niche; “business people and students.” So if your business is going to stay relevant in the marketplace; then you need to be unique.

4. Build a brand for your business

The fourth small business marketing strategies to outsmarting your competition is to build a brand for your business. You may say you don’t have the huge marketing budget of the big corporations but you can build a brand in your own little way.

“If you are not a brand, you are a commodity.” – Robert Kiyosaki

By emphasizing on quality, striving to fulfill your brand promise and working on your overall brand image; you can build a strong brand image for your business. Most of the popular brands in the world today were smaller brands of yesterday. If you consistently invest in building a brand for your business; you’ll stay ahead of competition.

“To succeed in business, you must build a brand and never destroy it. One competitive advantage I had when I ventured into manufacturing was my brand “Dangote,” which I diligently built in the course of my trading commodities.” – Aliko Dangote

5. Focus on the Customer

“A business absolutely devoted to service will have one worry about profits. They will be embarrassingly large.” – Henry Ford

In guerrilla marketing key point number two, I emphasized the need to focus on a niche. Now what’s that niche made up of? A niche is a group of people with a common interest. Most businesses are so obsessed with keeping an eye on the competition that they ignore the main asset of their business which is the customer.

“Business is not just doing deals; business is having great products, doing great engineering and providing tremendous service to customers. Finally, business is a cobweb of human relationship.” – Henry Ross Perot

Now does that mean you should take your eye off competition? My answer is no but do it with moderation. You focus should rather be how to serve the customers more efficiently; your utmost focus should be to give the customer maximum satisfaction.

“What is good for our customers is also in the long run good for us.” – Ingvar Kamprad

6. Connect with customers emotionally

All businesses try to communicate with the customers but not all connect with the customers. Your guerrilla marketing tactic here should be to discover your customer’s soft spot and touch them right on that spot. One question on the mind of all your potential customers is “Wii-FM,” meaning “what is in for me.”

“Stop talking about your products and services. Customers don’t care about products and services, they care about themselves.” – David Meerman Scott

The answer to the “Wii-FM” question is the key to successfully connecting with your customers emotionally. Connecting with your customers entails knowing your customer’s need and touching them at the point of that need. If you can successfully do this; you have nothing to fear about competition.

“Spend a lot of time talking to customers face to face .You will be amazed at how many companies don’t listen to their customers.” – Henry Ross Perot

7. Strive to achieve quality

The seventh guerrilla marketing to outsmarting competition is to give your customers the best of service. You must insist on quality and make quality a standard in your business. Insistence on quality at an affordable rate can set you apart from competition.

“Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.” – Steve Jobs

Never trade quantity and cheapness over quality because it’s going to back fire. Debbi Fields, Henry Ford and Michael Dell are successful entrepreneurs that carved a niche for themselves because of their insistence on quality. Debbi Fields extraordinary insistence on quality led to the initiation of their company’s motto “Good enough never is.”

“Good enough never is. Set your standards so high that even the flaws are considered excellent.” – Debbi Fields

8. Concentrate on innovation

“Innovation distinguishes between a leader and a follower.” – Steve Jobs

How did Apple become one of the most respected companies in the world? They made it through innovation. Concentrating on innovation was Apple’s overall strategy to stay competitive in the market place. Apple’s strategy was to stay competitive by providing the customers with constant innovative products that solves basic problems and all Apple’s guerrilla marketing tactics revolved around that strategy. So if constant innovation helped Apple stay in the game; why shouldn’t it do the same for your business?

“Pretty much, Apple and Dell are the only ones in this industry making money. They make it by being Wal-Mart, we make it by innovation.” – Steve Jobs

Being innovative doesn’t mean spending millions of dollars in research and inventions; being innovative simply means being willing to try out new products and techniques to improve the value of your offered services. Being innovative is simply searching outside the box for faster solutions to people’s problems so you can choose to compete with innovation or not, but know that a company driven by innovation will always stay ahead of the pack.

As a final note, these are eight effective marketing tactics you can apply to stay ahead of competition in your industry. I will like to emphasize that implementing the eight marketing tactics listed above is not advisable; rather, you will achieve more if you stick with one or combine at most three of the eight guerrilla marketing tactics.

How to Raise Startup Seed Capital from Family and Friends

Ajaero Tony Martins — Thu, 16 Feb 2012 08:16:51 +0000

Raising capital is one of the major business challenges faced by entrepreneurs; especially when it comes to starting a business from scratch. It’s much easier to raise capital as an established entrepreneur than to raise capital as a first time startup entrepreneur.

Since the need for capital is a business challenge that stress entrepreneurs the most; I am commencing a series dedicated to helping you raise seed capital for your new business startup. This series will address the issue and challenges of raising capital and today; I will be tackling the challenge of raising seed capital from family and friends because one of the very first places entrepreneurs turn to when seeking startup capital is their family and friends.

The importance of family and friends in the life of an entrepreneur can never be over emphasized; so this article will be dedicated to teaching you how to leverage your family and friends to launch your business successfully.

Now how do you leverage your family and friends to successfully start a business?

How do you raise seed capital from your family and friends?

Well, I will advice you read on because I am going to tear this subject apart. This year, my team and I decided to directly attack the issues pressing entrepreneurs the most and our starting point will be the issue of raising capital. There are many creative ways to raise seed capital for your startup business venture but I want to take it from the grass root which is raising capital from family and friends.

Raising startup seed capital from family and friends happens to be one of the easiest avenues of raising capital that entrepreneurs can exploit but if wrongly done; you can get your fingers burnt and the process may even end up destroying the existing relationship you have with your family and friends.

Raising seed capital from family and friends is quite easy if you do things the right way. After all, most successful entrepreneurs and drop out billionaires started business with capital sourced from family and friends. Example of successful entrepreneurs that raised startup capital from family and friends include Richard Branson, Bill Gates, Berry Gordy, John Johnson, Ingvar Kamprad, Orji Uzor Kalu, Aliko Dangote, Li Ka Shing, Howard Hughes, etc.

Now if these famous entrepreneurs can successfully start a business from scratch with seed capital raised from family and friends; I don’t see any reason why you can’t do it. Now how do you raise seed capital from family and friends?

How to Raise Startup Seed Capital from Family and Friends

1. Be in the Right Mindset

If you are not in the right mindset, forget about trying to raise seed capital from your family and friends. Now why do I emphasize you be in the right mindset before trying to raise capital from your family and friends? You need to be in the right mindset because you will still go through the entrepreneurial process of raising capital. The fact that you are trying to source capital from family and friends doesn’t eliminate the odds of disappointment.

What if your trusted friend turns you down? What if your most loved one says no to your business plan? How will you feel if you get laughed at by your loved ones? The answer to these questions is the reason I emphasize you be in the right mindset. Before trying to raise capital from family and friends; you must be prepared to face rejection. In fact, expect disappointment from even the person you love most. The reason I emphasize you be in the right mindset is because disappointment from your family and friends can strain the good relationship shared.

I think I have had a personal experience with respect to this case. I remember vividly when I caught the entrepreneurial bug some years ago and began nursing the desire of running my own business. I had some excellent business ideas which I was excited about and my determination to scale through kept my head buried in books while my mates were partying. I even attended seminars to sharpen my entrepreneurial skills and learn how to build a business.

With a feeling of confidence and excitement about starting a business, I shared my business plan with my parents. But instead of getting a word of encouragement; all I got was a hard stare from my dad and a detailed explanation of how incompetent i am with respect to starting a business. My dad told me to my face that I was still a kid and advised me to face my studies.

To be sincere with you, I was very disappointed. In fact, I was annoyed with my dad back then. After all my effort and time spent developing a business idea, drawing up a business plan and honing my business skills; my dad had the effrontery to call me a (incompetent) kid despite the fact that I had spent reasonable time running his own business. I felt like giving my dad a punch in the face for challenging my competence; and if not for the encouraging words from my mom, I don’t know what would have become of the sweet relationship between me and my dad.

As I lay on my bed and recalled this particular experience; it occurred to me that young entrepreneurs all over the world may also be going through this same experience and that was why I wrote this article. No matter where you are sourcing your startup capital from; always respect the odds that you can get turned down. Don’t take rejection personal; it’s the norm in the business world.

2. Build up your Credibility

Now since the odds of raising seed capital for your startup company remains the same despite the source you are exploiting; then how do you increase your chances of getting the financial support you need? The answer to that question is “credibility.”

What are you known for in your family? What’s your level of relationship with family and friends? Can you be trusted? How well did your past dealings with family and friends go? Have you handled any project on behalf of the family? How do you live your life? Are you an asset to the family or a liability? Are there any habits that could be a hindrance to your aspirations?

These are the questions you must answer before trying to raise capital from family and friends. Nobody wants to give money to a scumbag or an incompetent friend or relative and neither would I. I once told my immediate younger brother that I would never invest a dime in any of his projects if he doesn’t gain a stronger control over his life and finances. I made this statement to help my brother have a greater sense of responsibility.

If you haven’t got control over your life and the way you spend money; then it’s high time you change and reconsider you life’s pattern because a single bad habit can reduce your chances of raising money from family and friends. Remember that these two groups know you to the core; they know your strengths and weaknesses. In fact, they know personal things about you that even Venture capitalists and angel investors may never find out.

3. Have a Good Plan

Don’t walk up to your members of your family or friends and try to raise money without a good business plan. No matter how much they love you, they will still want to know what you need the money for. Even if you are not going to share the intricacies of your business plan with them; at least they deserve to get an overview. Understand your plans like back of your hands especially when you are coming from a family of intellects or trying to raise capital from learned friends. If your plan sounds too shallow or incomprehensive; you may be denied the financial support you need. But before sharing your business plan with your family and friend; make sure the step one and two above are sufficiently taken care of.

4. Have a Good Story to Tell

Do you have a good story backing your business plan and intentions? If your answer is no; then you better reconsider your approach because your proposal and request may be thrown back at you. The fact that you are trying to raise capital from family and friends don’t mean you should take them for granted. Threat them professionally with a touch of informality and back your business plan with a good story.

How did you develop your business idea? What are your chances of success? How viable is your idea? Try sharing the answers to these questions with your family and friends because it has been proven that humans listen to stories more than anything else. So share a story worth telling about your business plan.

5. Select your Targets

A good rule of thumb when raising seed capital from family and friends is this; “don’t go telling every dick and harry in your family about your plans.” Select a few prospects among your family and friends that have the potential to provide the capital you need and prepare a pitch tailored to their life pattern.

For instance, when I was trying to pitch my dad to invest in my business idea; I prepared myself properly because my dad was a strict individual who knows the fundamental intricacies of business. He doesn’t believe in throwing money around; and when it comes to money issues, he is strict about it with his children.

So knowing my dad was a no-nonsense person; I had to be straight and clear while pitching my ideas to him. Though, I still got turned down; I left his presence with some lessons about the challenges involved in raising capital.

The lesson I am trying to extract here is this; “the way you pitch a family member of high intellect will be very different from the one used to pitch a friend who is an entrepreneur; or a family member who is stingy when it comes to money.” Different pitch for different people and situations; never use the same words for people with different core values. What may attract a professional investor may turn off an scholar.

6. Sell Yourself

The next key to successfully raising seed capital from family and friends is your ability to sell yourself. Why should your family and friends give you their hard earned money? How are they sure the money will be used judiciously? How are they sure you are not trying to con them? You have failed on a previous project, why should they trust you on this one?

This is where selling yourself comes in. This is where you sell your potentials and competence to members of your family and friends; this is where you prove that you know your onions. If you successfully carry out step one to five and you miss it here; all your effort will be in vain. You will never get the needed capital.

7. Ask for the Money

If step one to six goes successfully; then you have to take the next action step which is asking for the money. Before asking for the money; you must be definite on your plans, you must know how much you need and the terms involved. Nothing annoys me more than an entrepreneur pitching me with his business plan and when I ask how much in capital he wants to raise; he or she becomes speechless or uncertain. So when raising capital from family and friends; it’s advisable you know your business plan like the palm of your hands, sell yourself excellently and ask for the money.

As a final note, these are my seven strategic action step plan to raising seed capital from family and friends. Remember, the key secret to raising startup capital from any source is creativity; thorough understanding of the business fundamentals and a good presentation. Once these three keys are locked in synergy with the seven action steps listed above; you will be able to raise any amount of startup capital you need.

10 Causes Of Small Business Failure You Must Watch Out For

Ajaero Tony Martins — Wed, 15 Feb 2012 18:54:22 +0000

If you visit a construction site or a chemical plant, you might see some warning signs. These signs are called “red flags” and they alert you of impending danger. Just as there are red flags in life, so are they also in business. In business, red flags are there to save us but most of the time we ignore it.

“Failure is an opportunity to begin again more intelligently.” – Henry Ford

In the process of starting a business, there are signs of business failure you must watch out for. I am going to reveal this signs to you. Whenever you see these danger signs in your business, you must act fast.

10 Cause of Small Business Failures You Must Watch Out For

1. High Debt Ratio

The first cause of business failures you must watch out for is high debt ratio. If your business is being owed much, maybe by giving too much credit to customers, then your business is at risk. Also, if your business is heavily indebted, then it’s at risk of folding up. An antidote to this is for you as an entrepreneur to always carry out an acid test ratio and keep a keen eye on the debt to equity ratio.

“There is one paradoxical characteristic every entrepreneur must possess to succeed. An entrepreneur must be able to persuade his debtors to pay their debts promptly and at the same, must tactically delay payments to his creditors.” – Ajaero Tony Martins

2. High level of mismanagement

The second cause of business failures is high level of mismanagement. If your key staff lacks professionalism, then your business is in trouble. Since your staff are in charge of running the day to day affairs of your business, their professionalism should not be compromised for anything.

“There will be times when you will have to be abrasive, even brutal to members of your staff. Don’t worry that your people will say bad things about you because of this. They already have. But in general, try to be pleasant and accommodating. Try to please the greatest number who work for you that you can; antagonize the fewest. Blow smoke.” – The Mafia Manager

3. Unexpected resignation of staff

The third to watch out for is the unexpected resignation of staff from sensitive position. This can really pose a threat to your business so you must be prepared for it. In business, poaching is really a factor to deal with. Big companies are always poaching good employees away from other companies by enticing them with improved salaries and incentives.

“The competition to hire the best will increase in the years ahead. Companies that give extra flexibility to their employees will have the edge in this area.” – Bill Gates

4. Inadequate Inventory

Another factor that leads to small business failures is inadequate stock or inventory. I don’t need to emphasize much on this because the point is clear. If you have inadequate stock either for production or for your customers, your business is bound for failure. Also; if you stock too much inventory, you are still bound to fail because you are tying down working capital.

“Inventories can be managed but people must be led.” – Henry Ross Perot

5. Selling products below cost price

The fifth cause of business failures is the sales of goods and services below cost price. Sometimes in business, cash crunch, fierce competition or economic factor make businesses sell their goods below cost price and this can ruin your business.

6. Dwindling working capital

Dwindling working capital also cause of business failures and you must watch out for. Depreciating working capital may be as a result of unnecessary expenditure, too much inventory and weak cash flow management on the part of the entrepreneur.

7. Consistent negative cash flow

The seventh factor that could lead to business failure is consistent negative cash flow. Cash flow is to business what blood is to humans. No business can survive without strong cash flow management. A solution to negative cash flow is to hire a professional accountant to keep a keen eye on the cash flow.

“The most important word in the world of money is cash flow. The second most important word is leverage.” – Rich Dad

8. Declining Profit

Declining Profit, if not handled properly can cause business failure. If there is a down turn in profit margins due to competition or deflation, your business could be negatively affected. A solution to declining profit is to increase your sales volume so you can make more profit on turnover or better still; diversify.

9. Loss of market share

Loss of market share is the ninth cause of most business failures. If you observe you are losing your market share due to either competition, new technology, innovation or trend, then this is a sign that your business is on the verge of been liquidated.

“Your greatest and most powerful business survival strategy is going to be the speed at which you handle the speed of change. That speed of change is trend.” – Ajaero Tony Martins

The only prevention to loss of market share is to keep your ears to the ground for any new industrial trend, technology or innovation. You must also keep an eye on your competitor and be quick to act and adapt to any positive or negative industrial change or once again; you can diversify.

10. Inability to secure operational capital

Lastly, your inability to secure funds from financial institutions could lead to business failure. I really don’t know what to say on this one because raising capital is one of the most difficult tasks in business. But it is often said that “where there is a will, there is a way.” If financial institutions refuse to assist you financially, you have to turn to other sources of funds.

In conclusion, the overall cause of business failure is lack of control on the part of the entrepreneur. Never leave total control of your business to your employees even if they are professionals. Remember, professionals are only there to advise you on what to do. The final decision lies in your hand as the entrepreneur and business owner.

“Before making an important decision, get as much as you can of the best information available and review it carefully, analyze it and draw up worst case scenarios. Add up the plus or minus factors, discuss it with your team and do what your guts tell you to do.” – The Mafia Manager

How to Influence Customer’s Psychology and Sell Your Products Fast

Ajaero Tony Martins — Wed, 15 Feb 2012 18:28:20 +0000

What has influencing customer’s psychology got to do building a business? Well, you will find out further down this article.

“Stop talking about your products and services. People don’t care about products and services; they care about themselves.” – David Meerman Scott

The whole concept of marketing and sales is to positively toy with the psychology of your customers with the aim of selling more products. Influencing your customer’s psychology and selling your products fast begins with knowing your customer’s soft spot and your product’s selling edge. When developing a marketing campaign around a product, attempts should be made to make it highly influential, so that the decision making of the customer will totally be in favor of your company.

Everyone loves to receive something for free especially when there’s no condition attached to it. When it comes to marketing, the word “free” is a very powerful term. So in this article, I will be sharing with you tips and tricks you can utilize to influence the mind of your customers. I will be telling you how to practically make your customers fall in love and stick with your company even in the face of stiff competition. Ultimately, I will be teaching you how to use the word “free” to increase brand awareness and customer’s loyalty. These strategies are not only applied by the super successful salespeople but also by larger companies.

One of the aims of an organization is to outperform the competition not just by increasing sales but by selling more products than the competition in less time. Without wasting much of your time, below are strategic steps to influencing your customer’s psychology and selling your products fast.

“We want to be able to sell you anything, anywhere, anytime you want it.” – Barry Diller

Please before attempting to apply any of these strategies, ensure that you have a quality product that satisfies a need or solves a problem. If your product doesn’t fulfill the three criteria’s above, don’t bother promoting it because it will be a waste of resources.

How to Influence Your Customer’s Psychology and Sell Your Products Fast

1. Offer Your Customers Something Valuable for free

Call it the mutual exchange principle or anything you deem fit and you won’t be wrong. Your company can start off on a good note by giving away something valuable for free to the customer. Whether it’s a free gift or anything valuable, your aim here is to allow the customer have a taste of your company’s product or services risk free. Your customer is bound to take your offer the first time, but when next you repeat the offer but this time with a price tag; he/she will feel obliged and try to return the favor. If the customer finds satisfaction with your product, he/she will definitely buy it next time.

Sales professionals sometimes get confused with this principle. For instance, they claim it is ineffective and wrong to promote a product according to this principle. So they use the “Spend over $25 and get a free T-shirt” approach. But in retrospect, the offer is not totally free. The customer has to spend to get the free product.

The principle of mutual exchange states that products to be used as incentives must be given totally free without any condition to be fulfilled. For example, “Get the latest lipstick shade absolutely free” will do the trick. If the shade is really good, they will buy it when next they need it and might even end up buying other shades of lipstick.

Software companies use this tactic a lot. They produce quality software and give them away for free with the hope of building brand trust. Afterwards, they sell upgrades to the same customers that downloaded their free software. Giving customers your products initially for free helps to build trust; It gives customers the opportunity to feel your company’s standard and most importantly, it gives them the confidence to patronize your company and refer others.

Another trick is to come up with something of high value, while making sure that your company incurs only small or no cost in producing it. A good example of such is information products. I personally use this tactic a lot. For instance, my company provides you advice on how to start a business through this blog for free without obliging you to buy anything from us.

Another tactic to employ while giving your customers free gift is to influence your customer into making a commitment; this can prove profitable for your business in the long run. The trick is to make the customer take small steps toward the goal, without them realizing it. For instance, when a customer requests for some information, provide them with relevant information for free and make them fill a form or give you their contact information. This is like getting them to make a commitment to get offers and information about your products in future.

You can also tempt the customer by saying that the information made available to them is a big time secret and is not known to anyone at all but please, make sure your information is truly valuable. Some marketers mess this strategy up, by claiming they are providing very valuable information. But in the end, it turns out to be another piece of advertisement.

2. Give out Free Samples to Targeted Customers

“I use nothing but the best ingredient. My cookies are always baked fresh. I price cookies so that you cannot make them at home for any less and I still give cookies away.” – Debbi Fields

Giving away free samples of your products to your targeted customers is an effective targeted marketing strategy. Most companies find it difficult to give something away and those who dare to give away something make the mistake of distributing samples of poor quality or rejected products. This certainly will hurt your credibility and reduce the customer’s trust towards your company and your product. They will assume that the product you are selling is actually of poor value and won’t go ahead to buy it.

Mrs. Fields Cookies, a company that does millions of dollars in sales annually started out using free samples as a marketing strategy. When Debbi Fields launched Mrs. Fields Cookies, she had no marketing budget, no sales experience and no business skills. All she had was her baking skill. So how did she breakthrough? She simply loaded her tray with some cookies and resorted to giving away the cookies to pedestrians. Today, her company still gives away cookies whenever they penetrate a new territory because the founder has discovered a strategy that works; the strategy of giving away free samples. At this stage, let’s look at another strategy that can help you influence your customer’s psychology and sell your product fast.

3. Create Artificial Scarcity

Direct mail marketers are excellent at using this strategy; they have mastered the art of causing a buying frenzy by creating artificial scarcity. When developing or sending out a marketing campaign, be sure to use words which stimulate immediate action. Words such as “Limited time offer” or “Offer ending soon” or “Offer open while stock lasts” are really motivating.

The trick here is to create artificial scarcity in the mindset of your customers; that’s why I titled this article influencing your customer’s psychology. The customer is left with the impression that the offer will end soon, so they will buy it at the very first chance. This trick works well especially with customers who have an interest in antiques, collectibles, information products and anything which is not easily available.

As a final note, I challenge you to implement these strategies on your business today and I will see you at the top.

How to Know the Right Time to Start a Business

Ajaero Tony Martins — Wed, 15 Feb 2012 13:06:56 +0000

Ideas rule the world. Everyone has at least one brilliant idea on the inside and that’s why Robert Kiyosaki said that “the world is filled with brilliant ideas.” I have a lot of business ideas on paper; and I bet you do. But one sad truth is that many people will die with their ideas, talent and skill; without giving such idea a chance to manifest. I have seen people with great ideas; just sit on their ideas and do nothing. Also, I have seen individuals who are enthusiastic about quitting their jobs or starting a business but year in year out; they never seem to be making headway. Why? The reason is because that most individuals with great business plans and ideas are waiting for the right time to start.

Do you dream of starting your own business? Do you have a good business idea or plan on hand? Are you planning on quitting your job to start a business? Then read on because this article is for you. Now how do you know the right time to start a business?

How to Know the Right Time to Start a Business

Most people with good ideas and plans believe that there is a right time to start a business. But in reality, there is no right time to start a business. Most people wait till they raise millions in capital before starting, others wait until their idea or product becomes perfect. Some will monitor the political, economic or personal financial situation before deciding if it’s the right time to kick start their business. The simple truth is that there is no right time to start a business. All lights will never go green and all stars will never line up for you; you just have to start anyhow.

“There are three components to starting a business. One is the right product, two is the right people and three is the capital. The sad truth is that rarely do these three pieces come together at once; so you just have to grab one piece and get started. You will have to find the rest along the way. It may take you one, two or ten years to assemble these three pieces. But the point is: just start with what you have.” – Robert Kiyosaki

I believe the statement above has answered this question in its entirety. Using myself as a case study; it has always been my personal philosophy to keep moving forward regardless of the prevailing circumstances. I have never started any business with the exact required capital; most of my businesses were bootstrapped from the scratch. I also don’t need the best ideas in the world to succeed; once I get the urge to pursue an idea or business opportunity, I just do it. Even when I have a sound idea or plan but lack the capital to execute the idea; I don’t just sit back hoping for a miracle. I will keep learning and making arrangements that are within my capacity; while still trying to raise capital.

“Excuses cost a dime and that’s why the poor can afford a lot of it.” – Rich Dad

So stop giving flimsy excuses, stop waiting for the perfect partner; stop sitting on your ideas. Forget about the million dollar idea or capital; just start with what you have, no matter how small and I will see you at the top.

10 Business Challenges of Starting a Small Business from Scratch

Ajaero Tony Martins — Wed, 15 Feb 2012 08:00:24 +0000

What are the major business challenges entrepreneurs face when starting a small business from scratch? How do successful entrepreneurs and drop out billionaires handle these business challenges? Must an entrepreneur face these business challenges when starting a business?

“Starting a business is like jumping out of an airplane without a parachute. In mid air, the entrepreneur begins building a parachute and hopes it opens before hitting the ground.” – Rich Dad

If any of the above questions is currently running through your entrepreneurial mind, then I will advice you read on as I trash out the top 10 business challenges you will face when starting a business from scratch.

“Without the element of uncertainty, the bringing off of even, the greatest business triumph would be dull, routine and eminently unsatisfying.” – J. Paul Getty

If you are an entrepreneur, then I believe you will be familiar with the business challenges associated with the entrepreneurial process of building a business from scratch. But if not, and you dream of becoming one someday; then I think you will find this article worthwhile.

“A business has to be involving, it has to be fun and it has to exercise your creative instincts.” – Richard Branson

I am writing this piece to enable aspiring entrepreneurs prepare in advance for challenges involved with the entrepreneurial process. Please it’s never my intention to discourage or scare you from going into business; In fact, I intend to achieve the opposite. I want you to venture into the business world and start your own business with a feeling of confidence.

“He that is prepared has half won the battle.” – Chinese Proverb

“The biggest challenge you have is to challenge your own self doubt and your laziness. It is your self doubt and your laziness that defines and limit who you are.” – Rich Dad

10 Business Challenges of Starting a Small Business from Scratch

1. Developing the Vision and Business Idea

“To have a great idea, have a lot of them.” – Thomas Edison

Developing a business idea is usually the first challenge faced by every entrepreneur when starting a business from scratch. Finding the right business opportunity or creatively developing an idea is certainly not an easy task. I call “Envisioning the idea” the first true task of an entrepreneur. As an entrepreneur, you must possess the ability to see what others cannot see. While others see problems, you must see opportunities.

“There is far more opportunity than there is ability.” – Thomas Edison

But seeing opportunities is just the beginning. The main business challenge is going to be your ability to forge that opportunity into a business idea. I see this as a business challenge because the process of transforming problems into business opportunities is like trying to turn lead into gold. I call it the entrepreneurial process of “Creating Value out of nothing”; a process that brings innovative products into existence. Below is an illustration of how the process goes.

Identifying a problem > seeing an opportunity in the problem > Coming up with a solution > Forging the opportunity into a business idea > Integrating your solution into a business plan

“A good businessman must have nose for business the same way a journalist has nose for news. Once your eyes, ears, nose, heart and brain are trained on business, you sniff business opportunities everywhere. In places where people see a lot of obstacles, I see a lot of opportunities. At times, there is something instinctive in me that tell me a business opportunity exist even at a place where others see nothing. That is what makes me different, maybe unique. A good businessman sees where others don’t see. What I see, you may not see. You cannot see because that is the secret of the business… the entire world is a big market waiting for anybody who knows the rules of the game.” – Orji Uzor Kalu

Developing a vision is definitely a business challenge because an entrepreneur must sometimes assume the role of a sorcerer. Let me explain in detail. Most individuals are comfortable with the present way of doing things but it is the duty of an entrepreneur to envision and forecast the future. An entrepreneur must always be ahead of his time or else he will lose his relevance. It is the duty of an entrepreneur to bring into present what is yet to be. It is also the duty of an entrepreneur to bring solutions to other people’s problems. Let me give you some practical illustrations:

“If you want to be rich, you need to develop your vision. You must be standing on the edge of time gazing into the future.” – Rich Dad

a) In the late 70s and early 80s, while IBM saw increase in demand for their mainframe computers, Steve Jobs envisioned a personal computer in every home and Bill Gates envisioned the need for easy to use software for personal computers. That single vision made Bill Gates the richest man in the world and Steve Jobs the most famous business person of the 21^st century.

“Business is going to change in the next ten years than it has in the last fifty years.” – Bill Gates

b) The Wright brothers envisioned a flying machine but they were massively opposed because the thought of humans flying was perceived as impossible. Today, the Airplane is a reality.

c) Back in those days when cars were custom made and exclusively for the rich, Henry Ford envisioned affordable cars for the masses. That single vision made Henry Ford one of the richest men in history.

“You are nuts and you should be proud of it. Stick with what you believe in.” – Trip Hawkins

I believe with these few examples, my point is clear. Developing the vision and idea is the first true task and challenge of being an entrepreneur.

2. Raising Capital for your Startup

After developing your idea, the next challenge you are going to face when starting a business from scratch is that of raising capital. As an entrepreneur, you are the only one that knows business your idea to the core. You are the only one that knows the story of the future.

“Capital can do nothing without brains to direct it.” – J. Ogden Armour

Trying to convince investors about something that doesn’t exist is definitely a challenge. Trying to make them understand that you are trustworthy and equal to the task is not child’s play especially when you are building your first business.

“If you want to know the value of money, go and try to borrow some.” – Benjamin Franklin

There is more to raising capital than just simply asking for money. Most investors want to invest in already established businesses with minimal risk and they want to be sure that they get returns for the risk they took. Most brilliant business ideas never scale through the venture capital stage because the entrepreneur is either not prepared or lacks what it takes to raise the needed capital. Just as my mentor, Robert Kiyosaki says:

“The world is filled with brilliant ideas and excellent products but the world lacks seasoned entrepreneurs.” – Robert Kiyosaki

To overcome the challenge of raising capital, you must develop the ability to sell your idea and vision to potential investors. When I say “sell your ideas“, I mean improving your communication skill and your manner of presentation. In the game of raising capital, you must have a good story to tell; backed by a strong business plan and good persuasion skills. You must know how to pitch angel investors and venture capitalists alike.

“The ability to sell is the number one skill in business. If you cannot sell, don’t bother thinking about becoming a business owner.” – Rich Dad

3. Assembling a Business Team

“Eagles don’t flock, you have to find them one at a time.” – Henry Ross Perot

The third business challenge you will face in the course of starting a small business from scratch is assembling the right business management team. When I talk about a team, I am not talking about regular employees. I am talking about a “strategic round table business team” that will meet regularly to brainstorm on ways to grow your business.

“Individuals don’t win in business, teams do.” – Sam Walton

The process of building a business team starts even before the issue of raising initial start-up capital arises. Remember I said that most brilliant ideas never scale through the phase of raising venture capital. Well; this is where most budding entrepreneurs miss it. Most brilliant ideas and products never get funded because the entrepreneur is trying to raise capital as an individual. A business team is a vital, yet often ignored key to raising venture capital successfully.

“Business and investing are team sports.” – Rich Dad

As an entrepreneur, you are bound to have strengths and weaknesses. That is the more reason you need a business team to cover up or compliment your weaknesses. A team is a necessity for building a successful business. Now finding a business team is just the second hurdle, transferring your passion and vision to your team is the next piece of cake.

“Teams should be able to act with the same unity of purpose and focus as a well motivated individual.” – Bill Gates

It’s your duty as an entrepreneur to make sure your team sees the future you see. They must believe in your possibilities and must also be passionate about making that possibility a reality. If they can’t grasp your vision, if they can’t see the future with you, then they are not worthy being your team.

“My model for business is the Beatles. They were four guys that kept each other’s negative tendencies in check; they balanced each other. And the total was greater than the sum of the parts. Great things in business are not done by one person; they are done by a team of people.” – Steve Jobs

Your strategic business team should comprise your banker, financial adviser, accountant, attorney or legal adviser and any other specialist that will be of tremendous impact to your business. A question on your mind right now might be “how am I going to pay this team” My answer is I don’t know. You will have to figure it out yourself or better still, you can consider bringing them on board as partners.

If you are still at puzzled at the thought of assembling a business team, then I will recommend read How to Build a Strong Business Management Team from Scratch.

“Go to the wolf, consider its ways and be wise. A wolf will never hunt alone; it hunts in packs because it knows the power of team work.” – Ajaero Tony Martins

4. Finding the Right Business Location

Is finding a good location a business challenge? I don’t know but what I do know is that finding a good business location at the right price is definitely not easy. How do you get a location that has a rapidly growing population, good road network and other amenities at a good price? Well, you will have to figure out yourself.

5. Finding Good Employees

“If you own a butcher shop, don’t hire vegetarians. To hire the right people, you have to let the wrong people go.” – Rich Dad

Most writers and managers crank up the process of finding good employees as an easy task. They define the process of finding an employee as simply presenting the job description and the right employee will surface. But I think it’s more than that.

“The competition to hire the best will increase in the years ahead. Companies that give extra flexibility to their employees will have the edge in this area.” – Bill Gates

Business owners know how difficult it is to find a hardworking, trustworthy employee. Most employees want to work less and get paid more. Finding a good employee who will be passionate about delivering his or her services is quite difficult. Finding good employees is a minor task compared to the business challenge of forging your hired employees into a team. You may have great employees but if they can’t act as a team, they are worthless and will yield nothing but stagnation. A football team may have great skillful players but if they fail to play as a team, their possessed skill is useless.

“Bringing together the right information with the right people will dramatically improve a company’s ability to develop and act on strategic business opportunities.” – Bill Gates

Employees are your representatives to your customers and the outside world. They are a reflection of your business culture and ethics. If an employee of yours is bad or rude to your customers, it is going to portray a bad image for your company. So you must be careful when hiring employees. Remember the golden rule of business; “Hire slow and fire fast.”

6. Finding Good Customers

The sixth challenge you will face in the process of starting a small business from scratch is finding good customers. Note the keyword “good customers.” In the process of building a business, you will come to find out that there are good customers as well as bad customers. You must be on guard for bad customers. Good customers are really hard to find. A good customer will be loyal to your company and will be willing to forgive you if you make a mistake and apologize. A good customer will try to do the right thing that will benefit both himself and your company mutually.

“Thank God for my customers. They buy my products before they are perfected.” – Henry Ford

Bad customers will always look for loopholes in the company’s policy to exploit and make a few gains. Bad customers will always try to exploit the company’s goodwill and look for ways to rip off the company. Bad customers are responsible for bad debts. Good customers build your business and bad customers will always try to liquidate your business. Just as you fire employees, you must also be prepared to fire bad customers without hesitation. Remember the story of the customer that sued McDonald’s claiming the coffee was too hot.

“You must fire bad customers just as you would fire a bad employee. If you do not get rid of your bad employees, the good employees will leave. If I do not fire bad customers, not only will my good customers leave but many of my good employees will leave as well.” – Rich Dad

7. Overcoming Competition

“In business, the competition will bite you if you keep running. If you stand still, they will swallow you.” – Victor Kiam

Competition is the next challenge you will face when starting a business. Most individuals see competition as a plague but I see competition as a good challenge. I see competition as a benchmark for creativity, the main engine that stimulates innovation and production of quality products at great prices. Without competition, there will be no innovation and without innovation, the world will be stagnant.

“If you don’t have a competitive advantage, don’t compete.” – Jack Welch

I see competition as a welcomed challenge and I want you to do the same. Competition keeps us on our toes and drives us to constantly improve our products and services. But you must be warned. Competition can make your business lose its relevance in the eye of your customers so you must always be on guard.

“The competitor to be feared is one who never bothers about you at all but goes on making his own business better all the time.” – Henry Ford

8. Unforeseen Business Challenges and Expenses

“Smooth seas seldom make good sailors.” – Anonymous

Just as a sailor prepares for unexpected storm, just as a pilot is always on the watch for unpredictable bad weather and thunderstorms, so must an entrepreneur prepared for whatever comes. Unexpected challenges can come in the form of:

Unexpected law suits

Inconsistent government policy

Not being able to make payroll

Unpaid bills and taxes

Unexpected resignation of staff from sensitive office

Bad debts from customers

Loss of market share

Dwindling working capital

Inadequate stock or inventory

“A company’s ability to respond to an unplanned event, good or bad is a prime indicator of its ability to compete.” – Bill Gates

These business challenges, if not handled properly can ruin your plan to build a successful business. Another challenge you must expect is an unforeseen increase in business expenses. If not handled properly, it might result in constant negative cash flow and eventually; business failure.

9. Keeping Up With Industrial Changes and Trends

“In three years, every product my company makes will be obsolete. The only question is whether we will make them obsolete or somebody else will.” – Bill Gates

Change in trends is a challenge you must be prepared for when starting a small business. Trends have made and broken lot of businesses. I know a lot of profitable businesses that have been wiped out by slight industrial changes and trends. A typical example is the Dot com trend, where many established industrial based businesses were wiped out by new web based dot com companies.

“How fast a company can respond in an emergency is a measure of its corporate reflexes.” – Bill Gates

When the Dot com era began, business owners were left with only two options. Either they join the dot com train or they get crushed by the dot com train. Seasoned entrepreneurs know that trend is a friend and are always willing to swiftly adjust their business to the current trend. Keeping your eyes open to spot trends is really a challenge but the big task will be your ability to quickly use the trend to your advantage.

10. Exiting the Business

“In the world of business and investing, your exit is more important than your entry. A good thumb of rule is this; exit before you enter.” – Robert Kiyosaki

When building a business from scratch, you are going to face the challenge of determining your exit strategy. Just as the quote above states, you have to plan your exit strategy before you even start the business. Most entrepreneurs run their business without any plans to exit and even if they have an exit strategy, they find it difficult to implement it.

“Always start at the end before you begin. Professional investors always have an exit strategy before they invest. Knowing your exit strategy is an important investment fundamental.” – Rich Dad

Before starting a business, it is advisable to plan an exit. Lack of an exit plan is the primary reason why most businesses crumble after the death of the founder. An exit strategy is very important to the long term survival of a business. now how do you plan an exit strategy? There are benchmarks you can use to determine your exit from any business. Most smart entrepreneurs will use a certain benchmark as a target and once this specific target is reached, they exit the business. Examples of such benchmarks are:

Annual sales

Annual Turnover

Asset Base

Market Saturation

Customer base, subscribers or number of users

Now when it comes to exiting a business, there are three strategies you can apply. You can choose to exit a business in any of the following ways:

a) Turning over the business to professional managers

When your business reaches a certain stage of maturity, you can exit by turning it over to professional managers. In this case, the business still belongs to you but you are not involved with its day to day affairs. You will have to give up administrative role to assume the role of a watchdog. When you exit in this manner, you will have more free time to look at other projects or retire.

b) Selling the business privately

In this case, you are exiting the business by selling it to a private investor. In the business world, it is called M&A (Mergers and Acquisitions). Exiting your business this way means that after the sale and transfer of assets is complete, you have nothing to do with the business again.

c) Taking the company public

The unique thing about this type of exit strategy is that while you are selling your business (in form of shares) to public investors, you still maintain control over the business. Please before you apply any of these exit strategy, I will advise you consult with your attorney or legal adviser. But ultimately, it’s up to you to decide the exit strategy you want to apply; but always remember “your exit is more important than your entry.”

As a final note, I want to state clearly that challenges come only to make you stronger; so don’t faint in the face of challenges. Stand tall; keep moving your business forward and I will see you at the top.

What is the Best Business to Start in 2012 – List and ideas

Ajaero Tony Martins — Sat, 04 Feb 2012 10:12:12 +0000

What is the best business to start in 2012? Which business opportunity has the potential for rapid growth? Do you have the capital and passion to start a business but you can’t seem to decide what business to start? If any of these questions best describe your thoughts, then please read on. Most aspiring entrepreneurs are usually confused when it comes to starting a business because they can’t figure out the best business to start. Just recently, I got an email from a reader on this business blog and this was the reader’s message.

“Respected Sir, how are you? This is (name withheld) from London, United Kingdom. Now I am doing MBA and ACA as well. Sir, I am very interested in business but I am very confused about field. Which field is more suitable for business, for growth? Would you like to suggest me something? Thanking you.”

I receive such emails on a daily basis so I decided to do a piece in reply to this email. Now what is the best business to start? Well, you are going to find out soon. In this article, I am going to explain in detail the best business to start and how to find such business opportunities. If you are an aspiring entrepreneur or an employee with a strong desire to start a business? Then please read on because this article is for you.

What is the best business to Start in 2012?

Well, before I reveal to you the best business to start this year; I want you to take a careful look at the list below.

1. 1900 – Andrew Carnegie made his money from steel – $475 million

2. 1910 – John D. Rockefeller became a billionaire in oil – $1.4 billion

3. 1920 – Henry Ford became a billionaire in the auto industry – $1 billion

4. 1940 – Howard Hughes became a billionaire with military aircrafts, contract, tools and movies – $1.5billion

5. 1957 – J. Paul Getty became a billionaire in oil – $1 billion

6. 1962 – Henry Ross Perot became a billionaire with EDS – $3.8 billion

7. 1970 – Sam Walton took retailing giant Wal-Mart public and became a billionaire – $22 billion

8. 1980 – Ron Perelman made fortune as a Wall Street deal maker – $3.8 billion

9. 1990 – Jerry Yang founded Yahoo! – $3.7 billion

10. 2008 – Aliko Dangote became the richest black man in the world as a manufacturer – $3.3 billion

11. 2010 – Mark Zuckerberg became a billionaire with FaceBook.com – $6 billion

Some of the successful entrepreneurs mentioned in the list above were school dropout billionaires. Is this list exhausted, my answer is no. Oprah Winfrey became the richest black woman in the world with television show productions. J, K. Rowling joined the billionaires list with her book “Harry Potter Series.”

Debbi Field’s became a multi millionaire selling cookies; and Mary Kay Ash became a billionaire with her company “Mary Kay Cosmetics. Rupert Murdoch and Ted Turner became billionaires by running their own cable network channel company; “Fox Broadcasting Corporation” and “CNN” respectively.

Now what is the best business to start? My answer to the question above is this: “The best business to start this year that can yield the highest returns on investment is non-existent.” Are you surprised? Please don’t be. I know you might be expecting me to make a list of businesses ranging from oil and gas to web based businesses. I am sorry to disappoint you because there is no stipulated best business opportunity with respect to the illustrations I cited above.

However, there’s a contradictory twist to my answer. I believe the best business opportunity exists but you have to create it or make it a reality yourself. Now what am I trying to stress? The point I am trying to stress is that becoming a successful entrepreneur does not depend on the business opportunity; it depends on you. So if you are going to successfully go through the entrepreneurial process, you will have to find your own best business opportunity.

Well, instead of telling you to start an oil and gas supply business or an internet business; I am going to reveal to you five criterion to creating your own best business opportunity. If you are still willing to learn, then below are five questions that will help you decide the best business to start this year.

How to decide what Business to Start this year

1. What is your level of preparedness?

The first key to finding the best business to start is you; and the reason is because building a successful business starts with you, the entrepreneur. Are you in the right mindset? Do you have what it takes to build a successful business?

I listed the entrepreneurial mindset here because it the fundamental key to starting, building and growing a business. The state of your mindset will determine how far you will go in the entrepreneurial process of building a business. Choosing the best business to start begins with you answering the following personal questions:

What is your risk bearing capacity?

Are you prepared to face business challenges?

Are you prepared to handle business failures?

What’s you perception towards making mistakes in business and life?

These are the type of questions you need to ask yourself before even deciding what business to start. These questions will reveal your mental preparedness for the entrepreneurial journey at hand.

2. How much Capital do you have?

The start-up capital you have access to, is another factor that will determine the best business for you to start. The best business opportunity for an entrepreneur with access to a $1,000 start-up capital will be quite different from that of an entrepreneur with a million dollars in start-up capital.

The best business to start for an entrepreneur with a $1,000 start-up capital may be an online niche store while the entrepreneur with the million dollar capital will feel that starting a gas distribution business or a manufacturing firm will be the best bet. So take note that your start-up capital is a predominant factor when deciding what business to start.

3. Who is on your Team?

The competence of the management team you have on board will determine the kind of business opportunity to pursue. If your business team has a track record of successes; then raising capital to pursue big projects will be a piece of cake. But if you are a solo entrepreneur, then your best business opportunity will be quite different.

4. How Strong is your Business Plan?

If you have the right plan, coupled with the right team and the right mindset; then you can pursue mega projects. But an entrepreneur who lacks the orientation of the use of a business plan will just bootstrapped his or her business on a shoestring budget. The extensiveness of both your personal and business plan will determine the kind of business opportunity you will pursue.

5. What Business idea do you have in mind?

Lastly, the best business to start varies from entrepreneur to entrepreneur based on the ideology of the entrepreneur and the prevailing circumstances. Your best business opportunity may differ from mine based on prevailing circumstances such as trend, your passion, hobby, skill, geographical terrain, demographics, psychographics, demand, supply, economic policy, etc.

The best business to start for someone in Nigeria or China will differ from that of someone in United States, Canada or India. And most importantly, I listed the “business idea” last because it is the least important necessity to starting a business. Remember, the world is filled with brilliant, million dollar ideas but the world lack savvy entrepreneurs.

An average business idea with the right mindset, a strong business management team and the right business plan will outperform an excellent million dollar idea with a poor mindset and a weak management team. So when deciding what business to start, make sure you do your preliminary feasibility study. Also make sure that the right combinations are in place and when contemplating on the best business to start; be sure to take into consideration the five questions above and I will see you at the top.

Six Lessons from My Failure in the Network Marketing Industry

Ajaero Tony Martins — Sat, 04 Feb 2012 09:56:19 +0000

For every success story, there are fifty corresponding failure stories and just like every other person; I have had my own share of failure. One of the reasons why I take the pain to share my failures with you is to make you realize that failing is not abnormal; in fact, it is part of the process of becoming a success. Secondly, I want you to know that I don’t succeed in every business venture I engage in; so don’t think I am a super human when I tell you about my successes. Thirdly, I have come to understand from personal experience that success is a poor teacher and it tends to make you believe you are infallible. But failure, though painful is the best teacher. You learn more from your mistakes/failures than your successes. Success inspires but failure teaches; and this is the sole reason why I listen keenly to failure stories than success stories.

I once joined a network marketing company as an independent distributor and along the line, I failed. Well, I have explained the reason why I Failed to Build a Network Marketing Business so I won’t be going into the details here. After my failure as a network marketer, I picked myself up and moved on but not without the lessons learnt. And with lessons learned from this single failure, I have built several successful businesses; so it’s this same lessons I want to share with you now. If you are planning on starting a multi level marketing business; then I will advice you read this before launching out.

Six Lessons from My Failure in the Network Marketing Industry

1. There’s a process to building a successful business and that process can never be bypassed

Before I signed up as a network marketer, I was told network marketing was an easy, stress free and quick paying business. I was told that my primary task is just to recruit new distributors and I will be on to a steady passive income. Now considering the low start-up capital involved, I felt I had nothing to lose; so I signed up with enthusiasm and high hopes of becoming a millionaire marketer overnight. After all, I have heard the success stories of other distributors; so mine shouldn’t be an exception.

Unfortunately, I was dead wrong. Network marketing, like every other business is not easy. After I flopped and quit the business, I realized that there was nothing different when comparing network marketing to other businesses. I came to understand that the principles of business is the same; regardless of the type of business, economy or location. Building a successful business requires a process; it’s a process that occurs in phases and each phase can never be skipped.

So never fall for the hype of a push button system or a stress free business model because it doesn’t exist. There’s nothing like overnight success; you have to toil to make your own bed of roses.

2. Acquiring the basic knowledge of a business is the first prerequisite for starting a business successfully

I believe this lesson is clear. You will be foolish to jump into the waters of business with both feet; without first testing the waters and understanding the basics. Business is universal in principle but each industry has its own tactics and intricacies. If you fail to learn the basics, then you are failure bound and nothing can help you. Learning the basics of a business can be done by understudying business models in the industry of your choice; attending seminars, by apprenticeship, reading books, journals, and most importantly, by starting small.

3. Business revolves around people

The network marketing business, just like every other business revolves around people. To succeed in the network marketing business, you must invest in people; because people are your assets in the business. So if you are an introvert; then you might reconsider your decision to start a network marketing business.

4. Selling is your most important task in business

If you have listened or read the prospectus of a network marketing salesman, you will notice the following bulleted points: No selling, No stockpiling, No stress, Easy to run, No recruiting down lines, etc. Most people hate selling; and these people are easily attracted to ads and prospectus that screams “NO SELLING.” Unfortunately, selling is the most important task of an entrepreneur; and without it, no business will survive. In fact, selling is life.

So if you hate selling, then forget about starting a network marketing business. In fact, forget about even becoming an entrepreneur because you are only heading for the rocks.

5. Leadership skill is the second most important business skill

I wasn’t born a great leader. In fact, I hated anything that will put me in the fore front. While in school, I was an A student but I hated being identified or singled out. I hated leading; even when I know deep down in me that I am competent enough to handle such task. But my adventure as a network marketer changed my perception entirely. While in the network marketing industry, I saw first handedly the importance of leadership and unfortunately, it’s something you can’t run away from in the industry.

As an entrepreneur, you have to be at the fore front of your business. People don’t follow someone who doesn’t inspire confidence. Secondly, people don’t like being guided from behind; they want to be lead from the front. So despite my failure in network marketing, I never forgot the importance of leadership in business.

6. Failure is the greatest teacher; only if you are willing to learn

Failure is not bad. In fact, everybody fails at one time or the other but unfortunately; only few learn from their failures. Failure is the greatest teacher, but that’s only if you are willing to learn. Now how can you learn from your failures? You can learn from your failures by keeping an open mind and critically analyzing the process that lead to the failure. When you analyze your steps, you are bound to discover where you went wrong and this will help you avoid the same mistakes in the future.

In conclusion, I want to stress the point that my time in the network marketing industry was worthwhile. It gave me the opportunity to meet great men and women who started from scratch. Secondly, my journey in the network marketing industry helped me discover my weaknesses and prepared me for the challenges of the business world. So my failure wasn’t really failure; it was a learning process for me because with the experience gathered from my failure in the network marketing industry, I have become a better entrepreneur with a successful business to prove it. So don’t let failure stop you; instead, learn to make it a stepping stone and I will see you at the top.

How to Start a Small Business – Best Advice and ideas

The Entrepreneurial Process to Starting a Business from Scratch

The Entrepreneurial Process to Building a Business from scratch

1. Experience the entrepreneurial seizure

2. Plan the business

3. Make mistakes and learn

4. Start a Business

5. Sustain the business

6. Make mistakes and learn

7. Stick to the process

8. Build a successful business

9. Count your wins or losses

10. Retire or repeat the process

Related posts

How to Start a New Business: It Takes More than Just an Idea

Now what does it takes to start a new business?

Five Things You Need to Start a New Business from Scratch

1. You need guts to start a business

2. You need business skills to start a business

3. You need the right mindset to start a business

4. You need capital to start a business

5. You need the right business management team

Related posts

8 Effective Small Business Marketing Strategies for Overcoming Competition

8 Effective Small Business Marketing Strategies for Overcoming Competition

1. Develop a competitive strategy

2. Focus on a niche

3. Strive to be unique

4. Build a brand for your business

5. Focus on the Customer

6. Connect with customers emotionally

7. Strive to achieve quality

8. Concentrate on innovation

Related posts

How to Raise Startup Seed Capital from Family and Friends

How to Raise Startup Seed Capital from Family and Friends

1. Be in the Right Mindset

2. Build up your Credibility

3. Have a Good Plan

4. Have a Good Story to Tell

5. Select your Targets

6. Sell Yourself

7. Ask for the Money

Related posts

10 Causes Of Small Business Failure You Must Watch Out For

10 Cause of Small Business Failures You Must Watch Out For

1. High Debt Ratio

2. High level of mismanagement

3. Unexpected resignation of staff

4. Inadequate Inventory

5. Selling products below cost price

6. Dwindling working capital

7. Consistent negative cash flow

8. Declining Profit

9. Loss of market share

10. Inability to secure operational capital

Related posts

How to Influence Customer’s Psychology and Sell Your Products Fast

How to Influence Your Customer’s Psychology and Sell Your Products Fast

1. Offer Your Customers Something Valuable for free

2. Give out Free Samples to Targeted Customers

3. Create Artificial Scarcity

Related posts

How to Know the Right Time to Start a Business

How to Know the Right Time to Start a Business

Related posts

10 Business Challenges of Starting a Small Business from Scratch

10 Business Challenges of Starting a Small Business from Scratch

1. Developing the Vision and Business Idea

2. Raising Capital for your Startup

3. Assembling a Business Team

4. Finding the Right Business Location

5. Finding Good Employees

6. Finding Good Customers

7. Overcoming Competition

8. Unforeseen Business Challenges and Expenses

9. Keeping Up With Industrial Changes and Trends

10. Exiting the Business

a) Turning over the business to professional managers

b) Selling the business privately