Entrepreneurial Inspiration

As an entrepreneur, you know the formula. Passion + Focus/Direction + Action = Success

Other formulas exist of course. A modern approach to one success formula is this one:

natural human talent + the use (or the inspiration) of technology + the delivery system of the internet

However you measure or calculate success, there is always room for inspiration or thinking differently. This TED video showcases Jon Chu and The LXD (the Legion of Extraordinary Dancers). As a viewer, I tended to concentrate on how technology (i.e. robotics, slow motion, mechanical moves) were an underlying theme and not so much on the hip-hop street style that many may be expecting. It is amazing what can expire you.

For more inspiring videos, visit www.ted.com

For inspiring ideas about starting a business and writing your business plan, visit www.ionfreshstart.com

Why you do not business planning software to write a business plan:

The best businesses in the world did not use business planning software to create a business plan.

Many successful companies never had an actual business plan, but the ones that did simply used a text editor, typewriter, pen and paper, or the famous cocktail napkin while brainstorming in a bar. A business plan has very simple components and its job is to clearly spell-out the road map for a company. Simplicity, clarity and accuracy do not require software.

ION FreshStart’s Advanced Business Planning kit has everything you need to build professional and sophisticated content, including robust financial reports and analyses. For more information on how to create a successful business plan without installing software, visit:  www.ionfreshstart.com

What is a Break-Even Analysis?

Fortunately, the term “break-even” is what it sounds like it is.

Using purchase costs, production costs, and total costs associated with the sale of product and matching it to an equal revenue figure gives a business owner a break-even point.

Break-even Point = Total variable and fixed costs are compared with sales revenue in order to determine the level of sales volume, sales value or production at which the business makes neither a profit nor a loss.

Variable costs = Expenses that change in proportion to the activity of a business and are considered volume/quantity related (i.e. labor, raw materials). These costs are absorbed with each unit that is sold.

Fixed costs = As opposed to variable costs, fixed costs are independent of business activity, and they tend to be time related (i.e. rental payments, salaries). These costs are the same no matter how much of the product is sold.

Unit Price = the amount charged to the customer for a single unit of the product sold.

FORMULA:

Break-even Point = Fixed Costs/(Unit Selling Price – Variable Costs)

Once this is calculated, the business owner will know how many units must be sold to break-even. Although you will use a sales price in the formula, this exercise is helpful in determining an actual and final sales price when considering making a profit. Once the selling price goes lower than the break-even point, the business owner will be taking a loss.

Example:

Fixed costs = $8,500 per month (for rent, utilities, salaries)

Variable costs = $13.50 per unit (raw materials, labor)

Sales price = $25 per unit

How many units must be sold to break even?

Break-even Point = Fixed Costs/(Unit Selling Price – Variable Costs)

$8,500 / ($25.00 – $13.50) = 739

739 units at $25 per unit must be sold per month to break even.

Check your math:

Revenue: $25 x 739 units = $18,475

Variable costs: $13.50 x 739 = $9,976

$18,475 – $9,976 = 8,499 just enough to pay fixed costs and break even

There are other formulas to incorporate into a break-even analysis if you wish to take a look from a different or more thorough perspective. What if you have a service oriented company? What if commission is a function of a sales equation?Additional formulas and charts addressing these questions will be discussed in an upcoming blog entry. For basic calculation, the above explanation will hopefully be of service to you.

For more information on break-even analysis and business plan creation, visit: www.ionfreshstart.com

Elevator Pitch: The Formula

Great idea
+ Elevator ride
+ You (and a 60-second verbal overview of your great idea)
+ Someone that can help you get your idea off of the ground
____________
= Successful Elevator Pitch

Okay, so you do not actually need the elevator. However, the beauty of the elevator is that you (with your idea) and that “someone” i.e. investor, partner, buyer – - will be enclosed in a small space with no distractions and no way to walk away for at least one minute. You can have their undivided attention.

An elevator pitch should be constructed with following in mind:

Address a problem that needs attention.
Explain how your idea is the solution.
Reveal how your solution is a lucrative one.
Keep the language simple. Nothing too techy and nothing too detailed – just the basics of your idea and why it is hot.

Being able to sum-up your business or venture idea in about a minute or two is crucial. Television commercials do it all of the time. Put together an elevator pitch and then practice it out loud. Refine the details without making it sound rehearsed. You never know; you may just find an elevator with an investor itching to finance a new idea.

For ideas on business planning, visit www.ionfreshstart.com

Which comes first, a Business Plan or a Business Model?

The answer, I am sure, is obvious. A business model comes first. With that being said, you’d be surprised at how many new entrepreneurs do not know the answer to this question and start with the business plan first. Many are so anxious and rushed to complete a business plan, secure financing and start a new business, that they are not even sure what type of business model is needed to be successful at launching their new company.

Business Model Considerations:

Are you a full-timer or a part-timer?
Are you home-based or will you have a store-front?
Are you offering products or services or both?
Are your services or products available online? Will you need an e-commerce solution?
Is your business non-profit or for-profit?

These are just a few of the questions that will need to be answered. In addition to these preliminary considerations, more formal areas of the business model will need to take shape:

What is your Value Proposition? This goes beyond listing your products and services and delves into the benefits versus the costs of your offerings.
Who is your Customer? This is a literal description of your customer, who they are and what they need.
Who are your Employees and your Suppliers? These are the individuals that will allow you to successfully run your business. You’ll need to understand who they are and how they can help.

Designing a business model can seem intimidating – but it doesn’t have to be that way. When you break it down to simple questions and answers, you will quickly have your business model in place and your business plan will be a breeze.

For additional information regarding business models and business plans, visit www.ionfreshstart.com

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Companies We Love: MOO

When starting a new business, you’ll want to create calling cards for yourself. Why not make it something a little different and quite special? MOO Custom Business Cards are clever, fashionable and professional. Who knew such a small piece of paper could have such a big impact? One smart feature is the price. Full color, double sided, custom design cards start at $21.99 USD (or £12.99) for 50 cards.

For more information about MOO and custom cards, visit moo.com

For information on building your custom company business plan, visit ionfreshstart.com

Keeping your business healthy should be a long term goal in your business plan, and keeping your employees healthy should be an equally important objective. The long term success of any company can be attributed to diligent management, shrewd partnerships and effective employees. Protecting your investment in training and the experience of your workforce makes economic sense, and investing in health will pay off with lower insurance premiums, fewer sick days, and less chance of workplace injury.

The health of your staff has other benefits that can greatly improve your company. Exercise has been proven to elevate mood and increase productivity. An employee who exercises moderately before work will arrive invigorated and energized, and with a more positive attitude. Imagine an entire workforce starting each day motivated, invigorated and in a good mood.

Companies that offer health policies including gym memberships and medical insurance packages are more attractive to more desirable employees, and these additional benefits are considerably more affordable when weighed against the quality of work to be expected from happier, more content employees. Combining both a comprehensive medical plan and an exercise membership with a local gym will directly contribute to lower medical plan costs for the company.

Even if your company is just starting out, and the cost and logistics of medical insurance or health club memberships is beyond your financial plan, you can still introduce and encourage personal fitness to your workforce. Offering a cycle to work program would work effectively for any company with a local employee base, which would not only promote fitness, it also supports environmental initiatives to cut company-wide emissions, reduce congestion, and can even make the commute to work faster.

Initiating an exercise program is one thing; encouraging your employees to take advantage of the program is another. The best way to encourage an effective fitness regime is make the program easy, effortless and affordable. Make biking to work easy by providing cycle locks or a parking bay near the company entrance, installing showers so employees can feel refreshed after the commute, even provide a monetary incentive for cycling to work. Gym activity can be encouraged by hosting competitive incentives, company sport teams or running clubs. Hopefully, as your employees become fitter and healthier, other employees will be naturally inclined to participate.

Encouraging fitness can be one of the most important things you can do for your employees, and the results can be one of the most effective ways to reduce overhead health expenses, while simultaneously increasing productivity, enthusiasm and moral.

Patient Capital

Jacqueline Novogratz explains Patient Capital and elaborates with real life “examples of entrepreneurial innovation driving social change.”

Partnerships, Innovation, Opportunity, Diversity, Fierce Upward Mobility – all areas that entrepreneurs should be thinking about.

For more inspiring videos, visit  www.ted.com

For inspiring ideas about starting a business and writing your business plan, visit www.ionfreshstart.com

Companies We Love: Hostgator

We decided to use Hostgator to host our company websites for several reasons.

1) Reliability: Over the years, we have used many big name, main stream hosting services. Hostgator has been equally reliable with minimal downtime, and in our case, no downtime.

2) Customer Service: If we have questions about our services or changes to our account, Hostgator responds quickly. The company has over 200 employees and 24-hour customer care.

3) Pricing: Hosting packages start at $4.95 per month. For a complete business website hosting solution, you also get a toll-free phone number. Just $12.95 per month.

4) Green Wind Energy: Hostgator uses wind energy to power its servers. How cool is that?

According to the facts found on the Hostgator website, “the average server produces the same emissions as a 15 mpg SUV. HostGator hosts over 1,800,000 websites on its shared and reseller servers. That means a lot of servers, and a lot of carbon emissions. So [Hostgator] asked [them]selves, ‘What can we do to be part of the climate change solution? We took steps to minimize our environmental impact at the office, but still we weren’t satisfied. We then switched to 36% more efficient servers, but still we weren’t satisfied! All of our shared and reseller servers are now 130% wind powered! We’re not just neutralizing our environmental impact, we’re reversing it!’ ”

Great job Hostgator! And we at ION FreshStart are very proud to be affiliated with your company. By using your hosting services, we too are helping reverse the impact.

Visit www.hostgator.com for details.

ION FreshStart provides tools and a step-by-step guide to building a professional and sophisticated business plan for your business. For more information, visit: www.ionfreshstart.com

Making Fun, Having Fun, Getting Rich

A popular saying goes: “Do what you love and you’ll never work a day in your life.” It is easy to find the truth in this statement. If you love designing and manufacturing skateboards, you’ll feel like you are doing something fun everyday. A hobby; a passion. If your passion is something that you would do, regardless of income opportunities attached to it, then you have completed step one. If you can follow your passion daily and receive ample income from doing so, then you have completed step two – and congratulations! you now possess the coveted ingredients of that popular saying.

But what about doing something goofy? Something that is not a business, per se, but is just something that makes you really happy. And what if you decided to share this joy with others via broadcasting it on the internet?

Two popular examples are Stuff White People Like and Where the Hell is Matt. Each started as a personal expression of humor and both are now wildly popular social experiments with large revenue streams. Another emerging expression and attempt at humor is the website People of Walmart. PeopleofWalmart.com is off-beat and pokes fun at shoppers at Walmart. A couple of guys put the site together to make fun and have fun. The site receives over a million hits daily and corresponding ad revenue is very impressive. Who knew?

Understand the magic formula of these examples (regardless of your opinion on the subject matter). Find your passion and do it all of the time. You never know – you may find riches beyond your wildest dreams!

ION FreshStart Advanced Business Planning. Find your passion and build a plan.