Five Legitimate Ways to Make Money from Home

Five Legitimate Ways to Make Money from Home

The lure of working from home is strong for most people. The ability to sleep in, spend breakfast and lunch with loved ones, and stop commuting is a dream come true for an estimated three million workers in the United States. According to Forbes, 47 percent of workers with the option to telecommute say they are “very satisfied” with their jobs. Only 27 percent of office-bound employees feel the same way.

The good news is, working from home is on the rise thanks to improved computer and communication technologies that make it easy to put in a full day’s work from your home office. Programs like Skype, Teamwork and Asana keep teams organized and in touch whether they are across the hall from each other or across an ocean. If your ideal job takes place at home, there are many options available to you.

Option One: Take Your Job and Move It

If you are currently working in an office, talk to your manager about taking your work home with you. This is not likely to be a problem unless you work as part of a team or need access to onsite equipment or resources. Usually, however, office jobs are computer-based with a bit of paper filing included, and these are things that most people can handle from any location.

If you are sure that you can continue your current job at home, you’ll just have to convince your boss. Let him or her know that the statistics are in your favor, since productivity is known to rise when employees leave the office for their homes. The increase in your job satisfaction also makes you much less likely to quit in the future.

When travel company Ctrip decided to save money by having employees work from home, they saved $1,900 per employee on furniture and space. They also noticed an average increase of 13.5 percent in productivity when their workers started doing their jobs from home. Explain this to your boss if he or she isn’t sure about letting you telecommute.

Tip: Suggest a trial period so that your boss doesn’t feel so pressured by your request. Explain that you’d like to try working from home for a month, and after that period, you can talk about the results and options for the future.

Option Two: Become a Language Teacher

If there’s one thing the world will always need, it’s language teachers. Many people find that learning with a teacher is much more effective than learning with books or software, so teachers of all languages are in demand.

If you decide to teach English or another language that you are fluent in, you can work with students in person or online. Skype offers a good platform for free two-way video calls that could be an important element of your classes. You might also consider registering with an established online education website such as Lingoda, which will do the work of finding students for you.

Tip: Consider becoming a TEFL-certified teacher for more job opportunities and the ability to charge higher rates.

Option Three: Create Your Own Educational Course

If you have valuable knowledge to share such as a business strategy or Medieval history, you can create your own educational course and promote it online. There are several websites that you can use to easily create your curriculum, such as Udemy, Teachable or Ruzuku.

If you register with any of these or similar sites, you’ll be given the tools you need to craft a course for virtually any topic. The great thing about creating a course is that once you set up your lessons, it can become passive income. If you prefer, of course, you can engage with your students by offering graded assignments and tests.

Tip: Create your own marketing funnel instead of relying on the exposure provided by the website. This way, you’ll have much more control over your traffic and the ability to increase your own sales.

Option Four: Offer Pet-Sitting in Your Home

Do you have extra space in the house and a huge love for dogs or cats? Offer pet-sitting services to members of your community. If you haven’t looked into the pet care market before, you might be surprised at how much work there is out there. In 2015, pet owners spent $5.41 billion just on grooming and boarding.

If you’re a cat or dog person (or both), the work is quite simple and enjoyable. You can choose to offer simple pet-sitting services, or pair that service with grooming or bathing. You could also specialize in high-end pet-sitting and offer your clients the best quality food, treats, toys, beds and private rooms.

Tip: Take a pet first aid class so that you know what to do in an emergency to keep your furry clients safe.

Option Five: Become a Virtual Assistant

There are endless possibilities for virtual assistants these days because small companies and startups love to outsource administrative tasks. If you have a computer and an internet connection, you’ll be able to take care of customer service inquiries, website troubleshooting, business or personal accounting, transcription, copywriting, spreadsheets, and all kinds of tasks that traditionally take place in an office.

If this kind of work appeals to you, you should start by creating a LinkedIn profile. This will allow you to share an online resume easily with employers and potential clients. Next, you can find job postings for virtual assistants via Indeed.com, UpWork, LinkedIn and directly through corporate websites.

Tip: Don’t undersell your services. Just because you see impossibly low rates from fellow virtual assistants doesn’t mean you should try to equal or undercut them. There are plenty of employers willing to pay you what you are worth, so hold out for a good opportunity.

Working from Home Is More Possible Than Ever

Adulthood in modern societies has been characterized by working outside of the home ever since the Industrial Revolution. Only now, with the recent advancements in computer technologies, has it become possible to once more earn a living within the walls of our own homes. If that’s your dream, there’s nothing holding you back but yourself!

How to Forge Successful Partnerships

How to Forge Successful Partnerships

Starting a business with a partner can increase your odds of success. It can also bring that success to a level and speed you may not have been able to achieve as a sole proprietor—but only if you base your choice of partners on the right criteria. This article will look at reasons why partnering is worth considering and also the most important points to remember when choosing a partner.

Small Business Survival

Partnerships—companies with more than one owner—are likely to be in business longer than sole proprietorships—one-owner companies—according to Brian Headd, an economist with the U.S. Small Business Administration’s Office of Advocacy.

Though there is no hard data provided to substantiate why this might be, having the right partner provides several benefits, including a support system to keep each other motivated during tough times, and someone to share expenses and responsibilities.

Financially speaking, a 2008 report from the U.S. Internal Revenue Service found that while income for sole proprietorships have been on the decline since 1980, income for partnerships increased during the same period.

Yet, despite this rosy forecast, 87 percent of non-employer companies (those run by one or more individuals with no staff or employees) are sole proprietorships; only seven percent are partnerships, according to the Office of Advocacy.

Not all types of businesses require or would benefit from partnership. For those that do and also hope to survive, there are several points you need to cover before declaring a partnership and signing on any dotted lines.

Each of the points that you’ll read below work together to provide a holistic understanding of how to proceed with choosing the correct business partner.

Establish a Pre-Business History

Whether you’re dealing with a friend, acquaintance or total stranger, you’ve got to establish some kind of history with them, like collaborating on one or more small projects—particularly the kind where there is little risk. This could take weeks, months or even years. This isn’t to say you’ve got to start from ground zero; you may have known and/or worked with someone for a long enough period of time to get an idea of their suitability.

By developing a pre-business history or reviewing an existing one, you can get a ground-level perspective of the other person’s work style: how they work, how they communicate, their level of responsibility, energy, and similar things which will tell you if they’d make a good partner … or not.

Ensure You Both Share the Same Values

This is related to establishing a pre-business history and is probably the most important factor to consider when choosing a business partner.

While you and your partner will likely be able to handle the occasional difference of opinion or other upsets, where values are concerned, your mutually-piloted ship will likely run aground on the basis of differing values. This is because one’s values are usually a matter of deep, personal conviction, which may have, been formed over a long time and reflect a person’s background, beliefs and experiences.

When values are aligned, it can be a beautiful thing, such as when both partners value social responsibility over raking in huge profits (or vice-versa). But when they are not aligned, or are opposed, such as one partner valuing leisure while the other values industriousness, it’s simply not going to work out, unless one person changes.

Choose Someone With Complementary Strengths

If you are the idea person, then you probably don’t need another idea person; you need someone who excels at action, implementation, and execution. One of the best examples in history of this was the early Apple computer: Steve Wozniak, the engineer and idea guy, had been “building” a better, more innovative computer on paper for years. (This was long before computers were common and affordable to the average person.) Steve Jobs, a computer buff of only average skill, took his enthusiasm for Wozniak’s creations and went out and found customers for it.

Of course, if you team up with another idea person and it works on that level, you would need to bring in a third person who is strong on execution. And your main strengths should be laid out in the beginning so that your job roles are well defined and mutually understood.

In addition to complementary strengths, it may be important at some point to recognize and utilize any additional skills each partner has that could benefit the business. There are probably as many possible skills a person could have and contribute, as there are different kinds of businesses. By making them known and figuring out ways to use them, the partner gets to fully express themselves through their work, which is a positive thing.

Establish Each Person’s Commitment

How many hours are you putting in? How many hours is your partner putting in? And what are they supposed to accomplish during those hours? Is one partner still working their day job and working on the business during nights and weekends?

These are the kinds of issues that have to be looked at, understood, and agreed upon by the partners, in order to prevent future disappointment and discord. If the partners, for instance, have said “50-50” yet one is working on the business full-time while the other is still at their day job, it could sow the seeds of future trouble.

However, time invested may not be an issue if you base commitment on hitting the required targets to move the business forward. If one partner is still working a day job but is hitting the necessary business targets, this might be considered an acceptable level of commitment.

Be as upfront as possible about this aspect of the business because it won’t take long for the reality to show itself.

Get the Money Issues Squared Away

If you’ve got a great business idea (or even just a good one), and one or two motivated, dedicated business partners who want to make it a reality, you’d better have this discussion sooner rather than later.

Take a good look at individual involvement and commitment and decide, based on that, how the profits will be shared. Then get it all down in writing.

Agree on the Endgame

Most business owners—partners and sole proprietors alike—don’t look far enough into the future, particularly at formulating and agreeing on an exit strategy for the business. Whether the business is successful or not, the two or three people who start it will gain a lot of experience. However, odds are against them gaining enough experience to be able to make the leap from a successful small business to the world of big business without a lot of expensive outside help.

Many businesses reach a point of profitability and success that attracts the attention of a larger business that will seek to purchase them. It may or may not happen to your business, but it pays to have an exit strategy agreement worked out long in advance.

Last Word

Are there other aspects of partnership other than these? Of course, including hiring and firing staff (whose responsibility is it, etc.), conflict resolution, and accountability.

But the main thing to realize is that even the best partnerships are not without their rough patches. That’s why the most important thing is the discovery period. Use it to take a close look at the person you are considering as a partner. Spend time with them. Meet their family, if any. Find out all you can to assure yourself that the person will be the one who can hold up their end in creating a mutually beneficial relationship.

4 Simple Online Ideas for Starting Your Own Post 9 to 5 Empire

4 Simple Online Ideas for Starting Your Own Post 9 to 5 Empire

For many people, 5 p.m. means indulging at happy hour with co-workers or sitting in front of the television watching the remaining ten minutes of a late afternoon quiz show. But for some, the end of the business day marks the beginning of a new goal. The latter return home after an enduring 9 to 5 shift and then begin work. They work each weekday and night at realizing their dreams of running their own business and being their own boss.

You should use your 9 to 5 job as motivation to work when you return home, not as a reason for casual inactivity. A regular 9 to 5 job should be the reason for you to get fired up, rush home, and plan your very own business.

If you fancy the independence and freedom from authority that most employees seek, consider the following list of potential business ideas that could soon make you your own boss:

1. Sell Your Expertise

If you have a prolific value proposition and consider yourself an expert in a particular field, you could package that wisdom into an eBook to help educate people that are seeking information in that niche.

If you can provide informative and educative content regularly, consider creating online courses. According to The Chronicle of Higher Education, online education went mainstream many years ago, while “academic leaders believe it will become even more prevalent in the coming years.”

Once you create digital content, you can sell it repeatedly, without the hassle of inventory caps or manufacturing costs. And if you don’t consider yourself tech savvy, you can use applications like udemy.com to help you.

Do your research first and see what the demands are in a specific area; if they’re high, you’re on to something. Begin drafting, brainstorming, and making important calls to start your business. The longer you delay it, the longer you’ll be reporting to your boss.

2. Create a Blog

Much like point 1, blogs provide a platform for you to express your professional wisdom and industry expertise.

Whether you’re experienced in travel, sports, marketing, real estate, or lifestyle, you can come back from your regular job and begin expressing yourself on your blog. Keep the posts educational, informative, and just as importantly, engaging!

Thanks to subscriptions, affiliate marketing, ad revenue, and sponsors, bloggers can earn a sizeable income from their content. With enough content behind you, you’ll soon be on your way to becoming a full-time blogger.

3. Manage Social Media

A report on Statista reveals that 78% of U.S. Americans have a social media profile in 2016. Therefore, the chances of you spending your time uploading selfies and crafting clever hashtags is probably high. Rather than going home and scouring your social media sites for free, you could earn some money by managing companies’ social media accounts.

In the 2013 Dreamforce conference, Facebook announced that it had 25 million active small business pages on its platform. There’s a high chance that some of these companies can use your help. Not only will the working hours be flexible, but you’ll get a great understanding of managing social media sites for when you launch your own company. Or, you could form a company that manages social media accounts for small businesses.

4. Develop an App

It may seem like there’s an app for just about everything, but then a new app comes along and becomes the must-have app for all.

App development is still a relatively new and ever growing industry. In 2014, the iPhone app market created over 4,000 job postings on freelancer.com.

Look at latest trends and try to brainstorm a number of different app ideas, no matter how absurd they may initially seem. Once you have your idea, it’s time to apply the mechanics, like coding.

Learning to code can be a little difficult and time consuming, but by no means is it an impossible task to learn. Constantly educate yourself and soon enough app development will come easily to you.

Read about various app success stories to learn how they became successful in order to motivate yourself. One such example is Ukrainian app developer, Jan Koum. Living a very modest life with his mother and grandmother in a small apartment, Koum got selected for a training program at San Jose University.

While working at Yahoo, Koum met his business partner, Brian Acton and after nine years they decided to leave the company for new opportunities. After leaving Yahoo, they applied to Facebook, but were quickly rejected. They put their heads together, and decided to create an app—the next big thing.

The record books show that they made the right decision. They created WhatsApp, one of the biggest communication apps in the world.

After a few failed attempts, the initial release figures showed that 250 million people were using the app in the same month it was released.

Notably, in February 2014, the biggest ever acquisition of its kind took place when Facebook (who once rejected the pair) purchased WhatsApp for a record breaking $19 billion.

Conclusion

Although there’s a wide range of online business opportunities, the four options above provide a focused and specific list for you to ponder.

Just remember that you don’t have to quit your day job just to work on being able to quit your day job. After all, it takes money to make money. You could use your regular job’s income to help feed your passion project and buy things like better equipment, which will increase the quality of your blog. Once you get into the routine of working after that 5 p.m. bell sounds, you’ll soon be on your way to becoming your own boss.

6 Decisions That Will Make or Break Your Startup

6 Decisions That Will Make or Break Your Startup

Flip through any book about starting a business and, within a few seconds, you’ll see multiple references to “strategy.” Without question, having an effective strategy is vital to every startup’s success, but the word gets bandied about far too frequently.

Perhaps because, deep down, every business owner dreams of having a secret formula for success—and the allure of finding that perfect startup strategy is too much to resist. Thus, they feel compelled to keep searching.

No Golden Ticket

In reality, the fundamentals of a business strategy can be broken down into two basic components: all the activities that go into creating a product or service, and all the activities that go into selling that product or service.

As Foundr recently reported: “Every business is different, every market is different, and you can bet that every entrepreneur is different. So therefore every business model or startup strategy is inevitably different.”

There is no golden ticket. Quiet often, credit for a successful strategy belongs to those who did a great job implementing a time-honored plan of attack. And that’s as much a reflection on decision-making as strategy.

The question is, are there certain strategic choices that virtually every entrepreneur must make when first starting out? And, if so, how can they increase their chances of success by making these decisions wisely?

Peter S. Cohan, who runs a management consulting and venture capital firm and is the author of “Hungry Start-up Strategy,” believes there are key strategic decisions every entrepreneur must successfully navigate. In fact, after interviewing more than 200 entrepreneurs, Cohan concluded there are six such choices. Here’s what they boil down to:

1. Goal Selection

Launching a successful startup requires you to attract the right talent (i.e. better talent than you can afford). So, the question you need to answer is, why would someone leave their present position to accept your offer when it’s probably less than what they’re making now?

As Cohan wrote in an article for Forbes: “ … The right mission can inspire terrific talent. And if a startup commits to an IPO or acquisition, this could help convince an investor that the firm will make him or her richer.”

2. Market Selection

In theory, you could sell your product or service to any business or consumer in the world. But theories don’t pay the bills. The question is, which market and why?

As Cohan sees it: “ … An entrepreneur should pick a market about which he or she feels deep passion and that is big enough to help the firm become a $100 million company even if the founder only receives 10 percent of it.”

3. Money

Funding your business is a tightrope act; you need cash to cover expenses, but you also want to retain control of the company you’re building. It’s a question of how to fund day-to-day operations during the startup phase without giving away your business.

According to Cohan: “ … To keep control, a company can borrow on its credit card or crowdfund until it has proved that customers will pay for its product. Then the entrepreneur can sell a stake to a venture capitalist to cover the last mile before an IPO.”

4. Team Building

In keeping with goal selection (see #1 above), the strength of your business—and its likelihood for success—hinges on the team you put in place to execute its mission. The question is, how will you build your dream team?

“The entrepreneur can’t do everything—so he or she needs to hire and motivate A-level talent,” explains Cohan. “The stock options offered will only help with recruiting the talent if the entrepreneur has already built successful startups and provides an emotionally compelling mission.”

5. Market Share

It’s tough being the new kid on the block. Attracting customers and clients isn’t easy for a startup because most prospects don’t want to do business with a company that may not be around six months or a year from now. So, how do you capture market share?

Cohan’s take on it: “To overcome this problem and gain market share, the startup should do two things: Find a customer who has pain that has no cure and deliver the cure at a price that makes the product irresistible—what I call a quantum value leap.”

6. Responsiveness

Let’s say you solve your market share problem. The phones are ringing, customers are buying, and your product is flying off the shelves. That’s great news, and you should be proud. The question you need to answer next is, how will you stay in sync with your customers’ evolving needs?

Cohan sums it up this way: “Once customers buy the product in droves, the entrepreneur should be kicked upstairs to monitor changing customer needs, new technologies, and upstart competitors to figure out additional products to build and fresh markets to conquer.”

Takeaway

Hot new business strategies will always garner attention from entrepreneurs and small business owners, but the essential elements of a business plan don’t change.

If you want to succeed in your business, forego the search for a golden ticket and focus on making the strategic decisions that pretty much every entrepreneur can expect to encounter when first starting out. The advice above should help guide your choices.

How to Set up an Efficient Office Space for Your Business

How to Set up an Efficient Office Space for Your Business

Having an office space for your business might seem like a trivial issue in the grand scheme of things; you just need chairs and tables for employees to sit and do work, right? Wrong. Choosing the right office location and layout is very crucial to the success of your business.

You have to find out exactly what your business needs in terms of space, accessibility, number of employees, workplace culture, and many other factors necessary to create a motivating and conducive work environment. Below are six tips on how you can create the best workspace for your business.

Get the Right Location

Your office building location is very important for all stakeholders in your business. You should make sure it’s close to public amenities like bus stops and public parking, so people in your organization can easily reach it.

An office that is too far from the city or public transportation can alienate potential employees, and your current staff would likely leave within 6-12 months because of the distance. Before settling in, don’t forget to check if the location is safe and there is security around in case employees need to leave the office late.

Get the Right Office Space

After you are certain of your office location, check out several office buildings in the area before leasing or buying space. Firstly, it should allow you to sign a long-term lease contract, as moving offices can be tedious and time-consuming. The office should also be spacious enough to allow for expansion in the future.

Before closing a deal for your office space, consider the price. Whether your business is doing well or going through a rough patch, the rental fees and utility bills stay constant, so make sure they will not be difficult to cover during the times you have low sales and revenue.

Your office space must have easily accessible bathrooms and a storage room for all your extra furniture and office supplies. Moreover, look for offices that have a space you can turn into a break room where employees can relax after a tension-filled day. You could include magazines and add a mini library as well.

Studies show that a conducive work environment can actually help reduce absenteeism, increase your staff’s productivity by 16 percent, and improves job satisfaction by 24 percent. Set up the best workspace for your company to have productive and happy employees.

Furnish Smart

Your office setup can greatly influence your company culture. When choosing a layout, keep in mind the type of business you do; for example, an advertising agency will have a more casual and creative feel while a finance management agency may have a more modern and minimalistic design.

Decide on a design concept you want to follow, but generally keep it between a traditional office and a modern-casual one. Open layout offices have gained popularity because they give a relaxed vibe, but you may still want to keep a few closed areas for confidential meetings or work that needs silence.

Purchase quality, affordable furniture that will be comfortable for your staff and would last long. It does not necessarily have to be new, as you can find great quality furniture in secondhand shops for a fraction of what a new furniture would cost.

Figure out Office Equipment and Supplies

Document all the office equipment necessary for your business. Depending on how mobile your employees are, you might buy either laptops or desktops for daily use. You will also need a centralized printing system which all computers will be connected to it.

Next, you will need office supplies like pens, sticky notes and notebooks. It is always best to buy this in bulk, which will help save money. You could also combine orders with other small business owners in your area to get even more discounts for bigger orders.

Get Excellent Internet Connection

Today, it’s almost impossible to run a business without the internet, and slow internet connection has no room in a business that wants to prosper. When choosing a location for your office, visit your prospective place and ask about the best internet connection in the area. Another option is to check your preferred service provider and find out if they have coverage in the location that you like.

Create a Customer Reception Area

If you are likely to have customers come into your office, create a reception area where they will be received before they go to your meeting room. A reception area makes your business look more organized and professional, and that is the impression you want to give to your clients.

Conclusion

Setting up an office space for your business is a crucial decision that you should carefully think about. Aim to create an encouraging and conducive office environment that inspires a positive atmosphere among employees. Opt for an office that is safe, accessible and would represent your company well.

How to Jump into Business Gradually

How to Jump into Business Gradually

Though a majority of people are interested in running their own businesses, many have no idea how to begin.

A recent survey of 1,600 adults by the University of Phoenix found that 63 percent of people under the age of 30 either owned their own business or desired to at some point.

For a lot of people, the advice of pro-entrepreneurial opinion leaders to just “jump in, make mistakes, and learn” doesn’t provide enough specifics on how to start. It also implies that business ownership is full of hidden perils.

To make this easier, instead of taking a blind, running jump into the unknown, take a gradual approach to starting your business—one that will present you with manageable challenges and impart valuable business experience.

That’s what these small and big businesses did.

From a Humble Tamale

Located a couple miles east of Dodger Stadium in Lincoln Heights, Mom’s Tamales is a thriving Mexican restaurant that has received rave reviews on radio and television (including one from “American Idol” host Ryan Seacrest). The place has become a real “foodies” destination.

In late 2000, Mom’s founder, Israel Briseño, had completed three years of community college. He was getting ready to find his first job when he realized that he wasn’t prepared: “I had not learned enough about anything to really say that I could do anything for a living,” he said.

Briseño actually wanted to be his own boss, but had no idea what to do. His parents had worked in the food industry and suggested he look in that direction. After a couple days of thinking it over, he decided on tamales.

In early 2001, he borrowed $200 from his mother and purchased the equipment and ingredients to make his first batch of tamales, which he sold from the trunk of his old Honda. His first couple of sales attempts weren’t too successful, but he kept going out, keeping his tamales and his face in front of people. That Christmas, he sold 500 tamales. (Tamales are a Mexican Christmas tradition.) By the following Christmas, the popularity of his tamales had grown to the point where he couldn’t keep up with the flood of orders and had to turn customers away.

Briseño opened the restaurant in 2005.

Takeaway: As far as start-up costs go, $200 is low. The bigger hurdle for some people may be the sales end—going out in public, talking to people, and peddling your wares.

Turning a Pastime into a Payday

Delia had done artistic things for much of her life, including oil and watercolor painting, various crafts, and particularly crocheting. If you know her, you’ve probably received a crocheted hat or scarf from her for the holidays. She finds it very relaxing and so she does it often.

She’d retired a few years ago and, after living on social security for a while, she realized it wasn’t going to be nearly enough. She wondered if she could supplement her income doing what she loved.

In the 1990s, she’d given crafts classes at local craft and hobby stores in Phoenix, Arizona. She’d also worked for years as a substitute teacher and cited those experiences when she made a proposal to the community programs director at one of the local colleges to teach a beginner’s crochet class. In September 2009, they added her class to the schedule.

The pay wasn’t much, but every dollar helped. In 2010, she wrote a short book of beginner’s crochet lessons, which she sold to her students. It took about eight hours to create and costs a few dollars a copy to duplicate, and she sells it for a 400% profit.

She got her book into the local libraries and used it to start getting bookings for classes at the local craft stores, where she’s found herself in demand again, providing another boost to the business of doing what she loves.

Takeaway: People can make extra money or a substantial living doing what they love. One way to expand that business is with a book. Like the “ultimate business card,” you can use your book to establish your authority and create more business.

No one woke up one morning and found themselves suddenly at the head of a thriving business.

Tiny Market Becomes Big Business

Nick Swinmurn graduated from UC Santa Barbara in 1995 with a degree in film studies. He had a few different jobs, including working for Autoweb, an early online car-buying service. That was 1997 and everyone was talking about the internet.

In 1998, he was in the mall searching in vain for a particular kind of Airwalk shoes when he got the idea for an online shoe store.

E-commerce was still in its infancy and he wasn’t sure it would work. So, he went to a local Bay Area shoe store and took pictures of various shoes. He told the owners that he was going to put them online and that if he made any sales, he would buy the shoes from them for full price.

He got some sales.

Swinmurn called his company Shoesite.com, but later changed it to Zappos.

By emphasizing the fact that shoes are a $40 billion-a-year business and that 5% of that came from catalog sales, Swinmurn was able attract interest in and funding for Zappos.

The company went through a long period during which they become wildly popular, but were barely profitable. Eventually, Zappos was purchased by Amazon.com.

Takeaway: It’s sometimes necessary to survey in order to verify if there really is a need or want for your product or service. In the case of Shoesite, it only required building a small website and the legwork of taking pictures and uploading them. Your business survey might even require less than that.

Final Thought 

You don’t have to jump in all at once. Dip your toe in the water. Start cheaply and observe your results. Little steps, like the ones described above, involve risk but it’s manageable risk and it will provide you with valuable business experience with which to make your next move.

Crucial Things to Consider for a Perfect Production Plan

Crucial Things to Consider for a Perfect Production Plan

For companies that offer tangible products, the need for a production plan is not just important; it’s imperative. Even if you offer online products like software or training materials, following a clear and directive production plan will guide you from conception to completion. Essentially, a production plan is a medium-range planning strategy succeeding long-range planning.

The Small and Medium-sized Enterprise Toolkit defines a production plan as, “the authorization of your manufacturing department to produce the items at a rate consistent with your company’s overall corporate plan.”

The Purpose of a Plan

In order to maximize productivity, it’s essential that companies make use of an effective plan. Production plans are a crucial segment of your wider business plan and will enable you to outline a schedule of production while allowing you to keep checks on each step of a product’s journey.

Since the central purpose of a production plans is to determine the output of the manufacturing department at each stage of the production process, it would be best to involve your operations team in the creation of the plan.

Advantages of a Plan

The main advantage of an effective plan is to help your company realize its production objectives while reducing costs and increasing functionality in a range of areas, including:

  • Minimizing labor expenses by enhancing the process flow and avoiding unproductive work time
  • Minimizing inventory costs, reducing the need for safety stocks and unnecessary work-in-process inventories
  • Optimizing the use of equipment and increasing capacity
  • Improving the rate of product and service deliverables

Understand Important Factors

There are a few areas and activities that will have a direct impact on the production process and it’s important to be aware them. They include:

Market Conditions

Understanding the current market conditions is essential to effective planning. You’ll need to make reliable estimations on projected sales figures and, although you may not have a definite set of figures to use, you can predict future sales by evaluating market trends and analysing historical sales data.

Inventory Control

The inventory levels that feed the pipeline need to be distinguished. Ensure that you have a good inventory system and strategy in place in order to create an accurate plan.

Human Resources and Equipment 

In business speak, “open time” is the period of time that is allowed between processes to ensure that orders run smoothly within your production line. A production plan can help you effectively manage your open time and avoid any potential delays.

According to the Business Development Bank of Canada, a point worth noting is that planning should help to maximize your operational capacity, but not go beyond it. Be sure not to plan for full capacity so that there is enough room available for unexpected changes.

Take Note of Each Step

The best way to determine each step in production is to map the processes in the order in which they occur and then note the average time it takes for the work to be completed. Once the process map is completed, you can analyse the time it takes to complete the whole process.

However, when there is duplicated work, it’s important to standardize the time and work involved. Make note of any comparable occurrences and use them as a baseline to distinguish future times and routings. You’ll notice a significant increase in the speed of your planning process.

Identify the Risk Factors

During the process mapping stage, you may come across “waste” or “excess items.” Evaluate these factors by looking at historical data that shows the time and materials involved, and various failures that were encountered.

If there are significant risks, you could conduct an FMEA (failure mode effect analysis) and then take the necessary action to minimize them.

Although this is more common in assembly businesses and manufacturing, you could take a similar approach to your business by using the FMEA template as a guide.

Internal and External Factors

There may be a number of internal reasons that could influence the level of demand for your company’s products: marketing, product design, customer service, price, and product quality.

Additionally, marketplace factors like industry competition, consumer perception, and consumer behavior could impact the accuracy of demand forecasts.

Managing Changes in Demand

Your company can address demand fluctuations through the following three basic production-planning strategies*:

Demand Chase Strategy

This strategy matches the demand (order) rate with the production rate through employee turnover as the order rate changes.

Level Production Strategy

This strategy helps maintain a steady workforce that works at a consistent production rate with the deficiencies and excesses absorbed by any of the below:

  • Modifying inventory levels
  • Permitting order backlogs (guaranteeing the customer that you will deliver the product at a later date)
  • Adopting marketing activities

Mixed Strategy

This strategy could include a combination of the following:

  • Maintaining a steady workforce, but adopting variable hours: various shift patterns, flex-hours, or overtime
  • Outsourcing work
  • Modifying inventory levels

Monitor the Effectiveness of Your Production Plan

You can monitor the efficacy of your production plan through three key areas: systems and procedures, production planning, and production control. There are a few things within each area that you should consider in order to evaluate how effective your plan is.

Ask yourself the following questions within each one:

Systems and Procedures

  • Is current documentation of the production plan, control systems, and procedures present? Have you communicated this to all persons involved?
  • Does the planning and control plan contain a proper monitoring system that will maintain and update the master scheduling accounts?
  • Is there a proper, sufficient system between sales forecasts, which can be detailed thoroughly so that they can be converted into specific production plans?

Production Planning

  • Does control and production planning formulate a master production schedule with each time allocation and production assignment?
  • Do the schedules allow for sufficient planning of inventory levels and purchases?
  • Are there any indications of low employee productivity or wasted time? If so, are the numbers significant?

Production Control

  • Can the work in process or order status be determined efficiently?
  • Are actual levels of production significantly different to planned schedules?
  • Are order shipments in accordance with the schedule?
  • Are important records (production control and reports) maintained in order to cover potential and present production loads?

Conclusion

Production plans are not cast in stone. It’s important to remember that workplace changes are a daily occurrence, so you must alter your plan in response to those changes.

When such changes occur, make it a point to communicate all details of the revised plan with all departments involved. After all, the production plan is everyone’s road map to producing a successful, final product.

*Source: Dilworth, James B. Production and Operations Management: Manufacturing and Services. Fifth Edition. McGraw-Hill, Inc. 1993

The Lean Start-Up: Yes or No?

The Lean Start-Up: Yes or No?

Lean start-up is a phrase that’s been around for a few years now in entrepreneurial and business circles, but is it just a new buzzword for an old concept or is it something new that your business can benefit from?

A Microcosmic Example

It was a cloudless 98-degree August day when 8-year-old Debbie Ann set up her lemonade stand on the corner.

With a supply of 5-ounce plastic tumblers and an old cooler full of melting ice cubes underneath a small folding table, she served cup after cup of instant lemonade for $0.25 each.

Roughly half of the people who pulled over for a drink said something to her about iced tea.

The following Sunday, the banner on the table read “Lemonade or Iced Tea 25¢.” That day, she sold twice as much tea as lemonade. More than half of her customers mentioned they’d gladly pay more for a bigger glass.

The Sunday after, Debbie Ann was on the corner again, this time with 20-ounce tumblers. The banner now read, “Big Iced Tea $1.00.” She could barely keep up with the traffic. Before the day was half-over, her mother had to go buy more ice and cups.

On the next street over, 12-year-old David was working on his “Be Cool Hat,” a baseball cap lined with blue ice packets that you put in the freezer overnight and wear on hot days to keep you cool.

He’d worked on the hat for several years, making the packets thinner and smaller, optimizing the comfort and cooling range. No one, except his family, knew about it. He managed to convince his rich uncle to fund a production run of the hats, which he had manufactured in China.

David also used some of the money to run ads in the local newspaper and got a couple of sales. He took the hats to the local flea market and sold one or two. There was very little interest. People said it was too heavy and uncomfortable. He discovered that the general audience for baseball caps was actually pretty small. He even refunded one of his sales when the customer complained that the hat gave him a headache.

David sank years of his life and a couple thousand dollars of someone else’s money into what he realized too late was a failed product.

David approached his start-up the way many entrepreneurs have: going forward with what they believe is a good idea and developing it in “stealth mode,” without feedback from potential customers or even ascertaining if their idea is attractive to any audience. They invest money in production and promotion, but the product, when finally launched, fails to gain traction.

On the other hand, Debbie Ann approached her business as a lean start-up would: taking her idea of “cold drink on a hot day” directly to the streets. In doing so, she found customers and listened to them. From their feedback, she was able to pivot slightly in her product offering. By continuing to listen to them, she was able to deliver exactly what they wanted and found success.

Lean Start-Up Methodology

Entrepreneur and author Eric Reis proposed the lean start-up philosophy in 2008. He had been involved in two start-ups that ultimately failed.

In both cases, he realized that the main reason was a failure to accurately understand their customers’ needs and wants. Both start-ups began “working forward from the technology instead of working backward from the business results you’re trying to achieve,” Reis said in the Xconomy.com blog.

Like any entrepreneurial endeavor, the lean start-up begins with a product idea. Rather than formulating a business plan to obtain funding so that you can begin building a team, developing and launching your product (as conventional start-ups have been doing since time immemorial), the lean start-up puts a “minimum valuable product” (MVP) into the hands of customers, known as “early adopters,” in order to obtain as much feedback as possible.

This feedback is called “validated learning” and its purpose is to find out as early and with as little effort and funding, if you’re producing a product or service that people actually want. That’s the “results you’re trying to achieve” that Reis referred to. It’s validated because it comes directly from customers rather than from anyone’s assumptions.

Lean start-up methodology is scientific in that it begins with a hypothesis about a product or service that a particular audience wants and then, by putting an MVP out there, proceeds to discover if that hypothesis is correct … or not.

By listening to early adopter feedback, the lean start-up can optimize its offering to be more of what’s needed and wanted. However, when the hypothesis proves to be weak, a lean start-up may still collect feedback and discover a new need or want. In such a scenario, the lean start-up may decide to “pivot” from their initial hypothesis to a new one, and provide an MVP that conforms to that newly-discovered need.

This entire cycle is summed up in the lean start-up concept, “Build-Measure-Learn,” which emphasizes the speed of developing a MVP, measuring customer response to the MVP, and learning from the “experiment” whether to proceed with the product or pivot to something else.

There are indications that the lean start-up methodology has been adapted for use by large, thriving businesses to pilot new initiatives and even by offices of the U.S. Government, such as Data.gov and the Department of Health and Human Services, as Reis describes in his blog, Startup Lessons Learned.

Not Everyone Agrees

Despite the seemingly sensible approach of a lean start-up, it has its critics, some of whom insist that not all early adopters have an interest in helping improve a product, but just wanted a finished product to begin with. (This is particularly true of software products.)

Yet, even Reis does not insist that lean start-up methodology should be swallowed whole, but should be the subject of validated learning by the user, in much the same way early adopters give feedback on an MVP.

The entire process and how to implement it is described in Reis’ book, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.

5 Wealthy Behaviors You Can Adopt Today

5 Wealthy Behaviors You Can Adopt Today

Besides a lot of money, just what is the difference between someone worth $50,000 and someone worth $10 million? With so many diverse millionaires in the world today, it’s easy to see that being rich is not primarily related to geographical location, ethnicity, education, or even family wealth.

T. Harv Eker, author of Secrets of the Millionaire Mind, says “you can have all the knowledge and skills in the world, but if your ‘blueprint’ isn’t set for success, you’re financially doomed.”

So what’s this special blueprint that sets wealthy people up for success? It’s written in the way they behave and in the habits they keep.

In particular, wealthy people have a different outlook and strategy when it comes to managing their income and cash flow—and that makes them even richer. Changing your habits is the first step toward being financially wise, stable, and capable of growth.

Here’s how the super-rich do it:

1. Put off instant gratification for a bigger payoff later.

Remember the Marshmallow Test of the 1960s? If not, here’s a brief overview: Psychologist Dr. Walter Mischel designed a test for preschool-aged children where they were put in a room alone and given one marshmallow. The children were told that they could eat their marshmallow immediately, or wait for the examiner to re-enter the room and give them a second marshmallow.

To four-year-olds, it was the ultimate test of patience, foresight, and the ability to delay gratification. Of the children able to wait for another marshmallow, Mischel said they were “more able to sustain effort and deal with frustration” as adults. Furthermore, these children went on to be physically healthier and score higher on State Achievement Tests.

2. Be frugal, even if you don’t have to.

“Learn how to live within your means and how to delay gratification; these are the habits that you need to maintain on the way up, so you can keep your millions when you get there,” says Adrian Cartwood, author of How to Make 7 Million in 7 Years.

Reports show that the preferred car of millionaires is a Ford. That’s probably not what most people imagine as their vehicle when they daydream about being rich, but it’s true nevertheless. Cadillacs and Lincolns are rated second and third, respectively. The reason for this is pretty simple: as an investment, vehicles have a poor return. Many wealthy people would rather invest their money into their own business or into a specific financial plan than spend it on a vehicle that will eventually need to be replaced.

Carlos Slim, CEO of Mexico’s telecom giant Telmex, is a great example of frugality in wealth. Worth $49.3 billion, Slim lives in a fairly modest 6-bedroom house in Mexico City, three miles from his birthplace. His children shared bedrooms growing up, and though he does own a Mercedes, he drives it himself.

3. Seek self-employment or start your own business.

If there’s one thing you can’t control when you are an employee, it’s your income and that’s something you really need to have control of in order to make and have plenty of money. The majority of millionaires in the United States are manager-owners of businesses, in charge of creating their own incomes.

Take Sir Richard Branson, for example. With startup capital of just £300 pounds, he first started a student magazine, then a mail-order record company, then Virgin Records, and eventually an entire empire of tourism, telecommunications, finance, and media companies. Today he’s worth almost $5 billion.

4. Seek education when necessary.

“Many world-class performers have little formal education, and have amassed their wealth through the acquisition and subsequent sale of specific knowledge,” Steve Siebold, author of How Rich People Think.

Earning a college degree, a university degree, or even a high school diploma isn’t a necessary prerequisite to becoming incredibly wealthy. In fact, on the Forbes 400 list, college dropouts outnumber PhDs 63 to 21. Richard Branson, Simon Cowell, Shawn Carter, and many more top earners joined the working world before completing high school. Even Bill Gates dropped out of college.

Despite these numbers, education is a big deal; it just depends on what kind of education you’re getting. Entrepreneurs have to find training programs, mentorships, and on-the-job support that will help the business succeed and grow. They’ll need to learn technical skills, sales techniques, and how to complete any number of integral tasks to bring money in and keep it coming.

5. Invest your earnings wisely.

“Millionaires make wise investments. But not all wise investments are listed on the stock exchanges.”—Thomas J. Stanley, The Millionaire Mind

One of the most important investments a business owner can make is back into the business. It is crucial to a company’s growth and success. Millionaires surveyed by Legg Mason stated that they keep an average of 25 percent of their assets in cash. In order of popularity, the most common remaining investments made by the wealthy are equities, bonds, real estate, and non-traditional investments.

Embrace a New Attitude

Even if you haven’t reached a million dollars in income or savings, it’s good to emulate how the rich handle their money. Their wisdom and attitude toward money management can positively influence your financial decisions, and help you to achieve your own wealth and affluence.

Ask yourself a couple of questions: Can you put off the gratification of spending a paycheck for the larger, future payoff of putting together a successful business? Can you turn down a low offer and wait patiently for a higher one? Are you willing to reinvest your earnings into your own business? Can you learn what you need to run your business? Wealthy people can.

Bezos Overtakes Buffet: 3 Secrets to Success from Amazon’s CEO

Bezos Overtakes Buffet: 3 Secrets to Success from Amazon’s CEO

Jeff Bezos has just overtaken Warren Buffet as the world’s third-richest man. According to Bloomberg, the Amazon CEO is worth $65.05 billion, beating Buffet by a whopping $32 million and pushing him down to the fourth spot. Bezos’ net worth is now only beaten by Spanish business magnate Amancio Ortega at the second spot and Microsoft founder Bill Gates leading the billionaire index at $90 billion.

How did the founder of a small internet-based business that started in a home garage in Seattle, at a time when everyone was dubious about online businesses, get to be one of the richest men in the world? Bezos’ story is an inspiring one with great business principles and lessons that every entrepreneur should learn from. Below are a few lessons from Jeff Bezos that could help make your business a success.

Don’t Be Afraid to Try

This is probably one of the first and most important lessons you could learn from Bezos. He left his vice president role at a top investment firm, D.E. Shaw & Co., to start a new business in a market that still had a lot of uncertainties. This was a great risk; he was leaving all the financial security and power that came with his job to start a business that he knew very well could fail and leave him with nothing.

“If you decide that you’re going to do only the things you know are going to work, you’re going to leave a lot of opportunity on the table,” he said in an interview about the A9 research. Leaving the job was a risk, but there was a lot of opportunities in his business idea, and it outweighed the risk.

Bezos came up with what he calls a “regret minimization framework,” where he basically imagines himself at age 80 and the kind of regrets he would have. He says the one regret he knew he was not going to have was trying out his business idea, even if it would have failed. This made it an incredibly easy decision for him to make. He had to go forward with his business.

Bezos’ life was pretty secure by being at the top management spot in his previous company, but he had a vision he believed in. He had thought it over, and he believed it could work even when the situation at the time didn’t look optimal. He risked everything to make his vision a reality, and it worked extremely well for him.

“I knew that if I didn’t try this, I would regret it. And that would be inescapable,” he said in one of his earlier interviews with Time Magazine.

Focus on Customers

According to Jeff Bezos, “The most important single thing is to focus obsessively on the customer. Our goal is to be earth’s most customer-centric company.” This mentality has stuck with the company throughout its existence, and making customers the main priority was the reason for the company’s tremendous success.

Starting a web-based business was a smart move by Bezos, because it made studying and measuring consumer behavior easy. It helped track metrics that contribute to overall customer satisfaction. Amazon continuously evolves to create features that improve the user’s experience, and some of its earliest additions are changing the internet today.

For example, when Amazon added customer book reviews to their website and encouraged their customers to share their opinion, they received backlash from publishers. However, the customers took on the idea of reviews positively. Today reviews have become a vital part of any e-commerce business.

Start Small, Stay Hungry

Amazon started off selling one thing only: books. Starting with too many products or services at once can delay you from establishing a niche and making a name for yourself in the market. Keep a vision of growth, but start with only a few products you can grow from.

Books were Amazon’s proving ground, but Bezos already had his eyes on having an “everything store.” Because he focused on perfecting Amazon as an online bookstore, he learned what worked and what didn’t, and he improved their processes as the business grew. When more products were added, Amazon had already made a name for itself as an online store, and they set a precedent for providing the best service to customers.

The trick is to keep evolving. As Bezos said, “What is dangerous is not to evolve.” If you just stay in one place, you are limiting your company’s opportunities and potential. Find a way to expand into newer markets, whether it’s going international, adding new products or anything else that will help you grow.

Conclusion

Being the world’s third-richest man is by no means something to ignore, but Bezos’ character as a business person and his ability to inspire goes beyond just his pockets. He is a smart businessman who knows how to take a calculated risk. He believes that the risk is worth the reward, as evidenced by leaving a high paying job to start his own business in an uncertain market.

He supports proactivity within his company and even created an award that he calls, “Just Do It,” which recognizes employees who take initiative, regardless if they fail or succeed.

The savvy businessman is a true embodiment of sharp business acumen, ambition, innovation and thinking out of the box, which all have helped him create the online empire that Amazon is today.

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