It’s hard to avoid certain mistakes, especially when you face a situation for the first time. In fact, many of the following mistakes are hard to avoid even if you’re an old hand. Of course, these are not the only mistakes CEOs make, but they sure are common enough. Take the following self assessment: give yourself ten points for each of these entrepreneurial blunders you are in the process of making. Deduct five points for those you have narrowly avoided. Your score, of course, will be kept confidential, but do seek help. Fast!

1. Big Customer Syndrome

If more than 50 percent of your revenues come from any one customer you may be headed for a meltdown. While it both is easier and more profitable to deal with a small number of big customers, you become quite vulnerable when one of them contributes the lion’s share of your cash flow. You tend to make silly concessions to keep their business. You make special investments to handle their special requirements. And you are so busy servicing that one big account that you fail to develop additional customers and revenue streams. Then suddenly, for one reason or another, that customer goes away and your business borders on collapse.

Use that burgeoning account as both a cause for celebration and a danger signal. Always look for new business. And always seek to diversify your revenue sources.

2. Creating products in a vacuum.

You and your team have a great idea. A brilliant idea. You spend months, even years, implementing that idea. When you finally bring it to market, no one is interested. Unfortunately you were so in love with your idea you never took the time to find out if anyone else cared enough to pay money for it. You have built the classic better mousetrap.

Do not be a product searching for a market. Do the “market research” up front. Test the idea. Talk to potential customers, at least a dozen of them. Find out if anyone wants to buy it. Do this before anything else. If enough people say “yes” go ahead and build it. Better yet, sell the product at pre-release prices. Fund it in advance. If you don’t get a good response, go on to the next idea.

3. Equal partnerships

Suppose you are the world’s greatest salesman, but you need an operations guy to run things back at the office. Or you are a technical genius, but you need someone to find the customers. Or maybe you and a friend start the company together. In each case, you and your new partner split the company 5050. That seems fine and fair right now, but as your personal and professional interests diverge, it is a sure recipe for disaster. Either party’s veto power can stall the growth and development of your company, and neither holds enough votes to change the situation. Almost as bad is ownership split evenly among a larger number of partners, or worse, friends. Everyone has an equal vote and decisions are made by consensus. Or, worse still, unanimously. Yikes! No one has the final say, every little decision becomes a debate, and things bog down quickly.

To paraphrase Harry Truman, the buck has to stop somewhere. Someone has to be in charge. Make that person CEO and give them the largest ownership stake, even if it’s only a little more. 5149 works much better than 5050. If you and your partner must have total equality, give a one percent share to an outside advisor who becomes your tie-breaker.

4. Low prices

Some entrepreneurs think they can be the low price player in their market and make huge profits on the volume. Would you work for low wages? Why do you want to sell at low prices? Remember, gross margins pay for things like marketing and product development (and great vacation trips.) Remember, low margins = no profits = no future. So the grosser the better.

Set your prices as high as your market will bear. Even if you can sell more units and generate greater pound volume at the lower price (which is not always the case) you may not be better off. Make sure you do all the math before you decide on a low price strategy. Figure all your incremental costs. Figure in the extra stress as well. For service companies, low price is almost never a good idea. How do you decide how high? Raise prices. Then raise them again. When customers or clients stop buying, you’ve gone too far.

5. Not enough capital

Check your business assumptions. The norm is optimistic sales projections, too-short product development timeframes, and unrealistically low expense forecasts. And don’t forget weak competitors. Regardless of the cause, many businesses are simply undercapitalized. Even mature companies often do not have the cash reserves to weather a downturn.

Be conservative in all your projections. Make sure you have at least as much capital as you need to make it through the sales cycle, or until the next planned round of funding. Or lower your burn rate so that you do.

6. Out of Focus

If yours is like most companies, you have neither the time nor the people to pursue every interesting opportunity. But many entrepreneurs – hungry for cash and thinking more is always better – feel the need to seize every piece of business dangled in front of them, instead of focusing on their core product, service, market, distribution channel. Spreading yourself too thin results in sub-par performance.

Concentrating your attention in a limited area leads to better-than-average results, almost always surpassing the profits generated from diversification. Al Reis, of Positioning fame, wrote a book that covers just this subject. It’s called Focus.

There are so many good ideas in the world, your job is to pick only the ones which provide superior returns in your focus area. Don’t spread yourself thin. Get known in your niche for the thing you do best, and do that exceedingly well.

7. First class and infrastructure crazy

Many a startup dies an untimely death from excessive overhead. Keep your digs humble and your furniture cheap. Your management team should earn the bulk of their compensation when the profits roll in, not before. The best entrepreneurs know how to stretch their cash and use it for key business-building processes like product development, sales and marketing. Skip that fancy phone system unless it really saves time and helps make more sales. Spend all the money really necessary to achieve your objectives. Ask the question, will there be a sufficient return on this expenditure? Everything else is overhead.

8. Perfection-itis

This disease is often found in engineers who won’t release products until they are absolutely perfect. Remember the 8020 rule? Following this rule to its logical conclusion, finishing the last 20 percent of the last 20 percent could cost you more than you spent on the rest of the project. When it comes to product development, Zeno’s paradox rules. Perfection is unattainable and very costly at that. Plus, while you getting it right, the market is changing right out from under you. On top of that, your customers put off purchasing your existing products waiting for the next new thing to roll out your doors.

The antidote? Focus on creating a market-beating product within the allotted time. Set a deadline and build a product development plan to match. Know when you have to stop development to make a delivery date. When your time’s up, it’s up. Release your product.

9. No clear return on investment

Can you articulate the return which comes from purchasing your product or service? How much additional business will it generate for your customer? How much money will they save? What? You say it’s too hard to quantify? There are too many intangibles? If it’s too difficult for you to figure, what do you expect your prospect to do? Do the analysis. Talk to your customers, create case studies. Come up with ways to quantify the benefits. If you can’t justify the purchase, don’t expect your customer will. If you can demonstrate the great return on investment your product provides, sales are a slam dunk.

10. Not admitting your mistakes.

Of all the mistakes, this might be the biggest. At some point you realize the awful truth: you have made a mistake. Admit it quick. Redress the situation. If not, that mistake will get bigger, and bigger, and… Sometimes this is hard, but, believe me, bankruptcy is harder.

Assume your costs are sunk. Your money is lost. There is good news: your basis is zero. From this perspective, would you invest fresh money in this idea? If the answer is no, walk away. Change course. Whatever. But do not throw any more good money after bad.

OK, everybody makes mistakes. Just try to catch them quickly, before they kill your company.

To avoid some mistakes in the future, it sometimes helps to ask good questions ahead of time. Click the link if you would like a copy of my fractal strategic planning questionnaire.

If you are looking to open a business of your very own, you are not alone. Every year more and more people make the decision to stop working to make other people rich and to start their own businesses. For most of them, having the start-up capital that is needed is harder than one might think.

Small business grants are often a hot topic with new business people with a small amount of money and little access to other capital. We have all seen the many media claims about “Free Government Grant for Small Business.” It seems all too easy to get these days.

Of course, if it were really that easy, all you would have to do is find a government small business grant to apply for, apply and before you knew it you would have the money to grow your business.

Most U.S. government departments, like the Department of Commerce, do not provide any grants for help in starting a small business. Grant programs are available through state programs and other groups as well. The grant programs are often awarded to people in fields such as medicine or education, and they all have specific eligibility criteria.

The process of finding a small business grant program to apply for and reviewing the requirements to getting is very time consuming. After conducting a two-week search for a medical publisher, I found the requirements to be very specific and difficult to meet.

Eligibility can be based on your location, and your business sales revenue to the application date, years in business, sex, race, and even for the purpose of funding. If your business sets out on a small business grant seeking mission there are some questions that you will have to answer which are:

1. Do you have the time and the resources available so that you can search for a small business grant program and apply for it?

2. Can you afford to hire a consultant if you are unsure of how to do it, or can you learn the grant application process by yourself?

3. Does your business need the money right now for expansion or can you wait up to a year?

4. If you do decide to ask for a grant, will it hurt your business because it will be taking away time from selling and marketing?

If you want to take a look at the small business grants available, the best place to start is the Catalog of Federal Domestic Assistance (CFDA). The CFDA lists thousands of grants from all government agencies for free. Many business grants will be geared towards minority business development or rural business opportunity grants. Do not overlook the other assistance programs available such as equipment and training.

If you do find a small business grant program that is available for your business, you will need to be ready to go through a lengthy, approval process. With todays funding cutbacks and the high amount of competition you will want to be prepared for it by following these quick tips:

Small Business Grant Tips

- Provide the grant company with all of your complete and accurate information in the application. An incomplete application will likely not make the review process or it can add delay your grant form getting approved.

- Get to know your grant officer and their constraints, budget and concerns with approving your grant.

- Stand out among the crowd with a well-prepared business plan if required. You will have to demonstrate your understanding of the business. Show how the money will bring the benefit the government agency wants.

- Bring in outside experts or consultants to help you if you need it. An accountant or consultant can add credibility to your application process.

- Keep in touch with the company offering the grant. Make regular contact with the grant office in a professional, but non-intrusive manner.

- The task of locating and applying for a small business grant is not for the people who are not willing to go through hell. Take an honest look at alternative sources first, such as loans, personal credit lines, friends and family.

Getting a bank loan is easier said than done all kinds of paper work, formalities, guarantors, and high interest rates.its enough to make a small business owner lose sleep.

Business cash advance or small business funding- a new concept in the economic block is proving to be a savior for small business owners and entrepreneurs, even those with bad credit history. Cash advance is a small business loan that is sanctioned against your future credit card and debit card sales.

The reputed and reliable small business funding companies pre-approves loan after understanding the nature of your business. They do not ask you to bring along a guarantor or pay hefty hidden costs.

All you need to do is to have a merchant account with a minimum monthly amount of transaction through credit card sales. Every day an agreed upon percentage of your credit card sales will go towards the repayment of your business loan till the time the complete loan amount is paid back.

Use this capital sourced from small business funding company to run, strengthen or expand your business or for any other purpose of your choice. Till recently, business owners plagued by bad credit history found it extremely difficult to get small business loans when banks were the only source to secure business loans.

But now with many private players entering in the lending market, securing loan for your business has become much easier. No matter what FICO score you have managed to secure in your credit report, bad credit small business loans are easily available in market.

Caution: If you are looking for a small business funding company then be careful of certain facts: Check out if the company is charging anything as closing cost. There is no closing cost involved in cash advance or small business funding. Plus, your bad credit history should not affect the approval or interest rate. So do not pay any extra amount to get approval.

New ecommerce entrepreneurs can find them confused and confounded by the tax and accounting requirements of their venture. And thats a shame: If someones spotted a great new category and successfully built a web presence, heck, that someone shouldnt find themselves bogged down with the accounting minutia. The entrepreneur should focus on increasing traffic, expanding margins, and growing cash profits.

With that in mind, I offer up the following tax and accounting tips:

Tip #1: Dont Incorporate

A true corporationwhether a C corporation or an S corporationsaddles your business with more complicated tax accounting and a bunch of state filing requirements. You dont want to deal with this redtapeor at least not until youre profitable.

Instead, operate your business as a sole proprietorship. If youre concerned about legal liability protection, note that you can setup a one-owner limited liability company, or LLC. A one owner LLC is treated as a sole proprietorship for income tax purposes.

Tip #2: Start Your Business Before Making Investments

Expenditures you make before youre actually in business-in other words, before youve got a business license and before youre selling or trying to sell your stuffarent very deductible.

Specifically, you can probably deduct the first 5,000 of these expenses. But any amounts in excess of the 5,000 must be amortized over the next fifteen years.

What this means is that you want to start your business before you start spending money on advertising, training, web development, accountants and lawyers and so on.

Tip #3: Automate Your Bookkeeping & Accounting

By lawand some people dont know thisyoure required to maintain an accounting system that lets you clearly measure your income. As a practical matter, this means you need to use a product like Quicken or QuickBooks.

But you ought to go one better than simply using desktop accounting software. Make sure that youre taking advantage of online banking and bill payment features which integrate your accounting system with your banking. As much as is possible, for example, you want to be able to move money from PayPal to your bank to QuickBooks simply by typing a few keys or clicking your mouse a few times.

Tip #4: Hire a Payroll Service Before Hiring Employees

Many successful ecommerce business owners can run their operations without employees. And if thats true for you, hey, congratulations. If and when you do need employees, however, dont try to handle the payroll yourself. Oursource the payroll to one of the large payroll service bureaus like ADP, Payroll, or QuickBooks.

These services are expensive. Figure 1000 to 2000 per year. But the services let you avoid the bookkeeping nightmare called payroll and prevent you from getting into payroll tax trouble.

Tip #5: Consider S Corporation Status After Youre Profitable

Ive written and talked much about how S corporations save taxpayers money and how the right way to set up an S corporation is first create a limited liability company and then ask the IRS to treat the LLC as an S corporation for tax purposes.

Let me review the basics here again, however. Suppose that youre making 90,000 a year off your web site. If you just treat your business as a sole proprietorshipor an LLC treated as a sole proprietorshipyou might pay 12,000 in income taxes on the 90,000 and then another 15.3% self-employment tax, or roughly 13,500 on the 90,000.

If you set up an LLC and have the LLC treated as an S corporation, youll still pay the same 12,000 in income taxes. But youll only pay the 15.3% self-employment tax on that portion of the profit that you categorize as wages. If you categorize, say, 50,000 of the profits as wages, youll pay 7,500 in self-employment taxes. (The other 40,000 in remaining profits, by the way, gets paid out as a dividend-like distribution.)

Note, then, that the S corporation saves you roughly 6,000 every year. Sweet, right?

Small Business Credit Card – Credit Card Services For A Business

If you are a new business and looking for a credit card, chances are you want a small business credit card. Because you are a new business, resources may be limited as well as manpower. When youre looking for that new card, you should consider the credit card services for a business that the issuer provides.

Credit card services for a business when looking for a credit card?

Sure. A small business credit card can provide you with more than extending credit. After all you are new and small. You may need all the help you can get.

Financial institutions understand the additional control and constraints a business needs over their credit. Business card offers vary just like personal credit cards, although some of the incentives are the same. However, various issuers go even further with their business credit card offers and add credit card services for a business.

When looking for a new small business credit card, you want to keep in mind that although youre new and small, you dont intend to stay that way. You want a credit card that can grow with you. Here are a few features to consider when looking for that new small business credit card.

- After the initial APR introductory offer, what is the regular interest rate?

- Is there a yearly fee?

- What is the line of credit and can it be increased as time goes by?

- Is there a limit to the number of credit cards that can be issued on the account?

- Do they offer airline mile points?

- Is there a cash rebate program?

- Do they have partnerships with leading retailers for office equipment and supplies so that they will offer discounts when using my business credit card?

- Is my account accessible online so I can manage my daily expenses?

- Is there an extended payment term for larger purchases?

- Does this offer include quarterly and yearly reports?

- Can this information be transferred directly to my companys accounting software program?

- Is there a choice of how I receive the summary of my expenses?

All of these benefits are not offered for every business credit card. But, the right combination for your situation can save you time and money. Choosing the right small business credit card can add significantly to your bottom line.

Small Business Computer Consulting: Additional Qualifications for the Sweet Spot

To find the ideal clientele for your small business computer consulting, you want to target small businesses by their number of PC’s, (10 to 50) as well as their revenue. Generally, companies that have anywhere from 1 million to 10 million in revenue are the sweet spot of small business computer consulting. In this article, you’ll learn why you should target this type of business. {Tip: Of course if you’re located in Canada, the UK, Australia, New Zealand, or any of the other more than 21 nations around the globe where our training has been adapted, be sure to convert this to your local currency. (See )}

Beware of the high end of this range
Once small businesses get to the high end of that revenue range, where they start having substantially more than 50 PCs, or substantially more than $10 million in annual sales, often the small business owners lean towards putting a real, salaried IT person on payroll instead of using a small business computer consulting professional. That’s when you start running into some tough competition. At this point, your client will add up your services invoices and try to figure out if they can do it cheaper or more efficiently in-house.

Look for clients that need a real server
Another important aspect is to find small business clients that are big enough to need a real dedicated server. Once small businesses need a real server, they need a ton of other professional services to go along with it. And it’s very unlikely they can handle it on their own, with just an internal guru. Bingo-you become their outsourced IT department!

Multiple locations are a bonus
Sometimes a sweet spot client has one location. A lot of times there’s a main office and some branch offices. The branch offices present a big opportunity for your small business computer consulting because there’s usually a HUGE need for sharing data in real time among employees in different locations.

The Bottom Line about Small Business Computer Consulting
In this article, you’ve been learned more about how to find the sweet spot in your small business computer consulting business.

Studies have shown that successful entrepreneurs possess these characteristics:

1. Self-confidence

This is that magical power of having confidence in oneself and in one’s powers and abilities.

2. Achievement Oriented

Results are gained by focused and sustained effort. They concentrate on achieving a specific goal, not just accomplishing a string of unrelated tasks.

3. Risk Taker

They realize that there is a chance of loss inherent in achieving their goals, yet they have the confidence necessary to take calculated risks to achieve their goals.

Entrepreneurs are people who will make decisions, take action, and think that they can control their own destinies. They are often motivated by a spirit of independence which leads them to believe that their success depends on raw effort and hard work, not luck.

So which of these three main characteristics is the most important? Believe it or not, it has to be self-confidence. Without self-confidence, nothing else is possible. If you don’t believe in your abilities, then the first challenge that arises may knock you off the path to achieving your goals. Here are a few things to keep in mind for maintaining a higher level of self-confidence.

Positive Thinking

Well, it all starts with a positive attitude, doesn’t it? Believing that something good will happen is the first step. Negative thinking simply is not allowed. You must truly believe that there are no circumstances strong enough to deter you from reaching your goals. Remember too, that positive thinking can be contagious. When positive thinking spreads, it can open doors to new ideas, customers, friends, etc.

Persistent Action

Now all of the positive thinking and believing in the world is useless if it is not applied towards a goal. You have to take action, no excuses are allowed. This action must also be persistent. Trying once and then giving up is not going to be enough. Keep at it one step at a time. If you can’t get by a certain step, then find a creative way to try again or just go around it.

At the beginning of this article we identified a few traits that are common among successful entrepreneurs. You should be able to look ahead and see yourself where you want to be. Now just maintain a strong belief in yourself and your skills, stick with it, and don’t give up. If you can do that, you’re already half way there!

Small Business – The Benefit Of Adding Benefits To Payroll

With unemployment rates going down and companies struggling to attract and retain quality employees, employers should pay close consideration to the emphasis being put on the importance of health care by employees. We have seen several times more and more that employees are first asking about the benefits plan and then about salary. It is obvious that affordable health care is prevalent on the minds of candidates.

For existing employees, weve found that offering higher benefits contributions in lieu of salary increases is a well received concept. Small businesses have their eyes on the bottom line and labor costs are one of the hardest hitting factors. By offering higher contributions to benefits plans employers are able to reduce the overall payroll costs. This is an area that most employers dont spend a lot of time looking at because they think they are under the impression it will be too costly. Another misconception is that for a good benefits contribution plan, an employer must purchase a group policy. This is not the case, a resourceful HR person will assist company leaders in researching alternative benefits options such as mini-meds (miniature medical plans with lower maximum coverage and limited visits), individual medical plans specific to each employee (often times much lower cost than group rates) and Health Savings Accounts just to name a few.

Small businesses should definitely consider benefits options now as there are proponents of legislation to make benefits mandatory for small to medium size businesses. At the end of 2005 California voters were presented with potential legislation that would require that certain employers provide health coverage for their employees and in some cases dependents through either (1) paying a fee to a new state program primarily to purchase private health insurance coverage or (2) arranging directly with health insurance providers for health care coverage. The state would also establish a new program to assist lower-income employees to pay their share of health care premiums.

This referendum lost by only about 2% so we are keeping our eye on this to resurface again in the very near future.

Are you a small business owner who is planning on preparing your own taxes this year? If you are, you may want to know about the business deductions that you can claim. You may be happy to know that there are a number of deductions that you may be eligible for. Just a few of those deductions are touched on below.

Your commercial space can be used as a tax deduction or a business expense. What is nice about this type of deduction, it that it can be used a number of different ways. For instance, if you are a small business owner who operates an online business, you may actually work from your home. If you do, you could actually calculate the amount of square footage that your business takes up and calculate rent for yourself; rent that is tax deductible. The same can be done if you rent a commercial building space from a commercial landlord.

The supplies that you need for your business can also be considered tax deductible. For instance, if you run a pet grooming salon and you recently decided to update your equipment, you may be able to write off the new equipment as a business expense; a business expense that is tax deductible. When it comes to supplies that your business may need to survive, it can be anything from a new computer, to computer paper, to pens, and a stapler. To save yourself the most money on taxes this year, you will want to get as many tax deductions as you possibly can. Of course, you will want to do so legally though.

In addition to the supplies that you may need to run your small business, the future that you need can also be written off as a business expense. In keeping with the above mentioned example of running a pet grooming business, if you run a pet grooming business, you may need to have an office desk, office chairs, as well as lobby or waiting room chairs. All of these furniture pieces and others that may need to be purchased can be considered businesses expenses and can be written off as deductions.

The above mentioned small business expenses are just a few of the many that can be written off, but they are some of the most obvious ones. One other expense that you may be able to receive a tax deduction for is any insurance than needs to be purchased. This can be looked at form a couple of different perspectives. For instance, if you need to buy your own health insurance coverage, the money spent on coverage can be deducted from your profits made. Also, if you run a business that requires you to be insured, like a pet grooming business or even a hair salon, the cost of insurance coverage can also be considered a deductible business expense.

As nice as it is to know what type of tax deductions you may be able to claim or business expenses that you may be able to write off, it is important that you remember to save all applicable documents and receipts. For instance, if you are going to list your new office desk as a business expense, you need to make sure that you have proof that you actually bought it, when you bought it, and how much you paid for it. That is why it is extremely important that you keep accurate business records, all year round, not just at tax time.

Studies have shown that successful business entrepreneurs possess these characteristics:

1. Self-confidence

This is that magical power of having confidence in oneself and in one’s powers and abilities.

2. Achievement Oriented

Results are gained by focused and sustained effort. They concentrate on achieving a specific goal, not just accomplishing a string of unrelated tasks.

3. Risk Taker

They realize that there is a chance of loss inherent in achieving their goals, yet they have the confidence necessary to take calculated risks to achieve their goals.

Business entrepreneurs are people who will make decisions, take action, and think that they can control their own destinies. They are often motivated by a spirit of independence which leads them to believe that their success depends on raw effort and hard work, not luck.

So which of these three main characteristics is the most important? Believe it or not, it has to be self-confidence. Without self-confidence, nothing else is possible. If you don’t believe in your abilities, then the first challenge that arises may knock you off the path to achieving your goals. Here are a few things to keep in mind for maintaining a higher level of self-confidence.

Positive Thinking

Well, it all starts with a positive attitude, doesn’t it? Believing that something good will happen is the first step. Negative thinking simply is not allowed. You must truly believe that there are no circumstances strong enough to deter you from reaching your goals. Remember too, that positive thinking can be contagious. When positive thinking spreads, it can open doors to new ideas, customers, friends, etc.

Persistent Action

Now all of the positive thinking and believing in the world is useless if it is not applied towards a goal. You have to take action, no excuses are allowed. This action must also be persistent. Trying once and then giving up is not going to be enough. Keep at it one step at a time. If you can’t get by a certain step, then find a creative way to try again or just go around it.

At the beginning of this article we identified a few traits that are common among successful business entrepreneurs. You should be able to look ahead and see yourself where you want to be. Now just maintain a strong belief in yourself and your skills, stick with it, and don’t give up. If you can do that, you’re already half way there!