How often do the words “I need” come out of your mouth, as it relates to your business? When you run your own company, it’s easy to think that the only way to succeed is to be moving forward with your expenses — the newest technology, a broader circle of professionals providing you services, involvement in more and more costly marketing efforts, etc. And it’s particularly difficult to resist the urge when you know you can generally take a tax DEDUCTION for any business expenses. But did you ever stop to think how many of those requests are actually needs, and how many are simply wants?
WHAT IS A NEED?
Let’s start by defining “need.” In the strictest sense of the word, a “need” is something that you have to have to get by in this world — a NECESSITY. In your personal life, you need food, shelter, clothing, medical care — the basics. You will probably experience physical suffering of some sort if you don’t have your needs met. In your business, you also have some basic needs — business cards, basic office equipment and supplies, a scheduling and follow up system, involvement in some networking activities, and generally some professional development or continuing education for your field. You can’t run your company successfully without them. Depending on your area of specialization and experience, some assistance with accounting, legal, or other professional issues might also be considered a “need.”
A want, on the other hand, is something that you desire — something you would like to have. But by no means will you suffer in any way (except perhaps mental anguish!) if you don’t get the thing you want. “Wants” quite often fall into the category of LUXURIES — nice to have, but the world won’t end without them. Having a computer that could keep Mir running or an Amazon.com quality website certainly fall into this category. But other items could be considered wants, depending on the type of business your run, your customer base, and the level of product or service you provide.
MAKING THE DISTINCTION
The hard part comes when you live in a prosperous capitalistic society, like ours. The “western” standard of living is so high that even many of our poor tend to live above the level of basic needs. In 1998, 97% of “poor” Americans (as defined by the Census Bureau) owned a television — something that could definitely be considered a luxury. In many third-world countries, less than 30% of the population even has access to electricity — which most westerners would consider an absolute necessity. My intention is not to make anyone feel guilty — it’s simply to point out that the distinction between want and need is often RELATIVE. It depends on the area in which you live, the company you keep, the lifestyle you choose, and the expectations of the society around you.
It is also important to have some PERSPECTIVE about your place in the world marketplace. If you are running a small business, the goal is not to become a multi-millionaire in the first year — sinking every penny you can get your hands on in your company, without an eye to the future (look at all of the dot-bombs in the early 90’s). You have to start out slowly — growing responsibly and spacing out your business investments as your revenues increase. At one point in your company’s lifetime, having a staff person to handle administrative duties may definitely be a luxury — but farther down the road, it might well become a necessity for you to handle the influx of new customers. On the flip side, you might make some changes in your business structure that allow you to let go of staff, reduce your need for expensive technology, or decrease some other expense. This is why it is so important to constantly RE-EVALUATE your needs and expenditures — to make sure they are still in alignment with each other.
THE POWER OF ADVERTISING
We are influenced, every day, by the popular culture around us. Television, magazines, movies, and advertising have all done a splendid job of PROGRAMMING us to think that we need a lot of excess consumable goods. Pretend that you are watching TV or flipping through your favorite business magazine and see an ad for something fabulous — the latest PalmXXII, Turbo, complete with satellite com link, scanner, global positioning system, and built in web server. Suddenly, your heart speeds up, and you get a tingly feeling in your gut. It’s perfect — how had you ever lived without it before? You rush right to the store — what?! You don’t have any left in stock?! Your heart sinks and you feel a rush of disappointment. You spend the rest of the day moping because you couldn’t find it anywhere.
Now, this might be a bit of an exaggeration, but it’s not far off the mark for some people. How often have you learned of a new product and were certain that you absolutely had to HAVE it? What if you had never seen the ad? Would your life be any worse off? It’s as if the knowledge that something exists causes the need for it.
KEEPING UP WITH THE JONESES
And, of course, we have peer pressure! But with the advent of the “global society,” the Joneses are not just the people next door anymore. They include business tycoons and techo-gurus and imaginary people on TV that don’t even really exist. But we hold these folks up as the STANDARD against which we should measure our own lives. Just because Bill Gates has an office that will run itself entirely through voice recognition, we think that our manual way of doing things is dated. And since that 24 year-old dot-com wiz profiled in Fast Company reads 23 business journals a week, we think we need to start subscribing too.
THE HIGH COST OF NEEDS
So why is any of this a problem? Let me ask you a confidential question — how much DEBT is your business carrying? Do you have several thousand (or tens of thousands!) dollars of past credit card purchases that you are still trying to pay off? Are you paying every spare penny you earn through your company each month to pay for your “corporate” lifestyle? How does your financial future look? Are you able to save for a rainy day — to put aside a reserve in case the economy tanks?
When your spending PRIORITIES are out of whack, you tend to experience stress, guilt, and anxiety — it can even affect your health. And just think about how many personal relationships are strained (even broken) over money issues. This can be a particularly sensitive issue for entrepreneurs, as the line between business and personal finances is often so blurred. Is that really how you want to live your life?
BALANCING NEEDS AND WANTS
Certainly, no one is suggesting that you give away everything you own and become a monk! But it is important that you strike a balance between those things that you have to have and the things that you would like to have. And it’s important that you be able to PRIORITIZE your business spending. The goal is to focus on those things that will really improve your efficiency, effectiveness, and bottom line — rather than just look flashy.
SO WHAT DO I DO NEXT?
Start by making a LIST of all your wants and needs. Try to be brutally honest about which category they fall into. Then, take a look at the items in your want list. First, ask yourself how much each purchase will IMPROVE your quality of life as a business person — how it will boost your company’s bottom line or build a base for future growth. Rate them with an “A” for a large improvement down to a “C” for a negligible improvement (and if it will actively detract from your entrepreneurial quality of life, cross it off the list!) At this point, don’t even worry about the “B’s” and “C’s” — if we get you to a point where you can have all of your “A” wants, then you can think about the rest.
Now, take a look at your “A’s” — try to decide if there is some way you can BALANCE between your high-priority wants and your needs. What are you willing to give up? Where are you able to compromise? Perhaps you can forego the expensive computer and make do with the one you have to afford hiring a PR agent to help increase your exposure. Or buy your office furniture used to leave enough room in your budget for that additional certification program you’ve been wanting to take. If you make these decisions based on how the purchase will improve your life and your business — based on your own personal priorities (instead of someone else’s!)– you shouldn’t go wrong.
Ramona Creel is a Professional Organizer and the founder of OnlineOrganizing.com — a web-based one-stop shop offering everything that you need to get organized at home or at work. At OnlineOrganizing.com, you may get a referral to an organizer near you, shop for the latest organizing products, get tons of free tips, and even learn how to become a professional organizer or build your existing organizing business. And if you would like to read more articles about organizing your life or building your business, get a free subscription to the “Get Organized” and “Organized For A Living” newsletters. Please visit http://www.OnlineOrganizing.com or contact Ramona directly at [email protected] for more information.
Beware the Opposition!
Any time you make changes in your life you are going to be met with opposition from people who would prefer you to stay exactly as you are. Sadly, these people are often the ones that love you the most; your family, friends, partners and even work colleagues. However, in your moments of entrepreneurial seizure, the greatest opposition that you will experience (particularly if you’re a seasoned employee) will come from within yourself.
The Boss is DEAD!
Some of us are born into families with “it”, some of us are just driven over the edge to “it”, and some of us crave “it”, but just haven’t figured out how to attain “it.” That “it” is an Entrepreneurial Spirit that is a powerful force that can be the key to your success, and yes?sometimes even failure.
Oil Change Guys History; Part I
How do franchise companies come to be? How do they start. What type of a person or entrepreneur becomes a franchisor? Below is the story of how one small company became a franchisor in the mobile oil change business. The story is written from our point of view and opinion. We claim freedom of speech, of the press in its entirety since a good part of it is opinion based.
Business Planning Overview
The successful entrepreneur is generally more inclined, once a business idea is selected, to sharpen the concept by a detailed planning process. The result of this step is a comprehensive business plan, with its major components being the marketing “mix,” the strategic plan, operational and logistical structures, and the financial proposal. The purpose of the business plan is to recognize and define a business opportunity, describe how that opportunity will be seized by the management team, and to demonstrate that the business is feasible and worth the effort.
How To Get More Clients and Customers; Dont Sell Be of Service
Whether you are just starting your business or focusing on growing it, I’m sure you are like most small business owners you are looking for ways to get more clients and customers. There is a lot of information out there on selling, persuasion tactics, and gimmicks to get people to buy. I am suggesting a radical shift in perspective when thinking about the question: How do you get more clients and customers?
Starting Your Business: It All Boils Down To Making Money and Saving Money
Bootstrapping in the context of business start-ups refers to the use of creative financing approaches such as leveraging personal savings, credit-card debt, loans from friends and family, bartering, and other means to launch a business. Some business founders use bootstrapping because they have no other choice. Just about anyone who has approached a bank has learned that “only established businesses need apply.” Bankers typically look for cash flow, assets, an established customer base, and a successful track record on the part of the business that is seeking a start-up loan. Obviously, this is a short list that is impossible to fulfill when you are just getting started.
Independent Auto Detail Shop VS Biz Op or Franchise
Owning a detail shop can be an exciting and rewarding business indeed. Many times an owner of an independent Detailing Shop will wish to add those items he/she believes their customers want. Since an independent detail shop is not a franchise or affiliate they can try new things and do what ever they want. They use their knowledge of the industry, a little intuition and luck; it is a best guess issue. For an independent detailing shop entrepreneur; there is no proven business plan to go by, but the savvy operator who is in touch with their customers seldom has to face a shot in the dark.
Venture Capital Negotiating Issues
When companies enter into negotiations with venture capital firms, there are several issues which need to be defined and agreed upon. This article describes the key issues.
Everything You Wanted to Know About Public Domain Info, but Were Too Afraid to Ask!
What to Look Out For:
Lessons Learned from Successful Entrepreneurs
Entrepreneurs are a special breed of high achievers. They create things, get things started: businesses, clubs, churches, associations, even nations. Their motivations vary. Not all want to be rich. Not all want to produce a Fortune 500 company. Some are motivated by pleasure or civic pride or the desire for fame. Mary Madden, president of Information America, told me she and Burton Goldstein started their company because it gave them freedom and flexibility.
100% of Nothing
What would it be worth to you to receive a steady stream of new customers with little or no effort on your part? Would you be willing to pay 10% of the revenue they generate? 20%? 50%? Or do you believe that you can’t afford to pay anything?
Executive Suites – A Way To Save Cash
Cash is one of the most important resources to a new business. One of the best ways to conserve cash for a startup business that is in need of office space is to rent an executive suite rather than to rent traditional office space. Most people don’t even know this little secret. In fact, most people don’t even know what an executive suite is.
5 Habits Of Successful Entrepreneurs
Habits get a bum rap. When you think about your habits, I bet you think of the “bad” ones – the ones that you aren’t particularly proud of, like eating too much sugar, or smoking, or dwelling on your negative thoughts. According to Webster’s dictionary a habit simply is: A pattern or action that is acquired and has become so automatic that it is difficult to break.
An Entrepreneurs Challenge
Living in the twilight zone has its advantages. In the early days of starting my business, I found the limitations of living in a rural area to be restrictive. However, later I realized that those limitations were not an obstacle that could stop me; they were only a challenge that would strengthen me. Since my business would be smaller, I would have the advantage of fewer employees and less strife in the processes of doing business.
The Fear Factor
I recently conducted a lil’ survey asking my colleagues what were their biggest fears when thinking about starting a business or running their business. The following are the top three fears that resulted from my survey and some ways to combat them.
Ten Traits of Successful Entrepreneurs
Successful entrepreneurs have many traits in common. Here are ten of those traits that I consider to be very important.
Double Your Income Automatically
It is a common known fact that it is far cheaper to keep an existing customer then it is to acquire a new customer. With this fact in mind you need to do everything possible to keep your existing customers happy and find complimentary products to offer your existing customers.
How Home-Based Business Entrepreneurs Think
Too many people are trying to start their home businesses with an ordinary employee’s way of thinking. This has become a common reason why not long after sitting down and giving it a fair look into even the most lucrative business opportunity they bump into, they put it away and decide not to take any chances.
Why Every Student Should Start a Business
With the economic downturn, students in all the major business schools have been dropping out of their entrepreneurship classes and transferring back to classes where they think they have a secure future. Students and professionals who were once planning to start businesses now have decided to go back to their cushy jobs. Everything is going back to normal. Or at least that is how it looks. Below are nine reasons why any student should start a business:You gain experience. Owning and running your own business is an incredible way to gain experience and credentials regardless of whether you decide to stay in business once you graduate. Jaime Gonzalez of Oklahoma State University received the highest job offer in his entire graduating class. Now, there are two kickers: First, he was the founder of an IT consulting company, and second, he had a 2.4 GPA. Hmmm…I wonder if starting a business helps in getting a better job when you graduate?
You have nothing to lose. I think it’s safe to say that most students dip into their parents’ checkbook when it comes time to pay the bills. In general, students aren’t paying child support, rent, utilities and many other expenses. The worst thing that could happen if your business fails is that you get a job, have an incredible credential on your resume, and have experience that will increase your chances of success in the future. The best thing that can happen is that you’ll become the next Microsoft. I don’t know about you, but I think that is better than choosing between no job and jobs that you’re in just for the money.
Two-thirds of millionaires are entrepreneurs, according to Thomas Stanley and William Dank, authors of The Millionaire Mind. If it’s the money you want, then consider entrepreneurship. You receive not only a salary, but also a lot of money if you’re lucky enough to sell your company or take it public. Michael Furdyk, a successful young entrepreneur, was able to sell his business, MyDesktop.com, for $1 million when he was 16 years old!
You develop networking skills. You’ve likely heard that your network increases your net worth. Consider the fact that by running a business and constantly being in a business community, you will develop excellent contacts. If you choose to get a job after you graduate, you will have a great pool of people who will be more than happy to hire you or send your resume to somebody who wants to.
You increase your value. Put simply, starting a business in college increases the value of “the brand called you” and gives you more options. For example, an entrepreneur with a large brand value can publish a book, star in a documentary movie (i.e., Startup.com), or go straight to the top of another company. I recently met one of the founders of Diversity Planet, a job site for minorities. He spent a year working very hard on the company and has since left to take a reporting job with Dateline NBC at the ripe age of 20! People don’t often don’t get an opportunity like that until they are much older.
Operating a profitable business in the long term is less risky than being an employee in the long term. For example, just look at the recent economic downturn. Tens of thousands of people have been laid off. I can guarantee the owners of profitable businesses are still with the business. They will be the last people to go down with a ship. Business owners can have multiple streams of incomes from different customers. If you’re an employee, you only have one stream of income and therefore are bearing more risk.
You will learn more about yourself and what they don’t teach or prepare you for in school. Furthermore, entrepreneurship is the combination of all the disciplines of business. It includes knowledge of marketing, accounting, management and operations. Already having knowledge of these topics before you take classes on them allows you to see more clearly how everything applies. Also, you will be able to learn early-on what subjects you like so you can make better decisions on what to major in and what industries to target.
It is yours. You make the rules, create your own hours, work from wherever you want and choose who you want to work with. You can also pick what interests you the most in the world and then start a business that is related to that topic in some way. If you like art, you can start a design business. If you like marketing, you can create or choose a product and then market it. If you like writing, you can write a book and do your own public relations and marketing. If you like the Internet, you can start a Web development business.
You’ll grow. I personally have grown a lot from owning a business. I used to be terrified to speak in front of others. Now I look forward to it. Before owning a business, I had probably read a total of five books outside of school, and I only read them because my mom made me. Since starting my business, I’ve probably read more than 100 books. The business has also allowed me to learn more about myself. I know that I will be an entrepreneur forever in some way, shape or form!
Work On, Not In Your Business
Are you busy? Everyone’s busy! Ask anyone they’ll tell you how
busy they are. But how many people are accomplishing real results?