I suppose the best place to start is with the obvious example. Would you go to a Dentist to do your accounting, or would you go to a Financial Planner with a broken arm. Of course you wouldn’t you would go to an Account for your accounting needs, and you would go to a Hospital with Doctors, for a broken arm. So the next question which begs asking is, who do you go to for business advice? Everyone will often have an answer here, however is it a suitable answer, take a look at some of the possible answers and see if it fits.

• Family and Friends – If you answered with Family and Friends, then you are potentially getting you advice from the wrong place. The reason often lands to emotions, and a will to protect you. Often the advice that you will get from family and friends is advice that will to some extent help you to justify taking the risk is a bad idea, or may be advice based on an opinion or view that may not be completely valid in a business sense. There is however one exception, and that is if your family or friends are running a successful business them selves.
• People at Work – Especially if you are thinking about starting a business and you are still working in a job, you will often find that the advice you get from people at work will also be placed in the wrong area. Often their thoughts will be on not wanting you to succeed while they are still stuck in a job. Or even sometimes thinking how if you start a business and succeed they will have to do more work because you are not there any more. So you may find plenty of negative stories or advice coming from people you work with.

Both of these area’s are where you probably do not want to be getting advice, and of course there are always exceptions to the rule. However before listening to anyone in these area’s give advice look at what gives them the credibility to provide that advice and what if any motive they have in giving the advice. It may not always be the easiest thing to see, however it can save you a lot of grief down the road. Now I don’t want this post to be completely negative, so here are some suggestions on more positive places to get business advice.

• Find a successful Mentor – There are a lot of successful people in business, of these people that are successful in business, there are any number of them that are happy to give a little advice.If you can find two or three, that you can talk to for a little while. While you still need to take all advice you get with consideration to your own circumstances, often advice you get in this manner can be much more powerful and useful.
• A Business Coach – While there is a potential to get some good free advice, at some point you often find to get the help that you really need, you may just have to pay for it. Possibly the most difficult part of finding a business coach will be finding one that you will be able to work with. On an ongoing basis your business coach will be on the most important business relationships that you have. As such two things to keep in mind are they someone that you feel comfortable working with? and Do they have the experience or knowledge to help you lead your business in the direction you want to take it?
• Other Advisers – The fact is that no one person knows every tiny detail of business expertly. This is why there are so many different areas of specialty, so that people can focus on the one area that they know best. Finding the range of people that can provide this different functions will of course depend on your business and your own skills, however some will include, Accountant, Solicitor and Bank Manager. As well as consultants in different areas such as marketing, import/export and construction, just to name a few.

Whatever the path you eventually choose to gain your advice, just be sure the question the validity and reason for any advice you may be getting. Especially if it is given to you without being requested and most important confirm the advice is being given in good nature to help you rather then hinder you. But possibly the most important part of advice it self is learning what it is you need to listen to and what you should ignore, if you can learn this skill properly you can start to listen to all advice and be able to discard that which is of no use.

The same is often true for growth. While growth can go unattended for some time it is not something that is recommended. Due to the nature of growth itself, leaving it to take its own course can leave you open to more likely a lower then expected outcome.

Providing management to the growth of your business is something that will ensure the growth flows and provides a benefit to your business. While you want to leave some freedom to the growth as it comes, there are many aspects of a business that require assistance in growing. Things like

• Support structure’s – Growth often requires better structures in place to support it, warehouse systems, distribution systems, support systems and sales systems. All of these systems often will need additional consideration to help support growth, and often have the potential to fail without the proper support themselves in times of growth
• Cash-Flow – Potentially one of the most important aspects of growth is managing how the cash flow will be affected. Maintaining a positive cash flow in a business experiencing high growth can be difficult, however if it something which you are aware of it can make it somewhat easier.
• Business risks – When a business is experiencing growth there is inevitably more risks involved. A high chance of unpaid bills, more bills to pay from suppliers, more potential returns, and many other things. All of these if they are managed and are things that you are aware of being possible up front, are things that can have plans put in place to avoid them, or at least lower the potential impact.

While there is potential to lose a lot of time managing growth, if you take a smart approach and be aware of the potential issue’s up front, then down the track less management is required. Just being aware and planning for some of the above points before they actually occur can even be enough. What some of this comes back to is that a proactive approach to managing growth can often give a better and less time intensive outcome then trying to manage growth as it is happening.

When it comes to business related tasks though there should be some thought given to how much a task provides in revenue or profit, compared to the time spent and the cost to the business. This really is how you differentiate what tasks are worth your time to complete, and which tasks are better to delegate to an employee. However there is no real specific path that will work for everyone, different businesses require different skills for different tasks and the value of a task for one business may be different for another business. So while i cannot provide a specific framework, i will give an example or two.

Firstly you need to consider the offset of one task against the other. First the task of sales. A sales person’s primary role is to sell the product or service of the business. Making sales generally should be the task that will give the most benefit for their time. If for example a sales person can generate on average $3,000 per hour in revenue when their only tasks is selling, then this is their maximum efficiency.

If however the sales person is required to also do ordering, take unqualified calls, and prepare marketing, this could easily take the sales persons productive time each day down to just 3 or 4 hours. So on an 8 hour work day the sales person would go from potentially creating $24,000 in revenue down to just $9,000-$12,000 in revenue. This is quite a substantial drop. The way to avoid this loss of productivity is where allocating other staff to fulfill the lower value roles can benefit. For example a staff member employed to place orders and answer the phone, may cost $200 for an 8 hour day, which would mean that the sales person now has the full focus to create sales to his full potential. An additional $12,000 in revenue or $200 for a staff member, big difference.

There is not going to be such a big difference for everyone, however for some it may be even greater. However it really all comes down to the fact that you will generally hire employees for one reason. To move the tasks that you are doing that take your time away from another task which provides more value. This value does not always have to be financial gain though. Lets have a look at another example.

You set up your new business a year ago, and you have been putting in some long hours sometimes60-70 hours a week plus more time at night when you get home. While you could continue like this and risk putting your family time at more risk, you look at the business and decide to hire two employee’s. One will be a receptionist, to answer the phone, prepare invoices, and any other mailings that may need to be done. This you figure should save yourself a good 10-15 hours a week and will allow for additional expansion.

The other hire that you decide to make is a sales person. While you do not want to take yourself out of the sales process entirely you see that there are a lot of sales that you do not have to be part of. Currently you see this could save you a further 15+ hours per week and will mean that there will be someone with spare time to look for more opportunities. While at first this may look like spending money, it is actually creating the ability to grow the business. at 60-70 hours a week there is little more time you could possibly give to the business, so adding employees is the only way to really grow or in this case to give you more time for your family.

In the first example you could see that by moving the unprofitable tasks from the sales person to another employee the sales person is able to spend more time on the tasks that are the most valuable for them. In the second example the most valuable time that you are looking for is the family time. By spending a little money on new employees you can regain some of this time, while also creating potential for the business to grow without adding extra hours yourself.

Finding what your most valuable task is and then finding a way how to focus on that task and move the other less valuable tasks away from you needing to do them, can provide a very valuable change to how you work. It really can give you a lot more time to create the value that you need to create to build a business that will last.

A business plan may deal with the specific’s of the business such as finances, products, the people involved and the overall view of the business. The marketing plan will deal with the overall view of  you guessed it the marketing of the business. What the strategic plan will deal with is your overall vision for the business, and how this is going to be achieved.

Creating a strategic plan is something that is always going to be an on going thing. This is the type of plan that should be reviewed and updated as often as you believe it is needed. This may be once a month, or maybe once a year. Relly whatever you believe is needed to keep yourself focused. This plan should deal with two main topics in relation to your business

• The first part of this plan should look to outline your goals. Not just the make X dollars per month or have a certain size customer base. These should be your driving goals, the ultimate where you want your business to go goals. A good example of the difference in these goals may be. In your business plan you might have a goal to provide 100 customers a month with your product at the end of the first year. Where as the same goal may be expressed in your strategic plan as to be the number 1 provider of your product to consumers within 10 years.

Often the goals that you are likely to set in the strategic plan are long term, driving and even visionary goals. They are things that you want to achieve however, are possibly bigger then what should really be part of your business plan.

• The second part of this plan will primarily deal with the how. How are you going to work towards these goals. While knowing the how or every step that you need to take is not essential by any means. Knowing to some extent what may be required to get from where you are now to where your goal places you, are important things. On the example of becoming the number one provider for your product, you may need to do the following. Expand the number of customer service representatives to allow for the growth. Add additional warehouse space to cope with additional stock requirements.

These may essentially be mini plans in themselves, however what they do is give you insight into your long term goals. These are also parts that you can line up as they may be required to include within your business plan.

So  what you are really doing is, creating a plan that outlines your long term goals, and how you plan to achieve them in milestones, rather then details. This plan does not have to be something that is big with every little detail. But it needs to clearly spell out what the goal is and at the beginning at least what some of the steps that may need to be taken to achieve the goal will be.

Being that many of the goals that you may look to include in this plan are long term, with steps that may take considerable time, is the primary reason why continual re-evaluation is needed. This re-evaluation is something that can easily be connected to doing the same with your business plan. The two plans should always be connected or related in some way. Preferably where the steps in your strategic plan, make up some of the focus of your business plan. If not then you are taking the risk of creating a goal that cannot be achieved.

All you need to do is just get started on creating a plan, be it a single page, with just a few details. Or maybe something a little longer, but just remember all you are really looking to do is to hone in on the goals and the overall path to reach them. The details of reaching them are not so much part of what this plan should be but more your business plan, when those milestones come into the scope of your business plan.

Interacting with your customers is often one of the most important part’s of your business, and one of the parts that makes the difference between repeat customers or not. It can also make the difference between how well you connect with a client, there is a definite difference between an email communication a phone call and a face to face meeting.

Meeting new clients can also be much easier when you make contact in a direct person to person instance. So you may be asking if i do not have an office how do i meet these new clients in person. There are a couple of ways.

• Join local groups – Things like the Chamber of commerce, or Toastmasters, may have people or businesses within your potential target market as members. Attending or joining these sort of groups are ways to meet new potential customers.
• Attend Networking events – These are events purely designed to connect people, so attending these events may again have people that are within you potential market attending as well.
• Tell everyone you meet – When you meet people have a fairly specific definition of what you do ready to share. Don’t drone on to long, but something that gets interest and lets them know what you do, in around 30 seconds, may gain you interest. Just don’t forget your business card.
• Create your own events – It will take work, and require some extra effort, but you can create your own networking event or local business group and create a network of contact not just for yourself, but for the other members or attendees that you get along.

They may be fairly simple idea’s and they may be the same sort of things you have thought about doing, but it really comes down to the pure fact thinking about it, does not solve anything. You need to get out and actually do these things, for them to benefit your business.

1. Trade shows and Expos – While this is discounted by some as a waste of money there are others that would not miss one of these events for anything. While they are not always a source of a lot of sales they do give you a lot of opportunity to get your name into the market and to get your information to a lot of people. So while they do not necessarily generate fantastic return’s at the time of the event, they can over the long term generate fantastic returns.

One of the things to remember with trade shows and expo’s is to ensure you have a way to get the details of people that you speak to or visit your booth. This enables you to market to these people more in the future, and because they showed interest at the show there is potential that they are going to be prospective customers.

2. Shopping Mall Sales booth – While you may not have a store or an office, there is nothing to stop you from having a temporary one. Many shopping center’s offer very short term leases to set up a small stall in the center which you can sell your products from. Of course this option is better suited to products that are of a retail nature that general consumers are likely to want to buy. However if you are a service business it can be a good way to increase the awareness of the service you provide and also of your business.

3. Markets – Again it depends on your product if this would be a suitable option or not, however with the right product this could be just the place to catch the attention of the customers that you may not normally be able to directly promote you business to. You do need to be aware of limits that are placed on the type of products offered at different markets, but it is always worth taking a look and seeing what potential may be there. It never hurts to try something new, the worst case you could get nothing out of it and have lost a little money. Best case it may be one of the better investments you made.

Three options you could use to better pormote your business in a temporary environment. Consider each option and you may just find something interesting to try.

For often a smaller group of people when they walk past these stores, they know what has gone into getting those stores there, some own these stores, some own similar stores, and some are the people in the corporations that own the stores. Then there is a smaller group, a group that used to own these stores or stores like them. Some of this group sold their stores and benefited from it, while others sold the store to just break even, or closed down because they could not afford to continue on.

While there are people going by these shops in all different capacities, there are probably few of them that are thinking how does each of these stores survive as a business. How does a store actually generate a sufficient profit to pay a lease, pay staff, pay the bills, and generate a profit to make it worth the investment of the owner. This is a question that i tend to ask myself a lot. Not because i am an owner of one of these stores. But because i like to analyze why, of how businesses manage to survive based on the minimal knowledge you can usually gain from looking at a business.

I am not so interested in the idea of how a large chain store makes a profit, as this is often rather easy to deduct. Based on the ability to place themselves as a draw card tenant to a shopping center, they achieve relatively low lease prices for the space. Then you expect that being a chain store they do have buying power which often means much better wholesale prices then other smaller stores. Finally the concept of pushing a lot of small sales through is one that works for this type of store, purely because of the scale they work on.

What i am interested in though is actually trying to work out how and more so why some of the small businesses can manage to survive. The type of costs that are associated with the business that they are running just seem to be beyond the ability of such a business to sustain over the long term. This is one of the reasons that i am very adamant in my preference for No Fixed Office, you can eliminate so many of these costs that are in my opinion a hindrance to a potential profitable business.

What you often tend to find is that the costs that these business incur are not what you really may imagine. Just an example, in a smaller area outside a major city, there is an area with a shopping center and shops along the main street. To get a store in the shopping center at around 50sqm, will cost a business over $40,000 for the lease. The same store in the front of the center on the main street, comes in at over $50,000 a year.

Unfortunately this does not appear as the end of the expenses for a business, Staff (just one person for 30hrs per week, could easily exceed $40,000 per year including all costs of staff). Utilities, or sometimes included as outgoings in your less, can vary from $30-$60 or more per sqm per year (or for the above 50sqm example $1,500 – $3,000). Then there is an ever growing list of other things, telephone, stationary, cleaning, and the list goes on. It is not hard to imagine the total exceeding $100,000 a year in costs for even the smallest of stores.

The most difficult part to work with though i believe comes from how these businesses derive their profit. It is the same as just about any other business a little bit at a time. Not only are these business at one disadvantage by needing to hold sufficient stock to make a sale. They also only sell a little bit at a time. If you were to consider an average sale of around $40.00, even at the best case scenario of maybe a 50% average profit margin, this equates to an average profit of $20.00 per sale. So how do you get from $20.00 per sale to $100,000 in expenses to cover, with over 5,000 sales. Or a little under 100 sales per week.

What i find interesting in some cases is that some of these stores may not even get this many customers walk through the doors per week. Then there are the stores that have a vast majority of products that sell for less then $20.00 alone. So it will take many more sales just to reach these levels.

Even though i have this preference for no fixed office, i can understand there is a number of businesses people traditionally see as needing a fixed location. Especially in retail sales many of the products that are sold rely on a store that potential customers can visit. However the way things seem to have traveled, it is almost a requirement for some stores to seek prime positions which cost them so much more then they really need to be paying in leases. If the owners of these stores saw the potential of a slightly less prominent location, and the potential that the extra money saved could provide in ability to market, and extra profit.

This is of course not to say that these business owners should not also consider the potential difference in sales. However often the consideration is fairly black and white, and is only tainted from this straight forward one or the other by information that does not necessarily actually count. For example is it worth paying three times the lease price to get a prime main road location over a position in an arcade, if at best you may only produce double the sales.

This is one of the fears that i dread seeing the most is people who are working their guts out to pay a lease, and staff and rent to operate a business that was suppose to be a fun and freeing experience for them. Which actually turns out to become one of the most challenging and difficult experiences that they have ever had to undertake. While I can see the need for many of these businesses, they are really almost nothing more then a fairly low paying job for their owner. They are working for an ideal which is almost not something that they are able to actually achieve on this path.

I do implore you to consider this, which i have shared today if you are planning to start a business which will require not just long hours, but the type of financial commitment, that i foresee you would need to put yourself in a prime location. If you can create a business alternatively which provides a product people want, that you can provide, but most importantly that you can provide from anywhere, either electronically, by delivery or by some means which eliminates the need for the excessive costs of placing your business somewhere you hope will provide what it is worth.

THE LEASE

May as well go with the biggest expense first, and for the most part, it will be the biggest expense by far. However the cost can vary greatly depending upon the location that you choose. I have found that in the local area near where i am now that a 55sqm office, can be leased for $1,300 per month plus tax and outgoings. All up this comes in at about $20,460 for one year. This is located in a area just south of Brisbane, if you were to look at leasing a similar property in Brisbane it self you would be looking at closer to $40,000 per year.

THE FURNITURE

At a minimum for an office you would want to have an area that at least resembles a reception area, whether you actually decide to have a receptionist or not, the area allows for a separation of your work area and where clients may enter your business. For your office, you would look to have a desk, maybe a bookcase, and a sideboard, which can act as storage and a place for your printer, fax machine etc, plus a chair for yourself and 2 or 3 chairs for visitors. Purchasing these items alone from a office furniture store would come close to $3,000.

For the reception area, a reception desk a chair behind and a maybe again 2 or 3 chairs for waiting visitors, plus coffee table which you could hold a more casual meeting with your client at. Again a conservative estimate for this would come in close to another $3,000. Which would give you a total of close to $6,000 for furniture.

THE TECHNOLOGY

Really this is an area that having an office means you need to do a bit extra then you may otherwise. Just like with the furniture you need to prepare for future needs, even if it is just for one additional person. So your basic needs would be 2 x computers, a Colour Laser Printer (or mono laser printer, and colour ink jet), a fax machine, a basic phone system, external network drive for backup, and an ADSL router. You could replace the 2 computers with laptops, however this would not really cause much saving. Your total cost is likely to be around $1200 x 2 for computer, $400 for printer/s, $400 for fax machine, $1,000+ for a basic phone system, $200 external network drive, and $100 for ADSL router. For a total of $4,500.

THE SERVICES

There are a few services that you need to have if you have a office, these generally all cost money and will quickly add up over a year.

- Telephone : It is a good idea to get at least 2 lines, so that you can be on a call and another call can still come in, additionally a separate fax line also ensures that faxes can get through without being affected by other calls. While two lines may be suitable it really depends upon how many calls you get. The costs associated with phone lines can vary greatly depending on the level of service and additional features that are enabled, however i would estimate a minimum of $50 per line, for someone who makes a low volume of outbound calls and faxes.

- ADSL Broadband : A fairly standard business grade ADSL service can be connected for about $100 per month.

All up even for these basic two services you are looking at around $250 per month or $3,000 per year.

JUST THE BASICS

So really this is just the basics that you need for setting up an office and when you put it all together for just the first year it does quickly add up

Lease $20,460 + Furniture $6,000 + Technology $4,500 + Services $3,000 = $33,960. This assumes that you are not considering also employing someone for reception, which if you do happen to get busy is almost a necessity with an office, if you plan to be in and out during the day. You are probably looking at a minimum of $40,000 a year for a receptionist when taking into account the expenses associated with employing someone.

THE CONCLUSION

While some businesses literally may need an office because the clients do visit them more often, especially if you are selling to retail customers. The general cost of having an office is quite high, considering that you need to make this money as profit above the expense of product before you actually make any money for yourself. While it will get a little better in the second year when you don’t have to purchase new furniture or technology, there are other costs that just happen to come up, like the almost constant need for stationary supplies, printer toner, and other supplies that you don’t expect.

THE LEASE

This is probably the best part of having no fixed office, the fact that there is no fixed lease. You may end up using some of the space in your house, or maybe a table in a coffee shop, but at the end of the day you are not committing yourself to an expensive lease which you need to cover before you can pay yourself.

THE FURNITURE

Again in essence you do not really need to spend anything on furniture, while you can use an existing table or such at home, you may like to spend some money on a desk to differentiate your spaces. Buying a desk for at home is quite different to buying on for an office where clients are going to visit you. So $300-$400 should be more then enough.

THE TECHNOLOGY

Unfortunately this is one of the area’s that it is hard to compromise on for a portable office. You still need a laptop, @ around $1,200, and if you want easy access to a printer, a portable printer will cost around $500. A portable backup drive will also cost you around $200. However even with these few items you are only out of pocket $2,100 or less then half of what you may expect to spend having a fixed office.

THE SERVICES

Rather then a phone line you are better off having a mobile phone, which will run at about $50 a month, if you don’t over use it. Again for internet you are better off using a Mobile broadband connection, which again is around $50 per month. Overall saving you up to $150 per month.

JUST THE BASICS

Again like in a fixed office there is going to be the total of just the basic’s which can show a good comparison between the two options.

Lease $0 + Furniture $400 + Technology $2,100 + Services $1,200 = $3,700

That is less then 10% the cost of a fixed office and the best part is that in year two you are down to just $1,200 ongoing. Which is actually considerably better then what a fixed office may cost you both upfront and in unrecoverable ongoing expenses.

THE CONCLUSION

The cost of having a portable office is so much less per year as well as up front as a fixed office that unless there was a very major compelling reasons to set up an office then why would you want to. The extra costs eat away at the profit that you could be earning and leave you wondering how much will be left for you.

In the changes that i made, i know i achieved the 2nd and 3rd points to a level i was happy with. The 1st point is something that i believe worked based on user feedback. However there was something that was just not sitting right with me. It was the advertising. Exactly what about it was not sitting right i was not sure, as i had it all set up how i was happy with. This was also confirmed by some of the feedback i received.

So far in just 18 days i have gone through 6 different stages with my advertising, eventually resulting in the current ad free result.

1. The first stage that i went through was before i even started, at the beginning the layout i choose had spaces for 7 ad blocks. Right off i decided to only use 5 of these. 1 in the header and 4 in the sidebar. This was mostly because i felt at the moment 6 spots in the side bar was to much.

2. The second stage i decided to cut the size of the header ad in half, from 468 to 234 wide. This was after some feedback mentioning that it was to over powering compared to my own header.

3. The third stage ended with me moving the sidebar ads, from being the main item above the fold in the sidebar, to one of the two columns in the sidebar. At the same time i dropped one of the ads here was four was maybe a little to many i started to think.

4. Stage four saw me finally decided to cut the header ad altogether. This opened up my mind to using the whole header for my use, which took me from 2 images to 5 images across the top and allowed more space for the tag line.

5. I was still wanting to keep some ads near the top of the page at this fifth stage. As such i inserted a group of link ads between the header and the main page. While not as grabbing as a normal link box. It could potentially serve it’s purpose.

6. Finally as of just an hour ago i decided to do away with the ads for the time being. This doesn’t mean i may not bring them back sometime in the future. However they really were not serving the purpose i was expecting them to.

As anyone that may have read this blog for some time, may know there have been ads on it since day one. My initial reasoning behind putting ads on straight away, was mostly for the idea of conditioning. If they are there straight away then they are not really going to shock anyone, if i had suddenly just plastered them all over one day. While it probably did not make a lot of difference really, there was a difference in my head.

In reality i eventually came to the decision the ads were not serving their purpose. As it stands today it is exactly 6 months since i made the first post on this blog. In that time the ads that i have placed on the blog here, have generated less then one third the cost on hosting the blog each month. Maybe it would be wise to consider leaving them in place, if there was something to support it. However the more i looked at the stats the more i realized it is no pattern, they are purely random clicks, one here two there and days on days with nothing.

So while not meeting the purpose that i see in placing ads, the final decision was more in a different direction. It was the thought that maybe this project at this point in time should not be about making money, but more providing a valuable source of information. Just to not worry about the potential income and how many visitors to how many were clicking, but to just worry about giving the best posts i can, and let the income appear in whatever form i may see it in the future. Maybe this will be ads, maybe it wont but i am sure it will be one of those things that will take care of itself, when it needs to.