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The Art of Compromise Helps Your Home Based Business
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Ok, this a bit of a rant. But there’s a lesson here too for your home based business.
If you’re like me, you probably remember your parents and teachers saying something like, "you can’t always have your own way." That comment may have been followed by, "stop being so stubborn." Or, maybe it was, "why do you always have to be so selfish?"
Let me rant first and get it out. If you look at our politicians, what you mostly see is exactly the opposite of what we were told as kids. BOTH parties are playing this game of "It Has to be MY Way." Instead of compromise and progress, there’s bickering and stalemate. And the country is suffering.
What does this have to do with your home based business? Everything! Even if the only person in your business is you, you can’t always have your own way. There are other people effected by your decisions. Your customers, suppliers, and maybe the people you’re sharing the house with. You have to be willing to negotiate, listen to the other party, give a little. Maybe even once in a while let the other person have everything they want.
The art of compromise is understanding what is important. Do you really need everything to be your way or do you care more about the quality of the outcome?
If you find yourself always insisting on "your way". you may be losing customers and important relationships along the way. You may be winning the battles, but losing the war. Is it really worth it?
Exuberance Can Kill Your Home Based Business
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I was listening to the news today about Ireland being bailed out by the European Union and the International Monetary Fund. It struck me that this event has a lesson for home based businesses.
Ireland has been flying high economically. It’s land prices were jumping. It’s banks were lending money wildly. Companies were building factories and warehouses. All the economic indicators were headed up.
Everyone was dancing in the streets. There was no end in sight.
Then came the world wide economic crisis. Land prices crashed. Factories closed. The banks were left with loans that were shaky or even no good. The bubble had burst.
Suddenly, the government was meeting in emergency session and dark clouds were everywhere. The result? Ireland went with hat in hand to the European Union looking for a bailout. The good times that could never end …….. had suddenly ended.
I live in Las Vegas. We saw something similar here. Massive building everywhere. Multi-billion dollar hotel/casinos. Shopping centers and industrial parks. New houses everywhere.
And then the crash.
Now there are unfinished billion dollar projects. Vacant shopping centers. Empty homes. The idea of "build it and they will come" had crashed in flames.
So how does this relate to your home based business? There are two ways.
First ….. you can get comfort from knowing a whole lot of very smart people didn’t see the meltdown coming. And if you didn’t see it either, you can know you weren’t alone.
Second …. is a reminder that life has cycles. Nothing lasts forever. Good times are fun. It’s wonderful to celebrate and enjoy the fruits of your efforts, but you also need to be prepared for when the winds change.
Remember, Ireland may get bailed out by the EU and the IMF, but you and I have to be prepared to bail ourselves out. Our home based businesses depend on us.
A Little at a Time Brings Success to Your Home Based Business
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Bill Walsh was a long time National Football League coach. His philosophy for his offense has an important lesson for your home based business.
Have you seen the movie Blindside? I haven’t yet, but I’m reading the book. I’m at the part that talks about Bill Walsh’s game plan for his passing offensive. Most teams like to go for the long pass. It creates excitement and gains yardage quickly. The short pass is used to set up the long pass or to save the quarterback from getting tackled.
Walsh took a different approach. Long passes may be exciting, but they’re harder to complete than a short pass. There’s also more chance for an interception, and while the quarterback is waiting for his player to get down field, he’s more likely to get tackled and possibly hurt. Walsh preferred going for lots of short passes and once in a while going for the long bomb.
And the result? ….. Many more completed passes. Long steady marches down the field. Many winning seasons. He was willing to trade the flash for the win.
How does this apply to your home based business?
Too often there’s a desire to go for the big success. The big win. Maybe that means getting a HUGE sale. Or it could be a one time splash in your local newspaper. It feels really good. But when you sit back and reflect, how much further has it gotten you to your vision? And how many things didn’t work out?
What would happen if you had lots of smaller successes? Each one would move you closer and closer to your dream. Slow and steady instead of flash and crash. Yeah, I know. This sounds like the story of the Tortoise and the Hare. The message was true in the fable and it was true for Bill Walsh. It’s also true for your home based business.
Take baby steps with lots of success and you’re get where you want to go. Or you can focus on "the big play" and find yourself with an incomplete pass. It’s your choice. Flash or success.
The Power of Credibility
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There are lots of things that impact the success of a home based business. Many of them are out of our control or can only be slightly influenced by us. But there’s one that is absolutely under your control. What I’m referring to is how you come across to people. Do you sound credible.
Ok, I can hear you say, "what are you talking about? Of course I’m credible." How do you know?
What’s your proof? Just because you think you’re credible, that doesn’t mean that’s how other people hear you. And no, I’m not suggesting you’re lying.
Studies have shown that when communicating with another person, the words you use only account for about 7% of the effectiveness of what you say. 55% is from body language and the rest (35%) is your delivery. (Tone, pacing, etc) So if you are only focused on the words you use, your effectiveness (your credibility) may be far less than you expect.
Even Napoleon Hill, in his powerful book "Think and Grow Rich", says one of the characteristics of successful people is that they speak with an authoritative voice. They ** sound ** like they know what they’re talking about. And lets face it, if you don’t sound credible, why would anyone want to do business with you?
Ty Cobb’s Lesson for Your Home Business
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Ty Cobb was one of the best hitters in the history of baseball. But he wasn’t well liked. Even by the members of his own team.
There’s a lesson here for the success of your home based business.
In 1910 Napoleon Lajoie of the Cleveland Indians was battling Cobb for the batting title. The winner would be determined after a double header the two teams were playing at the end of the season. Cobb’s manager told their third baseman to play in shallow left field each time Lajoie came to bat. In the two games Lajoie batted seven times and each time he bunted successfully towards third base. The seven hits raised his average enough that took the title away from Ty Cobb.
The day after the game, Lajoie got a congratulations telegram ….. From Ty Cobb’s teammates.
What’s the lesson for your home based business? How you treat the people around you, vendors, subcontractors, and even customers will determine how successful you’ll be. And that even if they pay a price, they could undermine your success.
Treat people well, and they will treat you well. Mess with them and be prepared to pay the consequences.
Bank Loans for your Home Based Business
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Last night I attended a meeting with 6 bankers on a panel. They all said "Yes! We’re lending!." One man from one of our largest banks in Vegas said, "The banks are getting a bad rap. We’re working hard to lend money. Please tell your friends that we’re just getting bad press." Do you believe that. He wanted us to feel sorry for him.
But I digress, because this is about getting a loan for your home based business.
Here’s the heart of it: Yes, they’re making loans. BUT, the criteria has changed. The banks are being stricter on their requirements. You have to demonstrate solid cash flow, because all they really care about is how they will get the loan paid back.
And the days of not providing documentation are over. You want a loan, you have to give them tax returns and cash flow statements. Depending on the size of the loan, the collateral, and how long you’ve been a customer, they may want much more.
There was one especially good tip they gave us: Come to the bank prepared. Have some sort of business plan and a good way of describing what you’re doing, why you need the money, how they will be repaid, and what you can give for collateral. If you can’t do this on your own, find a good CPA or consultant. In short show up looking like you know what you’re doing.
Can you get money for your business? Maybe. Be prepared to jump through hoops.
Oh, and don’t hesitate to take your loan request to several banks. You may be surprised how different the reception can be and the answer they give you.
Congress Creating Hardships for Home Based Businesses
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For the record, I’m neither a Republican nor Democrat. I’ve been a registered Independent since I was 18. I’ve always voted for a person, not a party. And yes, I’ve voted for D’s and R’s both.
Starting and running a business is difficult. There are new challenges everyday and there’s always uncertainty. That’s true whether you have a home based business or one run out of an office somewhere. During the last 18 months, Congress has added to that uncertainty and is making it much more difficult for those of us who run businesses.
How so? Lets start with the healthcare bill. One of the reasons for passing the bill was to reduce costs. And yet, what we’re hearing from across the country is that premiums are going up 20-30%. That money comes right out of our bottom line. And it’s not that most of us will get anything more for the higher premium.
And we get hit a second way. Not only do our higher premiums come out of our pocket, our customers may have disposable income, so they can buy less from us.
There’s also uncertainty over Cap and Trade. Economists say that if passed, this bill will increase all energy costs. Since we work at home, that impacts us more directly than the person who works in an office and can adjust their thermostat during the day to save on costs. Will this pass? I don’t know, but Congress continues to discuss it without making a decision.
The Bush tax cuts are set to expire at the end of the year. Congress has known about this for month, but has done nothing about it. Will taxes rise next year? I don’t know, but my point is that Congress is talking instead of doing.
So what’s the point? With all the unknowns and the uncertainty caused by Congress, it makes it harder to run our businesses. Setting prices becomes hard, especially if you have long term contracts. Deciding how to invest in your business becomes hard because you don’t know what will happen to your customers buying pattern. Money you spend today won’t be available as a reserve for tomorrow. If you guess wrong, you may miss an opportunity, or might even go out of business.
And remember, this impacts not only you, but your customers. The more uncertain they are about their economic future, the more incentive they have to save instead of spend.
What can you do? If you have a home based business, contact your elected representatives. Find out how they intend to vote? Find out when they expect to make some decisions that will take away some of our uncertainty. Push them. Get involved. Why? Because the health and success of your home based business is at stake.
Costs for Your Home Based Business can Easily Get Out of Hand
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There are only two ways a home based business can increase it’s bottom line: increase it’s the sales or decrease the expenses. Too often, the business owner is focused only on increasing sales.
Hey, it’s much more exciting to get a new customer or have an existing customer buy more, than to spend time going over your bills to see what you can cut. I get it.
But, as hard as we work to get more business, it’s silly to see that money wasted on costs.
It’s true that most of us are cautious when we first incur an ongoing expense. We look for the best possible price before buying. The problem is that over time, it’s easy to ignore watching to make sure the costs are still the best available.
Here’s a real life example: this past year we go a slight increase in our auto insurance. We’d been with the same broker for many years and never questioned the bill. This time we decided to check around.
What did we find? Yup, you guessed. We found better coverage for less. Lots less. So much that we decided to shop our homeowner’s policy too. (We had that coverage with the same agent that had our car.)
By now, you’re probably not surprised to learn that we were paying too much there too. Combined, we saved over $1,000 per year and had better coverage.
Here’s the rule: to maximize the profits in your home based business, you need to review your costs at least once a year. That doesn’t mean you need to leave your current supplier. But you do need to go through the conscientious review you did when you first bought the product or service. And no, the lowest price is not always the best, but you need to be able to make an informed choice.
15 Minutes Could Save You ….. and Your Home Business
Posted by: | CommentsIf you watch any amount of TV, it’s hard to miss the commercials for the auto insurance companies; everyone claiming to save you hundreds of dollars if you switch to them.
Why is this important for your home based business?
Because you may be making the same mistake they are.
Let’s assume for a moment that all the companies are using valid information. That is, if you switch, you’ll save lots of money.
Where are all the people who switch coming from? Other companies.
So what that means is companies are focused on getting new business, not keeping the business they have. If they were focused on their current customers, then other companies couldn’t be attracting them away. Right?
Years ago I heard it cost 7 times more to attract a new customer than to keep an existing one. If you’re not paying attention to your existing customers, you may have new customers coming in the front door while existing customers are going out the back.
For your home based business to be successful, you need to pay at least as much attention to your existing customers as you do attracting new ones.
Taking Short Cuts in Your Home Based Business
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Paperwork.
Policies.
Procedures.
Do those words make you cringe?
That’s the effect they have on lots of home business owners. You got into business to do what you’re good at, right? And that’s usually delivering a product or service.
But don’t take any shortcuts when it comes to doing the paperwork or you could be creating a future problem you don’t really want to have to face.
There are several problems with not doing the paperwork, many of which you probably already know. Here’s one you many not have thought of:
What happens if you’re sick for a while and your spouse or someone else needs to run your business?
Without having written instructions, how will they know what to do? Who do they need to contact? Are there things that need to get done on a specific day? How do they process your credit cards?
It may not be a fun part of your business, but it’s an important part.
This doesn’t have to be anything fancy. Just create some written instructions of the things that need to happen to keep your home business running if you happen to incapacitated. And be sure you update any instructions when something changes.