Cash FlowWritten by Bob Osgoodby
It doesn't matter how great your product is or how wonderful your service, if you don't have customers, all you have is a skill, or a product. People don't go into business normally as a hobby, although a lot of hobbies do turn into a business. The trick however, is to turn it into a positive cash flow.
If you're serious about doing business, you must plan for long run. Successful businesses don't normally just happen. They are result of long hours of planning, and a great deal of work.
There must also be a "war chest" of funds available until a positive cash flow is achieved. One of major problems that many encounter when starting up, is that they overextend their financial resources. No matter what your business, or how it is run, you must be able to meet current bills when they come due.
The "dot.coms" which were started on such a wave of exuberance, had plenty of cash behind them. They dealt in promises of huge earnings, which however never materialized. Now, majority of them have joined history books as "also rans". While they did have backing, sales at level they needed just didn't happen at a rate to sustain them.
The pundits will argue that economy is what brought them down. They violated however, one of basic rules of business. They overextended themselves, to point that their cash inflow wasn't enough to cover their expenses. When their "war chest" was depleted, they were gone. How does this affect small entrepreneur? Can we learn a lesson from this?
Let's examine a program that average person can get into. Network Marketing is current "buzzword" for Multi-Level Marketing, or MLM for short. MLM got a bad rap over past six or seven years, due to scamsters that abounded. A number of companies were founded that were simply "Ponzies" in disguise. The majority of their cash inflow was result of signing up new members. When cash flow from new recruits dried up, so did investment of those who had joined.
Are there legitimate companies out there - sure and many have a great track record. They don't rely on attracting high priced recruits, but have a legitimate product or service that they offer. If you are going to get involved in one of these companies, that should be a major concern.
The DabblerWritten by Bob Osgoodby
Many web sites of major companies came down with a resounding crash, and there are more to follow. Very few of "deep pocket guys" are making any money with their sites, and as money tightens, they realize their pockets may not have been quite as deep as they originally thought. Their sites are being taken down in droves, and the, "techno-wizes" are falling into disfavor.
As Economy slowed, many companies down sized their operations, and employee layoffs are on rise. There is a general "belt tightening" at every level, and heady expenditures of last year are being looked at with a "jaundiced eye".
So what does this mean to small entrepreneur? Is it time to also crawl under a rock, and wait for better times? The answer to this is a resounding - NO. While unemployment rate increased slightly to 4.2 percent, it is worth noting that proportion of population with jobs, at 64.5 percent, remains near a record high.
Now is probably best time to promote your small business on web. You will be facing less competition from web sites that have gone south. Not only will your potential market share increase, but sites that have been monopolizing "surfing time" will no longer be there. People will be looking other places for their information. The question should not be whether to get your own web site, but when you should get it.
Yahoo has made a major change in their policy of accepting web sites for review. While it used to take several months to get a site reviewed, they now say it will be done within 7 working days. Sounds good on surface, but is there a catch? Sure - what used to be free, now costs $199.
A cursory examination of results of any web engine search, reveals a lot of "garbage" up there. Many of sites are no longer in existence, or you had to wade through a lot of "junk" to find something meaningful. This could accurately be described as age of "dabbler". People who got a new computer thought they could make their millions on web. The "arm chair" entrepreneurs prevailed, and buried serious ones with their submissions. When their free AOL account expired, they were out of business and their web site went away.