By Clifford Jones

My wife recently lost her sales job after fifteen years in her field. And, like millions of other Americans in the same situation, she has been forced to deal with the harsh reality of finding another job. Of course, for people like me and maybe even you, the much better option would be to start and grow our own businesses. While not everyone is cut out to live the life of an entrepreneur and put it all on the line, there are plenty of people saying “Good riddance” to their corporate lives and taking the plunge into the world of self-employment and entrepreneurship.

Is now the perfect time to start your business? Only you can be sure. While there may be no “perfect” time for any of us, here are a few things to consider:

1. The silver lining in our very messed-up economy is that millions of people are being forced to start their own business. (That’s a good thing, because that’s where job growth comes from!) The simple truth is that many people just don’t have a choice. And if you’re at all like me, you have a serious entrepreneurial spirit waiting to be unleashed on the universe. Nuts to finding another job! It’s time to take charge of your future. So, go for it!

2. Now is a fantastic time to start a business. Forget what you think you know about the economy and all the bad news we get blasted with every day. I believe that starting, funding, marketing, and growing a successful business is the best way to create real wealth for most people. It’s not as much about timing or the economy or what your relatives think. It’s about your burning desire to create and grow a business—to own your future—along with all the good, the bad, and the ugly.

3. Be honest with yourself. Some people just don’t have the time, interest, financial sense, or abilities to be in business for themselves. Carefully evaluate your desires, motivations, and level of enthusiasm and commitment. Talk with a professional advisor and friends. Take quiet time to really think it through.

4. I am often asked, “What’s the best business for me to start or buy?” The answer to that depends on what you can be really passionate about and committed to creating and building. Being successful in business requires luck, skill, and lots of hard work. If you can get really clear on your purpose for being in business, it’s much easier to maintain the energy, drive, and commitment to grow it. Believe me, you’ll need tons of energy.

5. Build a solid team of people around you from the start. I don’t mean that everyone gets a salary and big desk at your fancy corporate office. Quite the contrary—build a team of people who can help you with your business planning, tax planning, legal planning, trade names and intellectual property, sales, marketing, accounting and bookkeeping, sales calls, networking events, employees, benefits, compliance, technology, and more.

6. Get over the illusion of fear. Dream big. Get really clear on your positioning and the problems you will solve for your customers. Focus on generating new business from minute one! Create. Plan. Market. Sell (yes, it’s essential, but not in a bad way). Communicate. Keep score every day. And enjoy the journey of creating your future. Learn to love learning and take advantage of the many incredible resources online, such as Kaufman.org, youngentrepreneur.com for social networking, the U.S. Small Business Administration at sbaonline.sba.gov, The Edward Lowe Foundation at edwardlowe.org, and many others.

Now is a great time to start your business. And there are plenty of success stories in small business every day, regardless of what you might hear and read these days. Be inspired and create real wealth through entrepreneurship.

By Matthew Toren

Have you ever wondered why you are not being successful in your current business or have struggled to find a path forward? More than ever, it seems that these days, a growing number of would-be entrepreneurs are seeking to branch out by themselves on their roads to fame and fortune. A small number actually reach the end of the journey, whereas very many do not even get to crank the car up or move out of the driveway because they fail to zero in on the correct marketing strategy to follow.

A small-business owner must do a significant amount of soul searching and targeting his or her efforts. It is rare for an entrepreneur to have a specific goal and to be perfectly aware of the strategies necessary to help him or her succeed. Rather, it is often a process of discovery and one that must be undertaken up front before results of any kind may follow.

Don’t be tempted to go from one idea to the next, achieving little; instead, always be prepared to innovate. There are so many conflicting ideals that may attract you for any reason, and you must limit your attention. It is easy to become caught up in hype if you do not fully understand your direction, and this will paralyze your ability to focus.

• To start, you must ask yourself who you are and what kind of business you’re in. What are your strengths? Narrow your ideals to one only and don’t try to adopt a scattershot approach, as one of the first things you will learn is that there are only a certain number of hours in a day, and these will be whittled away very quickly, especially if your vision is scattered.

• You must match your potential product or service to a market (make sure that one exists first). Don’t be tempted to become so engrossed in your new vision that you believe that “if you build it, they will come.” This probably won’t happen!

• Remember that a successful business is likely to be a problem solver. Analyze your clients’ wants and needs—their problems, and not yours. A good way to look at this is to focus on features and benefits. It should be fairly easy for you to identify the features of your business, but you really need to focus on the benefits to your clients.

• When looking to differentiate your business, establish what the true value proposition for your customer is. You must have a unique selling proposition of some kind, and this is the reason why your existing clients come back to you. Establish what this is and elaborate on it.

• When presenting your message to market, focus. Focus! You have very little time to get your message across before the harried consumer rushes on to something else. Never overhype your product or service; be very specific about them and ensure that you get the message across that your business can help solve their pressing problems.

• Communication is key. In an ideal world, you should be able to strike up a relationship with everyone who visits your Web site by establishing e-mail communication with them. This can be a huge source of clients—maybe not right now, but after a period of continuous communication. Many people forget that the answer may well be in the “follow-up.”

• Take time to develop your relationship with new and existing clients. Don’t just set it and forget it, but make sure that they are happy, as they are all potential sources of referral clients. Social proof is highly important; wherever possible, you should utilize your existing clients to drive new business.

By Jon Kenton
 

Building a successful business is challenging, even in the best of times. With today’s uncertain and daunting economic climate, businesses need to focus every ounce of effort toward finding new clients and customers. Traditional marketing and promotion continues to have its place, and for a new business or entrepreneur, networking is an essential part of the mix.

Networking is all about leveraging every contact you already have and establishing new ones. The average businessperson already knows at least 100–200 people. If each of them has a similar number of contacts, you could potentially reach up to 40,000 people through direct referrals alone. While this is an essential part of networking, reaching out to new people and establishing new contact “spheres” comprise the other half of the strategy.

There are numerous opportunities for networking here in Phoenix and on the Internet, where you can meet new people and spread the word about yourself and your business. Check out these resources and take action to network yourself and your business today.

BNI
bniarizona.com
bni.com
bniarizona.com/phoenix_rising.shtml

Business Network International (BNI) was founded by Dr. Ivan Misner in 1985. Dr. Misner is often called the Father of Modern Networking, and BNI has grown to be the largest business-referral organization in the world. According to BNI reports, “in 2008, BNI’s 111,000+ members, located in 40 countries, passed over 5.6 million referrals, resulting in more than $2.3 billion U.S. dollars worth of business!”

There are many BNI groups in Phoenix, and they meet every week at the same time and place. The meetings are very structured and aimed at building relationships and passing referrals. The members support and educate one another, thus building trust and following the ethos of “givers’ gain.” It’s as if each and every member were an extension of his or her own sales force. Checkout the BNI Arizona Web site and locate a chapter near you. I belong to the Phoenix Rising Chapter, and you are welcome to visit anytime.

Chamber of Commerce
scottsdalechamber.com
northscottsdalechamber.org
phoenixchamber.com
northphoenixchamber.com
cavecreekchamber.org

Joining the chamber of commerce in any city is always a good idea. Here in the North Valley, you can choose the one that’s best for your location and business. No matter which chamber you visit, they are all aimed at the same goals: fostering a prosperous community and offering partnership opportunities to their members. Each chamber is funded through member dues but run as a nonprofit with the benefits of membership that include networking opportunities, community involvement, political advocacy, information access, and numerous discounts and benefits.

LinkedIn
linkedin.com

If you haven’t heard of LinkedIn, go to the Web site as soon as you finish this article and join. The mission of LinkedIn is to “connect the world’s professionals to accelerate their success.” Your first job will be to create your profile, which summarizes your professional expertise and accomplishments. Then you can begin to build your network of connections by searching for friends, colleagues, old classmates, and business associates. You will then immediately be able to see their connections and search for introductions that will further your business. In my own network, I have over 2 million people I can reach through a LinkedIn introduction.

Young Entrepreneur
youngentrepreneur.com

The entrepreneur is one of the world’s most important economic resources. One award-winning small-business Web site encourages an entrepreneurial spirit, promotes the exchange of ideas, and fosters business relationships among rising entrepreneurs around the world. One of YoungEntrepreneur.com’s prominent features is networking among like-minded business professionals—venture capitalists, private investors, industry experts, business-service providers, inventors, and aspiring and rising entrepreneurs of all varieties. This site is a great resource for entrepreneurs and small business owners looking to start, manage, or grow their business ventures. Whether you’re seeking successful business models, business-specific advice, general tips, support, encouragement, or a larger network, YoungEntrepreneur.com is an essential online tool.

By Jon Kenton
The often-quoted curse “May you live in interesting times” seems to aptly describe our current situation and fragile economy. While solid business planning and strategy should always be a prerequisite, many businesses forgo these essentials during positive economic times and manage to make money. When something is placed under stress, cracks and weaknesses are exposed that otherwise would not be apparent. It is clear that many businesses are now struggling due to a lack of strategic fundamentals.

A question I always ask clients is, “How do you make money?” This is often followed by a deer-in-the-headlights expression and a comment similar to “Well, I go out and sell as much of my (fill in the blank) as I can.”

While it’s true that nobody ever made much money by not selling something, this is not really what the question is all about. I can show you many companies who have sold plenty and maintain revenue streams we would all be jealous of, but who have still gone out of business!

It’s not all about selling, but having a well thought-out, sustainable, scalable business model that will allow your business to flourish and grow. A successful business is one that provides a product that meets a defined market and consumer need, delivers value and benefit, and can consistently keep revenues growing faster than costs.

It’s this last part that many businesses fail to consider until it’s too late. Many businesses falter as they begin to see success and stumble even more so when placed under the stress of a weak economy. This is due to a lack of scalability in their business model. In the startup phase, most of the work is done by the principles who don’t necessarily need to get paid—they see this as their investment or “sweat equity.” Once things are moving, staff are hired and they must be paid; this affects the business and cash-flow model significantly. No matter how much or little you sell, the rent must be paid and so must the staff. If you have a service-based offering, this issue can be extremely acute, as the revenue-to-staff relationship is 100 percent linear. With a product-based business, operational and manufacturing efficiencies can enable a more logarithmic staff-to-revenue and -profit relationship; however, unless balanced and managed appropriately, it can easily lead to negative cash-flow scenarios.

Understanding the fundamental relationships between all the cost and profit centers of your business is essential. A well thought-out business model will do this for you. It will help you plan for growth and allow you to do scenario planning—e.g., what will the effect on my business be in various economies, with differing staff and product-cost profiles? While a complete model can be complex, a good start can be made by identifying and separating fixed and variable costs. Fixed costs will be all those that you must cover, no matter how much you sell. Variable costs are those related to providing your product or service. To break even, the difference between your revenue and variable costs (sales margin) must equal your fixed costs. Accurately understanding your sales margin is key to making money. Once you have reached “break even,” your margin percentage will tell you how much you get to keep (your profit) from every dollar in sales. If you’re not making money, you have questions to ask and decisions to make. If your business model is viable, is it efficient and scalable, or are you overburdening the business with unnecessary fixed costs? How can you increase your ROI (return on investment) in marketing?

The best business decisions are made by those with the most information. Don’t make decisions about your future business while shooting from the hip. Plan appropriately and create a business model that will show you exactly how you make money!

By Michael Sanibel

Fred Smith: Founder of FedEx

It isn’t often that a trade name becomes synonymous with the service provided by the company that created it. Like Xerox before it, the trademark FedEx has achieved common usage as a verb when people talk about shipping items out quickly. The man indirectly responsible for this familiarity is Fred Smith, the company’s founder and chairman.

Born in Mississippi, Smith attended Yale University, sharing lecture halls and cafeteria tables with two other future notables, George W. Bush and John Kerry. During his tenure at Yale, Smith wrote a paper that described his plan for an overnight delivery service. After graduation, he served in the Vietnam War, and while in service studied the logistics and supply systems used by the military. In the back of his mind was his college paper, which he hoped to turn into a reality after he left the service as a decorated veteran.

In 1970, he bought a majority stake in an aircraft maintenance contractor and founded Federal Express a year later. He had the benefit of a $4 million inheritance, but that was not nearly enough money to get his venture off the ground. He put together a business plan based on his paper, and made the rounds to investment banks in search of private investors to provide the capital he needed. He secured almost $100 million in equity funding for an idea that no one had ever before put into practice.

FedEx was the first company to successfully integrate air and ground shipments under an umbrella of an express delivery system. Smith also adopted the idea of a central hub that served as a clearing center for all traffic movements inside the system’s web.

If imitation is the sincerest form of flattery, then Fred Smith should feel extremely flattered. There is no shortage of express delivery companies that attempt to copy his term paper from long ago.

STEVE JOBS

It’s hard to say “Apple” without thinking of Steve Jobs. Like another early computer pioneer by the name of Gates, Jobs was a college dropout with a vision of how technology could be harnessed in ways never before thought possible. With his friend Steve Wozniak, they embarked on a mission to popularize the personal computer by recognizing and capitalizing on the commercial potential of the mouse-driven Graphical User Interface.

Much of Jobs’s success can be attributed to his legendary persistence and consummate skills of persuasion and salesmanship. When he was ousted from Apple by its board and the man he hired to run the company for him, Jobs didn’t miss a beat: he went on to found NeXT, a company specializing in the development of high-end computer platforms for the lucrative business market. He also bought George Lucas’s computer graphics division, which was renamed Pixar Animation Studios. He then contracted with Disney to produce and distribute several award-winning and commercially successful computer-animated feature films. When their contract reached its final year, Jobs and Disney CEO Michael Eisner were unable to negotiate a new deal, which was one of the factors that precipitated Eisner’s retirement from Disney. New Disney CEO Bob Iger decided to buy Pixar, making Jobs the largest individual shareholder of Disney stock.

Apple, now realizing what they’d lost in booting out its charismatic founder and visionary, bought NeXT, which meant the return of Jobs as the CEO of the company he had cofounded. After years of lackluster performance during his absence, Jobs wasted no time in recharging the atmosphere at Apple and challenging its employees to innovate. What followed were a series of big commercial successes, including the iMac, iPod, iTunes, and iPhone. It’s unlikely that any of this would have happened without the iconic leadership of Steve Jobs, named the most powerful person in business by Fortune Magazine in November 2007.

By Kendra Songer

With the word recession hanging in the air, small-business owners are a little nervous. They start poring over financials and questioning every decision and every purchase. But what exactly is the right response for a small business during uncertain economic times?

1. Relax. First, all recessions are temporary. Not only does the economy always recover, consumers continue spending even during down times. Many small businesses continue doing business, and some even grow during tough times.

2. Ask employees for help. Employees notice employers’ attitudes and actions even if nothing has been said. Having a frank discussion with employees will not only put a stop to any rumors, but it may generate helpful ideas as well. If the company is experiencing higher costs, then tell the employees and offer alternatives. To avoid layoffs, are they willing to cut back on hours? Are they willing to work in a tighter space so that the company can move to a smaller office? Employees may also be able to offer ideas on how to run their department more efficiently.

3. Make sure there’s enough cash flow. Everyone has heard this mantra, but it’s important enough to bear repeating. Cash flow can make or break a business. Make sure there is enough cash to pay expenses if revenue drops.

4. Increase the cash flow. This is easier for companies still in the black. The time to apply for loans or lines of credit is before a cash crunch. With interest rates dropping, try refinancing existing loans. A downturn in the economy can be a good time to try renegotiating with vendors. For those already suffering, it can be tempting to cut prices to keep money coming in; but be sure it won’t harm the business in the long term. Prices can always be lowered, but they are harder to raise.

5. Trim spending. Increase cash flow by cutting costs. Some solutions seem obvious—laying off employees, switching to subcontractors, outsourcing—but there are other options to consider. Cutting costs should be a temporary solution, so be sure that doing so won’t affect business in the long term (e.g., don’t cut costs on preventative maintenance of necessary equipment). If cutting costs is necessary, consider consolidating offices, dismissing underperforming workers, and so on.

6. Keep marketing. Many businesses cut advertising costs first, but advertising is needed to generate new clients. Reevaluate where the money is being spent. Cut where the results are few, and don’t forget to network. Networking is a great way to get the word out—just don’t be obnoxious.

7. Look for opportunities. This is a good time to find employees. Some great people are out of work or nervous about their companies’ futures. Look into sharing rent or equipment with other companies. Join a group advisory board to see how other small-business owners are handling the crunch.

8. Get tough with Accounts Receivable. Don’t let invoices go unpaid, and get tougher with nonpaying clients. Consider switching to online billing services. Know your customers—don’t extend credit to a company on the edge.

9. Beef up customer service. It’s easier to keep existing clients than it is to generate new ones. Practice customer loyalty: offer discounts, keep communication open, and don’t forget follow-up. When times are tough, customers may want to purchase in smaller quantities. Find ways to handle shorter runs or lead times. Can the product be broken up into smaller, more affordable pieces?

10. Be patient (and don’t panic). Making changes will improve the company, but it can take three to six months to see the effects. Running a successful business is as much about positive attitude and daily decisions as it is about the economy. Determination and hard work can help find creative solutions during tough times.

By Michael Greaney

Possibly the single most important rule of investing for any purpose is to stay away from things you know nothing about. As Peter Lynch observed in his investment manual, One Up on Wall Street, don’t invest in anything unless you’ve done your homework first—and be prepared to do plenty of it. The second rule is, don’t invest in anything you can’t control in any meaningful fashion.

Ordinarily, these rules dictate staying close to home and investing in your own business, since that is generally where you have the most control and thus can obtain the best information. Currently, the most widespread method of investing in your own business is through a sole proprietorship. For those who work in a corporation, the Employee Stock Ownership Plan (ESOP) has some advantages, although such an arrangement is what the law calls “beneficial ownership,” and does not generally convey any direct control over the investment, or even in many cases how much is invested. IRAs and 401(k)s also have certain advantages with respect to security, as well as substantial drawbacks when the issue is control.

Current economic and legal institutions, then, virtually mandate investment in publicly offered stocks and bonds in order to reach some degree of control over your assets and to reach your investment goals. There is also the issue that, having reached a level of “capital self-sufficiency” by following Andrew Carnegie’s advice of putting all your eggs in one basket and watching that basket very carefully, you will follow the prudent rule of taking whatever eggs may be overflowing and diversifying them to spread out your investment risk. For both of these goals, domestic and foreign exchanges offer a number of advantages as well as some serious drawbacks.

In almost all investments on the secondary market (as transactions on stock exchanges are called), minority shareholders have virtually no power, and thus, practically speaking, no meaningful control. For this reason, it is vitally important to keep a close watch on those economic and political factors that do have the power to have a significant impact on secondary markets for stocks and bonds.

If your goal is short-term investment for immediate gain, the current political and economic situation in the United States represents a unique opportunity to buy low with the expectation that, as they always have in the past, matters will improve immediately after the upcoming elections. Those with the liquidity to invest now have the possibility of seeing substantial gains in the short term.

If your goal is retirement or any other long-term objective, the foreign markets offer the opportunity to take advantage of rapid economic growth, particularly in Asia, and most particularly in China. Europe, while temporarily doing better than the United States, is tied too closely to the U.S. economy, and will eventually begin to decline unless serious steps at reform are taken. In addition, due to the decline in the dollar, European stocks are overpriced relative to those in the United States. While Asian stocks are also overpriced, they have the growth potential to offset the decline in the dollar, which Europe does not have.

Unless the United States soon adopts an economic and tax reform package along the lines suggested in Norman G. Kurland’s book Capital Homesteading for Every Citizen, there will be a continual decline in both the dollar and the domestic stock market, making the long-term investment potential more risky, and enhancing that of the Asian markets.

By: Keith Harmeyer

Some use it to create business empires, others use it to lead nations, and still others inspire entire civilizations to greatness. I believe, in fact, that this single skill is so critical that it is virtually impossible to succeed at anything without it—at least not in any meaningful way.

I’m not talking about positive thinking, assertiveness, negotiating skills, an improved vocabulary, appearance, education, or “the secret law of attraction.” All these things are great and might even contribute to success, but they’re of little value without the skill to which I’m referring.

So just what is this superpower, used every day by the world’s most successful people to achieve greatness? Simply, it is the ability to put yourself in the place of another.

Can it really be that easy? Just a mile’s walk in someone else’s shoes? Well, there’s a bit more to it than that. But if you can truly understand and appreciate a given situation from the other person’s point of view, there’s little that you can’t accomplish. In order to achieve almost any type of success—that is, to get something you want that you don’t have now—you must enlist the involvement of others. For example, if you’re in sales and want to achieve greater selling success, it is necessary for customers or clients to buy more from you. If you are interested in fast tracking your career, you’ll need the acknowledgment and recognition of the person or people to whom you report.

Corporate leaders take their businesses to new heights by understanding the needs of their customers, employees, and shareholders, and providing the value these groups demand. Politicians must speak to the desires and hopes of voters in order to get elected. Spiritual leaders touch the hearts of entire populations, inspiring great acts of sacrifice, responsibility, and charity.

Why not give it a try, and see what kinds of results you achieve?

By John Riddle

Stress in the workplace can lead to serious health problems, according to medical researchers. They estimate that 75 to 90 percent of all visits to primary-care physicians are for complaints and conditions that are in some way stress related. Every week, over 115 million people take some form of medication for stress-related symptoms. Regardless of your position within your company—vice president, secretary, data-entry clerk, or even CEO—you are at risk. Stress does not discriminate.

A survey by Northwestern National Life Insurance Company found that twice as many workers today consider their jobs “highly stressed,” compared with workers in 1990. The survey also found that about one-third of respondents seriously consider leaving their positions because they feel their jobs are too stressful. About one out of every seven workers will actually quit to escape the stress.

The official definition of stress is a condition that occurs in response to actual or anticipated difficulties in life. Stress at home is difficult enough to work through, but for millions of people who find their source of stress is at work, life can be a real nightmare. That stress, if left untreated, can lead to a wide range of medical problems, including high blood pressure, sleep disorders, and back pain. Additionally, stress can play a role in circulatory diseases such as coronary heart disease, sudden cardiac death, and strokes. It can increase your blood pressure, constrict your blood vessels, raise your cholesterol level, trigger arrhythmia, and speed up the rate at which your blood clots.

Even if your work is something you would normally enjoy, allowing different work elements to wear on you will wear you out. So if you are feeling stressed on the job, keep these tips in mind:

Manage your time Many people get stressed because they have trouble completing tasks on time. Look at your schedule and set your priorities. Know your own capacity, and don’t willingly take on more projects than you can reasonably complete.

Learn how to deal with conflicts When dealing with a difficult situation, keep your cool. Take a few minutes to calm down, and ask advice of people in your business who have successfully dealt with similar problems. Elevated tensions create stress.

Fit exercise into your daily routine Exercise is a great way to relieve stress, so take advantage of extra-long work breaks or the time between work and dinner to “get moving” before you get on with your evening.

Eat healthy Stop eating junk food and fast food for lunch and snacks at work. Your body will cope with stress a lot easier. Reach for a piece of fruit instead of that bag of chips.

Express your emotions Don’t keep your feelings bottled up. Talking to a friend or a coworker about your feelings is a great way to combat stress, but choose wisely—participating in workplace gossip may increase your stress, not release it!

By Jon Kenton

Making decisions is a fact of life. We make many every day—what to wear, eat, or watch on TV. Business-decision making is one of the key elements necessary to build and manage a successful business. Although these decisions tackle more heavyweight topics, they nonetheless must follow the same process as making everyday decisions. We must assemble all available facts, assess the situation, develop alternatives, and then choose one of them.

The ability to consistently make good and timely decisions is based significantly on the availability and accuracy of the data and information you have—a solid, up-to-date fact base. Business and competitive intelligence are two of the primary strands required by most businesses. Whether you have the staff and resources to have a permanent function or outsource to specialists as required, the benefits from gathering intelligence cannot be underestimated.

Business intelligence

Business intelligence is all about understanding as much as possible about the markets you focus on and the business and economic environments in which they operate. Before starting a new business or expanding into new markets, the creation of a business and marketing plan is necessary. A vital part of such a plan—business intelligence—helps to paint the opportunity picture. It also enables the construction of a model that can evaluate business outcomes based on potential changes in the environment. There are two main elements: target markets and environment.

Target Markets

Target markets are the definition, size, and growth of the market your products will serve. For them to be most useful, they should be divided into segments in order to identify which parts of them may be most attractive to your business. Take the automobile market, for example. It is subdivided into categories—compact, midsize, SUV, truck, sport, and so on, and there are other attributes such as economy and luxury. Each category or segment has its own specific attributes, for instance, 2WD/4WD, petrol/diesel/hybrid, manual/auto. For each combination, it is possible to identify how many units will be sold in a given period. Multiplying this by a price factor leads to the market size in dollars. No matter your business type, you can identify divisions and segments relevant to you, and will be able to associate unit and dollar volume estimates.

Environment

Every business is affected by environmental factors that it cannot necessarily control. These factors may positively or negatively have an impact on potential revenues and profits. The key here is to identify which elements will affect your business and how they interact with one another, as well as with internal factors that you can control. For example, if demand is less, should you lower prices to stimulate sales?

The environmental factors will be different for every business, and some will be more obvious than others. In the following examples, consider your environment and write down the factors that affect your business. Keeping a watch on them will let you plan better.

Interest rates Lower rates mean cheaper lending and more cash in your customers’ pockets, as well as cheaper borrowing costs for your business.
Exchange rates Foreign exchange rates can lead to a more or less healthy tourist trade, which is important for businesses such as hotels, restaurants or anybody catering to visitors.
Weather Rain illuminates leaks and is therefore good for the roofing business; not so good for golf courses. Extreme heat is great for AC companies and ice cream and cold drink sales.
Regulations Think of how tax changes might affect your business.

One of the most crucial environmental factors is the existence and activity of one’s competition. This leads us to our next topic.

Competitive intelligence

Simply put, competitive intelligence focuses on identifying and tracking all the other companies that offer the same or similar products and services as do you. When considering the competition, it is important to not ignore the “similar” category, as these represent valid alternatives, even if you don’t think so, that a potential customer of yours may choose. It is the information gathered from competitive intelligence that allows you to make decisions about positioning your product in the eyes of your customers to highlight why they should buy your product or service rather than one of the many others.
Does your product have distinctive features? Maybe it’s made from 100 percent recycled material (attractive to the “green conscious”) or is significantly faster, smaller, or lighter (all the better for portable items) than your closest competitor. If so, highlight these differences in your marketing materials and efforts, and make sure your potential customers can see the benefits and know they won’t be able to get the same anywhere else.

There are many questions that competitive intelligence aims to answer. Develop your own list. Here are a few to get you started:

•    How many competitors are there in the same geographical area as you?
•    What products do they have?
•    How do their products and services compare to yours in such areas as features, prices, and quality?
•    Does you market have seasonal dynamic pricing? If so when do your competitors change their prices, and how much do they change them?

When it comes to the bottom line, revenue and profits are generated based on a sound strategy and plan, and the many decisions that are made along the way. Good decisions mean good business. If you want to make good decisions, you need all the facts, so go out and collect some intelligence!