7 of the Most Important Things to Know When Joining Any Online Business

We live in a world where times are getting harder and harder. More and more people are losing jobs because of the struggle the world is going through right now. Because of this, people are now looking for more ways to generate an income. The one way everyone seems to consider is starting an online business. In fact, Forbes Magazine says that approximately 40 million people will look into starting an online business.

There’s a reason why online businesses are becoming so popular. Unlike a regular brick-and-mortar business, online businesses gives the entrepreneur the ability to leverage time. Also, with an online business, it is possible to generate multiple streams of income. The sole reason most people are looking to start a business online is because of their financial situation. Frankly, these online entrepreneurs couldn’t be more right in starting an online business to get their financial situation to how they want it.

Unfortunately, though they are making the right move to get into starting an online business, people jump in too fast. What I mean is that people try the first opportunity they see. The right way getting into an online business is like a brick-and-mortar business: Research must be done! An entrepreneur cannot just jump into any business.

What separates successful online entrepreneurs from the ones that constantly jump into an opportunity and find themselves back where they started, is the research they put into an opportunity before jumping into it. There are very important factors to consider when starting an online business.

The first thing an entrepreneur must consider is the product of the business. What should be considered is if the product is unique and high in demand in the marketplace. Let us consider the nutritional supplement industry. If you’ve been looking for business opportunities, you have probably noticed all the vitamins, juices, pills, etc. that you can push. The question to consider is this: “Does the people need another vitamin in their life?” The answer should be no. The reason is because there are millions of them out there which means competition. Would it be easy selling vitamins to a person if that person had seen most of the vitamins out there already? Think about it. The demand for vitamins are high, however, the top dogs in the health industry have probably sold them to most of the market. So, find a unique product, that hasn’t been around for too long, that has high demand. An example would be education. Everyone wants to be educated, but not everyone is willing to provide it. So, you have something unique to provide, with a very high demand. Looks like success to me.

Another important thing that must be considered when joining any business is it’s compensation plan. It has to be lucrative. Most companies out there may seem like they have a very lucrative compensation plan, however, the truth is it really isn’t. You must find a company that is willing to pay you high up front, and then high in the backend. Most companies out there either pay low in the front end and high in the back end or vice versa. A great opportunity pays high on both ends. Why do you need a high commission on both ends of the business? Your front end commission has to be high because it’s the money to keep your business going and growing. The backend is your actual pay for your hard work. It’s the one that keeps you rich. By the way, make sure it’s residual. Meaning, for all the hard work you’re doing now, you will forever get paid for it in the future.

One of the most overlooked aspects of a business is it’s marketing system. When you jump into a business online, you have to find a marketing system that works. Frankly, without a marketing system, no matter how good the product is, no matter how much demand there is, if you can’t get that product in front of whoever it’s for, you won’t make those high front end and back end commissions. Think about it: How else will you make sales if you can’t get it in front of the people who need your products? You see, a marketing system is so important, that it has to be duplicable. The business you’re considering jumping into has to have a proven marketing system that YOU can duplicate. Think of it like this: If you had a product to deliver (marketing), would you walk to that person to make that delivery (a system to market), or would you do what the successful competition is doing and use a car (another system to market)? Find the business with the car!

So, you have a unique product with high demand of it, a better compensation plan than you yourself could have thought of, and the best marketing system in the world. Is it time to join? No! Just because you have these three elements of the business does not mean you have a great opportunity. You also have to look at the leaders of the company. You have to look at the managers. It’s imperative that the leadership of the company be investigated first. Time and time again entrepreneurs find a business opportunity, work hard at it, start to see success, then the owners (management) just close shop. Now what? You see, it is important that you have leaders who will stick with you. Find out what management is all about. See how long they’ve been in business. Check where they’re coming from and do they even have success at all.

If you’re looking for a business opportunity, you would want an opportunity where it can go global. If you think of all the successful companies, brick-and-mortar or home based, you will notice that probably 95% are global. What does that mean? It means that the company is so successful that everyone in the world wants it. If a company has no intentions of going global, then there’s a big possibility that somewhere along the line, success will stop. Not having global intentions means that the company can’t grow once maximum success has been reached. If the company is already global, then that’s just one less thing to research.

Another great factor that should help you make a decision is if the company you are considering gives back to society. You see, a company that gives more than what they take is what keeps they’re customers. Besides, wouldn’t it feel good to know that you are part of a company that isn’t in it for the money, rather, for the people? I think anybody that is good inside the heart, would.

The last, and probably the most important thing to your success in a business is it’s support system. What happens if you get into a business and get stuck? Where will you go? Who is going to push you? If you try to do things by yourself, you’re most likely going to get to a wall you can’t climb yourself. Sometimes, you need someone to help you get to where you want to be. So support is very, very important.

These factors is what an entrepreneur must know before jumping into any business. If you can find all of these factors in a business, then the chances of you being successful is better than those who don’t try to find these factors in a business.

The 5 Phases of Selling a Business

Did you know that in 1978 it only took 57 days to sell a business? Compare that to today, when you’ll see three out of four businesses NEVER sell, and the average time to sell is almost a year.

There are ways that you can more effectively sell your business. This article outlines a 5-phase strategy for selling a business more easily and with less hassle.

The Upfront Work

You’ll see below that what you do before you start to sell a business is as critical as what you do once you put your business on the market. Preparation is critical to successfully selling a business, as is having a clear and concise process. A good business broker will understand this, and won’t have you sign a contract until you fully understand how businesses get sold today.

Phase I – The First Meeting

Those business owners who take the time to do all the preparatory work of selling a business stand a much greater chance of actually selling, and will sell for more money with better terms.

In the first meeting, your business broker and you will discuss your financial history, your employees, and your market. He’ll try to understand where you’re strong in the market, and where your competition is stronger. Ideally, he’ll already know your market, perhaps better than you.

The goal of the initial meeting is to see what you need to do to make your business attractive to buyers. It’s a waste of your time (and money) to just sign up with a broker because he says he’ll get your asking price. Remember that 3 out of 4 businesses don’t sell because they’re not in a position to sell.

Your broker should give you an honest assessment, and let you know if you need to go back and add value to your business before proceeding.

Once you’re ready, you’ll move to Phase II.

Phase II – Learn More, Do Research, and Add Value

Phase II is where your business broker starts to take over. He or she will do a tremendous amount of research, including analyzing five years of your financial records. He’ll perform a financial recast for you, research what has recently sold in your area or market, and then hand you a short list of specific ways that you can add value to your business before putting it on the market.

This phase is crucial to your success. You’ll take the time to “recast” your financials into reports that are easily digested by potential buyers and their banks. You’ll want to put all your financial records in terms that enable them to quickly see if the business will give them the profit and income they want.

Taking the time to add value, even if it’s just on paper, can make or break your sale in the long run. You won’t have to do everything your broker successes, but it’s a good idea to at least clean up your financial records so that there are no hidden problems for the buyer.

In Phase II, you’ll decide when will be the right time to sell your business. It may turn out that the best time for you to sell is five or more years down the road, after you’ve done all you could to build value and prepare yourself and your family for the sale.

Everything has to be put on the table during this phase. You want to provide the buyers with all the information they need to make educated decisions about buying or not buying your business. Time spent wisely in this phase can cut months off of the due diligence phase.

Phase III – Marketing Your Business to Buyers

There are six distinct steps in this phase.

Step 1: Get the agreement signed

You should not have signed an agreement with your business broker before this phase. Why? Remember that I said that you might not be ready to sell for a few years? Your agreement with the broker is a short-term (usually a year) contract to sell your business. It’s in yours and your broker’s best interest to only sign the agreement when you’re ready to sell.

Step 2: Create the marketing materials and package

When you’re ready, your broker will create a marketing package that contains everything prospective buyers need to make a go/no go decision.

The marketing package is a 50+ page “book” that includes all your relevant financials, detailed information about your business, information about your employees and company, and even photos if applicable.

You’ll include relevant plant information, equipment lists, leases, and contract arrangements. You’ll also provide relevant information about the potential growth of the business, the industry trends, and potential issues that may cause problems down the road. Full disclosure is vital to your successful sale because if there’s a problem or issue, the buyer WILL find it during the due diligence phase.

As you can imagine, your business broker will spend a great deal of time preparing your marketing package. However, the hard work that’s put into this phase will reap great rewards in terms of the price and terms you get for the sale.

As your broker is creating the marketing package, he’ll simultaneously be putting together a pre-screened list of potential buyers.

While many brokers send information to potential buyers one at a time, you’ll want to find a broker who contacts all potential buyers simultaneously. I’ll explain why in a moment. This list should be reviewed with you before any materials are distributed.

Step 3: Market the business

This is where things get interesting. Your broker will send all potential buyers a short message (phone, email, mail) announcing the availability of your business. Your broker may also list your business for sale on one or more online “market places” that list businesses for sale. While these can work well for small businesses, they are far less effective for the “middle market” (businesses that sell for over $1 Million).

What they receive is a “blind summary” that gives them enough information to decide whether to proceed and get additional information. Your privacy is protected, and they won’t discover who you are until they’ve signed a non-disclosure agreement and have demonstrated that they have the financial means to buy your business. That final step of demonstrating financial ability is even more important today than it’s ever been in the past.

Step 4 – Refine the buyer list

Now, you’ll choose a short list of potential buyers with whom you’ll want to move forward. Ideally, you’ll have at least two and up to four or five very good buyers. These are the buyers who truly understand the value of your business, and are in a good position to move forward with the sale.

Step 5 – Meet with the potential buyer(s)

Now, your broker and you will meet with the potential buyers for an hour or two. They’ll want to get a better understanding from you about your business, the opportunity, and the risks. They’ll ask some very pointed questions, which is why you should spend so much time up front in preparation.

Any objections or issues they uncover may cause them to turn away or bid a lower price.

Step 6 – Put the business up for auction

Your goal is to create a “bidding war” for your business. You’ve talked with two or three buyers, and each is convinced that they’ll benefit from owning your business.

They’ll submit bids, all at the same time. You provide a specific date for bid submission so that all bids arrive at the same time.

This enables you to easily compare all the offers that are on the table, see how they stack up against each other, and make a wise selection in choosing the best offer that also has the best likelihood of completing!

Phase IV – The Due Diligence Phase

The due diligence phase of selling a business is really the toughest part, and it’s where most deals fall apart. The reason you spend so much time up front, and why you fully disclose the good, bad, and ugly about your business is that buyers WILL find all the issues during this phase.

You run the risk of the buyer backing out or reducing their offer to compensate for the new issues they’ve uncovered. Remember that the buyer’s attorneys and bankers are actively looking for potential problems and risks, so if you’ve already disclosed everything, they will have nothing to find.

They’ll do financial audits, environmental audits, information technology audits, and generally invest quite a bit of time (months in some cases) looking through your business.

Phase V – Closing the Deal

Usually, the final phase starts at the same time as the Due Diligence phase. You’ll get all the paperwork in order, conduct final negotiations, draft additional agreements and exhibits, and get everything ready to go for signing and closing of the deal.

Then, once the funds have been put into your bank account, you can start the party!

For more information about selling your business, please contact Kris Karlson at Bowman/Hanson, California Business Brokers.

How to Start Your Own Online Business Empire

Forbes Magazine approximates that 40 million people will want to start their own business online. The reason is because more and more people are realizing that entrepreneurship may be the only way to their heart’s desire. That being said, more and more people are wondering how they would go about starting a business online.

Starting a business online is actually easier than what most people think. It’s actually easier than starting a business offline (brick-and-mortar). The reason is because starting a business online doesn’t have the big headaches that come with starting a business offline. Starting offline, you have to get A LOT of money, find a commercial zoned space for your business (the zoning has to relate to what type of business you’re running), and sometimes, finding employees which just brings in more headaches. On the other hand, starting a business online is almost completely opposite. You don’t need too much capital (money to start a business), you could work at home (or anywhere you can get internet), and you can do most of the work yourself. Though all that may be true, still, starting a business (online or offline) first requires research.

Research is probably one of the biggest hurdles future millionaires have gone through. Even if you were to join a home based business, like an MLM (Multi Level Marketing) for example, you would still need to do some research. What I mean is that there are things you still must consider when joining any business (especially with all the HYPE going around on the internet). If you would like more information on how to find the right business opportunity to join, then read my article:

You see, when business owner does thorough research in the beginning, he/she is able to plan their business much more effectively. Trust me, planning the business is very important. Without a solid plan, there will be no solid business. In fact, lots of people get so excited in starting a business, especially the ones that join already formed businesses (MLM, Network Marketing, Business Opportunities), that they inevitably forget to plan right. Here’s a saying in the business that may get you in the right mindset of entrepreneurship: “If you FAIL to PLAN, you PLAN to FAIL.” Simple as that.

So now, you’re probably wondering what should you research. Well, before we get into that, you must understand that a business is, in all it’s purity, a solution to a problem. Think about it, McDonalds has the solution to the “I’m hungy. What should we eat?” problem. Home Depot has the solution to improve your home. Any business you see out there, is a solution to a problem. So, what you need to research is what solution are you going to provide? Are you going to provide great advice on how to get more healthy and fit? Are you going to provide a solution to those who need money? Are you going to provide a solution to those that are having problems with their spouses?

There are a lot of problems out there. However, one person can’t solve them all. But then again, one person can solve one problem. What abilities do you posses that might be a solution to a problem? What passions do you have that may constitute as a solution to a problem? These type of questions are the questions you ask when you are starting a business. What you are essentially doing is trying to find the right market. For example: Maybe you love the idea of weddings. Well, then your market is, yes you guessed, The Wedding Market. Simple right?

Yes, it is simple finding a market. However, that’s just the first step. The next thing to do is break it down. You need to find what we call a “niche” in the market. The reason being is because just wedding is too general. Lets put it this way: McDonald’s is in the fast food industry (Wedding). However, they don’t serve all kinds of fast food. Their specialty are hamburgers (Niche). So, their Market is fast food, and their niche is hamburgers. So with the wedding market, the niche can be wedding dresses. Another niche of wedding would be wedding planning. There are a ton of niches in each market. The simplest way to find the one you’re going to be successful at is one where you will have passion about. After all, you got to be enthusiastic about your product right?

After the initial research stage, your next step would be to open up shop. You’re probably wondering how to do that. It’s simple really. First, you have to think a name of your shop. This may become a little difficult. I say so because, as stated in the beginning of the article, about 40 million people want to start an online business. That means, the name you want for your shop can already be taken. Just get a little creative, and you could end up owning a BRAND name. Now that you have a name, go register it. The name is what we call a domain. A domain is this:

www.yourshopname.com Register your domain. There are lots of places to do this, but the one I recommend is namecheap.com (it’s the one I use). OK, now that you have your market and name, you need somewhere to put it. This is what we call a host/server. Think of it as the real estate if you were opening an offline business. There are a lot of hosting services out there. It really doesn’t matter where you go for hosting. It’s really your choice. I would recommend justhost.com because it’s what I use.

Alright! You got a market, a shop. Now, you need traffic (potential customers). Getting traffic is what we call Internet Marketing. Marketing is the hardest part in the online business world. However, once you master it, you are set for life. Once you master Internet Marketing, you can go beyond what you are selling, and sell anything to anyone around the world while you sleep. Sounds good huh? Unfortunately, it’s not easy to master the Internet Marketing skill. It takes time, diligence, and hard, hard work. Fortunately, all the time, diligence, and hard, hard work will pay off 100x in the future. Think of it this way, work hard for 40 hours a week, for a year or two, and reap the benefits for life! So how do you market you say.

Well, that is about another 500 articles to write. What I recommend you do is Google “how to internet marketing” and you will find 1,000,000 answers to that question. Internet Marketing is the meat of online businesses. It’s what makes you work. It also is what makes you rich. If you really want more information, take a look at my sig on the bottom and it will tell you exactly what I do.

So now you know what it takes to start an online business. It may seem hard, but it really isn’t. As long as you set your mind to it, you can make it happen. Trust me, in this business, mindset is what counts. The desire to do something and change your life for, not the better, but the best is all you really need to succeed.