How to Overcome Challenges of Starting a Business in Bad Times

June 1, 2010


In our previous blog post Is this a Good Time to Buy a Business we argued that the difficult economic times present an excellent opportunity to start a business. There are a number of advantages and opportunities that bad economy; like current one; provides. The advantages include less competition, good talent available at reasonable salary and others.
While it is true that this is a good time to start a new business you cannot ignore the challenges that you will be facing in starting business in bad economic time. By understanding the challenges and preparing yourself to meet them head-on you will improve your success rate. Here are three most difficult challenges in our mind along with suggestions on how to overcome them.
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Filed Under: Buyers, Employees, Finance, Management Tagged With: , , ,

How to Succeed at Multi-unit Operations

May 26, 2010


Despite its lure of higher sales and profit the multi-unit operation is hard work and can be prone to failure. If you are not careful you may end up losing it all. In our previous blog we laid out the pros and cons of multi-unit operations. Here we will outline some of the steps you can take to make multi-unit operation succeed. I will say it again – operating multi-unit business is challenging. At the same time if you take care of the pitfalls that come with it you can not only succeed; but thrive.

The basic philosophy you have to adopt when moving from single unit to multi-unit operation is to take advantage of your scale; while at the same time standardize and apply the proven formula at multiple locations. These are the principles behind the concept of franchise; which is essentially multi-unit operation on steroids. If you want to learn how to succeed at multi-unit business; study how any franchise you operates.

Let’s look at the steps you need to take in more detail:

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Filed Under: Employees, Finance, Management, Purchasing Tagged With: , ,

Do NOT Hire a Close Friend to Work in Your Business

May 20, 2010


Here is an advice for all small business owners – DO NOT HIRE FRIEND OR RELATIVE TO WORK IN YOUR BUSINESS, if at all possible. I know it sounds harsh and may be even counter-intuitive. After all, in small business you need someone who you can trust with your money and who else would be better suited than a close friend or a relative who you know very well and can trust.

I am not arguing with the benefits of having a trusted friend or relative in the business who can watch for your good. However, you have to weigh this against the downsides that come with it. From what we have seen and experienced the downsides exceed the benefits; which calls for avoiding the situation, if possible.

So what are the problems and issues that come along with the hiring of a close friend or a relative in your business? Wall Street has good examples of the problems here. Here is my list based on my experience and that of some of our business colleagues:
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Filed Under: Employees, Management Tagged With: ,