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: , , ,

What can you learn from Zappos.com’s $1.6 Million Mistake

May 27, 2010


If you are not standing by your core values at the time of crisis and instead take a myopic view of the situation you will miss out on building a long-term, thriving business. Just look at what Zappos, the popular shoe site, went through on May 23, 2010. It lost $1.6 Million dollars within matter of hours. But it’s what it did afterward that is the real story.
For those who don’t know Zappos; it is an online web site that sells shoes. In the process it has built a Billion dollar business!! It has done this by focusing on core tenets of providing exceptional customer service at any cost. Amazon.com just bought the company last month for $928 million.
So what happened?
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Filed Under: Customers, Management, Marketing, Sales 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: , ,

Pros and Cons of Multi-unit Operations

May 25, 2010


Many of the business owners who expand from a single unit to multi-unit operations fail and even end in a worse situation than before. It’s human nature to think of a simple math – if you are making $100K from one unit; you should be able to make $200K from two, right? They may go even further thinking that the outcome should be more than $200K when you include all the synergy you can derive from multiple units.
Even though there is some truth in this argument the reality is operating a multi-unit business is hard work. You need to think long and hard before expanding and consider the pros and cons of multi-unit operations before making a decision. Below I have tried to highlight some of the key points to consider in terms of the benefits and pitfalls.
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Filed Under: Management, Operations, Sales 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: ,

How to Make Partnership Work

May 19, 2010


Statistics show that more than half of partnerships usually end up in failure. This is a reason enough to discourage many would be partners from getting into business with partners. However, it doesn’t have to be this way. Given sufficient precautions the partnerships can not only avoid failure; but can thrive.

There are a number of successful partnerships at a larger scale that have worked well. For example, the triumvirate at the helm of Google – Sergey Brin, Larry Page and Eric Schmidt has grown the company’s sales to more than $23 billion in 2009. So what makes a partnership successful and how can you use it in your situation? Below we have identified several traits of successful partnership from our own experience and that of others.
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Filed Under: Buyers, Management, Operations Tagged With: , ,

5 Reasons to Establish Partnership

May 17, 2010


The failure rate of businesses with partnership is much higher than those managed without partnership. So why would anyone want to get in the partnership? Despite what statistics shows there are some valid reasons why you should consider establishing partnership. As I mentioned in my previous blog there are pros and cons of partnerships. As long as you take steps to make it work you can get what you want out of partnership.
Here are 5 reasons why you should consider getting into partnership. In some cases there may be multiple scenarios depending on the situation and number of partners involved.
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Filed Under: Buyers, Finance, Management Tagged With: , ,

Pros and Cons of Partnership

May 13, 2010


Many people would love going in the business with a partner for variety of reasons. At the same time you will find equal number of others who hate the idea of working with a partner and losing independence. What is it about the partnership that brings different reactions from different sets of people? In this article we will highlight the pros and cons of being in a partnership.

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Filed Under: Management, Operations Tagged With: , ,

Welcome to Angel Business Advisors Blog

May 10, 2010

Angel Business Advisors
It was more than a year ago when I sold my small business to focus on family and personal life. The journey for me had started 5 years before that and it was a heck of a ride. I saw many ups and downs – challenges, opportunities, excitement, frustration all wrapped in one package. I know most of you are thinking – “Are you talking about you or me.”

Since the time I sold my business I have been inching to go back those exciting days  – something that would give back to the small business community I dearly love and share my experience and knowledge with those who may still be enjoying the ride or thinking about jumping on board.

And so I am jumping back in the small business world with this blog along with my consulting / advising business. This blog is about small business – be it in the form of a franchise or stand alone operation. I plan to cover a variety of topics that are on top of the mind for all business owners. These include; but not limited to, financing, purchasing, marketing, operations, customer service, employee relations, and overall management of small business. In short, this blog is targeted to the Chief Everything Officer of a small business – YOU!!  If you are an existing business owner or thinking about starting a business you will benefit from this blog.

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Filed Under: Management Tagged With: