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Starting a Business


Gautenger
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My experiences of starting a business.

This is a series of articles I posted on the SACanada site a while back which many folks found helpful, so I will repost them here for the benefit (I hope) of others in the same boat. The advice is taken from a book I am writing and am going to refine and add things as I go along so it won't be exactly the same as the original posts.

Please just remember that these posts remain my copyright and cannot be copied or used elsewhere without my permission.

First off I need to say that I am still in SA, so the advice / opinions I give here are general in nature. They eminate from my personal experiences and are often biased because of that. Please post your experiences / opinions on what I post so that others can also benefit from your experiences.

Here goes Post no.1 :

Having started six business in my time, some successfuly, others very unsuccessfuly, I feel that I am able to give some advice to those thinking of starting a business. Whether this is in OZ or elsewhere.

Starting a business from scratch is probably the hardest, but most rewarding thing you could do. There are however a few factors you need to consider before starting a business. These are :

1.) Do you really want to start a business or do you just think that it is an easy way to make mega-bucks?

You don't just start a business on a whim, they rarely work. You must always have wanted to start a business. If your mind is not on the business, but on the money you think you are going to make, forget it. Running a business is not about the money - full stop! It is about doing what you want to do and at the same time giving other people what they want/need. If you do that successfuly, the money will automatically follow.

2.) Starting a business is a high risk decision.

Statistics prove that most businesses never survive past their first three years (something like 70% - 80% don't). Of those that are left, another 70% - 80% will fail by the 5 year mark. The same goes for the 10 year mark. One of my businesses is now 10 years old and I can definately confirm that statistic. We started the business with nothing except personal debt. For the first three years we never knew where our next meal was comming from as every cent went to paying our debts. To this day I don't know how we did. There wasn't a day where we didn't think of going out to look for jobs again. We never did though - we were determined to show those doubting Thomas' at our previous work that we can make it! The turning point came when our debts were paid off (after three years). Suddenly we were making more money than ever before. If you want to start your own business, reduce your risk by first paying off your debt.

3.) Know what you want to start

This is probably the most difficult decision to make. The standard advice that most people will give is that you should start something you know a lot about, preferably something you are an expert in. I do agree to a certain extent - it takes one less stress off your shoulders, but starting a business that you know nothing about is possible, we did it (several times). Just realise that it is going take you longer to get the business off the ground. Let's say you have always wanted to own a butchery, but have never sliced a piece of meat in your life. What is stopping you? Buy an existing butchery or go on a butcher course, or make sure that you employ people that do know how to do the meat preparation thing, you can them learn from them. The important factor is that your heart must be in the business. To start an engineering consultation business because you are an engineer, but are sick of engineering, is suicide - I give you a year max because you simply won't put in the effort that your new business is going to demand from you.

There are many other factors to consider when starting a business, I will post them in segments otherwise this post becomes too long.

This segment may sound a little negative and discouraging, but remember that it is only a section of what you need to consider. Starting a business is a life altering process, you cannot take it lightly. Knowing what lies ahead, by talking to those that have been there, will prepare you for that process.

Working for myself is the best decision that I have ever made and would do it all again in a heartbeat.

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Part2

In my first post I mentioned a few questions you need to answer before you even decide to go into business. These are very important, but not nearly as important as the next three :

4) Does your family support you ?

Starting and running a business will be the most time consuming task you have ever undertaken. Any businessman will tell you that they now work much longer hours and way harder than when they worked for a salary. This is mainly because you are now the boss, receptionist, tea lady, delivery man, bookkeeper, salesman, you name it. Very few businesses have the capital and resources to immediately employ the ideal amount of staff, so you become the staff. This takes away a lot of the time that you would normally spend with your family. If they are not actively involved with the business, they MUST support your venture 110%, no matter how tough things are going. Every business has it's up's and down's, even big business, your family must be there to encourage you through the down's as well as praise you during the up's.

5) Protect the downside

This is a trick I learnt from Richard Branson of Virgin and it is used by all successful businesses. You are going to take the risk of starting your business, this can potentially bring you great rewards. By taking that risk however, you may loose everything. To save yourself from this you need to protect the downside. You do this by formulating an exit strategy BEFORE you start the business and update it as you go along. In your exit strategy you must decide (realistically, based on your marked research) how much $$$$ you are going to put into the business, how long it should take to break even, what are you going to do in the short term if things don't work out, what are you going to do in the long term to replace what you have lost, etc. When Richard Branson started Virgin Atlantic (normally a very high risk decision), he protected the downside by signing a lease on the Boeing for only one year with an option to purchase the plane after that. He gave himself a year, decided that his other business could carry the costs for that year, and if it failed he could give the Boeing back. Please don't start a new business using every spare capital and equity you have, the risk is simply to high. Rather look around for something that will cost less. There are many, many businesses you can start with practically no money that can bring in a decent income almost immediately. Especially if you know nothing about that industry, the risk to you should be low enough to be able to afford a few mistakes while you learn the ropes.

6) Get ready to make mistakes

No amount of studying or book reading is going to fully prepare you to run a business. Really knowing how to run a successful business comes only through experience. This is a problem in any line of work, you guys who have emmigrated already can attest to the ‘lack of local experience' problem. When you run your own business though, almost every mistake you make will cost you money, money which you probably won't have. For this reason it is important to seriously overestimate the amount of money you will need to break even and seriously underestimate the amount of business you will get in. This is probably one of the biggest mistakes entrepreneurs make - to overestimate the amount of business their new venture will generate and underestimate the cost of setting it up. This is not the only mistake that you will make though. I said in point 3) that starting a business in your field of expertise will only take one stress off your shoulders, let me explain. As you will suddenly find yourself becoming the chief cook and bottle washer, you will suddenly need to learn how to do the books, the marketing, etc. Stuff that you have never done before. Most of the time it is learnt through the School of Hard Knocks.

In my next post I will talk about a few more points you need to ponder before starting your business.

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Very interesting - thanks! We had our own business in RSA so I can agree with what you've said. In addition, being actively involved in our business together with my husband, I must say that it is very difficult to share a business and a bed with the same person! We have a solid marriage - 20 years - and I did not think that going into business together would affect our relationship, but it did. As the business grew and became more successful, so did the stress in the office and as a result, also in our marriage. There's no way you can not take your work home - or leave home issues at home.

We are now talking about starting our own business here in Aus again (but this time, one of us will stay out of it!) :) . Does anyone know the in's & out's of starting your own business in Aus? (Requirements, legalities, maybe websites/books with info etc.)?

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Thanks for the comments Riekie. I met my wife just as I was starting my first full time business, so she was involved from day one. We have for the past 10 years been working from home side by side so I know where you are comming from. It is not easy seeing each other 24/7/365. We nearly murdered each other in the beginning, but you come out stronger at the other end and that is good for the business & the marriage.

As far as the links are concerned, I will start a new thread with links, then folks can add them as they find them.

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Part 3

Here is another point to consider before you can start planning your business,

7) Get ready for a mind set change

When you work for a salary, you seem to live for Fridays and the end of the month. You go home every night and only think about work over coffee the next morning when you sit down at your desk. Tea and lunch times are sacred and yearly holidays are taken for granted. Not so when you work for yourself. You will find that you will see and relate everything around you as it impacts on your business, eg., the normally mundane task of driving to the mall to do some shopping now becomes an opportunity to spy on your competitors - how many customers are in their shop, what are their specials, how are they advertising, etc. And that's just on the way to the mall! Next you will find that every waking hour will revolve around your business. It becomes impossible to separate your private and business life because you are the business. I have forgotten what lunch times are, let alone tea times. I actually find myself upset when I get to a supplier and their workers are on tea break and I have to waste my time waiting for them to finish their coffee. Lunch is eaten on the fly, if at all, and Coke is quicker to make than coffee. Holidays become a juggling act, trying to ensure that everybody will cope without you, while still ending up calling the office everyday to find out if they don't need anything. The phone invariably rings just as you are starting to relax.

Our first holiday was only after four years - we could only afford it then & our business couldn't do without us for a week because we were the business.

When you are a Mom & Pop business and you go away for a week or two, it means no income for that period. Are you willing to give up those traditional holidays by the sea in the beginning to get your business going?

This may sound just terrible, enough to put anyone off starting a business, but the amazing thing is - You don't want to separate your private and business life anymore, you don't care about lunch breaks or even holidays, you want the phone to ring while on holiday, in fact, you will find yourself using your holiday to plan your business activities for the next year. You are your business, your business is a reflection of you, you cannot and will not want to separate the two. Business is pretty addictive stuff!

If you have truthfully answered the preceding questions and the answers were all satisfactory, then you are ready to take the plunge.

Note If you are in the situation where you cannot go away for a propper holiday, why not go away for a weekend every now & again. Go somewhere close by so you don't spend all your time driving. You will see that if you don't go overboard, the weekend will only cost two nights accommodation more than you would normally have spent over a weekend. If you go camping the costs are next to nothing.

It is however important to ensure that you spend some time away from the business. It allows you to relax and see the business through 'fresh eyes' when you get back.

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Thanks for that - I think we can all learn a whole lot from it. (I can understand the "murder" bit - when you start shopping in the pesticide isles you should get worried..... I know!! <_< )

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Part 4

What are the steps in starting a business?

1) Decide

2) Ready

3) Steady

4) Go

1) Decide

This is not deciding what business to start, there should already be no doubt in your mind what sector you want to start your business in by the time you get to this stage.

You need to decide what format the business will be that you start. There are basically three :

a) Start from scratch

:lol: Buy an existing business

c) Buy a franchise

Generally the first being the most difficult and least expensive, the third being the most expensive, but easiest to get going.

In my humble opinion I would definitely not recommend that someone start up a business from scratch (first time business owner) when moving to another country. The pressure of starting up a new business AND a new life in a new country would simply be too much. If you would like to start a business from scratch (first time business owner), then rather get yourself a regular job for a year or so. Settle in a little so that your surroundings have at least become familiar. Most people I have spoken to agree with the 3 year settling in period. After that go for it.

If however you would like to start a business immediately, rather go for an existing business or even better a franchise. Let's not come to the wrong conclusions though, even these options pose their own risks. I will discuss these, and the positives of each in the following segments.

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Part 5

Buying an existing business

An existing business owner would not normally sell the business for the reasons I have discussed in point 7) above. There must be something wrong. Some reasons could be - other business interests (I have previously sold one of my businesses to gear up another), loss of interest by the owner, ill health, retirement, time to cash in, and of course the business may not be making enough money. In all except two of these scenarios the business will have suffered and I can guarantee that the books that you will be shown will not reflect the true incomes and expenses. This may sound like a very pessimistic statement to make, but I have seen it happen too many times to not warn you. Every business runs two sets of books, neither are wrong or fake, they are just optimized for the intended viewer. One set shows high profit for the Bank Manager, the other shows high expenses for Uncle Sam. Which set do you think the owner is going to show you?

On the upside, when you buy an existing business, it already has customers. The systems are in place that keep the business running and the staff all know where they fit in and what is expected of them. It is usually a case of walk in and take over. You then from day one have more time to spend on improving the business than building it. An existing business also has a certain level of income that can be relied on.

Things to look out for when buying an existing business are :

1) Don't just accept the book work, even if your accountant has said everything looks ok. Do your own homework. Phone the suppliers and talk to the representatives that deals with the business you are going to buy. They will give you an idea of how the current owners conduct their accounts - do they pay on time or late, how much do they spend on average, will they let you take over the account on the same terms, etc.

2) Speak to the staff and ask them what they would like to change when you take over. They are best equipped to let you know what the real state of the business is.

3) See how many competitors the business has and try to get an idea of the amount of market share your intended business currently has. Try to find opportunities that you can immediately and without extra expense, implement to increase the business's market share.

4) Look for ways to improve the business before you buy, eg., the business may be running at 100% profit with a 20% market share. You may be able to cut back cost without compromising on service & quality giving you 120% profit. You could then cut your price by say 10% while still keeping the same profit. Your customers get a cheaper price, you increase market share and thus your income increases.

5) Does the business already bring in enough take home profit for you to live off, or will you still need to grow the business more. If you need to grow the business to survive, can it easily be done, how long will it take, how much reserve money do you need to carry you for this period?

6) Will you be able to use your own personal contact base to pre-secure extra business if you decide to buy?

In the next post I will look at buying a franchise.

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Part 6

Buying a Franchise

Buying a franchise is generally an expensive option, but mostly a safer option.

Let's first look at what is a franchise. Someone has started a business and it is running very successfully. He decides to expand the business. He now has two options, open another branch by hiring premises, staff, buying the equipment, etc., or franchise his business.

To open another branch means high initial overheads and the problems associated with managing staff from a distance, but it can bring in just as high an income as the first branch. If he decides to franchise, then the franchisee (person who buys the franchise from him) will take most of the profit, but the franchisor (person selling the franchise) doesn't have lay out the initial expenses and receives a smaller, but steady income from the franchise.

Why would you want to buy a franchise and why is a franchise more expensive?

Firstly the franchisor charges you a sum to set up the business. This sum normally includes the actual costs of setting up the business, initial marketing of the business, training in how to run the business, the right to use the franchisor's intellectual property, the advantage of the good will associated with the business and of course of profit for the initial services provided by the franchisor. Most of this makes sense except the intellectual property and good will bit. Buying the right to Intellectual property (IP) is buying the right to use the franchisor's name, logo, slogans, knowledge, systems, etc. Good will (GW) is the amount of public recognition the brand has, eg., the better the product is known, the more likely the public will make use of it / buy it. If you now start selling that product, you will automatically get people that come in to buy it. You have thus profited from the good will of that brand. A well known brand like KFC charges a huge amount for IP and GW.

It is these costs that push up the initial price of a franchise. The advantage behind that initial cost is that you save way more than the price you paid in branding. Let's stick with the KFC example. If you start your own roast chicken business from scratch, you will have to spend huge amounts telling the public about your product. This doesn't only cost a lot, but it also takes time. People are creatures of habit and afraid of change. They would rather drive across town to buy a product they know than try a product nearby. This is why many companies hand out samples, this way the customer can try the product without spending anything or going out of his way to try it.

If, however, you pay ten times more for a KFC, you can be guaranteed that the customers will be lining up at your door on opening day, simply because they already know & love the product.

So here we have the first point to look out for when buying a franchise : Is the franchise established or not, and how does that reflect in the initial purchase price.

Many people try and franchise their businesses, the problem is that many of these businesses are not even established themselves yet. I have mentioned the stats for business failures in an earlier post. If you are buying a franchise where the entire business hasn't even been in existence for 5 years, you are taking a huge gamble. That business could collapse at any time and take you with it. If the business has been running for 5 or more years though, then it could be a good proposition. If the business has been running for more that 10 years, then it probably is a good proposition.

Beware of franchises that are charging high initial start-up costs and low, or no, monthly royalties. Chances are these guys know that the business doesn't make much money so they have to make their money up front. Also beware of franchises that charge high monthly royalties. The worldwide standard is around 13% of turnover or less. Anything more and you will be living on the bread line while the franchisor is coining it. A franchisor that cares more about his franchisees and the business as a whole will charge a lower royalty (6% to 10%) as he knows he has a good business where the franchisee can make a good living, while he can also make a good living from many franchisee's royalties.

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Thanks Gautenger!! <_<

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Part 7

Buying a Franchise (cont.)

If you have looked at the franchise and seen that they are well established and that they are charging a fair market price for it, what else do you look out for?

What is their franchisee turnaround

Although it is inevitable that franchisees will come and go within a franchise, it is the circumstances that surround the franchisee leaving that you should look for. Any franchisor that is not willing to give you a list with names and telephone numbers of existing and past franchisees is not worth investigating further.

As with any business, a franchisee that is happy will not sell or dispose of his franchise unless there is something wrong. This could be - an over demanding franchisor, too high royalties, unprofitable business, or, the franchisor may simply have chosen the wrong person (this does happen), the franchisee has received a good offer for the business, retirement, loss of interest, the franchisee's personal expenses are higher than what the franchise can provide, etc. It is up to you to speak to as many people as possible, both existing and past franchisees, to gain a broader picture of the franchise. Just bear in mind that the franchisor that will not supply you with past franchisees contact details, or is mysterious about the issue, probably has something to hide. Also bear in mind that when speaking to past franchisees, that person will probably not admit to you that it may have been their fault that their business didn't work out, it is much easier blaming it on someone else. It often happens that a franchisee (any many other businessmen) either tries to live beyond the capabilities of the business.

One also finds that a franchisee, after settling down into the franchise, starts to feel that he doesn't need the franchisor anymore and feels that the royalties and restrictions needed to keep the brand image universal are a waste of good money. I will discuss this in the next segment.

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Part 8

What are the restrictions imposed on a Franchisee and what are royalties paid for?

When you decide to buy a certain franchise, you obviously really liked not just the product, but the whole business concept. The thing is, after you have settled down into the business, you start to see other ways of doing things. This is normal, you are growing as a businessman and starting to develop your business brain. You will then notice, with a shock that these brilliant ideas of your cannot be implemented as the franchisor will not allow you to. The first thing that goes through your head is that the franchisor is an :unsure: and it is your business, you paid a lot of money for it, and should be able to implement your changes. What you don't realize is that the franchisor has been in business a lot longer than you and generally knows better. He will probably have though of your brilliant idea years ago and implemented it too, only to find that it didn't work. If he is a good franchisor he will listen to your idea and tell you if it is a good idea or not. He will tell you that it has been tried and didn't work and why. He will do this so that you can learn from his mistakes - THIS is what you paid good money for.

If however your idea is a new one, and the franchisor feels that it is a good one too, then you will probably still not be able to implement it. The franchisor is responsible for ensuring that the public receive the same services and products across the entire franchise network. As I have said before, people are creatures of habit and will shop by you because they know they can trust your product to be the same as the last time. To implement everybody's ideas at each franchise would confuse the customers and drive them away. Let's say the franchisor thinks your idea is workable. He would first have to implement that idea at his company owned pilot store(s) to see what the reaction is, the profit margins, sustainability, etc. Only after this will he consider if it is viable to implement the idea across the entire network.

He has to consider the costs involved, to the franchisee, in implementing the idea. Each franchise is not equally profitable, think Delmas as opposed to Hatfield. If the idea puts an undue financial strain on the weaker franchises, then the risk is too great and the idea will be dropped. Remember that any new equipment that needs to be bought, etc., is for the franchisee's account. Implementing an idea at one store is easy and cheap, implementing at say 20 stores requires huge ad-spend for the franchisor, so the idea will have to be pretty profitable to justify.

This can seem like the franchisor is placing a strain on your business, but it is very much in your interest. The initial decision you took to buy a franchise, was definitely based on the idea that people would come to you to buy the product they know and love, so how can you now want to come and change that product? It's like shooting your cash cow. So, realise that if you buy a franchise, you are not buying a do-as-you-please business, you are buying the right the do business in the same, successful manner as the franchisor. If you are not prepared to work within these restrictions, then a franchise is not for you.

Then we get to the sticky point of Monthly Royalties.

You have paid the franchisor lots of money to open your business, but he tells you where to buy some products, you have to buy others through him, you are told exactly how to prepare the product, how to run the business, what prices to charge, how the shop must look, etc. Then on top of that you only see the rep once a month, he checks your books, and you still have to pay him say 7% of your hard earned cash. What for?

You need to bear in mind that although you now know how to run the business, before you bought, you knew didly squat, nada, nothing about the business. All you know is what the franchisor has taught you. When you signed on the dotted line, you agreed that you knew nothing about the business, where prepared to pay an amount upfront and every month thereafter for the right to know.

In return the franchisor has promised that he will teach you all he knows, he will let you use his trademarks that he spent a fortune building up, he will mentor you and let you piggyback on his success. In return the franchisor collects a Monthly Royalty and an Advertising Levy. He then uses that money to keep you in business !!! He develops new products, tests new markets, pays salaries to himself and trained personnel to assist you in your business. He even saves/invests some of that money to ensure that he stays in business. If his business collapses, then chances are yours will too as your supply chain is cut off. The Advertising Levy is used to advertise in places where a stand alone business could only dream of , like TV and radio.

After all the above, you can now see why I said in a previous post why you should never buy into a franchise that doesn't have monthly levies or restrictions. These are necessary to provide the franchisee with a meaningful back-up support network and ensure the sustainability of the entire franchise network.

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Part 9

You have now decided on a business to start, from here you move to the Ready stage.

Ready

The first and foremost question will be where do you get the money from to start / buy your business. You have a few options, some more risky than others.

Loan

You can loan money from various sources like the bank, friends, family, venture capitalists or guardian angels.

Most people immediately run off to their bank to loan the money. This is not always the best option, on the contrary, it is probably the worst option. A bank is a business and their product is money. As with any business they are trying to realize maximum profits with the least amount of risk. You now walk in with your brilliant idea for a business asking for a loan. The first thing the bank manager looks at is what is the risk factor involved. He knows that a good business can bring him in a huge return, but he also knows that he could lose all his money. Here are a few of the things the bank will assess :

a) Your previous credit and payment history

<_< Your current assets and liabilities

c) The viability of your business and that of similar businesses.

d) The banks own statistics on business failures in your geographical area and in your field of business.

e) Your ability / experience in running a business.

f) Your ability and experience in the field of business you want to start.

g) Your age.

The bank will not loan you a cent if the risks are too high. The bank will always require you to sign surety on a new business, as the business grows, you will build up a track record by which they can better judge their risk. They will want to be sure that if you fail they can come and collect your house, or whatever, to recover at least the amount they gave you.

To apply for a loan at the bank, they will require a business plan from you. What is that ?

Business Plan

A business plan is a document you set up before you start your business. It contains many items like your marketing strategy, your estimated cash flow, estimated expenses, break even analysis, analysis of competitors, proposed suppliers list, previous experience in the field, etc. There are many sites you can visit to learn more about setting up a business plan. Go to Google.com and search for "setting up a business plan". The business plan shows the bank that you have done your homework and are as prepared as possible.

Now I am going to throw a bone in the fan : I have never set up a formal business plan in my life and if I can help it, never will. It is not that I can't, I just feel that if you are able to fund yourself, then setting up an elaborate business plan as required by a bank is a waste of valuable time. I have to be very careful with my wording here as not to step on too many toes, so here goes :

I agree fully that you cannot start a business over a couple of beers on a Saturday afternoon, that is fateful !!! You can however start a business with way less planning than a formal business plan requires. As I have mentioned before, no amount of planning or book reading is going to fully prepare you to run a business. Most of your learning is done on the job, the hard and expensive way. Also sometimes one can get bogged down in all the planning as by the time that is done you may think that the business is just not viable. Whereas if you do a reasonable amount of planning and then jump in and just do it, you often succeed where it wasn't thought possible. Take the Wright brothers as an example. At the time it was thought to be impossible to fly, they said we will put all our efforts into it and we WILL fly. They also realized that the potential payout at the end would be huge. And after a hell of a lot of hard work and cash, they did fly! I have a personal example, t boils down to us climbing into a very competitive field where it requires hundreds of thousands of Rands to get into, and we did it totally differently without a cent and made a success of it. The bottom line is - sometimes you just need to get off your butt and do it.

In the next post I will discuss other loan options.

In the meantime, please feel free to comment on what I have said so far.

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Part 10

Before you rush off to your bank with your knee pads on to beg for a loan, why not first consider a few of the other options that are available to you. In my opinion, the most attractive of the loan options is a family / friend loan.

Family / Friends

Obviously this option is only open to you if you have a family member that has the money and is not stingy. You will still have to convince, no let me rephrase that, show that person you have a good business idea and the ability and drive to make a success of it. You will still have to do the ground work, like how much will it cost, what are the returns, what is the level of competition, etc., it will just be way less intensive than the bank is going to require.

I have made use of this option for two of my businesses, bless my Parents and Gran-in-Law's souls. Both times I offered them more interest than they would receive on their investments at the bank, but less than what I would pay on a bank loan. This way both parties ‘scored' out of the deal.

What you do have to realize though is that, that family member or friend is taking a huge risk in you. They are also demonstrating their trust and confidence in you, so you need to make pretty damn sure that you succeed. You can change banks, but you can't change family!

If you do decide to go this route, then do it properly. Set up a contract between the two of you which outlines payments, interest, penalties for non-payment, etc. It eases the lenders mind, forces you to make good on your promises and ensures that there are no arguments later on about this or that.

If the bank has turned you down, you cannot fund the business yourself and your friends & family are unable to help you, then you still have two more options.

Venture Capitalists and Guardian Angels.

Venture Capitalists (VC) and Guardian Angels (GA) can either be private individuals or companies. They are basically people that have the money and are looking for entrepreneurs with a good idea that are able to turn that idea into a healthy profit. They generally operate in one of two ways :

a) You prove that you have a good idea and can make a success of the business (Yes, through a business plan). They then lay out the money required. This is set out as a partial loan, the rest of the amount is converted into shares in your business. Once the loan is paid off you have the option to buy back the shares.

B) You prove that you have a good idea and can make a success of the business (Again, through a business plan). They then lay out the money required in return for a controlling share in your business, say 51%. They then effectively own the business, but you run it.

These options can be really good, if you meet up with a cool VC or GA, but also has huge disadvantages. Let's look at the advantages first : A VC or GA usually is willing to lay out more money than the bank is, is more interested in the long term success of your business, has contacts and business knowledge you can only dream of, automatically becomes your mentor and usually will not actively become involved in the day to day running of the business allowing you lots of freedom. If you make a success of the business you will then have heaps of VC / GA cash at your disposal to expand.

The disadvantages are that you will end up giving the VC or GA a huge share in your business. Now when the business is small, it doesn't matter that much, but there is a huge difference between earning ten thousand and one million per month / year. You also cannot make any major decisions on your own with out consulting with the VC/GA first, thus restricting your final say in the business. If the VC / GA holds a controlling share in your business and you don't achieve according to your predictions, he can kick you out of the business and send in his own people to run it.

If your business is based on a new / unique product then my advice would be to register the patent in your name first to give yourself some protection from an unscrupulous VC or GA who will go into business with you as laid out in B) above and then kick you out so that he can take all the money from your idea. Not all VC's and GA's are honest so please do your background checks on them, just as they are on you.

Another word of advice is that if you are battling to get finance for your new venture, always ask why. If everyone tells you that they don't think the idea will work. It means that you need to do way more homework to prove that the idea WILL work or discover for yourself that everybody is correct and that your idea won't work. I often have people come to me with ideas and 99% of the time I can immediately tell whether it will work or not. It is a sixth sense I have which has now been honed by experience. Often the originator of the idea is blinded by optimism and can't / doesn't want to see that his idea won't work. Don't let this happen to you 'cos it's going to cost you money.

Once you have your money you need to start setting up the business. I will discuss this in the next segment.

Edited by Gautenger
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Part 11

Setting Up Your Business - Steady Phase

As I am still in SA, I cannot give specifics about the nitty gritty of setting up a business in CA. I trust that some of my fellow businessmen in CA will do that. What I can however do is give the general advice that would apply to starting a business anywhere.

You would first off need to register your business where needed. This would be with the registrar of companies, the tax man and any local authorities / councils that your industry requires.

You should at this stage know exactly which format your business will be structured as, eg., a sole owner, partnership, closed corporation or public company. The names for these business formats vary from country to country, but the structure generally stays the same, nl. :

Sole Owner - You are the only member (boss / owner) in the business and any actions your business takes is as though you do it in your personal name.

Partnership - Two or more people can form a partnership. In this format, all the members of the partnership are equally responsible for each others actions, eg. If the one signs a cheque on behalf of the business, it is as good as all the members signed that cheque themselves, and in their personal capacity. This means that if two people are in a partnership, the one could disappear with all the money and the other would be personally liable for the repayment of the debt, etc. Many years ago, before I started my second business, I took a course at the local technikon. The accountant who spoke to us about finances said : "Never go into partnership with anybody unless you are prepared to sleep with them". At the time I thought it was a crude comment to make, but now I know that he was basically saying : "If you want to get scr*wed, do it properly." Never go into partnership with anyone in your personal capacity, not even your wife, nobody! Every business has it's ups and downs, and your partner may just disappear during one of the downs, taking all the assets of the business with him, leaving you with nothing but the debt. He gets a clean break and you are broke.

Closed Corporation (CC) - This is also a type of partnership, but the business becomes a ‘new person' in the eyes of the law and you are simply acting on that persons behalf. For doing that this ‘person' (your business) pays each partner a salary. You obviously determine that salary. Going into a partnership this way at least affords you some protection if your partner disappears. You are still accountable for the actions of the business, but it is limited to the percentage of the business you own. If you are in a 50/50 partnership and your partner disappears with 1 million, you will only (hick-up) be liable for half of that. Just a word of caution though, the banks are not stupid. They will almost always make all the partners sign personal liability for any amounts the business owes them. Most suppliers however won't, and if they do refuse and find another supplier, otherwise your CC becomes a partnership anyway. A CC's books need to be audited annually by an independent accountant.

Public Company - There are two types of public company, those that are listed on a Stock Exchange, and those that are not. In both instances the members are required to hold annual general meetings (AGM's) with moments of the meeting available. All major decisions need to be documented and agreed to by majority decision. The performance of the business needs to be reported either publicly (for a listed company) or at least to the shareholders (for an unlisted company). I personally don't believe this to be a good choice for a small business because of the restrictions imposed on it, unless you have the capital and resources to list the company on the local stock exchange.

Registering with the tax man and local authorities / councils goes without saying.

Then there is another very important registrar you need to apply to : The Registrar of Names, Patents and Trademarks. You need to register your business name to first of all ensure that it is available. Then if it is, to ensure that nobody else uses it without your permission. The same goes for any patents, logos and slogans you will be using. The order of registration I prefer to follow is - Name, company (after name approval), bank, tax man and other authorities, patents and trademarks. I keep the trademark registration for last as they mostly take over a year (3 years in SA) to approve. You are then granted a provisional license to use them.

More on setting up your business next time.

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Part 12

Location

Next you need to decide where you will run your business from. Obviously your ultimate decision will depend on the type of business you are going to start, eg., you can't open a noisy engineering business that requires a 10 ton crane in your garage. Your decision must be practical. Consider these points when deciding :

a) Type of business - as mentioned above your location must be practical.

B) Type of customers - Some businesses require that you maintain a certain image, eg., if you were to run an investment advice firm out of a garage in a scruffy neighborhood and you are dressed in jeans and T-shirt everyday, how many people do you think are going to listen to your advice? If you however run the business from a neat office park type environment, with a classy decorated office and you in the customary suit, your customers will immediately think that you are doing well, thus your advice must be good. Another way of looking at it - What is the point of running a printing business out of the sixth floor of a corporate office block, when your target customers are the micro industries down town. They would not come to you, they would use the guy in the same area. That guy, by the way will probably be wearing a jean & T-shirt as his customers will probably be wearing overalls.

c) Accessability to customers - Opening a fast food restaurant across the road from your local mall may sound like a great idea, but people are lazy by nature. They will rather buy from the fish & chips shop in the mall than walk / ride to you. You call this convenience. You may still do well if your food is really good, but if you could move in next to the fish & chips guy, you will probably do so much better that the increased rent you pay is worth it. In other types of businesses, it may not even matter where you work from as you go to the customer, eg., a paving or plumbing company.

d) Distance from suppliers - This is often a very overlooked consideration. If your suppliers are within short driving distances from you, you can keep a much smaller stock of items as they are easy to replace. On the other hand, if your business is in a rural area, you may need to buy huge amounts of stock, to last say a month. This will also impact on the space you need to run your business from, the security of the premises, the capital needed to start and run the business as well as the price you will be able to sell your product for. Many people have made the mistake of thinking that they can start a business in a rural area, as the competition is much less there and the competition charges more than their city counterparts. They then reckon they can easily undercut the competition and take their business away. What they don't factor in is the fact that it costs more to run a business in a rural area and the amount of customers is way less.

e) Road access - You are driving home from work and notice that you need to fill up your tank with fuel. You have two options : the garage at a traffic light where it is easy to climb back into the flow of traffic, or the garage a short distance away, in the middle of a block, where the traffic is already moving at high speed. Which one would you use? Another scenario is : would you rather buy from the CD store at the mall where there is plenty parking, but the CD's cost a bit more, or the guy down the road where there is so little parking that you end up walking three blocks to save $1?

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Part 13

Working from Home vs from a Business Premises

In the last decade or so there has been a word wide trend toward working from home. Is this the way for your business? You need to look at the advantages and disadvantages of both options before you are able to make a wise decision. Here are the pro's and con's of working from a formal business premises :

Formal Business Premises

Pro :

a) You have a definite place to work and a place to play. You lock up at night and go home, giving you a clear distinction between work & play.

B) If your business is situated in a good (visible) location, you save money on advertising as people come to you (walk-in customers).

c) Generally you would be able to stock more product as you have a dedicated place to keep all your business ‘stuff'.

d) It is easier to control your staff.

Con :

a) You have strict working hours which are usually 6 or 7 day weeks.

:whome: You need to dress up to go to work.

c) You are more at risk from robberies & theft, thus your security costs are higher.

d) You have additional expenses like shop rent, electricity, etc.

e) It may be impossible to work overtime at the store, as the complex may close at a certain time.

f) It is easy for your competition to open up next to you.

Here are some pro's and con's of working at home :

Pro :

a) You can work flexible and longer hours as your office is just down the passage.

:ph34r: No commuting to work which means you get to sleep later or start earlier.

c) You can work in your pajamas if you wanted to.

d) The work environment is much more informal.

e) Easier to give yourself the day off.

f) You are able to spend time with your family while still working at the same time.

g) You save a huge amount in rent, etc.

Con :

a) You need to be disciplined enough to not sit around & watch TV the whole day.

:holy: You need to advertise more as your home is not as visible as a shop.

c) You need to trust your employees not to scratch in your personal belongings when you are not there.

d) Some of your living space becomes business space so in effect your house ‘shrinks'.

e) It is more difficult to separate your work and your play times.

f) You customers tend to forget that you have a personal life.

You need to way these factors up to find the best solution for your business.

Obviously not all businesses are suitable for a home business, eg., a chemical manufacturing plant may pose too high a risk to run from home, a furniture manufacturing business may be too noisy, a business that requires walk-in customers, like a fast food outlet or mobile phone store, will also not do well from home. Businesses that are more suited to a home based setup are : lawyers, accountants, IT businesses, consultants, service oriented businesses like printers, plumbers, electricians, etc.

In my opinion, if you can work from home, then do so. The savings in rent will more than make up for the extra advertising costs. The freedom of being able to work late tonight so that you can watch the cricket tomorrow is great. The two main drawbacks are that you need to be disciplined enough to work when you are supposed to and that some customers think they can call you 24/7 and expect you to help them. This is easily overcome by installing a separate business line which you don't answer after hours. Customers that just arrive after hours need to be diplomatically, but firmly told that they are now intruding in your family time and should please respect that.

Next we will discuss advertising your soon to open business.

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Part 14

Advertising an Unopened Business

There is a difference between advertising a business that hasn't opened yet as opposed to an established business. The main one being that you are trying to introduce your business to clients that already have set buying pattern for your product. You are thus more interested in changing their buying habits than expanding your customer base.

As I have said before, people are creatures of habit and don't like doing things differently. Now you come along and want your potential customers to do things differently, nl., buy from you instead of from XYZ. There are a few ways to do this, but the overall idea is that you need to create a buzz around your product. People must be talking to each other about your product, they must be so intrigued by your advertising that they want to try your product. This advice applies equally to service businesses that don't have a product that you can hold in your hand.

How do you create a buzz around your product?

Regardless of how and where you advertise, you want to highlight the benefits to the customer :

a) What makes your product better to that of the competition?

:ilikeit: What advantages does your product hold for the customer?

c) If the price is less - why?

d) If the price is more - definitely why?

People want to feel that they are getting a bargain. This doesn't always mean a lower price, but rather better value. People are looking for way to make life easier - easier on their pocket, their time, health, emotions, you name it.

Identify and appeal to your target market

Sit down and decide which two of the senses and emotions your product most appeals to and base you ad campaign around that. Let's say you are selling a new shampoo. Your shampoo leaves the hair smelling great for hours afterwards and it won't burn your eyes. Obviously it appeals to the smell sense, but it also appeals to the feel sense and the fear emotion. From that you need to look at who would be more likely to find the stimulation of those senses more appealing : men, ladies, children, pensioners, teenagers, etc. In the shampoo example you would probably say more ladies and parents as ladies would like their hair to smell great and parents don't want the shampoo to burn their toddlers eyes. From this you can see that you have two distinct target markets. You can also see that by varying the fragrance of the shampoo you can also make the product more appealing to men as well (a man doesn't want to smell like roses the whole day ?).

You can now structure two different advertising campaigns, one for the ladies, the other for the parents. In each case you would highlight the appeal of the product to those senses / emotions.

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Part 15

More on advertising your Un-opened Business

Now that you know what appeals to your customers (what's in it for them), you still need to convince them to use your product instead of the competition. This is where the opening specials come in.

People are always looking for bargains so if you can get them to your shop you can get them to buy. A business that is about to open is probably the most ‘broke' business there is. You have just spent huge amounts of capital to set up the business, but nothing has come in yet. Now you need to start earning a return on your investment quickly. By running good opening specials you will obviously not make that quick return you are hoping for right? Not necessarily. For your planning stage you know how much profit you need to earn on each product to break even, the rest is profit. This means that if you adjust your prices between their normal retail and their break even prices you can still turn a profit on your sale items.

Now the ‘buzz' element is going to help you. By advertising specific discounts, eg., "50% off" or "Save $X.XX" people will want to buy your product as they will save. They will even go as far as telling all their friends, who will tell their friends. Now your store is starting to buzz even before it has opened. They know that these specials are only for a day / week so they need to rush. If your advertising has gone well people will be lining up at the door on opening day to snap up your specials. So now you have 20 people that are buying a specific product in one day where you would normally only sell 1 a week. Let's say your normal profit on that product was $10. You are selling it at the opening for $2 profit. This means you have made $40 profit in one day as opposed to $10 in one week. Not bad!

Signage

Another aspect of pre-opening advertising is your store signage. Get them up as soon as possible. If it takes you two weeks to do the interior decor in the shop and then you only hang up your sign, you have not just lost two weeks advertising. You have lost two weeks of intensely curious shopper's attention. You should then carry on from this and start advertising your opening specials in the windows at the same time.

Signage is actually an art form. Most new business owners sit down at their computers and design this stunning name & logo. They print it out and show it to all their friends, who also think it looks stunning. They rush off to the printer to make up their stationary and signs. The printer looks at them and the first thing he says is : "I hope you have lots of money.". The business owner thinks : "You slimy b*astard, you are about to rip me off, and you're not even being tactful about it!". He may not be. Printing works like this - the more colors you want and the more intricately they are blended together, the more difficult it is to print. A commercial printer doesn't work like your inkjet where you load the file, click print and out pops the printed paper in all it's full color glory. The picture you give the printer is scanned, redrawn, separated into colors, a template (positive) is printed for each color, then a plate is burnt for each color. Each color is then printed in turn on the paper. For a full color photograph each page needs to be printed four times. This takes time and if one color prints skew then the page must be thrown away as you won't accept it. We all know that time and wastage costs money.

When designing you letterheads, signs, etc., keep it simple. Especially with signage, less is usually more. People are driving past your store at speed. They only have a matter of seconds to try and read what is on your sign. The more you put on it, the smaller the type, the more difficult to read, the less that will be read. A fancy font looks good on a piece of paper in front of you, but stick that paper on the wall and ask your friends (who haven't seen it before) to run across the other end of the room and read it for you. Now do the same with a plain bold font

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Part 16

Shop Fitting

It is very difficult to explain shop fitting as each type of business will have it's own layout needed to make it practical, but there are a few guidelines you can use to make it easier.

a) Space

You store is a fixed size so you need to make use of your space effectively to not only maximize your sales, but also make it comfortable for your customers. A shop that appears empty will keep your customers out as they feel that there isn't anything in the shop that they will want to buy. On the other hand a store that is so full that you cannot move will make your customers feel claustrophobic and encourage theft.

If your store has aisles, make sure two people can move past each other. If it doesn't, like a mobile phone store, you need to arrange your displays so that it is easy for your customers to move from the door to the counter, while still being positioned in such a way that they are easily seen. A lawyer's office, with it's customary seating, should be laid out so that a customer can easily walk to the lawyer's office without the other people having to move.

B) Positioning of Products

An old trick that supermarkets use is to put the most popular products at eye level and more specialist products higher up. Weight is also another concern. Put lighter products higher up and heavy products lower to reduce the risk of injury. Supermarkets also occasionally move their product to a different position in the store. This forces you to walk around the store, increasing the chance of impulse purchases. Have you ever wondered why they put the sweets and chocolates at they checkout? More impulse purchasing, plus the kids drive you crazy if they have to stand in the queue just looking at all those yummy goodies. Speaking of children, the smaller, cheaper sweets are placed were the kids can reach them, with the boxes of chocolates that you would buy at eye level.

All these little tricks can applied to any business that sells a touchable product. All you need to do is think practical : if it is heavy put it low or it is going to fall on a customer's head. You then also think of the product's value to the customer : let's use the mobile phone store again. Would you have the phones up on the rack and the pouches and batteries behind the counter? No, you would keep the phones behind the counter where you can keep an eye on them and the pouches within close reach of the customer. The customer should be able to touch and handle the pouch. Once in hand it is not so easy to put it down again.

More on shop fitting in the next segment

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Part 17

c) Decor

Your decor should fit the type of customers you are dealing with. You cannot decorate your law firm to look like a McDonalds, it's too flashy. Conversely, you can't decorate your night club with classy velvet couches, they will get trashed in a month. Restaurants are a good example. A fast food restaurant will decorate using bright flashy colors and play upbeat music as they want you in and out as fast as possible. An expensive, high class restaurant will use more muted, woody and classy decor and play soft soothing music as they want you to hang around and buy more of their expensive french champagne.

Your decor should also be practical. You cannot lay a carpet if 1000 people are going to be walking up and down it every day, you would be better off with tiles. You cannot paint the walls of an art gallery bright green as it would make all the paintings appear a shade greener than what they really are. Simple common sense should prevail here.

d) Put yourself in your customers shoes

If you were the customer how would you like to shop for the product you are selling? The way it has always been done is not always the best way. One of the fields of business we are in is notorious for it's traditional drab reception areas, where the customer would walk in to the counter and order the product, turn around and leave. We decided to change that. We increased the size of our reception area, installed comfortable couches and a coffee machine, painted the walls brighter colors and put up arty looking posters of the products. We found that we not only were able to sell more, and different, products to our customers, but we also built up better relationships with those customers. This resulted in more referrals from them and they are to this day still loyal towards our company. Our approach allowed us to compete in a very cut-throat, capital intensive, industry with almost no capital behind us.

All too often I have seen businesses just slap a store together with no regard for the above, very seldom have I seen those businesses grow. By creating the right ambiance in your store you can make your customer feel welcome and like a million dollars. For this your customers will reward you with repeat business and referrals. Sounds like a good deal to me.

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Part 18

Launch

Besides running some cool specials for your business opening, it is also a good idea to hold an official launch (if you are opening a store). This is mostly held at night to enable those that cannot make it during the day to attend. Who would you invite though?

Invite suppliers, possible good customers, friends and family and of course the local press. The ‘important ones here are the suppliers, press and customers as they are the ones you want to impress.

To arrange something like this does take some work (it gets easier the more stores you open). The main aspects you need to consider are :

a) Invites

Make them real cool. If you are not that creative, then get a promotional company to design them for you. They must be cool, different & original. Send them out 3 to 4 weeks before opening to allow guests enough time to RSVP. Follow up on unanswered RSVP's 1 - 2 weeks before launch.

B) Catering

Don't do this yourself, you won't have the time and it won't look professional. Get a good caterer to do the food thing for you. Traditionally this is snacks as you want the guests to walk around and see what your shop looks like and you probably don't have the space for a seated dinner anyway. This doesn't mean that you must have snacks though, you could always take your guests to a restaurant first, then to the shop. Be creative.

c) Booze

It is impossible to have a launch without booze, even if you don't drink. Booze removes people's inhibitions, so after your guests have had a couple, don't feel bad about hinting for an order or two.

d) Speech

Although you don't need to climb up on a rostrum and preach to everybody, it is customary, and necessary, that you give a short speech. This is the one and only time that you will have the most important people to your business at that stage in front of you, all at one time, in a good mood and with a drink in hand. Now I have & never will lick anyone for business, etc., but it does help to profusely thank your suppliers for their support and your potential customers for their loyalty. Now you are thinking : how can I do that, I have just opened so the suppliers have not really helped me yet and no-one has ordered anything either. Surprise, surprise - you are now open - you will shortly need the help of your suppliers (to carry you when you get an order that you cannot finance on your own). You will also be getting a few orders that night from the potential customers you invited (if you do your networking properly). So you are just thanking them in advance.

e) Relax

I have been to many companies launches and every time it turned out a disaster, it was when the business owner was more worried about if everything runs smoothly than anything else.

Work your butt off before the launch to try and ensure that every things runs smoothly, but when the time comes, let it be. If the gherkins taste like Sunlight soap, so what, that is why you have booze. After your guests have had a few drinks it is not the food or anything else that matters, just the networking.

f) Networking

This is the crux of the whole launch !!!! It is simply an excuse to network with those that can be helpful to your business, nothing else. It will help you nothing to stand around the whole night & talk to your family & friends, you can do that tomorrow. Tonight is the night you need to start building a relationship with your suppliers and customers. Getting yourself off to a good start will stand you in good stead for many years to come.

g) Professionalism

First impressions are unbelievably important. It is vital that you, and your staff, conduct yourselves professionally throughout the whole evening, and thereafter for that matter. This includes : not getting sloshed, watch the swearing, dressing for the occasion, etc. Remember this is not a p*ss-up with your buddies, it is an informal meeting with those that are most important to your business. No matter how your customers or suppliers handle themselves, stay professional.

h) Media

You may or may not have to pay for the media to be there. It doesn't matter, just make sure they are there. This is a perfect opportunity for you to get some ‘un-biased' editorial for your business which can bring in loads of business and recognition.

The bottom line is : this is a promotional stunt you are conducting and need to treat it accordingly. Ignore the bloopers, enjoy the night and network, network, network.

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This is an excellent series Gautenger. I had my own business some years ago and can see many parallels. You should consider a book. :oops:

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Thanks for the kind words NZHigh, these articles are actually extracts from a book I am writing. Unfortunately the book ground to a halt about a year ago as we are busy repositioning our main business so that it will bring in the money regardless of where we are in the world so that when we finally get to move, our income is not affected.

The upside of this is that when my time is my own again, at least I will have some new valuable info to include.

Part 19

Running a business

There are many aspects to running a successful business. Each of them need to be mastered, some can be delegated to efficient employees, but you will still need to know what is going on. Some of these are : Marketing, Stock Management, Customer Care, Pricing, Accounting and Employee Management.

Marketing

Without a doubt marketing is THE most important aspect to running a business. It doesn't matter how good your product is, how well it is priced or how good your accounting program is, if you have no customers your business is dead in the water.

Marketing is pretty much a science. To market effectively you need to know how people think, act and react. You need to know who your target market is and what excites them. You need to know what your target market needs. You then structure the wording of your adverts to appeal to your target market by solving one of their problems / supplying them with what they need. There are many good books on marketing in the book stores and available online as e-books. Everyone you buy is an investment and not an expense.

Without repeating the whole saying here, there is a story that goes : A businessman thinks that it is a useless expense to advertise, yet he sleeps on an advertised bed, drives an advertised car, etc. When his business fails, he finally advertises : Business for sale.

Some of the most commonly used methods are : newspaper ads, magazine ads, flyers (pamphlets), bill boards, reps (representatives) and sponsorships. Each of these work to varying degrees for different types of businesses. In the beginning you may have to advertise in various media to see which one works best for your business. It also helps to be creative, eg., estate agents are known for dropping off little ‘gifts' along with their adverts - like a calendar with your house photo on it. Would you throw something like that away? Do things different from your competition and you will stand out. Look outside the box.

There is however one special form of advertising that any business cannot ignore - word of mouth. Of all the advertising methods you can pay for, none can beat a satisfied customer. So why not sweeten the pot by giving your customers an incentive to send their friends along?

There are so many ways to advertise, why not post some of your ways here so we can all learn from each other?

In the end any advertisement is better than nothing, you must advertise all the time. If there is even a minute of any day, while you own a business , when you have no visible advert out there, you better start worrying.

Edited by Gautenger
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Part 20

Marketing on the Internet

A few years back it was ‘cool' to have a web site for your business, but today it is a must.

People have found that it is convenient to first take a look at a business's web site before going to the trouble of contacting them. By visiting a business's web site you can tell many things - are they professional, do they care about their customer, do they sell what I want, do they make it easy for me to buy what I want, are they open and honest, etc.?

I am sure that Hendie will agree with me here - Setting up a web site is easy to do, it is the effort you put into building it and promoting it that brings in the rewards. So lesson number one is :

1) Setting up a web site is not a once off affair, you must be prepared to constantly build, maintain and promote it.

Visitors to your web site are just as good as visitors to your store. You need to keep them coming back for more. The more they come back, the higher the chances of them visiting your store and the higher the chance of them buying from you. Here are a few things you can do to keep your visitors coming back :

a) Update the site with interesting information at least once a month.

B) Offer discounts on online purchases.

c) Let them ask you questions online via a message board similar to this one.

d) Offer them printable discount coupons that they can redeem in-store.

Also use rule no. 2 :

2) Start an Opt-in mailing list and newsletter.

This is critical to getting people to visit your site again and again. In the newsletter send the subscribers to the new articles you have added on the site and offer them exclusive discounts.

Here are some more rules :

3) Use the web site to establish your business as the leader in your field, ie., establish credibility.

4) Offer online purchases if possible. You may be able to sell to a wider audience.

5) Read up on Titles, Meta Tags and Descriptions and use them wisely.

6) Get as many web sites as possible to link to your site. Offer a link back to theirs. This helps to increase your ranking with the search engines.

7) Constantly read up and learn as much as you can about promoting a web site as things are always changing.

8) Be thankful that your Internet dial-up is not charged per minute as it is in SA.

9) Give your site an easy to remember name, eg., xxx.rudmanpizza.xxx is harder to remember than xxx.yummypizza.xxx

10) Realize before you start that it is going to take many, many, many hours of hard work before your web site is going to pull in a lot of visitors. It doesn't happen overnight, but the patience and hard work will pay off in the end. Our web used to get a max of 30 visitors per month until I started promoting and building it, now it is the biggest and busiest of it's kind in Africa and one of the top 10 sites of it's kind in the world. We now often get more than 30 visitors an hour and the hits are still growing exponentially. How long has it taken? Two years, but if we can do it, so can you!!!

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