Can You Be Your Own Boss?

Many of us fantasize about owning our own companies. Nearly one million new businesses are launched each year, but more than 85 percent will close within five years. There are some key indicators of who will be most effective as owners. Take this quiz to help you determine if you have the burning desire, discipline and resources to become your own boss.

Are you a self-starter?

It will be up to you, not someone else, to develop the business, organize the projects, manage your time and follow through on details.

Can you handle the uncertain financial risk?

Businesses all have cycles, the ebbs and flows in profitability. Once it's started you'll have overhead and operational expenses that must be met before you get paid.

Do you have good business skills?

You must attract customers. New and repeat customers are the lifeblood of your business. You must possess or learn these skills -- accounting, business planning, operations, sales, marketing and customer service -- to survive and succeed.

Do you have the stamina needed to run a business?

Business ownership is a lot of work. Can you face 12-hour work days, six or seven days a week, every week?

Are you motivated by achievement?

Many entrepreneurs get great joy out of the daily "wins" they get from doing business. They find it's a competitive game and satisfying way to fulfill their instinct to achieve. They have fun doing it. These people have a passion and driving desire to come in first. They are doers and want to derive benefits from their efforts and labor. They are unlikely to get "burned out" or worn down by carrying all the responsibilities of the business on their shoulders.

Are you a good decision-maker?

Business owners are required to make decisions constantly, quickly, under pressure and independently. Do you research and examine all options on important decisions to minimize your risk, but then decide and go forward?

How well do you handle different personalities?

Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers and professionals such as lawyers, accountants or graphic artists. Your ability to successfully deal with demanding clients, unreliable vendors or cranky staff people in order to benefit your business will directly impact your success.

How will the business affect your family?

It's hard to balance work and family demands during the first few years after starting a new business. There may also be financial difficulties until the business becomes profitable, which could take months or years. You may have to adjust to a lower standard of living or put family assets at risk. Can your family deal with the challenges business ownership requires? Although many entrepreneurs go on to make large incomes, the "lean years" are a necessary part of the evolution and business growth cycle. Equally important to consider are the many job perks -- paid vacations, sick days, medical and dental insurance, stock options, cars, health club memberships -- that disappear when you own the company. Think about the extra costs you will now incur.

How will you deal with the isolation?

Once you go off on your own, you'll be just that -- alone. Can you deal with being isolated? Will you miss the status, respect and collegial connections that you had while working for an employer other than yourself? Don't underestimate this -- it's the reason many consultants and service business owners close their own operations and re-enter the corporate world.

Can you go two or three years without an income?

List start-up resources to buy/start and run your business. Note sales and break even points as well as profit projections. Be conservative in your estimates on how fast you'll be able to turn a profit. Develop family and business budgets that support you and your family while your business is beginning to grow.

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Robin Ryan has appeared on the Dr. Phil Show, Oprah, NBC Nightly News with Tom Brokaw, CNN, CNBC and is considered America's top career coach. She is the best-selling author of: "60 Seconds and You're Hired!;" "Winning Resumes;" "Winning Cover Letters" and "What to Do with the Rest of Your Life." She's the creator of the highly acclaimed audio training program Interview Advantage and The DreamMaker. To purchase her books and audio training programs go to www.robinryan.com. Sign up here for Robin Ryan's eNewsletter.

----------------------------------------------- Article Source: http://www.careerbuilder.com

How to Perform SWOT Analysis: The Simple Way

A valuable step in your situational analysis is assessing your firm’s strengths, weaknesses, market opportunities, and threats through a SWOT analysis. This is a very simple process that can offer powerful insight into the potential and critical issues affecting a venture.

The SWOT analysis begins by conducting a review of internal strengths and weaknesses in your organisation. You will then note the external opportunities and threats that may affect the organisation based on your market and the overall environment. Don’t be concerned about elaborating on these topics at this stage; bullet points may be the best way to begin. Capture the factors you believe are relevant in each of the four areas. You will want to review what you have noted here as you work through your marketing plan.

The primary purpose of the SWOT analysis is to identify and assign each significant factor, positive and negative, to one of the four categories, allowing you to take an objective look at your business. The SWOT analysis will be a useful tool in developing and confirming your goals and your marketing strategy.

Some experts suggest that you first consider outlining the external opportunities and threats before the strengths and weaknesses. Marketing Plan Pro’s EasyPlan Wizard will allow you to complete your SWOT analysis in whatever order works best for you. In either situation, you will want to review all four areas in detail.

Strengths

Strengths describe the positive attributes,tangible and intangible attributes, internal to your organisation. They are within your control. What do you do well? What resources do you have? What advantages do you have over your competition?

You may want to evaluate your strengths by area, such as marketing, finance, manufacturing, and organisational structure. Strengths include the positive attributes of the people involved in the business, including their knowledge, backgrounds, education, credentials, contacts, reputations, or the skills they bring. Strengths also include tangible assets such as available capital, equipment, credit, established customers, existing channels of distribution, copyrighted materials, patents, information and processing systems, and other valuable resources within the business.

Strengths capture the positive aspects internal to your business that add value or offer you a competitive advantage. This is your opportunity to remind yourself of the value existing within your business.

Weaknesses

Note the weaknesses within your business. Weaknesses are factors that are within your control that detract from your ability to obtain or maintain a competitive edge. Which areas might you improve?

Weaknesses might include lack of expertise, limited resources, lack of access to skills or technology, inferior service offerings, or the poor location of your business. These are factors that are under your control, but for a variety of reasons, are in need of improvement to effectively accomplish your marketing objectives.

Weaknesses capture the negative aspects internal to your business that detract from the value you offer, or place you at a competitive disadvantage. These are areas you need to enhance in order to compete with your best competitor. The more accurately you identify your weaknesses, the more valuable the SWOT will be for your assessment.

Opportunities

Opportunities assess the external attractive factors that represent the reason for your business to exist and prosper. These are external to your business. What opportunities exist in your market, or in the environment, from which you hope to benefit?

These opportunities reflect the potential you can realise through implementing your marketing strategies. Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about your business, or the ability to offer greater value that will create a demand for your services. If it is relevant, place timeframes around the opportunities. Does it represent an ongoing opportunity, or is it a window of opportunity? How critical is your timing?

Opportunities are external to your business. If you have identified “opportunities” that are internal to the organisation and within your control, you will want to classify them as strengths.

Threats

What factors are potential threats to your business? Threats include factors beyond your control that could place your marketing strategy, or the business itself, at risk. These are also external –you have no control over them, but you may benefit by having contingency plans to address them if they should occur.

A threat is a challenge created by an unfavourable trend or development that may lead to deteriorating revenues or profits. Competition – existing or potential – is always a threat. Other threats may include intolerable price increases by suppliers, governmental regulation, economic downturns, devastating media or press coverage, a shift in consumer behaviour that reduces your sales, or the introduction of a “leap-frog” technology that may make your products, equipment, or services obsolete. What situations might threaten your marketing efforts? Get your worst fears on the table. Part of this list may be speculative in nature, and still add value to your SWOT analysis.

It may be valuable to classify your threats according to their “seriousness” and “probability of occurrence.”

The better you are at identifying potential threats, the more likely you can position yourself to proactively plan for and respond to them. You will be looking back at these threats when you consider your contingency plans.

The implications

The internal strengths and weaknesses, compared to the external opportunities and threats, can offer additional insight into the condition and potential of the business. How can you use the strengths to better take advantage of the opportunities ahead and minimize the harm that threats may introduce if they become a reality? How can weaknesses be minimised or eliminated? The true value of the SWOT analysis is in bringing this information together, to assess the most promising opportunities, and the most crucial issues.

An example

AMT is a computer store in a medium-sized market. Lately it has suffered through a steady business decline, caused mainly by increasing competition from larger office products stores with national brand names. The following is the SWOT analysis included in its marketing plan.

Strengths

1. Knowledge. Our competitors are retailers, pushing boxes. We know systems, networks, connectivity, programming, all the Value Added Resellers (VARs), and data management.
2. Relationship selling. We get to know our customers, one by one. Our direct sales force maintains a relationship.
3. History. We’ve been in our town forever. We have the loyalty of customers and vendors. We are local.

Weaknesses

1. Costs. The chain stores have better economics. Their per-unit costs of selling are quite low. They aren’t offering what we offer in terms of knowledgeable selling, but their cost per square foot and per pound of sales are much lower.
2. Price and volume. The major stores pushing boxes can afford to sell for less. Their component costs are less and they benefit from volume buying with the main vendors.
3. Brand power. Take one look at their full-page advertising, in colour in the Sunday paper. We can’t match that. We don’t have the national name that flows into national advertising.

Opportunities

1. Local area networks. LANs are becoming commonplace in small businesses, and even in home offices. Businesses today assume LANs are part of normal office work. This is an opportunity for us because LANs are much more knowledge and service intensive than the standard off-the-shelf PC.
2. The Internet. The increasing opportunities of the Internet offer us another area of strength in comparison to the box-on-the-shelf major chain stores. Our customers want more help with the Internet and we are in a better position to give it to them.
3. Training. The major stores don’t provide training, but as systems become more complicated with LAN and Internet usage, training is more in demand. This is particularly true of our main target markets.
4. Service. As our target market needs more service, our competitors are less likely than ever to provide it. Their business model doesn’t include service, just selling the boxes.

Threats

1. The computer as appliance. Volume buying and selling of computers as products in boxes, supposedly not needing support, training, connectivity services, etc. As people think of the computer in those terms, they think they need our service orientation less.
2. The larger price-oriented store. When they have huge advertisements of low prices in the newspaper, our customers think we are not giving them good value.

Article Source: http://articles.bplans.co.uk

SWOT Analysis: Discover New Opportunities and Manage and Eliminate Threats

SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses, and for looking at the Opportunities and Threats you face.

Used in a business context, it helps you carve a sustainable niche in your market. Used in a personal context, it helps you develop your career in a way that takes best advantage of your talents, abilities and opportunities. Click here for Business SWOT Analysis, here for Personal SWOT Analysis.

Business SWOT Analysis:

What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares.

More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market.

How to use the tool:

To carry out a SWOT Analysis, answer the following questions:

Strengths:

• What advantages does your company have?

• What do you do better than anyone else?

• What unique or lowest-cost resources do you have access to?

• What do people in your market see as your strengths?

• What factors mean that you "get the sale"?

Consider this from an internal perspective, and from the point of view of your customers and people in your market. Be realistic: It's far too easy to fall prey to "not invented here syndrome". (If you are having any difficulty with this, try writing down a list of your characteristics. Some of these will hopefully be strengths!)

In looking at your strengths, think about them in relation to your competitors - for example, if all your competitors provide high quality products, then a high quality production process is not a strength in the market, it is a necessity.

Weaknesses:

• What could you improve?

• What should you avoid?

• What are people in your market likely to see as weaknesses?

• What factors lose you sales?

Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any unpleasant truths as soon as possible.

Opportunities:

• Where are the good opportunities facing you?

• What are the interesting trends you are aware of?

Useful opportunities can come from such things as:

• Changes in technology and markets on both a broad and narrow scale

• Changes in government policy related to your field

• Changes in social patterns, population profiles, lifestyle changes, etc.

• Local events

A useful approach for looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities.

Alternatively, look at your weaknesses and ask yourself whether you could create opportunities by eliminating them.

Threats:

• What obstacles do you face?

• What is your competition doing that you should be worried about?

• Are the required specifications for your job, products or services changing?

• Is changing technology threatening your position?

• Do you have bad debt or cash-flow problems?

• Could any of your weaknesses seriously threaten your business?

Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done, and in putting problems into perspective.

Strengths and weaknesses are often internal to your organization. Opportunities and threats often relate to external factors. For this reason the SWOT Analysis is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool.

You can also apply SWOT Analysis to your competitors. As you do this, you'll start to see how and where you should compete against them.

Tip: SWOT can be used in two ways - as a simple icebreaker helping people get together and "kick off" strategy formulation, or in a more sophisticated way as a serious strategy tool. If you're using it as a serious tool, make sure you're rigorous in the way you apply it: Only accept precise, verifiable statements ("Cost advantage of US$10/ton in sourcing raw material x", rather than "Good value for money"). Ruthlessly prune long lists of factors, and prioritize factors so that you spend your time thinking about the most significant factors. Make sure that options generated are carried through to later stages in the strategy formation process. Apply it at the right level - for example, at product or product line level, rather than at the much vaguer whole company level. Supplement it with other option-generation tools - none is likely to be completely comprehensive.

Example:

A start-up small consultancy business might draw up the following SWOT matrix:

Strengths:

• We can respond very quickly as we have no red tape, no need for higher management approval, etc.

• We can give really good customer care, as the current small amount of work means we have plenty of time to devote to customers

• Our lead consultant has strong reputation within the market

• We can change direction quickly if our approach isn't working

• We have little overhead, so can offer good value to customers.

Weaknesses:

• Our company has no market presence or reputation

• We have a small staff with a shallow skills base in many areas

• We are vulnerable to vital staff being sick, leaving, etc.

• Our cash flow will be unreliable in the early stages

Opportunities:

• Our business sector is expanding, with many future opportunities for success

• Our local council wants to encourage local businesses with work where possible

• Our competitors may be slow to adopt new technologies

Threats:

• Will developments in technology change this market beyond our ability to adapt?

• A small change in focus of a large competitor might wipe out any market position we achieve.

The consultancy may therefore decide to specialize in rapid response, good value services to local businesses. Marketing would be in selected local publications, to get the greatest possible market presence for a set advertising budget. The consultancy should keep up-to-date with changes in technology where possible.

You can see this analysis in diagram format in figure 1 below.

Drawn using SmartDraw. Click for free download.

Key points:

SWOT Analysis is a simple but powerful framework for analyzing your company's Strengths and Weaknesses, and the Opportunities and Threats you face. This helps you to focus on your strengths, minimize threats, and take the greatest possible advantage of opportunities available to you.

Article Source: http://www.mindtools.com/pages/article/newTMC_05.htm