Wednesday, May 7, 2014

Buying A Home Based Business Part 3: Finding A Home Based Business

image This article was written by Mike Capsuto, SCORE Orange County Business Mentor

Many an optimist has become rich by buying out a pessimist. Robert G. Allen

In a previous article we explored two topics:

• What is a home based business?

• What business is right for me?

This article will focus on locating the business that will meet your talents.

Information in this article is provided for general educational purposes only. No responsibility is assumed for any problems associated with the use of its content. One should seek the advice of their financial and legal counsel in every step of purchasing a home based business.

Where can one find a home based business for sale?

The first place to begin is to ask family and friends if they know of someone who is approaching retirement age, has health problems, has limited time that can be dedicated to their business, or wants to cash out. Be cautious when dealing with a family member or a close friend. Do not get pressured into a business. Analyze the business as if you were dealing with a stranger.

Ask your accountant or attorney. They represent many clients in financial and legal matters. They may have clients who are looking to sell their business. Many businesses are hesitant to publicly advertise for fear of losing customers.

Another place to find a business is in the newspaper under “Business Opportunities” or “Businesses for Sale”. Weekend editions are usually the days that businesses for sale are advertised. Be careful, there may be ads for grossly overpriced businesses. Legitimate local businesses for sale will most likely use local telephone numbers. Those with toll free numbers are usually large franchise or sales operations.

Visit or contact the companies in your area that manage buildings with executive office suites. These are small business offices usually accommodating one to four persons. There may be businesses for sale in these facilities that can be converted to a home based business.

Also look into local Small Business Development Centers. Small Business Development Centers provide management and technical assistance to small businesses. There might be businesses for sale suitable to be home based.

Browse the Web. Just enter “Home Businesses for Sale”. Many sites will pop up. To narrow down the sites, enter: "Home Business for Sale in (state)". Some websites can narrow down to a zip code or key word.

There are several magazines specializing in home based businesses found at local bookstores. Most of the advertisements are for franchises. Buying a franchise option works best for individuals who have limited business & industry background. However, do not expect the franchisor to solve all the business problems that might be encountered. It is your own business -- the only person you count on is you.

Contact a Business Broker. Brokers can offer assistance in various ways such as screening businesses for you. Good brokers turn down many of the businesses they are asked to sell, whether because the seller won't provide full financial disclosures or because the business is overpriced. Going through a broker helps you avoid these bad risks.

• Helping you pinpoint your interest. A good broker starts by finding out about your skills and interests, then helps you select the right business for you. With the help of a broker, you may discover that an industry you had never considered is the ideal one for you.

• Negotiating. The negotiating process is really when brokers earn their keep. They help both parties stay focused on the ultimate goal and smooth over any problems that may arise.

• Assisting with paperwork. Brokers know the latest laws and regulations affecting everything from licenses and permits to financing and escrow. They also know the most efficient ways to cut through red tape, which can slash months off the purchase process. Working with a broker reduces the risk that you'll neglect some crucial form, fee or step in the process.

The above are some of the sources for locating a home based business. Take the time to consider your options. However, do not make a decision on a particular business without further diligence. This will be the topic of a future article.

Support for Windows XP and Office 2003 Ended April 8, 2014

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We want to make sure all small business owners are aware of an important event happened last month. As of April 8, 2014, Microsoft discontinued provide technical assistance for Windows XP and Office 2003, including automatic updates that help protect your PC. According to Microsoft, more than 20 percent of small businesses are still using the XP platform, which Microsoft first introduced in 2001.

What does this mean for your business?

1. There will be no new security updates, non-security hotfixes, free or paid assisted support options, or online technical content updates. 

2. Without critical security updates, PCs could become vulnerable to harmful viruses, spyware, and other malicious software which can steal or damage business data and information.

3. Anti-virus software will not be able to fully protect PCs running Windows XP once the OS is no longer supported.

4. Businesses that continue to run Windows XP after support ends may be exposed to potential security threats, and may even risk breaching compliance standards depending on the industry in which they operate. 

How do you stay protected?

To stay protected after support ends April 8, you have two options:

  1. Upgrade your current PC: Very few older computers will be able to run Windows 8.1, which is the latest version of Windows. You may want to download and run the Windows Upgrade Assistant to check if your PC meets the system requirements  for Windows 8.1 and then follow the steps in the tutorial to upgrade if your PC is able. For more detailed information, read the FAQ.
  2. Get a new PC: 

If your current PC can't run Windows 8.1, it might be time to consider shopping for a new one. The average price of a PC is considerably less expensive than the average PC was 10 years ago. 

What does it mean if my version of Windows is no longer supported?

Which version of Windows am I running?

For more information on the Windows XP and Office 2013 end of support, click here.

Why Market Research Is Important When Your Business Idea Is An Invention

clip_image002This article was written by John Rau, SCORE Orange County Business Mentor

I recently conducted a Google search using key terms such as “sex”, “inventions” and “invention market research”. I got 122 million hits for the term “sex” and 38.5 million hits for the term “inventions” thus suggesting, as a metric, that perhaps sex was 3 times more important than inventions. (Note: I’m not sure everyone would necessarily agree with my logic relative to sex!) With regard to the term “invention market research”, I got 19.7 million hits. This would then imply, using my logic, that sex was over 6 times more important than invention market research! (Again, no comment about my logic here.). What is noteworthy, however, when we focus on inventions rather than sex, is that I got over 50% as many hits for “invention market research” relative to hits for “ inventions”, thus suggesting the importance of invention market research relative to inventions. In comparison, I also searched on the term “market research” and got 32.4 million hits. What’s interesting here is that over 60% of the “market research” hits were related to “invention market research”, thus suggesting (again trying to create an illustrative metric here) that a major focus of market research activities deals with market research relative to inventions. This is an extremely important point as the term “market research” as an activity in the invention development process occurs in many areas.

If you want to commercialize your invention idea, then you need to understand the market. In this regard, the first step is to study it through market research, which as an activity occurs in many areas such as:

· The determination of “prior art” which includes existing related patents as well as non-patented similar products already in the marketplace.

· Information required in your initial assessment to ascertain if it makes economic sense to move forward with your invention idea.

· The basis for the marketing element in your business plan if you are moving forward and plan to develop and market your invention yourself.

· The basis for your marketing plan and/or invention business plan and promotional materials if you plan to promote your invention idea to investors, potential licensing candidates and companies who might have an interest in buying your invention.

The prior art search should generally be your first step for two basic reasons. First, to determine the patentability of your idea you need to conduct a patent search to determine what similar or like inventions, if any, are already patented. The term “similar” doesn’t necessarily mean “identical”, but claims listed in existing patents may overlap those you intend to make, thus creating the basis for an infringement claim should your invention ever enter the marketplace. Another subtle, but important point, is that some similar (or like) products you identify in your market research efforts that are already in the marketplace may never have been patented for a variety of reasons. Don’t assume that all existing and potentially competing products in the marketplace have been patented. If there is enough similarity with your product claims, then your invention idea would not be regarded as “new” and, as a result, not patentable. If it is determined that your invention idea is not patentable, then that doesn’t necessarily mean you should stop and not move forward with trying to commercialize your idea. It just means that you won’t be able to receive patent protection in the sense of keeping others from using your idea without your permission. In this situation, you are most likely in the Red Ocean and you will have to decide if you can successfully compete against existing competitive products.

If you decide to move forward to develop and market your invention idea yourself by setting up a business, then you should have a business plan. Many templates for such a plan are available on the Web and preparation assistance can be obtained from the Small Business Administration and the Service Corps of Retired Executives (SCORE) relative to which there are over 340 chapters across the country. A key chapter (or element) of your business plan is your marketing plan which defines your marketing strategy and how you plan to market your new product. Your market research results form the basis for this section of your business plan. Here is where you define who your competition is, what are the competing products and how do they compare with yours, what are the sales trends and demand for products like yours, who are the potential consumers, how big is the market, how do you plan to capture market share, etc.

If you plan to promote your invention idea to prospective investors, licensing candidates and potential buyers of your new product idea, then you need to recognize that trying to sell your invention idea without patent protection will limit its marketability. In any case, you can expect that most companies who may consider licensing or purchasing your invention will inquire about your patent search results, thus be prepared to share these results along with those of your market research activities.

If you decide not to prepare a business plan and want to promote your invention idea such as to potential licensing candidates and/or companies that might have an interest in purchasing your invention idea, then you will need to prepare promotional materials such as brochures and summary presentations as to what your invention is all about. In addition to a description of your invention in terms of what it does, what needs it meets, how it is better than and/or an improvement over existing potential competing products, you will need to address its “marketability” in terms of how it fits in the marketplace. You should identify its unique features and describe how these would make it appealing to customers. Having sales projections based on an analysis of similar or related products would be useful along with any market trend information to show compatibility with your new product would also be useful. Here’s where you will need the results of your market research.

In summary, without having conducted adequate market research, your chances of commercialization success are “slim to none”!

Increase Sales by Evaluating Your Company Data

clip_image002This article was written by Barry McKinley, SCORE Orange County Business Mentor

Business owners and managers sometimes are so busy building sales, they miss the most obvious. The saying “Can’t see the forest for the trees” becomes very fitting. To understand and grow your business profitably you need to have a very good understanding of what makes your business tick. Following are ten areas you want to review regularly.

1. TOTAL SALES BY PERIOD - Track your business revenue on a calendar basis, monthly, weekly and daily. This is your score card on how you are currently doing; two months later could be too late.

2. SALES BY PRODUCT/SERVICE – What is selling and what is not? You may be able to increase inventories in certain areas to eliminate “out-of-stock” and turn slow moving inventory into cash. It is important to understand what you should be promoting and where to spend your advertising dollars.

3. SALES BY LEAD SOURCE – Know where your marketing dollars are producing the most activity and profit. Just because a particular campaign was effective a year ago doesn’t mean that it is working today.

4. REVENUE PER SALE – Increase sales without increasing your client base. McDonalds doubled profits when they started asking, “Would you like fries with that?” and then again doubled when asking, “Would you like to supersize that?”

5. NEW vs RETURNING CLIENTS– How many new clients are you adding? In a normal business cycle a company will lose anywhere from 20% - 33% of their clients yearly. This means in many cases your business is not growing because you are not adding enough new clients

6. TOP 20 CUSTOMERS – Who are they and is their business growing or declining?

7. SALES PER PRIOR ACTIVITY – How effective is your advertising and other sales promotions? Measure cost vs. outcome.

8. PROFIT PER ITEM – What products are giving you a good return and what aren’t.? Does it make good business sense to continue to carry the low profit items?

9. WEB ACTIVITY – What is the activity on your web site, how many hits, how long are they staying, how many pages are they reviewing, what is the % of loaded carts not checked out?

10. SPECIAL REQUESTS / COMPLAINTSAre you missing sales because you are not carrying products your clients want? Is your business polices creating lost revenue?

By analyzing each of these potential profit centers for your business you will find how easy it is to increase sales and profits while decreasing inventory, outdated polices and non-productive employees.