Spring is a time for renewal, evaluation and growth. Let’s take the business model of a SWOT analysis and apply it to anything you have going on in your business, career or life.
So you have decided to leave your job and start your own home Scangator by working online. But do you really have the resources and knowledge necessary for this venture. Before anything else, consider the following: (a) why you want to start your own business, (b) the product or service that you are offering and their advantages over the competitors, (c) the target customers, (d) the start-up costs, (e) the time you will spend on the job, (f) where you will work, (g) your motivations and (h) support from your family.
It is important to remember that your business or marketing plan is not designed to be set in stone. You will establish goals and objectives however be mindful that the growth of your business will be an evolution. Keep your options open and be fluid in your approach as you and your business learn, adapt, change and evolve.
If you need a more in-depth analysis to make your business decision, you may want to consider calculating the pay-back period. This is the amount of time it will take to recover your initial cost. For example, if you invest in a new technology that costs $20,000 up front and saves you $5000 annually, then your pay-back period is 4 years. At this point, you want to be sure that the new technology you’re investing in will benefit you for more than 4 years.
Profit or loss does not equal cash flow. This is because profit and loss are only one contributor; and there are other equally important factors to consider: inventory management, accounts receivable, accounts payable, capital purchases, loans and debt payments, and timing. Considering profit and loss equivalent to cash flow is a mistake, since it does not take into account other important factors.
Most people have a portfolio of stock and they have no idea they could be generating income from their stocks. In my position trades I have a portfolio of options and I generate income off of those options. This is much less risky and has greater profit potential than owning stock long term.
Knowing and employing this five knowledge based areas in your business will help you avoid the cash crunches that become your nightmare when you fail to utilize them.