Business Principles Start-Up

Start-Up issues faced by all new businesses.

Business Barriers

No business is instantaneously successful.   There are multiple obstacles referred to as barriers all owners and managers have to overcome.   There are three primary groups of barriers for every business out there.   They include capital (financial backing), knowledge (level of education and/or experience) and persistence (staying power).   The following sections introduce …

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Feedback Loop in Business – Identification and Parameters

The goal of accounting is to make continuous improvements in operation by monitoring economic results over a period of time.   Any changes to economic value is analyzed for impact and the source of the change.   In effect, management is constantly tweaking the business to gain marginal improvements via  financial results.  This entire process is known as …

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What Startup Owners Can Learn from Expert Traders

When it comes to managing a successful business, expert traders can teach entrepreneurs a thing or two about how to gain from a competitive market. It may not be too obvious, but trading and entrepreneurship have much in common. In fact, some of the most successful investors and traders have started their own profitable companies, …

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Stock – Fundamentals of Ownership and Control

The basic principle of stock is an ownership right of a company based on the percentage of outstanding shares in possession.   It is essentially a mutual understanding between shareholders that each investor’s percentage of ownership is similar in rights based on that percentage of ownership.   So if a shareholder owns 30% of all sold shares,  …

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Microbusiness

Microbusinesses are all around us.  Often overlooked and rarely given a second thought they are the backbone of our economic system.  From the local beauty salon to the Mom and Pop pizza shop; microbusinesses are everywhere.  Microbusiness is defined as the small closely held operation that provides a family a supplemental or primary source of …

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Mission Statement

A mission statement is a written document identifying the businesses’ primary reason for existence.  It should convey the core values and the principals of the company.  It should be reviewed with staff frequently to remind everyone of the chief goals of the company.   When asked about preparing a mission statement I tell clients to focus …

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Shareholder Dynamics in Small Business

The majority of small businesses are owned by a single individual.  An additional pool is family owned or controlled.  The balance usually involves friends or relatives that are passive in ownership.  These forms of ownership create some interesting shareholder dynamics and if not thought out, can create some legal and financial issues in small business …

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Types of Business Models

In business there are four distinct business models.  Just about any business can be identified with one of the four.  The following are the four types of business models: Low-Volume, Hi-Margin Hi-Volume, Hi-Margin Low-Volume, Low-Margin Hi-Volume, Low-Margin  No single model is the best or the worse.  Each works in their respective industries.  In general, the …

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How Much is a Fair Profit? – Part IV of V Return on Capital

For all investors in business, capital is the fronted equity an investor risks in exchange for a return.  This return can range from zero to infinity depending on the success of the business.  A fair profit is really a function of four different factors.  They are as follows:  Part I – owner’s compensation plays the …

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