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Minggu, 17 April 2011

Selection Strategy


Operating the wrong business is the most frequent mistake that start-up entrepreneurs make. Here is a checklist to help you to evaluate if you are in a potentially successful one or to reassess the business you are in:
  • If you have not yet selected a business, take your time and wait for the business that is just right for you. You will not be penalized for missing opportunities. The selection process takes a lot of planning and your experience and complete knowledge is vital for your success.
  • Don’t be discouraged by not having much money to start a business. Many businesses can be started with no money at all. You can start small and humbly and grow one order at a time. Here is a sample, partial list of businesses you can start with very little cash:
    Businesses Requiring Little or No Money to Start.
  • Don't tackle or pursue businesses that may be too challenging. It is better to identify a one-foot hurdle than try to jump a seven-footer.
  • Try to identify a business that has long-term economic potential. Follow Wayne Gretzky's advice, "Go to where the puck is going, not to where it is."
  • A big mistake can be an error of omission. This means you may fail to see an opportunity that is right in front of you.
  • Keep in mind that as a general rule specialists do better than non-specialists. Wouldn't you be more inclined to take your sick cat to a veterinarian whose practice is limited to cats rather than to a general practitioner?
  • Operate a business that will grow in today's and tomorrow's markets. Many small retail stores are no longer in business because huge stores such as Wal-Mart and Home Depot provide more choices to the customer and often at a cheaper price.
  • Follow the advice of Chairman Warren Buffett, of Berkshire-Hathaway Inc. and the most successful business picker in American history. Mr. Buffett looks for businesses that focus on a "consumer monopoly" with pricing power and long-term predictable growth prospects. Here are two books that will give you invaluable insights into how Mr. Buffett selects businesses in which to invest. You can copycat these basic principles to help select your own business.
  • BUFFETTOLOGY by Mary Buffett and David Clark  BUFFETTOLOGY by Mary Buffett and David Clark. The previously unexplained techniques that have made Warren Buffett the world's most famous investor.  THE WARREN BUFFETT WAY by Robert G. Hagstrom, Jr  THE WARREN BUFFETT WAY by Robert G. Hagstrom, Jr. Investment Strategies of the World's Greatest Investor.  
  • Businesses to avoid are "commodity" businesses where you must compete entirely on price and in which you must have the lowest cost to survive. As Mr. Buffett has said, "In a commodity type business you're only as smart as your dumbest competitor."
  • Most service businesses have pricing power. Pricing power means that you will not need to have the lowest price in order to secure business. Your customers will be willing to pay a fair price for a better product or service.
  • Should you bet on a business you don't know when you can bet on a business you do know?
  • If you are manufacturing a product, consider the pros and cons of contracting out production to a low-cost supplier. In other words, operate a "hollow corporation." A "hollow corporation" is a company that subcontracts manufacturing and packaging.
  • If your business is based on marketing an invention or patent, keep these ideas in mind:
    1. First check to determine if there are any issued patents similar to your idea. You can secure information from the U.S. Patent office at www.uspto.gov.
    2. Be cautious about getting involved with firms that ask for up-front fees to market an invention.
    3. No matter what you hope for, you will need a product to test, to show and to solicit feedback.
    source:http://www.myownbusiness.org/

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