Cash or Profit?

In one of the recent workshops we discussed about how could a profitable company goes bankrupt.

Weird, but it is true.

For all entrepreneurs, it is important to remember that cash is king. While profit, as calculated by the accountant based on accounting principles is important, cash is vital. Accounting allows you to record profits when you don't actually have any cash. Take for example, a RM1,000,000 sales of cokodok that you made to Mr A on credit. Mr A has 90 days to settle the bill.

Accounting wise, you would have recorded a revenue of RM1 million ringgit and if the cost was RM300,000 you would have recorded a profit of RM700,000. This is called accrual based accounting.

The problem is, when the supplier comes to collect his RM150,000 cost or your staff wants their salary at the end of the month, you cannot pay with profit! You need cash. You need cash to pay everyone their dues.

So, while you would be happy with your profitable business, please take a closer look at your cashflow.

Selamat berniaga :-)

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Distractions in business

When we start or have a business, one of our biggest enemy is distractions. Distractions is bad as it derails us from our original and true intention; making us lose focus on what matters, normally leading to wasted money, time and resources.

Distractions come in many forms and guises. For those who are making progress, distractions could be in the form of lifestyle and fun; the women, men, frolicking and all the sweet things on earth. These kinds of distractions would come to those who started making money from their business. We see and hear these kinds of stories all the time; someone falling off his fortune because of a mistress, excessive travelling and lavish lifestyles.  These types of distractions are tests for those who has made it and wishes to either stay on top or go higher.

But those who just started business and have not made it yet are not spared from distractions. For those who just started a business, distractions can come in forms of new ideas and perceived opportunities. In the beginning, you business will have to go the 'budding' phase; it is a phase where the growth is not visible and it could be frustrating at time. During this phase, your impatience may invite you to be distracted with new ideas and perceived opportunities. These distractions are very dangerous as they would cause you to abandon your original plan, leaving it half-baked. Be careful of this distraction of perceived opportunities as it is very intoxicating. Why? Because it is filled with hope and hope drives an entrepreneur high; only that getting 'high' on hope is not going to get you anywhere.

Therefore, my advise is to always check if you are on the right track. I mean have a systematic method to check if you are on the same track and persistently moving along the track. The first thing is to write it down on paper - do not trust your brain with the plan. You need your brain for the execution of your plan; storing the plan itself should be on a piece of paper. make it a point to spare 1/2 an our each monday to go back and read that piece of paper to remind yourself of your goals and plans. Sit down and write what are the things that you are planning to do for the rest of the week and compare that list with your original plan. You would be able to spot clearly, once it is on paper, what are necessary actions and what are the distractions. Cross out the distractions and reclaim back the time and effort that your are planning for that distractions; the very least, you could use the time to be with your family.

Please do not mistake this with the adjustments that you need to make on your track due to reasonable and valid reasons. That adjustments is vital. You must know the difference between adjustment and distractions.



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Start a business to sell goods or services, not to get grants

Recently it was reported that PUNB has approved for an allocation of RM200 million to help bumiputera entrepreneurs. Great. But if you want to start a business, assume that your name is NOT in the list.

Many Malay entrepreneurs assume that a government grant is almost automatic for them if they have a business. Many went on to build an operation and make commitments based on the assumption that PUNB or some agencies would give them a grant/loan/assistance for their business. WRONG

One thing that you would need to realize, no matter how great you think your product is, how ingenious is your idea, how original your concept is, there will be a thousand others who thinks the same about their products/services. Therefore, there is no guarantee that your business will get the grant.

Build your business assuming that you will not get a grant; your business must be able to stand on its own. Ironically, once your business is proven to be able to stand on its own, he grants and loans will come pouring in. The rationale is simple, the grant officer wants to deliver success stories and proven business are less likely to fail.

But it does not mean that you should not apply for such grant. You should and must apply, but do not assume you will get it. And if you want to prepare your pitch, the following might  help (I do not own the copyright to the photo, it is reproduced under the Fair Use law, for educational purpose only)

Do what you have to do so you can do what you want to do, later

Hello readers,

Sorry for the long silence. I have been caught up with a myraid of things to sort and obstacles to jump over. Anyway, today I read an article which I cannot delay passing on to you through this blog. Read it if you have the time and please do comment if you share the views  in the article, here.

http://www.entrepreneur.com/blog/222831

See you again soon

Yazdi

If you like the article above, please like us here. :-)The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

Developing your business

Hello friends,

I am sure most of us have growth as one of the top priority, if not the highest. No, I do not mean the waistline (although mine has a mind of its own) but your business. Simply put, most of us equate business development / growth as increasing profit and wealth.

Well, if you are going to do it yourself (as most entrepreneurs would), these are some simple steps that you could follow:

1. Where are you now? You need to know, precisely, what is your present business model, how much business is it generating and its corresponding size. Brainstorming together with your employees would be a great idea. Do you have strong strategy but weak operations? Or weak strategy but strong operations? What is lacking?

2. Where do you want to go? You need to be clear as to what you want to GROW. Remember, it is sustainable profits that you would want to grow, not simply size. The target should be 'Realistic" but multiplied by two, at least. Set high standards. Do not be afraid that you might fail.

3. How are you going to achieve it? Organic growth VS in-organic growth? Product development? Market development? Diversification? Market penetration?

4. How much it is going to cost? You need to be very clear as to how much is this going to hit your pocket. Find out any hidden cost.

5. How are you going to fund the cost? Own money? Borrowing? New investors? Equity? Hybrid? Convertibles? What is the art of getting funded?

6. Is it going to be worth it? Is the benefit going to outweigh the cost?

Lastly, keep it simple and doable. Do not make your growth plan complicated. Take action.


Related reads:

1. Growing successfully for small businesses
2. Growing to business failure
3. The Art of Getting Funded



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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

Women in Business, now on air!

Many moons ago, I wrote about the rise of ladies entrepreneur in Malaysia, and today we see another milestone. The sign are so clear, we cannot disregard it. The Star Newspaper reported:

Capital FM 88.9 - Malaysia's first women's radio station to go on air Thursday

By JADE CHAN

PETALING JAYA: Malaysia's first women's radio station Capital FM 88.9 is all set to sizzle the airwaves as it begins its broadcast from 6am Thursday.
Joining the stable of radio stations under Star Radio Group, the all-new Capital FM is the only radio station that provides women a voice and a hub to exchange thoughts and opinions.
Capital FM 88.9 features a handpicked line-up of celebrity presenters, namely Asha Gill, Joanne Kam, Xandria Ooi, Patricia K, Sheela Haran, April Kuan, Joey G and Liang, who will each bring their own flavour to offer different dimensions to the radio station.
Targeted at urban women in the Klang Valley aged between 25-35, the station aims to be a platform for women's issues.
"Capital FM has been tailored to meet the needs of women. To be a friend and confidante. Women empowering women in their daily lives,” said Star Radio Group deputy chief broadcasting officer C.K. Tan.
"Our driving goal is to connect with women by addressing their emotional and intellectual needs, to enhance the quality of their lives and their communities."
Star Radio Group chairman and Star Publications (M) Bhd group managing director/CEO Ho Kay Tat credited Capital FM's unique tagline Women - The New Capital - to Star Publications (M) Bhd executive deputy chairman Datuk Vincent Lee, who coined it as a tribute to and in recognition of the value and importance of women.

The success of this radio station will depend on the kind of values they instill in the womenfolks in Malaysia. I hope that it serves to eliminate the prejudice that existed in both men and women, letting people focus more on living better, peaceful and prosperous.

The only thing I don'd like is the tagline " Women - The New Capital". As I see it, women has always, always been a very significant capital since the beginning of mankind, since the beginning of trade. I was merely hidden away, not prominent. In Islam, Prophet Muhammad's wife, the love of his life, Khadijah was a WEALTHY businesswomen who had employed the greatest man that ever lived. And you don't call that capital? Women should give more credit to women.

Work Smart Everyone.

Related reading
1. Rise of Women entrepreneur
2. More on women entrepreneurs in Malaysia


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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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ElixirEducate

You have got what it takes to be a successful entrepreneur

Dear friends

I am dedicating this post to all my friends in direct selling and multi level marketing. And I wish that all those who has shunned away from direct selling friends to read this letter too so that we can all be friends again.

Direct selling comes in many form and provides different products, from insurance, unit trust, herbal products, vitamins, containers, household, shampoo and the works. I am not talking about the pyramid scam or get rich quick scam, but I am talking about the genuine multi-level sales channel. And direct selling has garnered a very bad name, such that people shuts down by the mere mention of the subject. It seems that someone would have a bad experience with a direct selling, with the way they are being pushed to buy or sign up. Direct selling entrepreneurs are being shunned, pushed away into a society of their own.

I say, what a waste of talents. MLM entrepreneurs can be successful and instead of shunning them away, I want to embrace them that with the right method, they can be the millionaire they wanted.

1. You have what it takes to be successful. The fact that you are taking action, meeting people and overcoming your shyness and fear is already a magnificent start. It is the quality that is required in all entrepreneurs. You are brave.  Not many people have this, but you do. This alone can ensure success. You are taking action to achieve your goal, making changes in your life, sacrificing your time and energy to achieve what you wanted. Unfortunately, people has taught you wrongly and you ended up sacrificing your friends too. But you can fix this easily. Just email me and I will tell you how.

2. You have a dream and you dream big. That is another essential quality to become a millionaire. You are not happy with the status quo, you present situation. So you sell. You sell to achieve your dream. But you must not limit your dream to merely profits. You must dream bigger than a car, a bungalow and a holiday. You must dream to be a better person with a better life. To help other people in need.

3. You are building relationship. Whatever product you are selling now in MLM is just one product, but what you are building is a relationship between a product and a consumer. And that relationship is very valuable. If you build the relationship properly, you can use the relationship to sell other products and make more money. A happy customer who had bought vitamins from you would also be happy to buy some health  equipment too, right? But build relationship the right way, build on trust.

4. You have a plan. Every MLM entrepreneur will start with a plan on how to reach the millions. But the plan is only regarding one product. MLM entrepreneurs must have a bigger plan, their own plan on how they want to achieve thier goal, not juston one product and not just on MLM alone. MLM entrepreneurs must have a plan to eventually become a true entrepreneurs if they really want to earn the passive income. Get an mentor, a coach or anyone who can help you get your entrepreneurship plan drawn out for you.

Finally dear friends, you can get there. You can buy your dream car, your expensive houses and your love boat. But you may need to make some minor adjustments to get there. Old tactics in a new world, a world of social networking and fast dissemination of information as well as disinformation, would not work. People are getting smarter and have more choices. You can be different, if you choose to do so.

And to all those who has lost friends in MLM, share this with them so that we can all be friends again.

Work smart everyone.

Related reads:

1. Marketing formula

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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
Lastly, if there is anyone that you know who may benefit from reading this article / post please forward and share this posting by clicking the button "Share" below. Have a great day ahead.

ElixirEducate

A letter to aspiring entrepreneurs, Part 3

Helloo there,

How are things going with your new venture? I hope you are getting along fine. I am good too, despite having to work this weekend. Well, you know what they say about us entrepreneurs, "weekends are weekdays but our weekdays can be our weekends too, anytime".

To recap, in my last letter to you, I briefly mentioned about the need to follow your passion, to have the endurance, to be resourceful and to have an 'entrepreneurship plan'. We left off at how your business plan would fail you. Therefore, without further ado, I present to you lesson number 9.

Lesson 9. You Business Plan will fail you. What do they have in business plans? The important ones would be product description, target market, financial projection, swot analysis, competitor analysis, industry analysis, business model and marketing plan. And some people would produce 100 pages of this surefire plan and set off to build a business based on his plan. And one thing are 100% sure to happen: things would not go as planned. And even if you rigidly follow your plan, there is 90% chance your business will fail.  No. It is not because you are not a smart planner, it is certainly not about your capabilities at all.

It is simply because the nature of the business plan. They are all a bunch of guesses and assumptions. Some might argue that it is an educated guess, but it is a guess nonetheless. And most of the assumptions are bound to go wrong. It could be overstated or understated.

But  don't get me wrong. You must have a plan. But you must accept and be ready for the plan to fail and needing adjustments. That is the nature of a plan. It is its natural order of life. Have a plan and keep an eye out for feedbacks and be ready to make changes to your plan. Like the saying "roll with the punches", find ways to find the right plan; the plan that makes money.

And even when you have found the right way and are making money, do not take things for granted. Keep your ears to the ground, listen to the heartbeat of your business and competitors. Modify your plan if you have too.

My last piece of advice on this business plan thing is, keep it simple. 100 pages of business plan are for investors and bank. As for you, you must fit in on a piece of A4 paper. It must be easily understood by you, clearly and visibly. Making money, based on our plan, must not be complicated.

Well, that is all for now, I will write to you again soon, about Overcoming Your Fear of Failure. In the meanwhile, send my love to the family and make smart decisions.

Yours sincerely

Yaz

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If you like the article above, please like us here. :-)

The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
Lastly, if there is anyone that you know who may benefit from reading this article / post please forward and share this posting by clicking the button "Share" below. Have a great day ahead.

ElixirEducate