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Have An Idea? Starting A Business? STOP! Read This Article

May 22

Posted by Jim Hart in business, business startup, strategies | No Comments

As a business consultant I am asked a lot of questions about success, especially from younger clients from age 25 35 who are loaded with ideas and the youthful enthusiasm but lack experience. My answers are usually the same each timeyou have to have a good idea, a written plan backing that idea and enough business knowledge to deal with the issues surrounding start-up launch and rollout. And thats where things get a little shaky for most people. They have the ideas. They have the enthusiasm. But they dont have a realistic written plan (if they even have a plan) and they lack true knowledge and experience.

Most people starting in business have never written a business plan and/or dont have enough business acumen to write one correctly. Specifically, they lack real world business education and experience. These same entrepreneurial-types virtually always over estimate sales and under estimate costs. They dont have a firm grip on management, marketing, advertising, human resources and accounting, law or finance. They have a lot to learn and will waste time and money on costly mistakes to gain hard learned and expensive lessons.

And the complexity of an idea kills many projects before they get off the ground. I have heard every business opportunity under the sun for manufacturing, distribution, retail sales, borderline scams and on and on and on and my conclusion is this:

KISSkeep it simple stupid. Keep you start up costs low and human resource requirements at a minimum. The more intellectual your product or service, the more involved you will be in the day to day grind of work product output. You want to be able to clone yourself. You want your business to be so simple a monkey could do it. Let me give a quick example: Lets say you want to set up a mortgage company. In this case, you have to know a lot about a lot and your staff will have to know a lot about a lot and these educated people are going to want a nice big fat juicy payroll. Whereas, a business like an oil change company hires people with little or no education to simply drain car oila monkey could do it! The result is a number of successful business franchises. Simple process, low paid employees.

Then I tell people, before you run off and look for your big success with a new idea stop and think about how you can make money doing something simple, something you can clone, something with low start up costs, something you can test quickly and easily. Something like; washing residential and commercial windows. Why window washing? Whats your up front start up costs? All you need to get started is a bucket, a squeegee and some cleaning fluid! Then, go sell. If you were the company washing all the commercial windows between Chicago and Detroit you would be a millionaire. And a monkey can do it.

The problem here is, like every business, making the sale. But remember something; if you create a new product or service, you will have to spend time educating people about your offer before you can sell it. Thats twice the work. Do something they are already familiar with–that way you can spend your time selling rather then educating and selling. Something like washing windows. I dont care what your business or idea may be; if you cant sell it, the project will fail.

This is why you need a plan. Do you want some free business coaching? Here it is, and it wont cost you a dime. Click the link belowget the Business Planning Ebook, its the best planning tool you will EVER find. I use it all the time. Thanks for reading and good luck!

We have a number of Free EBooks you can download at our site that is related to this article. Our site does not hyper-advertise at you to sell product. Our EBooks are high quality, powerful and worth your time.

Click the link below, go to the freebie section to get your Ebooks. This offer is an Ezine Article exclusive.

Copyright 2006
James W. Hart, IV
All Rights reserved

Author: Jim Hart
Article Source: EzineArticles.com
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Using Sector Funds to Construct Diversified Mutual Fund Portfolios

Apr 21

Posted by Sam Subramanian in investing, mutual fund, stocks, strategies | No Comments

Sector funds are too risky. I doubled my money with Fidelity Select Technology in 12 months! Avoid sector funds. If all of this sounds confusing, you are not alone. Sector funds are among the more misused and misunderstood investments. So, how should you use sector funds?

Before looking at one of the uses of sector funds in detail, lets review what sector funds really are: Sector funds confine their investments to a particular sector of the economy. Fidelity Select Healthcare (NDQ: FSPHX) is an example of a sector fund. By focusing on stocks of companies in the healthcare sector, the price moves of this fund are more dependent on factors that impact the healthcare sector rather than the economy as a whole. Demographic change, such as increasing age of the population, is an example of a factor that particularly drives investments in healthcare. By diversifying its assets across over 60 companies within the healthcare sector, Fidelity Select Healthcare provides investors with the opportunity to benefit from secular trends driving the demand for healthcare while mitigating company-specific risks such as failure of clinical trials conducted by a particular company.

Lets now look at a high-potential approach of using sector funds.

Using sector funds to create a diversified mutual fund portfolio By allocating assets across a group of sector funds, investors can effectively create a diversified mutual fund portfolio using sector funds. This approach gives the investor flexibility to over-weight or under-weight certain sectors versus broadly diversified indexes such as the S&P 500.

To implement this active approach to money management, it helps to have a diverse group of sector funds to choose from. Fidelity Investments manages 41 sector funds under the Fidelity Select Portfolios umbrella which makes this family of sector funds well-suited for this purpose. By dividing assets across, say, 8 sector funds in the Fidelity Select Portfolios, e.g., Fidelity Select Biotechnology (NDQ: FBIOX), Fidelity Select Computers (NDQ: FDCPX), Fidelity Select Energy Service (NDQ: FSESX), Fidelity Select Home Finance (NDQ: FSVLX), Fidelity Select Medical Delivery (NDQ: FSHCX), Fidelity Select Multimedia (NDQ: FBMPX), Fidelity Select Retailing (NDQ: FSRPX), and Fidelity Select Wireless (NDQ: FWRLX), one can build a customized diversified portfolio. With each of the sector fund managers actively scouting for the best investment ideas within their sectors, this cluster of Fidelity Select Portfolios packs a lot of power into your diversified portfolio.

Other mutual fund families that provide a relatively wide choice of sector funds include ProFunds and Rydex Funds. Exchange traded sector funds such as Select Sector SPDRs, iShares, and Sector HOLDRS, that trade on the American Stock Exchange, can also be used to construct diversified sector fund portfolios.

The wide selection of sector funds available provides you with the ability to take advantage of changing market conditions and continually optimize the risk-reward characteristics of your diversified portfolio. To employ this approach effectively, you need to understand and follow the dynamics of the individual sectors. You must also be able to make informed decisions on sectors to select and sectors to avoid. At the end of the day, you should be right more often than wrong with the sectors you select.

AlphaProfit.coms research suggests that by constructing diversified mutual fund portfolios using sector funds, investors have the potential to outperform the market averages on the basis of relative returns as well as risk-adjusted returns. The track-record of AlphaProfits model portfolios indicates the potential of this approach.

A Caveat

Diversification is one of the cornerstone principles of mutual fund investing. Sector funds that focus on high-growth sectors or narrow niches of the economy tend to be volatile. It is generally not advisable to commit a substantial portion of your total assets to a single sector fund. Maintaining adequate diversification across sectors in your overall mutual fund portfolio is good investing practice.

Key Points to Remember

1. Sector funds are investment vehicles that focus their investments on a particular sector or industry group. Sector funds provide investors with an opportunity to profit from trends impacting a particular sector or industry while reducing company-specific risks.

2. High-potential diversified portfolios can be constructed by dividing assets among a group of sector funds. This active investment approach requires investors to make informed decisions on sector selection. The power-packed cluster of sector funds may offer investors the potential to outperform the market averages.

3. Diversifying mutual fund portfolios across sectors is good investing practice.

Notes: This report is for information purposes only. Nothing herein should be construed as an offer to buy or sell securities or to give individual investment advice. This report does not have regard to the specific investment objectives, financial situation, and particular needs of any specific person who may receive this report. The information contained in this report is obtained from various sources believed to be accurate and is provided without warranties of any kind. AlphaProfit Investments, LLC does not represent that this information, including any third party information, is accurate or complete and it should not be relied upon as such. AlphaProfit Investments, LLC is not responsible for any errors or omissions herein. AlphaProfit Investments, LLC disclaims any liability for any direct or incidental loss incurred by applying any of the information in this report.

The third-party trademarks or service marks appearing within this report are the property of their respective owners. All other trademarks appearing herein are the property of AlphaProfit Investments, LLC. Past performance is neither an indication of nor a guarantee for future results. No part of this document may be reproduced in any manner without written permission of AlphaProfit Investments, LLC. Copyright 2004 AlphaProfit Investments, LLC. All rights reserved.

Author: Sam Subramanian
Article Source: EzineArticles.com
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5 Rules to Reduce Risk When Starting a Business

Mar 31

Posted by admin in business, business startup, internet business, mindset, mitigating risk, strategies | No Comments

5 Rules to Reduce Risk When Starting a Business in the Other 8 Hours

By Robert Pagliarini

I have a metal paperweight on my desk with the inscription, “What would you do if you could not fail?” It’s a nice ornament with a feel good message, but it’s completely wrong and dangerous. Anybody can fail at anything. If you start a new venture without first thinking about and limiting risks, you can put your finances — and worse yet — your relationships in jeopardy. What starts as a way to build a dream life during the other 8 hours, become your own boss, or make a fortune can turn into a nightmare if you don’t limit your risk.

A better and more useful message would be, “What would you do if it didn’t matter if you failed?” To me, that’s much more realistic and powerful. Instead of taking a risk that could end in a cataclysmic strikeout, your goal is to limit the risk of financial catastrophe. This means containing projects so that a swing and a miss doesn’t have the potential to ruin your life.

Here are 5 rules to reduce risk when starting a business in the other 8 hours:

  • Get free help. You should enlist the support of others. Find service partners willing to invest their time a piece of the venture’s future income instead of upfront cash. The same person who would laugh you out of their office if you asked them for a $2,500 investment may gladly trade $2,500 of their services for a small piece of ownership in a promising new venture. Why? Like you, most people are looking for an opportunity to get ahead without risking too much. If someone can invest a little of their time with the hopes of making a huge return, they may jump at the chance.
  • Make small bets. In the investing world, everyone talks about risk tolerance — a measure that determines how psychologically comfortable you are with the possibility of losing money. This is good to know, but more critical is knowing your risk capacity — that is, how much money can you afford to lose without it destroying your finances and your ability to pay your rent? Start small and start slowly. Immediately committing thousands of dollars to an idea is as ridiculous as walking up to a girl you’ve never met and asking her to marry you. You need to put a little out there and get a little back. Then you can put a little more out there and hopefully get a little more back.
  • Negotiate fiercely. You must be relentless about getting what you need. You don’t have the luxury of a six-figure budget. You’ve got to get your ventures up and running as cheaply as you can. One way to minimize risk is to negotiate everything. Don’t accept anything as is. Negotiate discounts, concessions, bonuses, terms, etc. It will feel awkward at first, but keep practicing.
  • Limit liability. If you are producing a product or providing a service that could lead you to get sued, you must protect yourself against lawsuits by incorporating and by having the proper liability insurance. Don’t risk financial disaster by not shielding your personal assets from your business assets.
  • Keep your day job (at least for now). It’s important to have that steady and predictable income during the day while you swing for the fences at night.

Unless you’re sports-challenged, you know if you get three strikes you’re out. But what if that weren’t the case? What if you could swing and swing and swing without ever striking out? A swing and a miss is not a failure when you follow these rules. A swing is simply one swing closer to a hit.

You can download several free resources(assessment, poster, audio interview, video, and more) at www.other8hours.com and learn more about my new book, The Other 8 Hours: Maximize Your Free Time to Create New Wealth & Purpose.

Read More

* Bad Day? 5 Tips to Keep Your Motivation
* Is it Too Late to Improve Your Finances?
* Make Money From Your Hobbies

(Baseball image by Scott Ableman, CC 2.0)

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Your Biggest Money Decision

Mar 31

Posted by admin in investing, mitigating risk, strategies | No Comments

Before worrying about your nest egg, you need to sit down with an attorney and draft a will. MoneyWatch’s Jill Schlesinger explains.

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Legg Mason Fund Manager: How to Beat the Market

Mar 5

Posted by admin in business, commodities, investing, investment gurus, mitigating risk, mutual fund, stocks, strategies, warren buffett, wealth | No Comments

Everyone wants to beat the market.  Very few investors do.  Your friends at Black Swan Management, LLC are always on the lookout for information that will make the road to the riches a little bit smoother.

If the stock market doesn’t go up much, your index fund won’t bring big returns. Robert Hagstrom of investment firm Legg Mason says you should use actively managed funds.

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Life Lessons From Leaders

Mar 1

Posted by admin in business, investing, Leadership, mindset, strategies, wealth | No Comments

Zig Ziglar has been quoted as saying “People often say that motivation doesn’t last. Well, neither does bathing – that’s why we recommend it daily.” Inspirational quotes and sayings can help us stay motivated as we deal with life’s ups and downs.  Perhaps that is why some people subscribe to Reader’s Digest—for the inspirational stories that can provide a new perspective for our daily challenges.  Following are some of the best inspirational quotes and sayings and some commentary on the life lessons offered by these quotes and their authors.

“Tomorrow is often the busiest day of the week.” – Spanish Proverb

Why is tomorrow the busiest day of the week?  Well, in my experience it is human nature to procrastinate and many of us postpone taking action, preferring to ‘do it later’.  We all know tomorrow is not promised, yet we tend to put off taking action until some unspecified, later date—usually euphemistically termed ‘tomorrow’.  This quote inspires me to take action today.

“Things may come to those who wait but only the things left by those who hustle.” – Abraham Lincoln

Hard work and hustle are more valuable than a high IQ, a degree from the right school, or any of the so-called factors that most people attribute success to.  Abraham Lincoln is remembered as a hard worker, yet few people discuss the fact that he overcame obstacle after obstacle before he finally became the President of the United States.  Lincoln was born into poverty and faced defeat and setbacks throughout his life. He lost eight elections, failed twice as a businessman, and suffered a nervous breakdown.  He began working at the age of the age of seven to help support his family, went bankrupt at 24, spent the next 17 years repaying his debts, but never gave up.  Although I may never be President, this quote inspires me to hustle and never give up.

Don’t find fault, find a remedy. – Henry Ford

Henry Ford, often credited with revolutionizing industry and perfecting mass production methods, was an expert at using other people’s ideas and making them better.  Other people made cars before Ford but Ford made better cars and sold them for less. Other people designed and built car factories but Henry Ford built the biggest factory of his time and made the entire factory a moving production line.  How did the son of a farmer (Ford’s parents fled the Irish potato famine in the 1840s) achieve all this with little formal training?  Henry Ford developed the attitude of a problem-solver.  When others saw insurmountable obstacles and problems, Ford saw opportunity.  Where others saw failure, Ford recognized an opportunity to learn from his mistakes and try again.  When he realized he didn’t know enough about electricity to pursue his dream, he took a job working at an electric company.  When his investors backed out on him, Ford raised funds by selling shares of stock. When his assembly line workers were unhappy Ford bucked the entire industry standard and increased pay while cutting hours.

Henry Ford’s story is inspirational because it proves that hard work, finding creative solutions, and remaining persistent even with repeated failures is the key to solving life’s problems.  In fact, Ford’s attitude laid the foundation for his success.  He knew that every big problem is really a collection of smaller problems.  Instead of dwelling on the problem and placing blame, Ford faced his problem and focused on solutions.  Henry Ford knew that placing blame on others, external circumstances, or life in general only makes the problem worse. Henry Ford inspires me to see ‘problems’ as opportunities.

One secret of success in life is for a man to be ready for his opportunity when it comes. – Benjamin Disraeli

Benjamin Disraeli entered politics (unsuccessfully) in the early 1830s but did not hold elected office until 1837.  For the next 31 years it always seemed he was on the verge of wielding power and influence but somehow, things never worked out in his favor.  He stayed the course and in 1868 finally became the British Prime Minister due to a resignation.  However, later that year in the general elections he was unseated.  It wasn’t until 1874 that he got another opportunity to implement his political ideas.  Two years later, once again Prime Minister, he was recognized by Queen Victoria with the title of Lord Beaconsfield and continued to shape his government’s policies.  In addition to a successful political career, Disraeli also gained renown as an author, solicitor, and social figure.  His words provide inspiration because Disraeli exhibited patience and preparedness long before he reaped the rewards others enjoyed.  He was (and still may be) the only British Prime Minister of Jewish heritage and achieved social recognition even though he was not wealthy like many of his political peers and was often at odds with some politician or another.  We can take note of his words because he lived accordingly, waiting patiently for many years for opportunity to come his way.

If you can dream it, you can do it. – Walt Disney

Many people are familiar with some of Walt Disney’s various accomplishments— pioneered the animation field, created Mickey Mouse and the world’s first synchronized sound cartoon, held the patent for Technicolor for two years, Academy Award-winner (48), Emmy Award-winner (7), Oscar Award-winner (26), winner of the Presidential Medal of Freedom, creator of the first full-length animated musical feature (as well as numerous other classics), first to present full-color programming, inventor of the multiplane camera, etc.—however one of his most inspirational characteristics was his vision.  Walt Disney had the ability to see something that didn’t exist yet, harness his energies, and turn his vision into reality.

Disney supervised and orchestrated the acquisition of 43 square miles of swampland –twice the size of Manhattan Island–in the middle of Florida. He planned to build a “Disney world” of entertainment which would include an amusement park, resort hotels, and his Experimental Prototype Community of Tomorrow (EPCOT). Crazy?  Not to Walt Disney.  In fact, people willingly sold him their property thinking it to be near worthless.  Eventually he used dummy corporations and cooperative individuals to avoid a burst of land speculation that could derail his dream project.  In return for leading economic development in central Florida, the governor gave Walt Disney the authority to establish an autonomous quasi-government giving Disney full control over building codes, zoning, planning, and the like.  Walt Disney World required $400 million and 9,000 workers to build, and Walt Disney passed away before seeing it completed, but it doesn’t matter—Walt ‘saw’ his dream come true long before any of us did.

Following in the footsteps of successful people is a great way to get started on your personal path to success, however, searching a little deeper to see what makes them ‘tick’ can provide you with even more motivation.  From time to time your friends at Black Swan Management will give you a sneak peak at what makes us tick, and the lessons we’ve learned from individuals we admire and respect.  Like the great Zig Ziglar once said, “success is not a destination, it’s a journey.”  So enjoy the journey. We are.  As always, happy investing.

About the Author

Anthony Sills, M.B.A. formerly traded FOREX from the Atlanta Financial Center and has worked for stock advisory services, brokerages, Fortune 100 companies, and national banks.  Mr. Sills is currently a licensed loan officer and freelance writer.  You can reach him at anthony@BlackSwanManagementLLC.com

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