February 18, 2008

The Key to Making Fewer Mistakes... Choosing the Right
Distribution Channel... Following Your Trail to Success...
A Little Tax Goldmine for You... and More.

** The Key to Making Fewer Mistakes
By Adrian Newman, Founder of e-Wealth Daily

When you start your own business, you're going to be tempted to work all the time and put in a lot of hours to make sure your venture is a success. I see it all the time, particularly with sole proprietors who are relying on themselves only. However, you need to know that burning yourself out could lead to disaster.

You want your business to be successful, right? Of course you do. And there's nothing wrong with that. But when you push yourself too hard, you end up making careless mistakes.

On a very general level, think about when you're tired and at home. Maybe you forget to turn off lights or the television or forget to put the milk back in the fridge. These things are very minor omissions, but when it comes to missing things in business, there's no such thing as a minor mistake — they all end up costing you.

If you put in 12-hour days and push yourself to the brink of exhaustion, it's only a matter of time before you will make a mistake. You will forget to make a deposit or make a payment to a supplier. You will forget to make a loan payment or call back a customer. Small mistakes or omissions can result in the loss of business, credit problems, or something worse.

Also, when things start going wrong, it can be difficult to break free from the snowball effect that can occur. Meaning that when you have to go back and fix something, the next task on your list will suffer as a result.

If you're burning yourself out, then you're probably not allowing yourself to recharge. I realize that having your own business requires attention, but if you're feeling that you are working yourself too hard and you start to miss things, you are making mistakes, or your personal life is suffering, then it may be a sign that you need help.

If you can't afford a full-time employee, then enlist the help of someone on a part-time basis. You can even get the help of your spouse or a family member. You won't have to pay them a huge amount, but it will take off some of the pressure that comes with overworking yourself.

Don't be afraid that if you're not attending to the business 24 hours a day, seven days a week, something will go wrong — it's not an inevitability.

Focus on utilizing your time to it's fullest when working. Make every hour of your day count. Budget your time so that you can fit everything into an eight- or nine-hour day. You can do this by working out a schedule for certain tasks and sticking to it.Schedules might need to be adjusted as situations arise, so you also need to give yourself some leeway for such occasions. Also allow for some down time in your day for lunch and for making follow-up calls to customers or cold calling new customers.

Don't forget about when you have somewhere to be, such as a family event or something equally important. Make sure you attend. If you begin to burn yourself out and your personal life suffers, your business life will inevitably start to suffer as well.

So make time for yourself. If you know you are pushing yourself too hard, take a step back and recharge your battery. You can make up for lost hours, but remember: mistakes are much harder to recover from.

How are you planning on getting your product to customers? In other words, what will be your distribution channel? There are many considerations to make with every type of distribution channel you review, from the cost to the marketability. However, you will find that many have the potential to work well with your business.

Essentially, there are two categories of distribution. Each can be broken down into various channels from there, but you do have two general choices. You can either do it on your own or go through another source in order to get your product out to the customer.

If you want to take the most basic and hands-on approach, then you should sell the product on your own. This is a category of distribution, but know that there are a number of channels that lie within it.

When you're selling on your own, the customers deal with you and buy from you. The profits are yours to take entirely.

If you're going to sell directly, then you need to ask yourself if you have the time it takes to perform all the necessary management and sales tasks. It can be time consuming and it requires you to have a sales pitch. You also have to have the patience to make it work. By cutting out people such as retailers and wholesalers, you are going to increase your profit potential because you're the first and last line of contact for your customers.

The Internet has made it easy for a small business owner to reach many people on a global scale. You can use a web site and have the customers buy directly from you by using e-commerce technologies.

Telemarketing, of course, has been a popular choice for many types of businesses. With this option, you're going to need a good sales pitch and you'll need to be able to think on your toes.

Mail order is another method. As with telemarketing, you're going to need a good sales pitch and you will need to reach people that will be genuinely interested in your product.

Having a store location of your own is ideal. This can mean operating booths and kiosks at malls and flea markets as well as having an actual shop of your own. Remember that this will increase your costs because of issues such as rent and display costs, for example. However, being able to show your product and make contact with your customers in person can be highly effective, plus it's a tried-and-true method.

There are a number of distribution channels you can utilize if you choose to go through another source as well. For instance, you can sell your products through a separate retailer. You would set up your own independent display in, say, a department store, for example. With this option, you would do the merchandising and stocking, and your product would be sold along with the other items in the store.

With this method, the store either purchases your item or the arrangement would work much as a consignment store set-up, where there would be an agreement for a percentage of the profits. Consignment stores are another means of indirect selling. These stores are filled with independent products; they would sell your item and take a cut of the profits.

You can also choose to sell your products to a wholesaler. This is where you sell your product and someone else (the wholesaler) handles selling it to retail storeowners, for example. They have the connections and they will handle all the hassles of distributing your products to other stores.

However, going through this channel to get to another source means cutting your profit per item yet again. Keep in mind that you could sell a large quantity of your products to a wholesaler and still have access to loyal retailers.

Make sure that you consider the time involved with each option by going through each of these distribution channels individually and weighing the pros and cons of each. You have to think about what method will best suit your product and how involved you want to be in the process.

** Following Your Trail to Success
By John Hurd, Chief Wealth Researcher

Without knowing it, you leave a trail behind you every day of your life. Some days it's a small trail and other days it extends in leaps and bounds.

It's important to monitor this trail. You see, the trail you're leaving behind you can be an indication that you're headed for success. However, it can also show you that you're on the wrong track.

What is this trail that I'm talking about? It's made up of the receipts from every purchase you've ever made. Stacked on top of each other, these receipts would reach a rather impressive height.

While many people only hold onto receipts for warrantees and returns, they can be much more useful to you. You can stop right where you are, look behind you and follow your receipt trail.

It's a journey that can be painful for many people. Especially when the total sum of these receipts adds up to much more money than you're bringing in.

In fact, a recent poll has shown that too many people are living this way, spending more than they are bring home, and the long-term results can be pretty terrible.

There is some good news, because it's never too late to change your spending habits. And you don't have to be a skilled economist to figure out how.

Calculating a monthly budget is a good start. However, it's hard to determine exactly what your monthly spending is going to be in advance. You never know what surprises will pop up that will require a little extra cash.

So rather than sticking to a rigid budget, work your way down to spending less than you make slowly. Rather than cutting out big expenses, start eliminating the smaller ones.

Changing your habits overnight is only going to lead to stress and anxiety. However, if you set achievable spending goals and introduce new ways to cut your spending over weeks rather than days, you could find yourself with more money sooner than you thought possible.

If you're looking for an additional tax break, I think I've found one for you. Not only will it give you breaks now, but it will also make your life a bit easier in the future.

If you contribute to an Individual Retirement Account (IRA), a 401(k) or any other tax-favored retirement program, you have the ability to cut your tax bill up to $1,000 per person through a secret tax credit. Not too bad, if you ask me.

To qualify for this little goldmine, you'll have to meet a few qualifications. If you're single, your adjusted gross income (AGI) will have had to be less than $26,000; or $52,000, if you are married. In order to get the maximum allowable credit, you will have had to contribute at least $2,000 to a retirement plan and had an AGI of $15,500 (single) or $31,000 (married).

Don't worry if you haven't been contributing to an IRA, because you still have time to take advantage of this opportunity. As long as you start contributing to a tax-friendly retirement plan by April 15 of this year, you'll qualify for the 2007 tax year. So act fast and start putting your money in the right place to get it working for you.

This is actually a very valuable secret because it is a tax credit, not a deduction. A tax deduction, for example, only lowers your credit based on the percentage of your tax bracket. Therefore, if you were in the 25% tax bracket and received a $1,000 deduction, your tax bill would only be reduced by $250. However with a tax credit of $1,000, your bill is lowered by $1,000 no matter what tax bracket you fall into.

This tax break has benefits that are two-fold. First of all, you get the immediate satisfaction of having a lower tax bill this year. This benefit is then compounded in the future because it creates a foundation for retirement savings.

In order to take advantage of this credit, you'll need to complete IRS Form 8880, which can be accessed by clicking here: http://www.irs.gov/pub/irs-pdf/f8880.pdf.