Developing a Great Business Model

Great business models depend on developing three "green lights," or qualities that help the business succeed: finding high-value customers, offering significant value to customers, and delivering significant margins. Great business models also avoid three "red lights" that can derail a business:

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Small Business Tips from Someone Who’s Been There

As a small business owner you've probably encountered dozens of people who say “Why aren’t you doing this?” or “You should try that.” Unfortunately, most of these pointers come from people who don’t have any experience starting or running a company. With this in mind, I would like to share some advice with you, one entrepreneur to another.

Startup Costs: Human nature causes us to think too big too soon. Startup costs for my company, Wasatch Software, were somewhere around $100 (website and business licenses), and overhead for the first several months was about the same. Here are some key categories that you might be tempted to overspend in:

• Technology: Opt for the $500 computer system instead of the beefed-up machine. Take advantage of inexpensive VOIP phone services.
• Office Space: Yes, it would be nice to have a plush office with expensive furniture right away. However, these things are not necessities and should be viewed as earned rewards as your business becomes profitable. Consider working from home until you can afford something better.
• Marketing: Concentrate on using time and effort in place of capital:
  ***Web Advertising: blogs, directories, forums, and organic search
  ***Networking: chamber of commerce membership (go to the meetings), friends and family, hand out plenty of business cards
  ***The Not So Fun Stuff: cold calls, outside sales

As you begin you are vulnerable to mistakes. Wouldn’t it be nice to make these without losing too much money? Try not to use business loans or personal cash if you can avoid it.

Be Patient and Persevere: Giving up may be the only thing that causes businesses to fail more than money. We all dream of being millionaires within a year of launching an enterprise, but it is more likely that you won’t start making money for several months, or even longer. Work a second job until your business can support you. Put in long hours for your own company after you are done 'working for the man' each day. Remember that the ability to keep going is what separates the winners from the losers.

Use Free Resources: There are many free resources at our disposal that go unused all too often. You can teach yourself almost everything you need to know by using resources that cost nothing at all:

• The Internet: Almost anything you need information about can be found online. Use the web to learn about building and marketing websites. Search for information on business finances, or anything else you need to know.
• Free Counseling: Seek out organizations like SCORE in your area and use them. You can visit with counselors for free about any business topic. You may also know other entrepreneurs. Most of them are more than willing to share their experience and expertise with you.
• Media: Watch shows like Small Business School and take advantage of podcasts. Also, read the newspaper, magazines, and books related to business and your industry.

Keep the Cash: You just made your first big sale! If you’re like me, you thought this was just the tip of the iceberg. Instead of spending the money or treating it as personal income, keep it in the company until you know this type of income can be earned consistently. Better yet, use the money to grow the business. Besides, you are trying to build something that can provide security for a lifetime, not a few moments.

Prioritize Your Effort: Take care that you spend your time on important tasks rather than details. I recall a personal instance that is especially applicable. I purchased a solution that contained many features our website needed. In the end, most of my time was spent configuring this add-on (adding/changing products, etc.) and more important tasks like marketing were ignored. My company has since switched to a solution that requires very little maintenance. This allows us to focus on bringing in revenue instead of a completing a less important task that could be done easier another way.

Hire Help Only as Needed: Take on employees only when two requirements are met:

1. You are way to busy to handle all of your customers and also administer the business properly. There is no need to bring on more help (and thus give away your money) if you can handle the amount of business you currently have.
   
2. Your profits over a period of time are enough (or close to enough) to sustain the increased expenses that a new employee will bring. Don’t hire an employee with the thought that they will suddenly make your company more profitable. They probably won't.

Wasatch Software has achieved millions in revenue over the past few years, and your company can too! Just know that effort and perseverance are your keys to the freedoms a successful small business can bring!

Websites for Promoting your Local Business

I came across an article that you small business owners out there might be interested in. It details a number of sites (15, in fact) that you can use to promote your small business. Some of these are sites that mainly offer classified ads, while others are directories that you allow potential clients to find you through a category search. Either way, this is a great way to promote your local business no matter where you are!

Opinion: Apple vs. Microsoft

A battle that has raged on for decades appears to be stronger than ever! This rivalry between technology giants has been rekindled with new commercials from Apple, and the release of Windows Vista by Microsoft. Sure, Macintosh systems offer a high level of reliability and are surely a 'best bet' for users with an artistic flair. On the other hand, Microsoft Windows systems are best known for their user-friendly nature and also for a versatility which allows users to select different hardware and software configurations that meet their own computing needs.

Surprisingly, this ongoing battle may be less about the quality of products and more about business models. Macintosh has opted to do just about everything for their systems in house. This rigid business model inhibits consultants, resellers, and others from promoting a very quality product.

Microsoft, on the other hand, has opted to offer its products through channel partners (like Wasatch Software), retailers, and distributors on a very wide scale. What is the result? Huge computer manufacturers like Dell, HP and Gateway ultimately prop up Microsoft and even indirectly market Microsoft's products. The same can be said for the thousands of other smaller system builders, resellers and consultants that exist (in whole or in part) simply because of Microsoft.

When these methods of delivery and marketing are compared, it is no wonder that Microsoft has clearly come out on top over the years, an should continue to dominate for many more.

Windows Vista Upgrade Eligibility (Volume License)

You may have wondered what operating systems qualify for a Windows Vista Upgrade through the many volume licensing programs, such as Microsoft Open License. The answer is hidden deep in Microsoft's Product List (Page 30). We've taken the liberty of posting the pertinent excerpts on our website:

• Windows Vista Upgrade Eligibility

This page includes an easy to understand chart followed by licensing caviats, including your rights to Windows Vista Enterprise and Ultimate. Let us know if you have any questions or comments, or if you need a quote. Thanks!

Microsoft Open License

I often speak with individuals who aren't familiar with Microsoft Open License and all of its particulars. With all the options out there, who can blame them? Here are some simple explanations to oft asked questions:

1- It takes just 5 licenses to get started. You can even mix and match different products (i.e. [3] Office Standard and [2] SQL Server CALs will meet the minimum).

2- In addition to purchasing the licensing, you'll also need* to purchase a media kit for each product so you can install the software. You can use the same media kit for all installations.

*Note: recent releases such as Vista, Office 2007, and Exchange 2007 offer free downloads. Media for these products is still available upon request.

3- Only upgrades are offered for Windows Vista Business, while adding Software Assurance gives you the rights to Vista Enterprise. Microsoft does require that you have a previous operating system to upgrade from. This is likely because they want to see computers delivered with an OEM version of Windows already installed. All other products under the volume program offer full versions.

4- Software Assurance offers 2 years of upgrades (3 for Open Value). When you cover a license with Software Assurance you automatically have the rights to a new version when it's released. Software Assurance also gives you certain support and training rights.

Let me know if you have any questions on this or any issue. Thanks for your time!