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3 Key Steps to Selling a Business in Good Times or Bad

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Archives, Commentary, Global Trade Daily

3 Key Steps to Selling a Business in Good Times or Bad

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The COVID-19 pandemic is putting people out of work, slowing down lots of industries, and causing businesses to close. But at the same time, an uncertain chapter in America’s economic history may provide opportunities for individuals looking for a fresh start – or a soft landing.

Nearly half of small business owners in the U.S. are 65 and older, and a good number are considering selling their business rather than putting their resources and energy into bouncing back from the recession. But isn’t an economic downturn an inopportune time to sell a business?

Not necessarily, says Terry Monroe (www.terrymonroe.com), founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business.

“Some think due to the current difficult times many businesses are having that they wouldn’t be able to get a reasonable sale price,” Monroe says. “And they worry that they’ll have to delay retirement for several years because of COVID-19. But the reality is, there are lots of people, including the unemployed, looking to reinvent themselves and for a chance to run their own business. Investors with plenty of money are always around looking for good opportunities.

“The baby boomers who own many of these businesses are burned out and want to get out. But small business owners in general often don’t realize all that is required to achieve a successful sale. Done the right way, selling can result in owners walking away feeling they got good value for all they put into their business.”

Monroe says owners should think about the following factors when considering putting their business on the block:

Ask yourself why. “Selling a business can initially be an emotional consideration, but one has to drill down to the reality of why they want to sell and why it would make sense,” Monroe says. “Burnout is a common reason. If it’s affecting health or company performance, it’s time to get out. Another common factor is the inability to expand when necessary – the owner doesn’t want to incur the added debt relative to their age.” Other reasons owners decide to get out, he says, include lack of a family succession plan, too much disruption in the particular industry, and hitting a wall in terms of profitability.

Put together a professional team. “The selling process is very stressful,” Monroe says. “You can manage that by putting together a team of professionals who will guide you through it.” The team should include an accountant, a mergers and acquisitions specialist, and an attorney, in that order, he says. “You’ll hear business owners brag about the money they saved in fees because they did the negotiations themselves, when in reality they ended up leaving considerable amounts of money on the table,” Monroe says.

Know if you’re selling too low. How do you know if you are selling too low? Do the research before you decide to sell your business. “Finding out what a business like yours is selling for in the marketplace is not going to be very difficult in the internet age,” Monroe says. “In the end, you should confer with a professional who understands your industry and can provide data to find your business’ worth in the current climate. Don’t over-focus on the price. What you should focus on is how much you would put in your pocket when the sale is complete.”

“Selling a business involves considerable thought and performing lots of work with an unknown timeline,” Monroe says. “But doing it right can lead to the reward one deserves.”

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Terry Monroe (www.terrymonroe.com), is founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business.  Monroe has been in the business of establishing, operating, and selling businesses for more than 30 years. As president of ABBA, which he founded in 1999, he serves as an advisor to business buyers and sellers throughout the nation. His knowledge and expertise in multi-store operations and sales has led to many multimillion-dollar transactions. As an expert source in the convenience store industry, he writes a routine “Financial Insights” guest column for Convenience Store News and has been featured in numerous publications, including The Wall Street Journal, Entrepreneur magazine, CNN Money, and USA Today.

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Archives, Commentary, Global Trade Daily

4 Factors to Consider Before Buying an Essential Business in COVID Times

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The shutdowns and rollbacks of businesses due to the COVID-19 pandemic continue to play havoc with the U.S. economy. But the least-affected businesses during the crisis, for the most part, have been those deemed “essential” by state and local governments, allowing those companies to remain fully operational or close to it.

Meanwhile, with the idea that essential businesses can be recession-proof and even boom during a public crisis, buying one is becoming a more attractive prospect for some people, says Chris Buitron, president of Mosquito Authority® (www.mosquito-authority.com).

“Our current economic challenges as a nation are showing that owning an essential business can be a solid financial strategy for an individual,” Buitron says. “They are practical purchases. They are not often glamorous businesses, but they make sense largely because they offer services that are currently in demand, and as such they can weather economic downturns.

“Some essential businesses, such as ours, are busier than ever as people are trying to maintain social distance by staying home and not taking many vacations. People consider protection from mosquito bites and the diseases they carry as a high priority for their family’s health and outdoor enjoyment. Like other essential businesses, our franchisees provide measures of security and comfort, allowing people to enjoy being in their yards at a time so many are cooped up inside due to the pandemic.

“And at the same time, all kinds of essential businesses provide ownership opportunities while millions of unemployed people are looking for new opportunities or new career tracks. Perhaps they’re looking to be their own boss and to have more control over their financial future.”

Buitron suggests considering the following when weighing whether to buy an essential business:

Focus on successful types of essential businesses. Among the essential businesses  that have the potential to succeed even during difficult economic times are: delivery services, grocery stores, convenience stores, e-commerce, gas stations, cleaning services, liquor stores, auto repair, lawn care, pest control, mailing/shipping services, and contracting. “The pandemic may be with us for a while,” Buitron says. “People will be home more often, and businesses that can service their needs while home will gain customers.”

Consider franchises as ownership opportunities. While some franchises are struggling during the pandemic, others are in a better position, Buitron says. “For franchises in general, much of the industry will be entering a buyer’s market, and those with the means will find some good opportunities,” he says. “People need jobs, and franchises annually employ 9 million people in the U.S. One benefit of buying a franchise is having an organizational and management team already in place to train you and help guide you. Reach out to other franchise owners to get a sense of the company’s commitment and support.”

Know a bargain vs. a bad investment. A relatively low sale price tempts some people into making a poor buying decision on a business. Buitron says it’s important to pore over the business’ financial numbers that it recorded before the pandemic and do all the research possible – especially of the market where the business is located – to determine if it was on a growth track and what the competition is like. “Two questions you need to ask yourself as a potential buyer of an essential business are: What can you bring new to the business to make it more successful, and why was or wasn’t it profitable?” he says.

Be sure you’re up to owning a business. “There are no guarantees with owning an essential business,” Buitron says. “The pandemic has put a spotlight on their importance, but they take lots of work and organizational skills to run. If you are someone who can’t deal well with uncertainty, buying a business any time, let alone during the most uncertain time in our history, isn’t the right choice. Buying a business and committing to it requires thorough research, a passion for the business, a solid financial foundation and a leap of faith.”

“Owning an essential business brings with it the satisfaction of providing necessary services for people,” Buitron says. “In these times especially, that’s a noble pursuit.”

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Chris Buitron is president of Mosquito Authority® (www.mosquito-authority.com), a nationwide leader in mosquito control with franchises serving communities across the U.S. and Canada. Buitron has an extensive background in franchise industries. He was chief marketing officer for Senior Helpers, vice president of marketing for Direct Energy (home services division), and director of marketing for Sunoco Inc., where he supported the company’s 4,700 franchised and company-owned rental facilities across 23 states (over $15B in annual revenues).

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Archives, Commentary, Global Trade Daily

All In Or Out? How Business Owners Can Deal with COVID’S Cloudy Future.

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As the coronavirus pandemic continues, small businesses have reopened across the nation but certainty and optimism are a long way from being restored.

Spikes in infections in many states, double-digit unemployment, consumer and lender concerns, and steep economic challenges in the wake of a long shutdown make it difficult to forecast if and when many companies will fully recover. Small business owners – many of them baby boomers and in the retirement age range – are in a difficult position trying to decide whether to risk staying in business or sell and cut their losses, says Michael Sipe, author of The AVADA Principle and founder of the consulting firm 10x Catalyst Groups (www.10xgroups.com).

“We are in the early stages of a depression that’s going to go on quite a while,” Sipe says. “Many small business owners are in their 60s and 70s, and they’re tired and beat up. Some recovered from the financial collapse of 2008, but now they’re getting hammered again.”

“Customers and employees are scared or nervous. The supply chain is a big problem, and there’s this crazy situation where prices are going up because of the shortages, but meanwhile we have a depression because there aren’t enough transactions.”

Sipe offers the following suggestions to small business owners as they try to sort out their future amidst so much uncertainty:

Quit. “A lot of people are going to do that,” Sipe says. “And if that’s the decision, they should quit fast. Don’t drag this out. One of the things that happened in the recession of 2008 was people refused to face reality, and it cost them everything, their savings and retirement. If you’re 60 to 70 years old right now and don’t know if you can gut this out another 10 or 15 years, then cut your losses. You’ll have a little nest egg now as opposed to spending all of it trying to bail the business out.”

Reinvent. “If you’re not going to quit,” Sipe says, “then you’ve got to change. Just slugging it out and hoping it’s going to get better or that it will get back to normal – that kind of thinking is ridiculous. We have huge structural problems as a country. So if you’re going to reinvent, you have to come back to the fundamentals of business. The owner has to back up and say, ‘What are the fundamental concerns of customers we are actually trying to address here?’ And focus energy on those prime areas that are going to move people to pay a good margin for your product. Don’t ask why it’s not easier; ask how you can get better.”

Be flexible. Given the fluid state of our world, Sipe says changing some of your business model and processes may have to become a habit. “The next thing business owners have to do is realize what they changed today may need to change tomorrow,” he says. “The innovation has to happen every day. That has a lot to do with listening to customers and anticipating what they would respond to. Engagement with customers and engagement in the innovation process for owners is absolutely critical. If an owner is not willing to try and get that figured out with and for their customers, they’re going to fail.”

“The business has to be infused with a fresh energy and a fresh passion,” Sipe says. “If you’re not going to quit during these extremely difficult times, that means you’ve got to get back in the game. And you’ve got to play hard because this is going to be tough.”

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Michael Sipe, author of The AVADA Principle, is the founder of 10x Catalyst Groups (www.10xgroups.com), which helps entrepreneurs grow profitable and thriving businesses organized on a foundation of Biblical principles. Sipe has also enjoyed a successful 30-plus year career in mergers, acquisitions, and business development as the founder of CrossPointe Capital, a middle market investment-banking firm. In that capacity, he consulted with and evaluated over 5,000 companies and has provided advisory services for approximately a half-billion dollars in business sales involving hundreds of companies. He remains active in transactional work and has been a key advisor in mergers and acquisitions projects covering a multitude of industry sectors.

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Archives, Foreign Trade Zones, Global Logistics, Global Trade Daily

Important Things to Know about Doing Business in the UK

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Interested in expansion into UK markets? It’s a worthwhile investment. The UK is one of the most prosperous and stable markets in the world, with a high wealth per capita and plenty of opportunities for capital acquisition, especially within London. 

You’d be forgiven for thinking this kind of prosperity was fairly exclusive. Indeed, following Brexit, it would seem that opening up a business in the UK as a foreign national is going to be quite a challenge. But, in fact, it’s quite the opposite.

Starting a business in the UK is really easy for newcomers and foreign nationals. You can establish a Limited Company in Britain without jumping any additional hurdles. You don’t need VISAs, agreements of trade or anything else — and there is no requirement for specific ID or passports. All you need is a company name, at least one director, to provide all necessary documentation (not as intimidating as it sounds) and to follow the process of registering for taxation. The only barrier you may face compared to a British resident is you’ll need to register your business to a UK address; easily done these days through virtual offices. This criterion of requiring an address does not exist to exclude anyone from starting up in Britain. It is merely a gateway to simpler correspondence and domestic accountability — should accountability be necessary.  

It should be noted that accountability is rarely necessary, but when it is, it’s vital. This is because the UK business landscape rests upon a complicated legal structure. Industries form around different regulatory bodies, and standards are upheld by various commissions, depending on your area of business. The nature of the UK business landscape is very protective and favors business stability and longevity. Follow the legal processes correctly and you’ll have a lot of the tools you need to thrive. However, failure to follow the legal structures imposed on your business can result in problems. Regulations are strictly enforced and consequences for non-compliance can be severe.

Education is your best bet. Enter the market aware of all your obligations and legal responsibilities. Legal advice from specialists — those who can ensure you get set up properly and conform to the right guidelines — is often recommended if it is an affordable expense. More than anything, this is to ensure you don’t miss any of the finer details — because your competitors, and customers, will likely be aware of those finer details and take you to task for rule-breaking. 

Standards of education in the UK are very high. Similar to the USA, it is legally required for all students to attend formal education until they are 18. Following basic education, many move on to university as higher education is often subsidized by the government with the rest of the money obtained through widely-available student loan systems. Expectations for levels of education are high, so be prepared to meet the high standards set by domestic learning, and contend with partners and consumers who know what they’re talking about. It’s a good business practice in the UK to assume that your customers know as much about your industry as you do, if not more. 

This fact leads us to the most important lesson you can learn about doing business in the UK. Good business routinely comes down to good business relationships. Every successful entrepreneur and business owner knows that who you know is just as important as what you know. That means no matter where you do business, you need to build healthy alliances and relationships.

In the UK, the key to building great relationships lies in navigating society and culture. The UK business landscape is a powerful environment for building strong, long-lasting, and loyal relationships that can provide pivotal opportunities for growth. But you have to get this right. In general, UK business culture — particularly the modern and adaptive landscape of London and other large cities — is very open to foreigners. The more you travel outside of cities to do business, the more cultural barriers you may find stand in your way, but this often comes not from hostility towards outside opportunities, but a lack of familiarity. Time and effort to establish yourself is what’s important when dealing with business communities with a lack of experience of foreign trade. A slow and tactful approach is always going to play favorably in the UK, no matter where you are trading.

However, with this idea of openness in mind, there are certainly still some cultural lessons to be learned before diving head-first into business within the UK. As we’ve mentioned, you’re building relationships, and the key to any successful relationship is behaving correctly. Loud, obnoxious, and forceful traits are unwelcome in British culture. Pushing for hard sales or getting in people’s faces with ideas might seem like the mark of passion and enthusiasm, but it won’t make you many friends — even in London. Modesty, restraint, and an even temperament are important. You’re looking to play the long-game here, building up stable bridges over time through humility, gradually increased levels of trust, and real-world demonstrations of your expertise and worth. 

In the UK, talk is cheap. 

Once you do start forming those relationships, you’ll have to be careful not to lose them. Bonds in UK business culture are tough to break once established, but the early days make them vulnerable if strife is introduced. Privacy is coveted, as is space. Don’t get too personal, and respect distances people establish. 

While there are ways your behavior can influence the business relationship, there are also ways that the actions of your new British partners could affect you. If you’re not aware of these factors, you may misinterpret them, which can again lead to conflict. We’re talking specifically about humor. Jokes — commonly at the expense of others — are prevalent in the UK. Referred to as “banter”, these are often light-hearted remarks aimed at teasing another individual. The intent is most-always friendly, but if you’re not familiar with the custom, it can appear to be offensive. The levels of “banter” you’ll experience can vary wildly from person to person, but it is a widespread form of social interaction in the UK. Just remember, it’s all in good fun, so laugh along. People who are unable to take a joke are generally looked upon unfavorably. 

Anything else it’s important to know about doing business in the UK?

To make a cup of tea, first, boil the kettle. Place a tea bag in a mug. Ask how many sugars. Each request, for example, “two sugars” means one teaspoon of sugar. Add the requested amount of sugar. Pour the water in. Leave to brew for a few minutes. Ask if they’d like milk. If yes, add a small amount of milk until the tea goes from dark to pale brown. Stir well. Remove the tea bag with your spoon. Extra points if you use the spoon to crush the teabag against the inside of the mug to squeeze out any remnants of flavor.

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This article was written by Rajesh Velayuthasamy, founder and director of Mint Formations, a company that supports local and foreign nationals to establish a business presence within the UK. 

Successful Entrepreneurs
Archives, Global Trade Daily, Special Reports

10 Traits of Successful Entrepreneurs

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Many aspiring entrepreneurs see business ownership as an avenue to quick riches, a path to becoming “that boss” and creating jobs for the less fortunate, as a ticket to the freedom of working how and when they feel like; as they please! But owning a business is not that easy and convenient. If it was, everyone would succeed at it. The truth is that entrepreneurship can be your ticket to wealth, but it definitely is not your ticket to freedom. If anything, it calls for you to work harder than you ever did before, take huge risks, and fail at so many things without giving up. That is the entrepreneurial spirit.

There are many traits that define successful entrepreneurs. Here are 10 of those:

1. They network

Regardless of the niche they are in, or the success they’ve achieved already, successful entrepreneurs never stop networking. They work with influencers on social media, reach out to potential investors via emails, and generate leads by all means necessary. You will find seasoned entrepreneurs networking with freelancers in a coworking space in Chicago or using a shared workspace to get inspiration for business ideas from likeminded individuals. They regularly host events that create an engaging, exciting, and inspirational platform for their employees, clients, and other stakeholders to exchange ideas and challenge the status quo. That helps them to grow and compete more effectively.

2. They are disciplined

Successful entrepreneurs have clear goals and timelines, and data-inspired tactics to accomplish them. They are always ready to cut out anything that weighs them down in order to only focus on things that make their businesses work. They are disciplined enough not to deviate from that path.

3. They are passionate and motivated

They know the problem they want to solve within their niche, and their main motivation is passion; not money. They derive joy in seeing their target clients happy and satisfied. They wake up every morning eager to learn new things; to perfect their skill in order to change the world in a positive way.

4. They are creative

You need a unique, original business idea in order to cut a niche for yourself within a crowded marketplace. And because your fresh idea will always be challenged by newer ideas every single day, you must constantly figure out ways of doing everything better than it’s been done elsewhere. If you wish to remain at the top, you have to challenge the status quo and think outside the box even when you feel like you have the best ideas and strategies. That is why you need to be creative.

5. They are flexible

Flexibility helps entrepreneurs to adjust fast whenever things don’t go as planned, or when new and better opportunities present themselves. Successful entrepreneurs are quick to acknowledge a good idea even when it comes from a competitor. They are always open to their ideas being challenged, and they change tact as soon as they realize things aren’t working as they should.

6. They are persuasive

Entrepreneurs negotiate with stakeholders all the time. You have to persuade the best talents to work for you, clients to trust in your services and/or products, potential investors to buy into your ideas, and your employees to help you actualize your vision. That is why you need to be a persuasive person.

7. They work hard

Entrepreneurs have to work harder than their employees in order to set a good example, and for the fact that they own the vision of their establishments. As much as you can hire department heads to help you manage your business, you must be willing to be the overall supervisor in order to ensure that everything is done as per your directives. Sometimes you will have to work overtime and through weekends in order to catch up with all departments.

8. They are decisive

Entrepreneurs are constantly faced with questions and dilemmas that can make or break their business. Being decisive helps them to make sound judgment under immense pressure.

9. They are futuristic

Future-oriented entrepreneurs know exactly how they want the future of their business to be. They have a plan. They set their goals around a strong vision. They know how to read market trends and predict how those trends will affect their strategies in future.

10. They take risks

You cannot be successful if you aren’t willing to take risks. New marketing strategies, new technologies, and new investment opportunities are all risks that can make or break your business. Some risks are harmful, others are beneficial. To succeed as an entrepreneur, you must know how to distinguish between those two types of risks, when to take the beneficial risks, and how to create a plan B in case plan A backfires.

Conclusion

Entrepreneurship is an art that you have to master. Some of the qualities discussed above are inborn, others have to be developed.  But even as much as some of them come naturally to you, you must identify and perfect them if you are to be the best.

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Archives, Global Trade Daily, News, Special Reports

What Small Business Owners Can Do to Steer Their Way Through a Crisis

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As the nation’s economy continues to struggle because of the impact of COVID-19, small business owners and their leadership skills are being put to the test.

They face the task of adapting to the crisis and helping their employees adapt as well. But just what steps can business leaders take to keep employee morale high, make sure the business stays afloat, and manage their own concerns about the future?

One of the most important things is to be transparent with employees about where the business stands, says Adam Witty, ForbesBooks co-author of Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant.

“Face the facts head-on and don’t try to sugarcoat it,” says Witty, the founder and CEO of Advantage|ForbesBooks (www.advantagefamily.com). “Share with your team, in calm and rational terms, what impacts you expect the virus to have on your business and what the business is doing to try to mitigate those negative impacts.”

Witty suggests other steps business leaders need to take as they manage their way through the crisis:

Over-communicate. With remote work, communicating is more important now than ever. In an office, much of the communication happens naturally as people drop by each other’s offices or pass in the hallway. With everyone spread out, communication can easily fall by the wayside so it needs to be more intentional. Witty says it’s critical to use video communication like Zoom or Google Hangouts whenever possible to interact with employees. He also makes a point of sending at least three company-wide video messages a week. “In times of great uncertainty, communicate more not less,” he says. “In the absence of information, people tell themselves stories, and I can promise they are bad stories.”

Project calm. When a leader is anxious and fearful, everyone will pick up on that and they, too, will become anxious and fearful. “If your employees see that you are worried, they will begin to think it is all over,” Witty says. That doesn’t mean to fake it or to pretend the situation isn’t bad. “We can’t control the situation we find ourselves in,” he says. “But we can control how we react to the situation, and how we react will dictate our results.”

Consider introducing new products or services. Now is a good time to get innovative, Witty says, so brainstorm with your team about alternative ways to bring in revenue if your usual sources have been disrupted. For example, some restaurants that were strictly sit-down establishments pivoted to offer takeout and delivery. Witty’s own company created new publishing and marketing products aimed at potential clients who may be more cost-conscious during these tough economic times.

Finally, Witty says, have a plan.

“Hopefully, you already have a strategic plan for your business that you are executing week in and week out,” he says. “As we continue to move along through this crisis, that plan will need to be adjusted as COVID-19 makes some pieces of your plan obsolete.”

He suggests meeting weekly, if not more often, to keep updating the plan to reflect the new realities. Then communicate the plan and its latest adjustments to your team.

“When employees know the leaders have a plan,” Witty says, “it creates calm and confidence.”

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Adam Witty, co-author with Rusty Shelton of Authority Marketing: Your Blueprint to Build Thought Leadership That Grows Business, Attracts Opportunity, and Makes Competition Irrelevant, is the CEO of Advantage|ForbesBooks (www.advantagefamily.com). Witty started Advantage in 2005 in a spare bedroom of his home. The company helps busy professionals become the authority in their field through publishing and marketing. In 2016, Advantage launched a partnership with Forbes to create ForbesBooks, a business book publisher for top business leaders. Witty is the author of seven books, and is also a sought-after speaker, teacher and consultant on marketing and business growth techniques for entrepreneurs and authors. He has been featured in The Wall Street Journal, Investors Business Daily and USA Today, and has appeared on ABC and Fox.

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Archives, Global Trade Daily, Top Cities

Metros With the Most Self-Employed Workers

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The coronavirus pandemic has cost a record number of Americans their jobs as much of the economy shut down in mid-March. Even as some states start to reopen, many businesses will remain closed or operate in a reduced capacity, meaning millions of workers will remain unemployed.

According to Census Bureau data, there are over 15 million self-employed workers in the U.S., making up about 9.7% of the nation’s workforce. Self-employed workers are especially vulnerable during economic downturns since they do not have the same type of job protections as other workers. The CARES Act provides emergency government aid to workers affected by the pandemic, including the self-employed, who might normally fall through the social safety net. But these funds have been difficult to secure and can have long wait times. Furthermore, confusing messaging around the loans leave many self-employed workers unsure about what the funds can be used for.

The self-employed, which for the purpose of this analysis includes those adults who operate either incorporated or unincorporated businesses, are represented in every industry sector except public administration. Other services—a catchall industry sector that includes, among others, car repairs, barbershops, salons, dry-cleaning, and pet care services—has the largest share of self-employed workers at nearly 26%. Both the Agriculture, forestry, fishing and hunting, and mining industry and the Construction industry have high rates of self-employment, at 24% and 23% respectively.

As of 2018 (the most recent year of Census data available), these three industry sectors accounted for over 5 million self-employed workers, but a combination of non-essential business closures, disruptions of the food supply chain, and a hold on construction work in many states will likely drive these numbers down.

While almost 10% of workers are self-employed at the national level, the self-employment rate varies considerably across cities and states. Montana and Vermont claim the highest percentages of self-employed workers in the country, at 14% and 13.4%, respectively. On the other end of the spectrum, West Virginia has the lowest share of self-employed workers, with just 6.3% of workers who are self-employed.

To find the locations with the most self-employed workers, researchers at Volusion used data from the U.S. Census Bureau. The researchers ranked metro areas according to the share of workers who are self-employed. Researchers also looked at the total number of self-employed workers, the median income for self-employed workers, and the median income for all workers.

To improve relevance, only metropolitan areas with at least 100,000 people were included in the analysis. Additionally, metro areas were grouped into cohorts based on population size. Small metros contain 100,000-349,999 residents, midsize metros contain 350,000-999,999 residents, and large metros contain 1,000,000 residents or more.

Here are the large metropolitan areas with the largest percentage of workers who are self-employed:

For more information, a detailed methodology, and complete results, you can find the original report on Volusion’s website: https://www.volusion.com/blog/cities-with-the-most-self-employed-workers/

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Archives, Foreign Trade Zones, Global Trade Daily

4 Things Everybody Gets Wrong When Starting a Business in China

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Starting a business is a brave and bold move. It requires effort and you may even have to sacrifice an average of 70 hours a week, for probably the next 2-3 years, in order to get the thing running smoothly. This, in essence, is what most startups fail to recognize and understand. Some say success doesn’t come overnight and to some extent this holds water. So, if you are looking to open a new chapter in life and start a business, here are some problems faced by startups that are considered wrong when starting a business.

1. Business Name

This is a mandatory requirement and if you have in the past had another startup, you know this is required. So, for those starting up a new business, or for those venturing into this world for the first time, a Business Name is necessary. Once you have registered a Business Name, you may go a step ahead to getting a logo for your new business as well as acquiring a domain name. All these three should be unique and not like any other registered business. This will be the trademark of your business and if in doubt over the name, logo or domain selected, there are sites that can help you know if the one you select or create has already been taken. By failing to do so, you may end up registering using either a business that closed or one that never took off, eventually bringing confusion to prospective customers when simply searching for your business.

2. Business Plan

This is another necessary requirement. Failing to have an established business plan is like planning to fail. One thing that a new start-up again may confuse is a Business Plan and a Business Structure. These are two different things. First, doing some research and deciding whether to be a Sole Proprietor, venture into a Partnership or register a Company, should be the first step into knowing what business plan to have. Once you have decided on the type of business, you can then lay down the plan. Contained in a Business Plan are aspects of funding as well as what type of business venture to undertake. It will also entail how you plan on spending, so as not to over or underspend.

3. Business Structure

A business structure is different from the Business Plan. While new startups confuse this, they eventually lack a management scheme and gradually finish to poor management. So, a Business Structure is what entails what every employee in the business is to do. From the executives, accountants, superintendents, junior staff to all other working employees. When deciding on what structure to have, it is advised to seek the knowledge of professionals and experts in the field as such, professionals such as lawyers, accountants, and even some businessmen may help you understand and decide on the best business structure for your business.

4. Business Location

This is a vital element. For those looking to register a business in China, failing to understand the laws of the land could lead to problems. Again, this is among the biggest problems faced by startups. You will need to understand laws relating to taxes, registering the business as well as the many different laws within the country. So, the laws in different countries are different, and to avoid problems during startup, it is similarly advised to seek the counsel of those experienced in the field or do thorough research.

5. Nature of The Business

While you will be required to state the Nature of The Business when registering it, it is an essential aspect in determining how things will be run and what is to be done. In other words, this is a sure way to set yourself apart from other ventures depending on the type of business you carry on. Note that, this is also an aspect in the Business Plan, and because of that it should be a well-researched type of business to avoid huge competition. Though competition is good, you will need to offer something new to the Nature of the Business so as to keep the light on.

So, considering this factor carefully and staying in line with them, you will be on the way to having a fruitful business and even though it may take time, it is worth the wait. It is also recommended to do more research over the matter of opening a business to have enough knowledge when you do so.

success
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The Road to Leadership Success is Paved With Knowledge

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Different Kinds of Organizational Knowledge and Where they are Found

Executives must have an understanding of the concept of knowledge itself. Knowledge is identified as a multi-faceted concept and is distinct from information and data. Knowledge is quite elusive and is changing on a day-to-day basis with discontinued products and the ever-changing vast array of technology. Therefore, to counter the above definition of knowledge, Ruggles defines knowledge as a blend of information, experiences, and codes. The key take-away for executives is that knowledge is a resource that enables organizations to solve problems and create value through improved performance and it is this point that will narrow the gaps of success and failure leading to more successful decision-making.

Executives still wonder where is knowledge and how can it be utilized when it comes to decision-making. Scholars found that within organizations, knowledge resides in various areas such as management, employees, culture, structure, systems, processes, and relationships.

Organizational knowledge cannot merely be described as the sum of individual knowledge, but as a systematic combination of knowledge based on social interactions shared among organizational members. Executives, being more conceptual, agree with Tsoukas who determines organizational knowledge as a collective mind, and Jones and Leonard who explain organizational knowledge as the knowledge that exists in the organization as a whole. Most importantly, organizational knowledge is owned and disseminated by the organization. To analyze knowledge in organizations, there are two important taxonomies of organizational knowledge that need to be discussed.

Tacit and Explicit Knowledge

Why would executives care whether knowledge is tacit or explicit? The simple answer is that tacit knowledge is not shared and sometimes bottled up in individuals causing a bottleneck in the organization. If knowledge can be categorized as tacit and explicit knowledge then how can executives manage knowledge to enhance productivity?

Since tacit knowledge is the knowledge that exists in the minds of organizational members which is gained by their individual experiences, and it is difficult to formalize and transfer unless directed to do so, executives need to pinpoint and encourage this type of knowledge to be drawn out of followers. More controllable, explicit knowledge is the knowledge that is highly formalized and codified, and can be easily recorded and communicated through formal and systematic language, and manifested in rules and procedures providing the necessary tools and processes for executives to manage. It can also be captured in expert systems and tapped by many people throughout the organization via the intranet. Executives know that explicit knowledge is more formal and has the potential to be more easily shared. When it is expressed in words and specifications, it is much more useful compared to tacit knowledge.

Private and Public Knowledge

Since executives are constantly dealing with the public—-especially if they are a publicly-traded company, the private and public knowledge is something they pay a great deal of attention to. Of course, this is not new but worth mentioning. For example, a scholar by the name of Matusik, argues that knowledge in organizations can be categorized as either private or public knowledge and can be advantageous to executive decision-making. Firm-specific knowledge must be guarded and not shared with the competition. Any leak of such information may expose the organization and increase the operational risk. Contrary to private knowledge, public knowledge differs in that it is not unique for any organization. Public knowledge may be an asset and provide potential benefits when posted on social media and other means of communication.

It is important for executives to consider the ownership of knowledge as a factor which is a significant contributor to the knowledge of organizations. Moreover, knowledge emerges in two additional forms, including the knowledge that is only accessible by one company and the knowledge that is accessible to all companies. The best approach to knowledge is for executives to know which knowledge is to remain private and which to go public with. A mistake in this area may be vital to the organizations and executives must choose wisely.

Today the question arises whether the management of an organization’s intellectual capital itself can be a source of effectiveness for leaders. In the next section, I pose that ineffective knowledge management may expose organizations to missed opportunities and lack of using leadership opportunities to their benefit given the existing opportunities in international and domestic markets, and how this lack of judgment may concern stakeholders. I also assume that the lack of effective strategic knowledge management may lead to human assets to be ineffective. My final assumption addressed in this article is that the crucial role of knowledge management practices, such as coordinating and hosting the continuous sessions of company-wide experts to share their knowledge, maybe underestimated and underutilized.

How Does KM Practices Impact Leadership Effectiveness?

Knowledge is firstly accumulated by creating new knowledge from organizational intellectual capital and acquiring knowledge from external environments. This knowledge exchange with external business partners develops innovative environments that can enable leaders to create a more innovative climate in companies. This knowledge process enhances the capabilities of leaders to play the role of inspirational motivation, which enables these leaders to directly set highly desired expectations to recognize possible opportunities in the business environment. The knowledge exchange also positively contributes to leaders to develop a more effective vision, including a more comprehensive array of information and insights about external environments.

Executives then integrate knowledge internally to enhance the effectiveness and efficiencies in various systems and processes, as well as to be more responsive to market changes. Knowledge integration focuses on monitoring and evaluating knowledge management practices, coordinating experts, sharing knowledge and scanning the changes of knowledge requirements to keep the quality of their production or services in-line with market demand. It is apparent that knowledge integration activities can help leaders assessing the required changes to keep the quality of both products and services at maximum levels. Furthermore, a systematic process of coordinating company-wide experts enables leaders to propel the role of intellectual stimulation, which creates a more innovative environment within companies.

Executives must also curtail knowledge within organizations. The knowledge within organizations needs to be reconfigured to meet environmental changes and new challenges today. What worked yesterday or a few years ago is changing rapidly as technology has increased in a prolific way. Knowledge is globally shared with other organizations through domestic and global rewards such as the Malcolm Baldridge Award in the United States and the Deming Award in Japan. However, past industry researches have posited that companies might lack the required capabilities or decide to decline from interact acting with other companies, or even suffer the distrust to share their knowledge. Therefore, expert groups may not have sufficient diversity in order to comprehend knowledge acquired from external sources.

Based upon these limitations whether natural or caused, networking with business partners is a key activity for companies to enhance knowledge exchange and it should not take an award to be the impetus to initiate interaction. Ergo, networking with external business partners may enhance the effectiveness of leadership, thereby empowering leaders to better develop strategic insights to develop a more effective vision incorporating various concerns and values of external business partners. The knowledge transference among companies itself improves the effectiveness of learning, which in turn enables leaders to empower human resources by creating new knowledge and solutions. Thus, I suggest that networking takes place among companies in both domestic and international markets which may enhance the effective use of leadership. Therefore, if leaders in senior positions effectively use knowledge management then they may be able to improve leadership effectiveness through increased learning opportunities.

In Conclusion

This article suggests that knowledge management constitutes the foundation of a supportive workplace to disseminate knowledge and subsequently enhance the effectiveness of leadership. Accordingly, I suggest that by channeling knowledge management practices into organizational constructs, engaging in the practices of leadership, executives will continue to prosper. I also suggest that a firm’s ability to develop leadership can be highly affected when executives implement knowledge management projects as the primary form of managing people, resources, and profitability.

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Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders. He is a business book author and a long-time contributor to business publications and his work has been featured in top-flight business publications. 

References

Jones, K., & Leonard, L.K. (2009). From Tacit Knowledge to Organizational Knowledge for Successful KM. In W.R. King (Eds.), Knowledge Management and Organizational Learning, (pp. 27-39), Berlin: Springer.

Matusik, S.F. (1998). The Utilization of Contingent Work, Knowledge Creation, and Competitive Advantage. The Academy of Management Review, 23(4), 680-697.

Ruggles, RL 1997, Knowledge management tools, Boston, MA: Butterworth-Heinemann.

Tsoukas, H. (1996). The Firm as a Distributed Knowledge System: A Constructionist Approach. Strategic Management Journal, 17, 11-25.

Entrepreneurs
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Metros With the Most Successful Entrepreneurs

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Many Americans dream of quitting their job and becoming their own boss. Whether the goal is to live the laptop lifestyle or turn a creative pursuit into a full-time business, entrepreneurship offers flexibility and excitement, but it is not without risks. While the potential upside of starting a successful business is appealing, it often takes years for a new firm to become profitable, and many entrepreneurs do not earn as much as they did in their previous jobs. According to data from the U.S. Census Bureau, the median annual income for full-time entrepreneurs is $50,000, which is the same as the median income for all full-time workers.

At a more granular level, full-time entrepreneurs (defined here as self-employed workers in their own incorporated or unincorporated businesses) tend to report higher incomes than full-time employees at for-profit businesses. However, the typical full-time entrepreneur makes less than both full-time employees of non-profit organizations and full-time government workers. Interestingly, Census data shows that federal employees enjoy the highest median income at $65,000 per year, followed by non-profit employees at just under $53,000.

While nationally the median income for entrepreneurs is the same as the median income for all workers, there are big differences at the state and city level. At the high end, entrepreneurs in Rhode Island and North Dakota have median incomes that are 28.3 and 20.0 percent higher, respectively, than the median income of all workers. On the low end, entrepreneurs in Vermont and Delaware have median incomes that are 18.8 and 16.7 percent lower, respectively, than that of all workers.

To determine the metropolitan areas with the most successful entrepreneurs, researchers at ZenBusiness analyzed data from the U.S Census Bureau. The researchers ranked metros according to the income premium for entrepreneurs, which is defined as the percentage difference between the median income for full-time entrepreneurs and the median income for all full-time workers.

Here are the top 15 large metropolitan areas with the most successful entrepreneurs:

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For more information, a detailed methodology, and complete results for all metros, you can find the original report on ZenBusiness’s website: https://www.zenbusiness.com/blog/cities-with-the-most-successful-entrepreneurs/