Many small business
owners invest their own money into
their businesses, or seek out active
partners to invest and help run the
business. However, some business
owners seek silent partners. A silent
partner invests in the business, but
does not handle the day-to-day
operations. Becoming a silent partner
has several advantages.
Passive Income
As a silent partner, you invest money
into a business. You can earn a return
on that money when the business
makes a profit. Partners, even silent
ones, share in the income brought in
from a business. The amount of
income you make will depend on how
well the business does and what
arrangement you have with the other
partners. For example, some silent
partners may make a smaller share of
the profits than more active partners,
especially if you invest less in the
business than others.
Less Responsibility
Small business startups typically
require a lot of work, with many long
hours and periods of uncertainty.
Active partners must devote a good
portion of their time to getting the
business up and running. They must
make crucial decisions, and often
have to deal with difficult situations,
such as hiring and terminating
employees. As a silent partner, you
have less of a responsibility to the
operations of the business. A silent
partner does not involve himself in
the daily operations of the business,
so your investment in the company
may come with less stress and hassle.
Easier Investments
An active partner in a small business
must work hard to make sure the
business succeeds. Most active
partners have a deep knowledge of
the industry and understand how to
market their type of business
successfully. As a silent partner, you
can invest in a small business even if
you do not fully understand the
industry, since you will have little
involvement in the business itself. This
will give you more freedom to choose
the investments you want, as you do
not have to limit yourself to industries
where you have experience.
Warnings
While you can sign on as a silent
partner without much experience -- if
you have the funds to do so -- you
should take care to measure the risks
of any large investment. You will also
share in any losses. Protect yourself by
researching the company and the
other partners involved before
investing large sums of money.
Dauda Ablaku Faris
Media & PR
www.businessmode.gnbo.com.ng
businessmode.ng@gmail.com
ablaku.dauda@yahoo.com
+234 (0) 8032910381
+234 (0) 8097704290
Thursday, 23 August 2012
Saturday, 18 August 2012
INVESTING IN BUSINESS
A small business needs funding to
start operating. Many small business
owners invest their own money into
their businesses, or seek out active
partners to invest and help run the
business. However, some business
owners seek silent partners. A silent
partner invests in the business, but
does not handle the day-to-day
operations. Becoming a silent partner
has several advantages.
Passive Income
As a silent partner, you invest money
into a business. You can earn a return
on that money when the business
makes a profit. Partners, even silent
ones, share in the income brought in
from a business. The amount of
income you make will depend on how
well the business does and what
arrangement you have with the other
partners. For example, some silent
partners may make a smaller share of
the profits than more active partners,
especially if you invest less in the
business than others.
Less Responsibility
Small business startups typically
require a lot of work, with many long
hours and periods of uncertainty.
Active partners must devote a good
portion of their time to getting the
business up and running. They must
make crucial decisions, and often
have to deal with difficult situations,
such as hiring and terminating
employees. As a silent partner, you
have less of a responsibility to the
operations of the business. A silent
partner does not involve himself in
the daily operations of the business,
so your investment in the company
may come with less stress and hassle.
Easier Investments
An active partner in a small business
must work hard to make sure the
business succeeds. Most active
partners have a deep knowledge of
the industry and understand how to
market their type of business
successfully. As a silent partner, you
can invest in a small business even if
you do not fully understand the
industry, since you will have little
involvement in the business itself. This
will give you more freedom to choose
the investments you want, as you do
not have to limit yourself to industries
where you have experience.
Warnings
While you can sign on as a silent
partner without much experience -- if
you have the funds to do so -- you
should take care to measure the risks
of any large investment. You will also
share in any losses. Protect yourself by
researching the company and the
other partners involved before
investing large sums of money.
bBUSINESS REORIENTATION
Over the past 3 years these are the
things I‘ve learned to help make a
business successful:
1.Smart People
Always surround yourself with
smart, talented people. If you do
things I‘ve learned to help make a
business successful:
1.Smart People
Always surround yourself with
smart, talented people. If you do
not know any, join a networking
group and find them. Being an
entrepreneur is a series of highs
and lows. You need to surround
yourself with people who
understand that when it gets low, it
is not the end of the world. It is
just an opportunity to grow.
2. Always Have a Plan.
The plan is not set in stone, but you
need guidelines and a revenue
model. I always get approached by
people asking me about a business
idea they have. The first thing I ask
them is: “Who‘s writing you
checks?” If they cannot answer that
right away, I know they do not
have a revenue model. That is not
to say that all business ideas need
one at first, but would-be
entrepreneurs should not mix
“hobbies” with business.
A good plan should take you into
multiple years and show growth
and revenue generated. This will
help you understand how diverse
your products or services should
be. You will be able to do the rough
math to figure out how many
products you need to sell or
services you need to complete
before you hire your first
employee. And do not worry if
plans change, they always do. They
are strictly a guide to keep you
from going too far off the original
concept.
3. Ignore friends and family.
This was a lesson I learned in art
school. Your friends and family will
lie to you. It is not because they
want you to fail, it is because they
may not be experienced in
business. They may give you their
advice based off of their own
experiences. What you need to do
is bounce your idea off of people
that have had multiple past
experiences — in business.
Be prepared though, you may not
like what a real business owner has
to say. Some business owners have
a pessimistic outlook toward
businesses they are not educated
in. Nevertheless, any negativity will
actually help you uncover possible
problems that you may not have
thought of.
We had many people who, to this
day, still cannot believe that people
would buy our product. Our
100,000+ users would disagree.
4. Don’t Quit.
An entrepreneur cannot quit. They
cannot give up. When things are
difficult, I always say this phrase to
myself – “How many other people
quit at this point?” It pushes me to
think smarter, work smarter, and
accomplish more. I do not want to
live my life saying, “If I only would
have…”
In the end, our team has worked
two full-time jobs for over three
years before the idea was stable
enough to allow us to work solely
on LoveBook. Even to this day, the
work load has not let up. We still
continuously put in 70- to 80-hour
workweeks in an effort to stay on
top of the technical side of the
industry.
5. Always check the numbers.
Most entrepreneurs are good at a
few things, but the most important,
and probably the most overlooked,
is money management. I cannot
stress enough how important it is
to understand the formula for
profitability. You always need to
keep a close eye on where money
goes and how it comes in.
This includes your marketing
budgets. Every drop of marketing
has to be accounted for. Since I am
the Chief Marketing Officer (CMO),
I can go on for hours about
strategies and positioning — but
that is for another book. We are
certainly no exception when it
comes to making mistakes.
A year ago, we had a few
advertisements running on a cost-
per-click (CPC) site that we thought
was doing pretty well. We had
about a dozen different ads going
at one time. Most of them were
doing really well and we did not
think to check each one
individually. After we broke down
each ad individually, we found that
we spent almost $10,000 on an ad
that was barely producing any
sales. We quickly removed that ad,
saved money, and still maintained
great sales through the site.
From then on, we have maintained
a good track record of keeping the
ads that do well and dumping the
ads that do not.
I promise you that being an
entrepreneur is not for the faint of
heart. It will be the most difficult
work you will ever do, but it will
be the most rewarding too. Just
keep learning, keep networking,
and keep evolving.
http://www.businessmode.gnbo.com.ng/
group and find them. Being an
entrepreneur is a series of highs
and lows. You need to surround
yourself with people who
understand that when it gets low, it
is not the end of the world. It is
just an opportunity to grow.
2. Always Have a Plan.
The plan is not set in stone, but you
need guidelines and a revenue
model. I always get approached by
people asking me about a business
idea they have. The first thing I ask
them is: “Who‘s writing you
checks?” If they cannot answer that
right away, I know they do not
have a revenue model. That is not
to say that all business ideas need
one at first, but would-be
entrepreneurs should not mix
“hobbies” with business.
A good plan should take you into
multiple years and show growth
and revenue generated. This will
help you understand how diverse
your products or services should
be. You will be able to do the rough
math to figure out how many
products you need to sell or
services you need to complete
before you hire your first
employee. And do not worry if
plans change, they always do. They
are strictly a guide to keep you
from going too far off the original
concept.
3. Ignore friends and family.
This was a lesson I learned in art
school. Your friends and family will
lie to you. It is not because they
want you to fail, it is because they
may not be experienced in
business. They may give you their
advice based off of their own
experiences. What you need to do
is bounce your idea off of people
that have had multiple past
experiences — in business.
Be prepared though, you may not
like what a real business owner has
to say. Some business owners have
a pessimistic outlook toward
businesses they are not educated
in. Nevertheless, any negativity will
actually help you uncover possible
problems that you may not have
thought of.
We had many people who, to this
day, still cannot believe that people
would buy our product. Our
100,000+ users would disagree.
4. Don’t Quit.
An entrepreneur cannot quit. They
cannot give up. When things are
difficult, I always say this phrase to
myself – “How many other people
quit at this point?” It pushes me to
think smarter, work smarter, and
accomplish more. I do not want to
live my life saying, “If I only would
have…”
In the end, our team has worked
two full-time jobs for over three
years before the idea was stable
enough to allow us to work solely
on LoveBook. Even to this day, the
work load has not let up. We still
continuously put in 70- to 80-hour
workweeks in an effort to stay on
top of the technical side of the
industry.
5. Always check the numbers.
Most entrepreneurs are good at a
few things, but the most important,
and probably the most overlooked,
is money management. I cannot
stress enough how important it is
to understand the formula for
profitability. You always need to
keep a close eye on where money
goes and how it comes in.
This includes your marketing
budgets. Every drop of marketing
has to be accounted for. Since I am
the Chief Marketing Officer (CMO),
I can go on for hours about
strategies and positioning — but
that is for another book. We are
certainly no exception when it
comes to making mistakes.
A year ago, we had a few
advertisements running on a cost-
per-click (CPC) site that we thought
was doing pretty well. We had
about a dozen different ads going
at one time. Most of them were
doing really well and we did not
think to check each one
individually. After we broke down
each ad individually, we found that
we spent almost $10,000 on an ad
that was barely producing any
sales. We quickly removed that ad,
saved money, and still maintained
great sales through the site.
From then on, we have maintained
a good track record of keeping the
ads that do well and dumping the
ads that do not.
I promise you that being an
entrepreneur is not for the faint of
heart. It will be the most difficult
work you will ever do, but it will
be the most rewarding too. Just
keep learning, keep networking,
and keep evolving.
http://www.businessmode.gnbo.com.ng/
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