* Buy an existing coffeehouse; or
* Start a brand new coffee shop from scratch.

It is absolutely critical that you discuss each option with your accountant and as you can expect there are advantages and disadvantages with each.

Existing coffee shop:

The obvious advantage of buying an existing coffee shop is that it should be an established, successful business. Also, you won’t need to spend as much money fitting the store out, as you would in a start-up business and it is as close to a turnkey business as you can get. On the other hand, if you buy an existing business, you may be buying the problems of the outgoing business owner, for instance increased rent and overheads, a disappointing bottom line, etc. Of course though, you can minimize the risk by carefully considering the business and its full financials with your lawyer and accountant’s expert advice and direction.

Start-up business:

If you start your business from scratch, you can fit your space out as you like from day one. You are completely designing your store from scratch. On the other hand, start-up businesses are riskier because you don’t have a proven track record in the business as you have created it at that location, and it costs a lot more to start a brand new business as opposed to buying an existing one.

Be sure to thoroughly do your homework and research whenever you are considering an existing or start-up business – and remember to enlist a great accountant and lawyer to help you make the right decision.

Chances are you will probably require funding from an outside source to get your coffeehouse business off the ground. There aren’t too many people around who can fund a business on their own!

To secure the finance you need to turn your coffee shop dream into a reality, you’ll need a business plan. After all, the financial institution you hope will loan you money needs to know that you have a great business concept that is viable.

Even if you are fortunate enough to fund your own business, you will need a business plan!

You’ve probably heard of the term, “Fail to plan, plan to fail” right? Basically it means that failure is highly likely if you do not plan your business.

You need to know exactly where you want to take your business, and you need to come up with strategies to help you achieve those goals.

Your business plan will take into consideration absolutely everything: your mission statement, your market position, your finances, your sales projections, your marketing and advertising and your future plans – absolutely everything!

So, take some time to plan and avoid expense and stress in the long term.

Trace Beaney has collaborated on a guide to setting up a coffee shop, based on coffee shop owner Don Clarke’s years of experience in the industry. The guide has been reviewed by Cafe Culture Magazine. You can read this review at: http://www.howtosetupacoffeeshop.co.uk/review.htm

Your Free Top 10 Tips can be downloaded from the website, together with a copy of the current newsletter.

There are several different coffee shop franchise businesses to choose from and each one offers something different. They may offer freshly baked pastries and breakfast sandwiches, or deli sandwiches and coffee. You can even serve ice cold fruit smoothies to your number one customers who find that your smoothies hit the spot on a hot summer day. In the winter they can select from all the best flavored hot coffee you offer to help them warm up their day.

It’s not easy starting one of the many coffee shop franchises but you can do it with careful planning and help from the franchisor. The initial investment depends on each franchise and they each offer you something different. Being in business for yourself can be very rewarding for you both financially and emotionally.

You will first need to think about what you are looking for in a franchise. For example, do you already have a cozy little shop that would be great to start your business in or do you want one that is on the go? Maybe you want to have a drive through coffee shop where customers don’t even get out of their cars to get their coffee because your employees will be bringing it to them. This is not only a wise concept but it is a great way to promote your business because people will soon start talking about the fact that they do not need to get out to get their daily dose of quality coffee in the mornings.

There are other things to consider when you want to open up a coffee shop franchise. You need to think about the location expenses, employee expenses, insurance and more. Your franchise manager will go over all the expenses with you so you will know exactly how much to account for your business.

Like any business, be sure to create a business plan. Be sure to include all your goals, both personally and business-wise, and how you want your business to turn out. What do you want to achieve? It’s all up to you. Before making your final decision on a franchise, be sure to speak to someone with each franchise that interests you the most and then you can base your decision on your conversation. Enjoy your new business!

Stewart Baker writes for JavaBeanReview.com. They offer a comprehensive look at the hottest coffee shop franchises available for the coffee entrepreneur. Be sure to check out Its a Grind & Maui Wowi franchise. If you are a franchisor, go to MercuryRoad.com

Firstly, Location. It is imperative that you decide on a strategic location for your Internet Cafe. I recommend an area where a sizable crowd pass by on a regular basis; close to a school or a heavily populated residential area is best. As a pro gamer, I would like to find my preferred cafe close to a school exit so finding it will be easy. Placing it close to some eateries or “carinderia” is helpful (discard this if you plan to serve “real” food to your clients, see bottom for further details). Most pro gamers would want to eat at a place just outside or near their Internet Cafe.

Next, make up your mind as to how many computers you want. My guess would be around 15-20 for beginners. You might also want to put in fewer weighing in your cafe’s space and starting capital. More personal computers may translate to higher income; which can be assured if are the only café owner in a residential/commercial area for a few blocks.

Computer Specifications. Being a gamer myself, I would like to play without the annoyances of lag or slow start up. Every second matters when you play MMORPG’s, especially during guild wars or other vital regular events. I would recommend on going for the most recent specs, to give you an advantage on other internet cafes. High-quality specifications allow you a bit of breathing phase before you would need the next upgrade. Owning a technology receptive business means that in the succeeding months, a brand new hardware would be released to make yours the not-so-new in the line. So, investing on those well performing hardware are really a gain.

On the other hand, if you intend on renting your computers to a market made up of students who only want to type their projects, work on the internet, and the like, you can go for basic hardware.

Please remember that the key in this sort of business is decent service. You must have your clients keep returning for more. Maintain your computers by keeping them up to date with first-class computer specs. At present, having a dual core processor is ideal. Along with respectable RAM (1Gb to 2Gb is best), and a high performance video card of 256Mb-512Mb will make a good rentable computer. You could do without an optical drive and a floppy disc drive (which already appear to be outdated with the launching of USB mass storage devices). You can have a CD/DVD writer combo on the server so CD’s can be regulated and monitored before they are used. In addition, you can also add cd/dvd-burning to your list of services.

Next in line are good cafe softwares. You can choose free cafe management software like HandyCafe. They permit the administrator to take control of the internet cafe via functions only available to the server. You can limit the rental time for each client and regulate the bandwidth when heavy downloading affects the entire network. Cafe management softwares often have billing functions that automatically calculate what you should charge your customers. This is a nice feature to use particularly if you want to manage the cafe by yourself.

Food. Most gamers spend less time eating whenever they go online. It is difficult to break the concentration of a playing pro gamer. However, they are people, and people do eat. Whenever they feel the urge to revitalize, you can offer them quick preparation food like instant noodles. But, if you wish to enhance your Internet Café’s income scheme, you can offer “real” food to your customers. This would mean that they won’t have to go look for a restaurant and leave your cafe, thus remain in it while on their favorite games.

Comfortable chairs. I, for one, spend most of my time in from of my laptop or PC. I want to feel snug and comfy in my seat. Long hours in an uncomfortable chair can be exhausting. Consequently, I believe it vital that next to good service, customer comfort ought to be taken into account.

Games and Wordprocessors. After you have everything ready, you can ask your technician, or if you are capable yourself, install all the games and word processing applications on the computers. You opt for OpenOffice applications in place of Microsoft Office if you have a strict budget. Purchasing the licenses for these applications can be very pricey, particularly their operating systems.

I hope you find my guide to putting up your own Internet Cafe useful.

Please check out my blog, http://www.mobileexpressions.blogspot.com for more information on the subject.

The prospective new business owner approaching a lending institution should keep in mind the “five c’s of credit:” character, cash flow, capital, collateral, and (economic) conditions. Character consists of the borrower’s integrity, experience, and ability; particularly close attention is paid to a borrower’s credit history, which is a matter of record. Should you decide to try to fund a startup through a commercial lender, the remaining criteria are addressed in the loan request.

The loan request should include a credit application, financial information such as tax returns and personal financial statements, and a brief business plan emphasizing projected financial performance of the new venture. The plan should demonstrate how the business will generate sufficient cash flow to repay the loan, specify collateral, and show the borrower’s personal investment.

In addition to servicing the loan, cash flow should also cover operating expenses, and provide for some re-investment for the increasing financial demands of a start-up venture. As collateral, banks will often lend up to 80% of the market value of real estate, and up to 50% on business assets such as equipment, inventory, and current accounts receivable. Lenders and investors often require that the bulk of start-up monies be provided by the business owner. This assures these stakeholders that the owner is committed, and has confidence in the financial projections.

When the entrepreneur can not meet the requirements of commercial lenders, and does not have a favorable arrangement with partners or other investors, the remaining options are difficult and expensive. These options include public-sector guarantees, finance companies, and the venture capital market.

Even where the start-up investment consists largely of other people’s money, the amount of financial risk for the entrepreneur is beyond what most can responsibly handle. For many with the financial means, the stress of bearing complete responsibility for the company’s direction and performance is the discouraging factor.

Once the venture is off the ground, a new set of challenges faces the entrepreneur. A recent survey showed their major concerns, named by more than half of respondents, were: “getting new business/clients;” “managing my time;” and, “promoting my business.” Another interesting question was what they missed about the corporate world. The top three responses were “company-paid health insurance,” “a regular paycheck,” and “retirement plans.”

Various estimates have been made for the failure rate of business start-ups, based on various concepts of failure and of appropriate survey methods. The consensus seems to be that less than half of new businesses survive the start-up “trauma.”

Perhaps, a major reason for what seems to be a high failure rate is that it is so easy to start a business. There is no institutionalized check of qualifications in the U.S.; on the contrary, our tax dollars fund the Small Business Administration and other agencies and programs that encourage business formation.

Another survey showed that over 80% of entrepreneurs would take a pay cut if that is what it took to keep the business going. Just over a third would sell the business, even if a good price were offered.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

Recently I was told of a woman who had started her twenty-first business. In each case the business was related to cooking. The good news was this woman was a capable businesswoman and an excellent cook.

The problem for this woman was that she got tired of running a business very easily. She would get a business established and grow weary of the day-to-day grind and would set a date to close the doors. Her husband was a carpenter and had systematically refurbished twenty separate properties for his wife’s business ventures.

This woman recently started a coffee shop with a variety of baked goods for sale. The business hadn’t been open 3 months when a separate coffee shop opened in the same retail complex. When she discovered the new business she threw her hands up in despair and asked the owner of the second shop if she could come to work for her.

You see, there is an invisible wall that is sometimes difficult to overcome. That wall is moving beyond the difficult work of day-to-day business where you are needed in the monitoring of all aspects of the business. Some, like the lady in our story, simply get tired and go home to regroup their strength for a later attempt. Others will find ways to derive income that does not rely on their own efforts. These are the entrepreneurs that more easily move forward.

Passive Income

If you are a store that specializes in a product you have created, the sale of items that are available from other suppliers can provide income that is your simply because you supplied shelf space.

The sale of insurance provides a means of deriving an income based on commissions that require little attention from you.

The use of affiliate programs can allow others to sell your products and provide you with an income on something you were not actively involved in selling.

The development of passive income is important to entrepreneurs because if you attempt to develop revenue exclusively on your own then your revenue stream goes dry the minute you need time off.

Someone once said, “Work smarter, not harder.” That’s especially true as you continue to develop your business. Seek ways to allow others to help you sell and market your goods and services. This likely means there will be salespeople working at selling your business even when you’ve left the building for a much needed day off.

Scott Lindsay is a web developer and entrepreneur. He is the founder of HighPowerSites and many other web projects.

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Business Models If you’re pondering over how to start an internet cafe, the most crucial decision you have to make is which business model to adopt. There are numerous choices. The first one is the most conservative model wherein you provide only internet access. Another option is to serve tea, coffee and snacks along with internet connectivity. You could also add computer repairs and maintenance services and even sell computers and computer parts. Many people buy franchises of prevailing internet cafe businesses. When you buy a franchise you get the advantage of a time-tested business model and the know-how behind it, but you’ll have to pay for that edge.

Planning Before starting a cyber cafe, always chalk up a solid business plan. A good business plan should lay down your business goals, ways to achieve them, the obstacles that you may encounter, how to surpass them and financial planning and analysis. If at all possible, talk to at least three different cafe owners about what you plan to do. Try to contact cafe owners from out of town, so there won’t be any competition conflicts, and, if possible, show these experienced owners your business plan. The advice they give could save you thousands of dollars, so don’t hesitate to offer them a really nice dinner or lunch for their time.

Start Up Costs Finance is the driving force in any kind of business. So make sure that you acquire adequate funding before starting your business. How much is enough? It depends on your business model and the services you intend to offer. If you’re planning to provide exclusive services like gaming, social interaction or a remote office, your capital requirement can run into thousands of dollars. There are computers to purchase, broadband connections to book, furniture to be bought and a place to be leased or acquired outright. Include these things in your budget. Also conduct an analysis of monthly expenses, projected future incomes and profits. You can raise finance through private investors, banks and financial institutions that specialize in granting small business loans.

Changing Trends The success of a cyber cafe depends on how you keep up with the latest cutting edge technologies. Trends keep changing and technology keeps improving. Webcams, video conferencing and innovations like VOIP were unheard of before but are widely used these days. So the survival and prosperity of an internet cafe depends on how well you adapt to the changing trends in computers and related technologies.

Advertising Advertise as much as possible to draw attention to your cafe. Distribute your business cards whenever you get the opportunity. You can also sell memberships in terms of internet hours. Put in an ad in your local newspaper and on community websites. Get a listing in the yellow pages.

Last but not the least; apply for a business license to run any cafe. Evaluate all the risks, conduct your market research and adapt to changing technological trends. If you’re serving food, this will mean in inspection by the health department. Health department inspectors regularly refuse licenses until major repairs or improvements are completed. Your business plan needs to be ready for an unexpected $5,000 expense.

Pamella Neely writes about how to start an internet cafe for http://www.OpenAnInternetCafe.com.

SBA – So many sources push SBA loans, SBA LOANS, SBA LOANS! Let me first say, the Small Business Administration loan program is awesome, if you can get approved. Although they have loosened up some of the requirements lately, it is still somewhat tough to get approved.

First of all, the government does not loan the money. The standard program is a bank loan though there are some micro loan programs available that use funds from capital groups. Most of these loans are normally collateral loans, and they are backed by the US government similar to HUD and FHA home loans. What that means is that if you should happen to default on the loan, the government will reimburse the bank for certain percentage of the loan amount. That is good for the bank, and good for you if you can qualify for one of these loans. They are tough to get I’ll say again, and there is a lot of paperwork to fill out and file. You also have to have good credit, very good assets, low debt to income ratio, and unencumbered collateral.

Some SBA loans can take some time to get approved and then funded, but if you are approved, they usually have up to a 7 year repayment period and a favorable interest rate. It’s best to talk to an approved SBA lender for particular details, as the bank calls the shots, the SBA only backs the loan. You can work with a local SBA office as well for details or go to www.sba.gov

Personal – This is the easiest form of financing, but less likely for most people. Try to put all you can into this venture from your own pocket without ruining your marriage, family or jeopardizing your home. If you do get financing, you will be required to pitch in at least 25% of the total you need to start your coffee shop anyway. The more you have in, the more the bank knows how serious you are and more likely they are to fund you. They also know the more you have in personally, the less likely you are to run when the times get tough.

Cash is king. Liquid assets are a great source of funding. Liquid assets are assets that can be converted to cash quickly like stock, bonds, or a 401(k). I only recommend any retirement plan as funding as a last resort. This is what I did when I ran into capital problems and could not get a loan because I was maxed out. It’s best though to leave this money alone and search out other options.

Real estate equity – This is a good source of funding if you have enough equity in your home or another piece of real estate. The interest rates are usually favorable as well.

Friends and family – if you cannot put in as much as you need to, friends and family are a good way to raise additional capital. Just be sure it’s clear how you structure the money deal: are they investors, partners, both? Are you issuing them stock in your corporation? Whatever the deal, get a contract attorney to draft the paperwork to make it legal. It will cost you about $500-1000 or so for this service and when it’s done, you will be glad you did it. Spell out all details.

I once saw a guy invest in a restaurant and the owner wanted a loan only, so they had a repayment plan but not any written contract stating what was what. The investor assumed he was now a ‘partner’, as in part owner and started showing up daily, scheduling meetings, wanting to rearrange the store and making menu change suggestions. That was not a pretty situation!

Investors – most high dollar investors want to see success before they pony up cash to someone they do not know. However, it can happen at the beginning though. You need to surround yourself with PWM: People with Money. This can also be the friends and family route. Ads online and in the paper are ok, but will most likely bring you more weirdoes than real investors.

Join local business organizations, talk with the Economic Development Corporations and chambers of commerce in the areas you are looking to open and ask them for investor referrals. A lot of investors shy away from seeding food and beverage related businesses unless it is a liquor establishment but they are out there.

Non-traditional lenders – aka private equity firms, capital groups fall into this category. Their guidelines are less stringent but again, most want existing businesses looking to expand. They also are not normally looking for food industry investments because the risk is too high and search out tech type companies that have a higher return. However, this is again certainly not the law.

Banks – traditional lenders, they are tough ones to get on your side if you have NO money to kick in or marginal to bad credit, and no collateral. Sometimes just a lot of work, a lot of talking and an awesome coffee shop business plan may just be the thing you need to get them to help you. A banker on your side that believes in you, and you have established a relationship with could be what stands between you and a funded loan. Treat them like gold.

Credit Unions – usually most do not do much in the way of business financing, but for those that do, their guidelines are slightly more relaxed than a traditional bank, like those for personal financing but you will still have to qualify.

Credit Cards – I am not recommending this option! If you do use them, be sure they are a very low interest rate, even 0% with some of the introductory rates some banks give. You may want to have back up cash in case you run into problems with one.

Be careful, however because after the intro period is over, the rate may go higher than you think if you are still carrying a balance. Also, if you are late one time, you run the risk of getting rate-jacked. That is when the credit card company jacks the interest rate to the default rate, as high as 29%! Yes it should be illegal but unfortunately for us, it is not. They can also raise the rate whenever they want regardless if you are in default or not. It’s in your agreement with them; i.e. the fine print. Once the rate is up there, it is very difficult to get it lowered again. Chase is the most famous for this. Just be careful!

Credit cards are good for purchasing however, if you get the rewards points or airline miles programs. I have several I use for purchasing and have gotten several airline tickets and thousands of dollars in gift cards for using the cards and getting points. Besides that, you can effectively buy more time for your accounts payable if you plan the billing dates correctly.

So whatever source(s) of funding you choose for starting a coffee shop, be sure you know what you are up against. Do your research and talk to the people that can help you. Stay focused, and well informed regarding your planning stages. Be sure your prospective lender gets a copy of your coffee shop business plan. All lenders will want to be sure you know what you are up against! Good luck.

Tony DiCorpo is a coffee shop owner, operator, barista and entrepreneur. He is also a coffee shop business consultant. He has authored many articles on the specialty coffee business and a business plan package that can be found at tonys-coffee-shop-business-plan.com

People ask quite often of the importance of a business plan when starting a coffee shop. My response is always a statistic: Most businesses fail within the first year due to lack of planning but coffee shops have a higher failure rate due to their nature. If you don’t have anything to plan your course by, how can you move forward? Any business vision is blurry without a written plan.

Your plan takes time to write now, but it’s designed to help you avoid costly mistakes later. The true value of creating a business plan for your endeavor is not the finished product, but in the process of writing it.

Experience has taught me that while planning to open a coffee shop, templates and generic plans will not help you much except for the typical form the plan should follow so be very careful. You need to make yours unique, and as coffee shop friendly and specific as possible.

When I wrote my original business plan I read and studied quite a few versions of them on the internet, and picked out sections I liked best. I rewrote it until I was satisfied and then gave it to my banker. He said it was the best business plan he had ever seen. So I put the plan to use and opened my coffee shop, and made lots of mistakes!

My banker loved it but he was not a small business person, nor anyone that was familiar with coffee shop operations. Had I wrote the plan realistically and pertaining specifically to a coffee shop I’d have avoided a bad location, incorrect demographics, lack of capital, and a lot of other mistakes.

You have to be realistic with your prospective numbers and in many ways you have to get creative, especially with marketing. The specialty coffee business is unlike a lot of other food service businesses because of its nature. Writing your coffee shop business plan will force you to think about your business in a way that you will always have to think about it: it’s unique.

And just because you open your shop and may be open for a year doesn’t mean you can put the plan away. You should always be tweaking it. Trust me you will always be a business person and thinking about what you can do different and new. Things change, markets change and trends change so your business has to change as well to adapt. Otherwise, you will be closed before you know it.

It bears repeating: If you fail to plan, you plan to fail. It’s as simple as that! Be sure you have a specific business plan when starting a coffee shop. Your plan won’t be worth beans otherwise!

Tony DiCorpo is a coffee shop owner, operator, barista and entrepreneur. He is also a coffee shop business consultant. He has authored many articles on the specialty coffee business and a business plan package that can be found at tonys-coffee-shop-business-plan.com

Investors want to see a plan that maximizes return on investment. High fixed costs are the enemy of a great profit margin. When business turns down, and it always does at some point, fixed cost assets become liabilities and must be continually fed, even as income declines.

Always present decision-makers with the most streamlined operations plan possible. Do not confuse grandiose staffing and equipment wants with actual needs. In today’s business climate, almost every possible service can be rented, leased, farmed out or performed by contract manufacture. A 25,000 square foot factory that is not running at 100% capacity is an under-performing fixed cost asset, especially if a private label manufacturer will provide the service at a competitive price. The cost to rent, power, insure maintain and staff the facility is ongoing and will be a drain on the bottom-line.

Investors want to see a lean operation with no fat or excess. They will always be open to adding costs as growth and sales traction begin to kick in. Initially, the entrepreneur needs to display that he or she will be a prudent shepherd of the investment required to startup the enterprise. Here are a few areas where fixed costs can be avoided and potential investors greatly impressed.

Facilities

An opportunity killer is a funding request that includes money to buy a facility, office or plant. No startup can accurately pinpoint the growth (or failure) rate of a brand new business. Investors will want to see a plan reflecting realistic goals and space requirements. This almost always means renting facilities until need demands a purchase of facilities.

Manufacturing

There are almost no good reasons for a startup to manufacture their own product. Possibly, if there is a very valuable trade secret involved, but not often even in that case. All contract manufacturing should include a Non-Disclosure Agreement (NDA) as part of negotiations. Contract manufacturing is available and utilized in almost every industry today. Estee Lauder manufactures almost none of the many cosmetic or fragrance products they market. Liz Claiborne and Calvin Klein make none of their apparel. Ikea sells only furniture made in third world facilities.

All of these companies, and many more, realized long ago that manufacturing was better left to factories located where labor, raw materials and government rules were not stifling. These companies concentrate their assets on research and development, design, sales and marketing. So should every entrepreneur seeking to succeed in obtaining investment.

Sale

Every entrepreneur should be able to aggressively market and sell their product. However, no single person, or small partnership, can be in front of every customer that will potentially be interested in purchasing the product on offer. The investor will want to know that there is a sales strategy that offers an excellent chance for success.

In the area of sales, there are industry specific sales representatives: manufacturer’s representatives and agencies available to sell an interesting, market ready product, on commission, within their industry. Commissions are typically standardized within each industry. The gift industry is 15%. Food products are 3% and up, depending on the volume a product can reasonably be projected to achieve. Industrial products are 2% to 5%. Historic profit margins dictate commission rates.

When using sales agents, the entrepreneur should manage the sales force as if they were salaried employees. Weekly calls to review goals, promotions and upcoming meetings. Write letters and e-mails pointing out other agent’s successful achievements. I have used commission sales agents for many years, and recommend them to most of my clients.

I make as many key- account sales calls as possible with my sales agents. If it is my product, I want to control big presentations, even though I will pay a commission on the sale I have principally generated. I attend as many sales meetings as possible. The more I can meet, learn and know about my sales teams activities the better I will be able to motivate, train and energize them.

When commission sales agents do not sell a product they are not paid. This obviously minimizes fixed costs. However, you will want to pay the largest amount of commission as possible. Healthy commission checks mean a very healthy sales base.

As a very young National Sales Manager for Vidal Sassoon Hair Care Products I was confronted with a problem. Our sales had exploded. Growth was so rapid and market acceptance of the Vidal Sassoon brand so overwhelming that our commission payments likewise accelerated to the point that my top management became upset when commissions exceeded their own salaries. “Don’t those guys work for us, why do they make more than the owners”, they asked?

I faced a difficult situation. I offered two options: cut commissions or fire the commission agents and hire a company employed sales force. I reckoned that if I could get sales coverage for 8% cost of sales (including salaries, benefits, travel, etc.), it would make sense to make the transition. Cutting the commission rate would displease the agents and I did not want to risk losing the excellent momentum we had developed.

Very surreptitiously and quietly I interviewed and hired a team of key regional sales managers and we quickly executed a plan of conversion that top management had signed off on. Vidal Sassoon was at the point in their business development that a company owned direct sales force was needed and justified. However, it was a concern as we were greatly increasing our fixed overhead.

Entrepreneurs should focus maniacally on sales growth. Sales are Job #1 in every company, especially a new venture! Be very careful in constructing sales coverage that will support the growth you project while not choking cash flow with a very high selling cost.

Marketing

Hopefully the entrepreneur, or a member of the management team, has marketing experience. If not, the answer is often to hire a consultant. An experienced consultant will save time, money and mistakes. Be sure that the consultant being considered has current industry specific experience, strong references and a transparent history of success.

Fulfillment

I never recommend for a new venture to handle their own logistics (warehousing, pick and pack, shipping, billing, etc.) Dealing with shipping, handling, conditions and the terms necessary to satisfy retailers is daunting. Big box stores such as Kroger, Lowes and Wal-Mart have exceedingly complicated inventory control systems. Special, very expensive software is needed to communicate and expedite receipt of goods.

On average, I can have my inventory warehoused, packed and shipped for about 4% of my selling price (depending on volume). If business is seasonal or slows down I do not have to pay high fixed costs, just a percent of the shipments total invoice amount. If business is booming, my contract fulfillment warehouse ramps up hiring. A good contract warehouse offers a complete menu of services that I can pick and choose from as needed. Their systems will be sophisticated enough to handle the most demanding purchaser of my product.

The first time reader of a business plan typically has a strong reaction, positive or negative, to the overall document. A negative result usually occurs when the Executive Summary contains references to high fixed costs. A positive verdict is more probable when the entrepreneur indicates in every way possible that they are solely interested in maximizing profit and return on investment, not building a colossal infrastructure that will bleed the enterprise dry if all does not proceed perfectly and assumptions are not realized.

Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.

After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.

Mr. Ficke and his consulting firm, Duquesa Marketing, Inc. (http://www.duquesamarketing.com) has assisted businesses large and small, domestic and international, entrepreneurs, inventors and students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.