Financial Future

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Before embarking on writing a business plan for starting a car wash, a definition of what a business plan is in order. A business plan is a document to identify an opportunity, research why this opportunity is profitable and the steps needed to capitalize on the opportunity. The business plan can be a formal document or it can be written on the back of a napkin but the mere act of writing the idea down forces you to get the idea out of your head and on paper which helps find hidden business flaws and makes you think carefully about each phase of your business.Creating a business plan is something anyone can do, even if you don’t know anything about business or finances. Even though the business plan is critical to getting the idea off of the ground, many entrepreneurs procrastinate when it comes to preparing a written plan. If you don’t know anything about business or finances, this is the best time to begin learning as the chances of your business being successful will be limited without this knowledge. Just as a builder won’t begin construction without a blueprint, entrepreneurs shouldn’t rush into new ventures without a plan. The old saying that “those who fail to plan, plan to fail” is very relevant when talking about starting a business. SBA’s statistics claim over half of new businesses fail in the first three years and the common factor is poor planning or under-capitalization (which is also poor planning). Getting Started The first step in creating a business plan is just getting started. Writing the business plan may seem overwhelming at first, but if you break the plan down to bite sized pieces and work on one section at a time won’t seem as daunting. Begin with what you know first and describe your business and your product or services. Work towards the more difficult subjects such as marketing, operations and financials. Don’t worry about it being perfect now, just get the concepts on paper – expand and refine later. If you get stuck on a section in the plan, skip it for now and come back later when you have more details.Who is your audience? When writing your car wash business plan, you need to keep in mind who your intended audience is and why you are writing the plan. Why? A plan for the bank will be less interested in the exit strategy and return on investment than one for equity investors. Additionally, a plan for written for internal use will be different than one looking for financing as a bank is not necessarily interested in detailed operations of the business.Structure Business plans tend to have a lot of elements in common. While there is not a format that all business plans follow, there are generally accepted guidelines that most follow as the order in which the subjects flow are not random. The Business Description of a business plan is aimed at painting a picture of your business and why this business will be successful. The Marketing, Management and Operations sections are researched and a strategy of how your business will compete and operate is developed. Last financial projections show in numbers what you explained in the business plan for the sales and expenses. Breaking these three major sections down even further, a business plan consists of six key components:

For more free articles and resources for starting a car wash are available at www.StartingACarWash.com.

Additionally, business plan help can be found at www.TheBusinessPlanFactory.com

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24 Key Attitudes For Success In YOUR Business

 

What to take YOUR business to a whole new level? This article is designed for business owners who want to take their business to a whole new level and realize results beyond their wildest dreams.  The first of a three part business tips series, it deals with the 24 key attitudes that are fundamental to the success of your business. 

 

The second article… The 5 Biggest Small Business Mistakes and How to Fix Them deals with the next most important area – Marketing. Without a solid foundation of who your target market is, what they want, how they want to deal with you, then you have no prospects, no customers and no basis for a company.

 

Finally, the third article in the series… The 5 Key Business Profit Factors  deals with how to make massive amounts of profit.

 

The Key to Business Success

 

What is the most important factors of a business’s success?

 

·         A Unique Selling Proposition (USP)?

 

·         Having the lowest prices?

 

·         Great sales people?

 

·         The best location?

 

·         The best products?

 

·         Good customer service?

 

·         A strong local economy?

 

While these are all factors, based on our experience working with all kinds of different businesses, the most important determinant is YOU – the business owner.  History is riddled with examples of successful businesses that have failed with a new owner and lackluster businesses that have flourished under new ownership.

 

As a result, you are your most important business project.  As such, you should be investing significantly in yourself.  This includes reading books, examining your strengths and weaknesses, setting development goals for yourself, seeking outside advice, tracking your own personal development and getting a mentor to keep you on track.  You probably spend plenty developing and maintaining your business’s physical assets.  How much time and money do you spend on developing yourself?  

 

The great motivator and speaker E. James Rohn advises: “Work harder on yourself than you do on your job”.    In my opinion, if you are serious about your business and what you want to get out of life, you simply must dedicate 5-10% of your time to self-development…   And, yes, you must set aside some money to pay for it.  Rest assured, this money will likely give you the highest ROI (return on investment) possible.  After all, you are the person that can increase your profits by 50% or more.

 

There is no better time than now to make a commitment to yourself.  Get out your calendar right now and block off 30-60 minutes every day for self development, for the next 12 months.  Next, write down specifically what you are going to do with this time for the next two weeks.  At the end of two weeks, you should be in a position to detail your development plan for the next month, then the next quarter.

 

Another great quote, also from Jim Rohn: “Never wish your job were easier, wish you were better”.    Think about it.  If you are better, you will get better results.  If you wish for it then you are more likely to find a way to make it happen.  If, on the other hand, your job were to be easier, then everyone would want to do it and you would be back to square one.

 

1.   The Winning Attitude

 

The journey towards extraordinary profits begins here. There is no greater factor responsible for success, or failure, than your own mental attitude!  As a result, it is imperative that you begin by preparing your mind with the attitudes and perspectives that will set you free to achieve your business goals.  I am not talking about psyching yourself with positive thoughts, although at times this can help.  What I am talking about is adopting ways of thinking that will free your mind to find the solutions to your business challenges.

 

How you think and what you believe to be true about how you do business is what brought you to where you are right now.  Before you can find a better way of doing business, you must learn a new way of thinking about business.

 

It is a simple truth that it does not matter if you think you can, or you think you cannot, either way you will be right!

 

Stop blaming, denying or making excuses and start taking ownership, being responsible and winning.

 

2.   In Business There Are No Mistakes

 

Did you know that Edison had tried over 500 times, unsuccessfully, to make a light bulb.  One day he got asked “you have failed 500 times, how can you go on?”  Edison quickly responded “I have not failed once!  I now know 500 ways not to make a light bulb.”  The only failure is the failure to Participate.

 

If you want to be successful in business, you must be prepared to take calculated risks.  Many things you try will not work the first, or second, time.  You learned to walk by falling down.  It is the same in business.  You probably had parents or that gave you a safe environment in which to learn.  In business, you can seek out a mentor to help give you a safer environment.

 

3.   What if Contrary Information was “Interesting”?

 

Have you ever had an argument?  You knew you were right and the other person was wrong.  However, the argument was vigorous because the other person, who was also bright and articulate, was convinced they were right.  So, there you had it, two people both right and both wrong at the same time.  You argued but the other person would not relent.  Several days later, you still were thinking about it when you realised that you were wrong after all. 

 

Brad Sugars, the remarkable entrepreneur has an approach which has enabled him to continually innovate.  When Brad hears an opinion that is contrary to his he says, “isn’t that interesting?”  This then opens his mind to the possibility that he will learn a new way.

 

You see if there is an up, then there must be a down, and a left and a right… If you have to prove yourself right, then you cut off all possibility that there may be a better way. 

 

If you truly want to change the success of your business, you must be willing to change the way you think and the way you behave.  Isn’t that interesting?  

 

4.   I Know – the 2 most dangerous impediments to Business Innovation

 

Teenagers KNOW everything. Just ask them. Now that you are a little older you realise that it is probably not polite to say, “I know” out loud to everyone.  So as an adult we listen politely, cross our arms, all the while in the back of our mind saying, “I know”.

 

Try this exercise.  Close both your fists tightly.  Now try to button your jacket or make a phone call or compose an e-mail.  Your mind is like those closed fists.  There are very few things it can do well when it is closed.

 

You need to forget the mindset that says “I know”.  It is what you learn when you think you know everything that counts 

 

Open your mind up, it is not the major realizations that will make you a fortune, it is the fine distinctions that gives you the edge over the rest of the population.  The difference between ordinary and extraordinary is that little bit extra.

 

5.   Business is Fun!

 

You have decided to go into business for a number of reasons; more money, more control over your time, more free time.  Unfortunately, if you are like many business owners, you let the business take control of you.  It may even suck the life out of you… but life should be fun.  Since owning a business should give you more life, it only stands to reason that business should be fun!  To have fun, I suggest you treat it like a game.  First, learn the rules.  Second, keep score.  Finally, have fun

 

6.   Time is Your Most Valuable Asset

 

If you spend every penny you have you can go out and earn more money.  In this sense the amount of money we can have access-to is infinite. Unfortunately, we all have a finite amount of time on this earth.  If we waste a minute, we have lost it forever.

 

While this may seem intuitively obvious, amongst the business owners I meet, this one simple principle is the most important yet under appreciated principle of business.  Let me describe one conversation that is representative of conversations I have had time and time again with different business owners.  We will call the business owner Mark 

 

Peter:  Tell me how your business is performing relative to your goals.

 

Mark:   Well we are doing OK but I know we can do better.

 

Peter:  If you know what to do, what is keeping you from doing it?

 

Mark:   I always get interrupted and I can never find the time to do the new things.

 

Peter:  Is your business profitable?

 

Mark:   Yes it is. But I know I could easily do better.

 

Peter:  How much would you like to make in the next twelve months?

 

Mark:   After all expenses £150,000.

 

Peter: Do you believe that this is a realistic objective

 

Mark:   Absolutely.

 

Peter:  How many hours a week would you like to work?

 

Mark:   50 hours per week and I would like to take 5 weeks vacation (including holidays).

 

Peter:  So Mark, that means you would like your business to earn about $64 for every hour that you work. (£150,000/(50 hours x 47 weeks)). 

 

After an examination of Mark’s workweek, it was obvious that he was involved in a number of activities that were not worth £64 per hour.  If Mark spends 35% of his time working on tasks that could be handled by a £15/hour employee he is either going to have to work a lot more hours than he wants to, or he is going to have to get his business earning more like £90 per hour for the balance of the time he works.

 

Now, I am quick to advise owners to be careful with how they spend money.  But Mark’s penny pinching was not in his best interest.  Mark was trying to save paying more wages (about £17,000 per year).  But, by trying to save money it was costing him considerably more.  He was not having fun and he could have been implementing changes that would yield him more like £50,000 in additional profit (3 times what he thought he was saving).

 

As an owner, the most important decision you make is what you spend your time doing.  Owners that I meet who work too many hours and do not make as much as they want, often treat their time very causally.  Typically, they do not plan their day and tend to be reactive.  Often they do not even keep a calendar. Rarely can they tell you how they actually spent their time.  Conversely, successful owners plan and track their days and their week as carefully as they spend their money. 

 

I recommend that you emulate the successful owners.  Think about what will give you the best long term ROI [Return On Investment] for your time.  Do not be distracted by saving a few short-term pounds if you have an opportunity to create something that will generate returns for you year after year.

 

7.   Questions are more important than answers

 

One night at dinner, a young man asked his wife, “Why do you cut the ends off the roast?” Her reply, “I am not sure.  It is what my mother used to do”.

 

Some time went by before they visited her mother for dinner, and when they did, they had roast for dinner. So he asked, “why do you cut the ends off the roast?” Her reply, “I’m not sure, my mother always did it that way”. So he made a phone call to his wife’s grandmother and asked, “why do you cut the ends off the roast?” Her reply, “well, I’ve only got a small baking tray”.

 

So, often we do things, just because it is the way we have always done them, having absolutely no idea why it was done that way to start with.  Ever notice how new people tend to question things?  As an owner you should question why your business runs the way it does.  The only way to perform substantially better than your competitors is to be substantially different from them.  In business, following the crowd will almost certainly lead you to slaughter.  Looking at it another way, have you ever seen a flock of eagles?

 

To succeed in business, you often have to depart from conventional wisdom.  For many people this will be difficult – especially those who did well in school.  After all, we were taught in school what we had to do to be successful – quite often it involved conforming.

 

In an increasingly competitive environment, you must distinguish yourself by more than just price. You do this by being different. Think about what makes you unique and then tell the world. 

 

8.   Take a look in the Mirror

 

Ever notice that when you are having a good sales week that the next week just seems to get better and you keep closing more accounts with little or no effort.  Or maybe you have had a slow couple of weeks and all the prospects that you meet seem to have trouble deciding.  You have to make multiple sales calls, answer question, after question, after question.  The people you attract in your life are a mirror of where you are at. 

 

Most businesses are a clear reflection of its owner. Some owners want to control everything and wonder why none of their team ever takes any initiative. Some hate selling and love paperwork, so they have always got their numbers done, but never really sell much.

 

When I look back at my life I can clearly see times when my successes lead to more successes.  Success follows success. This brings me back again to the key to success in business – you.  Make sure you invest in you.

 

9.   Business is a Self-fulfilling Prophecy

 

Remember the last time you bought a car.  You chose something that you thought was distinctive.  Then after you got it you started to notice that you were seeing the same car all over the place.  Or, another example, try right now to NOT picture a purple cow in your mind.  What happened…. You are seeing a purple cow… Your brain has an amazing power to create whatever you focus on. It is called your Reticular Activating System (RAS) and it is like your personal compass.

 

Your RAS will find proof that the earth is flat if you want it to. In fact, it will find proof that November is a slow month if you want it to. In other words, attention determines direction. Just like the last time you said to yourself; “Do not forget, do not forget, do not forget… ” And, what happened, you forgot. Change your wording to “remember” get rid of the negative ‘do not’.

 

Another example, if you were to ask a person how their day has been, and they answered, “Not bad”. What is their benchmark on life? BAD, and today is not that. Your RAS is an amazing tool and it will find whatever you ask it to find, so you had better ask for very positive things. Remember to ask for the things you want, NOT to push away what you do not want.

 

Every day your business meets your true expectations. In other words, if you believe you have to work hard to make money, then that will always be your reality. If you believe you can never get good people then that will be your reality.  You generally make true that which you believe to be so.  So, choose your beliefs carefully.

 

10.        Listen to the Taps on Your Shoulder

 

Traveling down the road of life, it is easy to be distracted, get off track and lose sight of the big picture. You have heard the old saying, “can’t see the forest for the trees”.  However, every day you are getting little taps on the shoulder, an idea that you should change what you are doing, a suggestion from someone, a hint.  These taps are just like the cats eyes in the center of the road and the small slits in the shoulder that serve as warnings.  You feel little taps if you stray too far one way or the other.  Either you learn to listen to the taps and adjust your course, or eventually you will run into the sign posts at the side of the road, or worse, oncoming traffic.

 

In business, we get taps all the time.  Unfortunately, they are a lot more subtle than the taps we get on the road.  They are however, just as important for the health of your business.  If you do not want your business to be run over by the proverbial ‘hit by a bus’, it is imperative that you become adept at listening to the taps.

 

The most successful business people are very perceptive.  They have perfected the craft of surrounding themselves with other people and then listening – really listening – to what they have to say.

 

So, be sure to listen for the taps and look for the signs. Sticking your head in the sand never helped anyone.

 

11.        Build a Business do not Buy a Job

 

From what I have found, people start their own business for one thing and one thing only: FREEDOM; whether that freedom comes from working for yourself, having more time to yourself, financial freedom, or just the freedom of knowing that you are in charge of your life.

 

With a successful business, this freedom is truly liberating.  Now your friends that have never had any interest in captaining their own ship (those who work for others) may argue that you are far from “in charge” when exposed to the volatility of owning a business.   What they do not realize is that if you have 100 different customers and you lose half of your customers you still have 50 left. Your friends on the other hand have only one customer – their boss. If they lose that “customer” then they are out on the street!

 

Unfortunately, most business owners never achieve the freedom they seek.  In fact, about 80 per cent of businesses started this year will be gone in 5 years time.  Moreover, for those businesses that are still operating, most of their owners seem to work harder than any of their people and many seem to make less income than they could make elsewhere. Most end up having the business run them, instead of them running the business. In fact, they end up with the very thing they did not want, a JOB.  And that job may even come with the worst boss they ever had – themselves!  In effect, they have taken great risks and expended vast energy and all they have done is bought employment.

 

12.         A business needs to be profitable and work without YOU!

 

If you want to achieve that freedom that all business owners seek, then you should adopt this definition of a business:

 

A business is – A commercial profitable enterprise that works without YOU!

 

Why build a job for yourself when you can build an income stream that keeps on growing whether you are there or not. Remember the business exists solely to serve you – the owner; not your customers, or your employees.  Yes, customers and staff are important, but the reason you start a business has nothing to do with them.  It is essential that you adopt this attitude.

 

13. The only reason you would ever start a business is to sell it.

 

If you want to achieve true success and freedom then you need to think of your business as your product.  It is what you are building and it is where you are ultimately going to make your profit – selling the business.  That is right; you start by thinking about how you can build your business so that lots of people will be competing with each other to buy your business. 

 

Very few people ever make a fortune running their business, but many people make a fortune selling businesses.  Look at Bill Gates for instance. Yes, he has made a lot of money selling software, but he became the richest man in the world by selling his business – shares of Microsoft.

 

Are you too involved in your business? Ask yourself: could I pick up the phone in the morning and tell whoever answered, “you guys look after things, I am taking three months off”.

 

If you are like the vast majority of business owners out there, the answer is definitely NO.

 

14.         Working “ON” not “IN” the Business

 

Ultimately, you have to get yourself out of the day to day of the business. Stop working 9 till 5, doing the work of your business. Else be like most small builders…  they spend all day using a hammer and nails, working IN their business.

 

Imagine when you started your business that you built it in your mind, and then you put down that picture of what your business would be like when it was finished.  If you are going to sell a product, you must know when it is finished.  It is the same with a business.  You have to finish a business at some stage and have it ready for sale.

 

As an example, let us say you wanted to buy a new sofa.  How much would you pay a furniture shop for a partially completed sofa?  Likely, only a very small fraction of what a completed sofa would cost.  In fact, if you are like most people you would not even be interested in paying anything.  It is the same thing for a business.

 

When people try to sell a business that is not finished, at most they are really only selling a JOB.   As a result, these people only get a few people interested and they only ever get a fraction of the potential price.

 

When you have the finished picture of what your business will look like, then you go to work creating the business.  This way you are working ON the business, rather than just working IN the business.  You should be designing your business to run whether you are there or not.  If you do this then you have a choice, and choice gives you freedom.  You can work in the business or you can spend your time more creatively.  You can keep the business, or you can sell it.  I like good choices like these.

 

15.        You work hard because your business doesn’t

 

Imagine a business where you did not have to work there – would the business WORK? I mean, would it function properly?  Would all of the systems and the people integrate to get the result you wanted, the result the customer wanted?  Of course it would.

 

Almost every business owner I have ever met works so hard (too hard) for this exact reason. Their business does not work, they do. Everything about the business is in their head, and they are the only one who can do anything, so they are trapped.

 

Most are like this because the owners do not trust anyone else to do the job. For some reason they believe that no one can do it as well as they can. This need to be in control prevents them from growing their business.

 

Take the step, start to document how everything in your business gets done, put systems in place, teach other people and give them the responsibility to get the job done. (If you need more convincing, Read Michael Gerber’s book – The E-Myth Revisited. 

 

16.        Assign Tasks.  Don’t Delegate Just To Abdicate

 

All great leaders are good at delegating so you must start off-loading tasks as soon as possible.  Remember, time is your most precious commodity.  Since delegation is so important, you must prepare properly for it.  You must make sure that the person that will be doing the task knows what to do.  The worst thing you can do is to abdicate a task to someone.  By this, I mean telling them to do something when they do not have the skills or the training to handle the task.  It is essential that you carefully explain what you want done, how you want it done and what you consider a successful outcome to be. 

 

This may come as a shock, or at least seem like overkill, but you must document how you want your processes and tasks to be completed.  From my experience, most owners just give their staff a (quite often limited) set of verbal instructions.  The owner then assumes that the employee knows what to do and the employee then assumes what he thinks the owner wants done.  While well intentioned, this feeble attempt at delegation often does not produce the desired results.  You see, it is a simple but important fact about human learning that only about 20% of people are auditory learners – people that receive and easily comprehend verbal information.  The rest of us are either visual or kinaesthetic learners. That is, we need to see (a picture, diagram or read) what to do, or we need to actually do something before we fully understand.  (I have some simple, but effective tools that can help you successfully delegate.)

 

After you have properly prepared, trained and given your team member the job to do, then let them do it. Do not jump in and save them or they will never learn how to get the job done. If you do, they will “learn” that you are the only one who can fix things.  Guess what, they will be right.  You have to let them fall off the bike to learn how to stay on.

 

17.        Work for Yourself and go the extra mile

 

What if you do not own a business yet – that is, you work for someone else?  I suggest that you think like You Inc.  Treat your boss like he is your customer.  You want your customer to be thrilled with You Inc.  You want him to continue to buy more and higher value services from You Inc.  At a minimum, adopting this attitude will be great experience.  Think of your job as market research (for your business) that someone else is paying you to do.  But remember, what goes around comes around, so give it everything you have.  Your boss may even spot a future business partner in you.  Always go that little bit further than you are asked to, give a little extra and you will go far. If you are asked to stay until 5:00 PM, stay until 5.30 PM, just do a little more than were asked.

 

18.        The key to success is laziness

 

Which would you prefer – 1% of 100 people’s income or 100 % of your own income.  I would prefer the former, not just because I am lazy, but also because with this attitude my income can be unlimited.  On my own, I can only earn 100% of my own income.  On the other hand, there is nothing stopping me from working with 101 people or 1000 people. (why stop there?) 

 

If you have ever thought that you will succeed if you just work a little harder, put in some extra time, or just do more of what you are doing right now, then it is time you lifted your head and took a look around you.  You probably know several hundred people who work hard.  How many of them are really getting somewhere?

 

The aim of the game is not to work harder; it is to create better results with less effort – finding ways of achieving more with less. In other words, to continually leverage your time, your efforts, your money and your knowledge.

 

If you are paid an hourly wage, you will never earn more than the number of hours you work, but if you and your business are set up so that you are paid whether you work or not, then you have truly understood one of the key principles of success – Leverage.  Leverage is simply – the ability to do more with less. The aim of the game is to create an income stream that flows whether you work or not. Build assets that yield income.

 

There are numerous ways to create Leverage. You can leverage yourself through people, systems & processes, marketing and finance. 

 

19.        Your Business is Like A Tree

 

It is important to view your businesses as a living organism – like a tree.  Your business is either growing or it is dying.  When does a tree stop growing – when it is dying.  The same is true for a business.  You see the world does not stand still.  New products, services and competitors are cropping up everyday.  If your business does not evolve, then it will die.

 

20.        Change – The Only Constant

 

It is important to consider your business in the context of the wider business community and the world economy.  Consider the Agrarian, Industrial, Information ages.

 

In the Agrarian age (which lasted until early in the 20th century) 95 per cent of the population worked the land and the wealthiest people were the landowners. 

 

In the Industrial age (which lasted until about 1980) those that owned the factories created the most wealth. 

 

In the Information age those that owned the computers and software production, the telecommunications and have the information and corresponding managing tools created the great wealth.

 

By considering just the length of time that these ages have lasted we can easily see that the pace of change continues to accelerate at an increasingly rapid rate. In the information age we are living through, it only takes about 18 months for the available information on the planet to double, where it took about 50 years a century ago.

 

Some would argue that we have already left the Information age.  With constant change, occurring at an increasingly rapid rate, it has never been more important for owners to:

 

1.      Work ON their business, rather than IN their business

 

2.      Work harder on themselves than their job

 

3.      Surround themselves with experts that can give them every competitive advantage

 

21.        How Do You Compete?

 

With information moving so fast, people can copy, reproduce and have ready for sale any product or service in a matter of weeks. In today’s economy, you cannot be cheaper than your competitors can for long.  Therefore, the 21st key is that you have to know what information is important for your business success.

 

The only way you can stay ahead of the market is to out-think, out-sell, out-market and out-maneuver your competitors. Your marketing, sales and customer service is crucial. You do not have to have the world’s best hamburger to sell billions of them.

 

The next time you have a group of people in a room ask them “who thinks McDonald’s have the best hamburgers in the world?” I will bet that not one person puts up their hand. Yet, who sells more hamburgers than anyone else does?

 

Then ask the same group, who thinks they can build a better sales, marketing and distribution system for hamburgers than McDonald’s. Once again, no one will put up his or her hand.

 

22.        Ask for more

 

If you are going to build a great business, if you are going to make your fortune through business then you have got to ask for a whole lot more than you do right now.

 

If you shoot for the stars, at least you will make it to the moon.   If you do not ask, the answer is always NO. If you start to ask for more, and be grateful for it, you just might start receiving. Just remember, those who are grateful always receive more than those who just complain about life.

 

Do not be afraid of someone saying NO. They are not rejecting you, it is just that your request may have come at a bad time or their goals are not quite aligned with yours. Do not take offence … every NO gets you closer to a YES.

 

23.        Abundance vs. Scarcity

 

For most people getting more means that someone else has to go without. As intuitive as this may seem, nothing could be further from the truth!  There is literally more than enough to go around.

 

To succeed in business, you often have to depart from conventional wisdom.  Because, as I mentioned earlier, the crowd is often wrong.

 

Scarcity was first espoused by English Preacher Thomas Malthus, who concluded that England would run out of food as there were too many people for the available food production.  Yet, even to this day we still produce more than enough food to feed the entire planet.  Because we believe in scarcity; or more commonly known as supply and demand, much of it gets thrown away. 

 

In business, you have got to realize that there is always more than enough money to go around.  When will you go out and get your share?

 

Abundance is a mindset, a mindset that understands how technology has removed scarcity; how the old thoughts in economics are exactly that – old. (Read Paul Zane Pilzer’s book – Unlimited Wealth for more on this.)

 

24.        Work Smarter, not Harder

 

Just to prove that thinking differently is so important, write down how much money you earned last year. Now add a zero to the end of it. You have just increased your income tenfold.   To make that much money doing exactly what you are doing right now, how hard do you have to work? 

 

You have to stop working harder and start working smarter.  Remember, people with jobs earn money while business owners and entrepreneurs make and create money.

 

Some final words

 

We have been discussing some key attitudinal concepts that will be fundamental to the success of your business.  Yes, there are a lot of other important concepts about Marketing, Sales, Customer Service, Operations, Employee Development, Finance, Cash Management and Administration.  There is a lot that can be done to help you develop your business in all these areas.

 

However, years of experience tell us that it is the fundamental attitude that you must embrace first.  Your attitude is the essence of who you must BE as a business owner if you are to get what you truly want from your business. 

 

This experience is also consistent with the simple BE-DO-HAVE goal attainment philosophy.  This philosophy says that in order to HAVE the things you want in life you must DO the right things.  Before you can do those things, you must BE the person that is capable of doing the right things.

 

A Complete Waste of Time!

 

Now let me be brutally honest with you.  Most of the people reading this article will gain absolutely no lasting benefit from having done so. It will have been a complete waste of time!

 

Why would I say that?  Do I not believe that what we have written has benefit?  Absolutely it does…. but then again, there are many great business books.  Most of them have a lasting impact for only a few people. 

 

In order for you to get any lasting benefit from the information I have presented, you must take some action.  Otherwise, nothing will have changed for you.  If you do not change anything, you will get the same result that you are already getting.   

 

Peter Cantelo (Copyright 2008)

www.vivavi.co.uk

For the Support  of Small Business in Georgia

Content.

In the conditions of deep economic crisis and  during the period of extreme restriction in requisite  resources for economic investments of tendency of selecting priority in investing activities enquire upmost importance. According to these circumstances, small and average businesses must be admired in such system of priorities. It follows not only from conjectural, political  or ideological  purposefulness, but also from objective activities of social-economic conditions; Simultaneously it is also connected to the position perspectives of this field to solve vital questions of the country. (creating concrete atmosphere, increasing employment level and efficiency, treating and spreading technical decisions etc)  however, it is baseless to speak that small and average businesses in our country have any kids of advantages in distribution of investing resources, ` moreover, it often moves to the second place.

Financing has always been the urgent problem of small and overage businesses.  According to the social research of small industrial management, half of respondents had to use  their own savings in organizing these enterprises. Only more than a quarter managed to receive credits, but less than 20% – to attract depositors’ sources.

The  employers admit that, the first and main problem is finances and buildings and then follows cooperation with local authorities. However, investment always remains as the main problem in the activities of a particular firm.

Pressent Day Situation of a Small Business.

In western countries outnumbered commercial banks, insurance companies, branch funds, regional commercial departments of tuition structures stimulating small business, regional guarantees, outnumbered charitable funds and associations, actively support  them.

Due to not existed similar institutions, the development of small and average businesses is prevented. So it is quite natural, that development of small industrial net is still unable to form the commodity market. Nowadays supporting industrial activity has  no main basis in small and overage businesses. The situation of providing these enterprises  with material, energetic and financial resources has recently   been deteriorated; according to results of selective researches in 2000-2005, in order study small industrial business activities in industry, building and retail trade showed  that  nearly 40% from small industries have their raw and building material supplies reduced. The existing level of orders and resource  maintenance was estimated as “..below average”; however unlike large industries, homogeneous tendency  of economical situation in small and average businesses is distincted, e.g. during 200-2005, the amount  of employees and usage level of industrial capacity maintained sufficiently stable in small industries.

Although capital investments of small industries include sufficiently large amount  of  money (11% of investment realized at the expense of financial resources in Georgian economy. The small enterprise activity of industry in the field of investment is still exceptionally low.

Inquiries showed that among active reasons  about  restriction of investing activities, about 60% of  respondents  consider high level of taxation, 30% – high rate of inflation, above 30% general economic and political instability.

The leaders of small industries, critically characterize competitiveness of their products over 50 % of leaders  consider   it as “average” towards the internal market.

Leaders of examined small industries consider lack of their own resources. (75% from inquired people), high payment rate (over 60%), unaccepted conditions of investing and accounting as a main resistance for their  innovational activities.

Financing Sources of a Small Business.

Analysis of financing sources for small and overage business  shows that the most available for their activities are inner developing sources which are used by over 3/4 of industry, while only one from four, manages to abtain any kind of means from external sources. Enquiries show that their own small business incomes take first place among financing sources. It’s  proved by every two participants from three ones. On the second place are the founders of average business with their own sources;  (21,7%). And private credit takes the third place, used by 17,9% of these industries. Other sources are used by 10-15% of small businesses. Simultaneously over 20% of enquired leaders consider that their enterprises have no any developing chances. More complete idea about the nature of investing in small and average business field is given by the results; Researches on tendencies of small business investments. According to this data, leaders are those industries which direct their investments towards the equipment and transportation (57,5%); and the enterprises which use investments to fill their sources of circulation. take the second place (44,3%). A lot of enterprises use their sufficient sources in repairing building and commercials (38%). Over 20% of small enterprises spend their sources on their staff training.

Comparison of data according to the groups of small industries prove all the following differences connected   with specificity of a business field. e.g. small industries of trade fill their  sources of circulation, frequently (76%), but they stay backward in investment of human capital – only 8% of them provide staff training, whilst corresponding average index for all enterprises is 20,8%.

One of the main problems in small business development is their slight investment in the process of crediting due to existing high risks in this field. It  is caused by following factors: usually, small industries have no ability to represent absolute  guarantee independently over their responsibilities and there’s no complete system of guarantees and insurance of their investing activities.

Usually, personnel of small and average  businesses have no sufficient knowledge in economy, which is the main cause of those incomplete projects which are introduced by them. As for consulting service of business management and preparation of investing projects, as a rule it is excessively expensive for enterprises of small and average businesses.

The results show that in the process of providing crediting resources, leaders of small and average enterprises experience not only general inflexibility of crediting, but also discriminative policy of banks towards small and average businesses.

The main difficulty in the process of receiving credits is price restriction (very high percentage was mentioned by 47,6% of leaders of small enterprises); It is followed by the range of nonprice restriction – unpractical mortgage and  guarantees (21,9%), innaccessibility of investing credits (10,5%), restriction of crediting terms (14,3%) and subjective evaluation of discriminative conditions. Besides, the role of organizing factors is not sufficient.

The interests of commercial banks are not directed towards crediting of small enterprises due to their non-existing complete technologies of investment; Besides it claims to discuss numerous investing projects, though working procedures are highly  significant. Banks don’t take risks, due to their negative experience in disappearing of credited firms, no returned credits and hidden mortgages, including small and average businesses as well. Hence, due to controlling and providing insurance, they choose organizations having accounts in a particular creditor bank.

Banks avoid crediting of newly founded firms and insist on collateral security guaranteeing  a small enterprise. The level of percentage implies the level of risk that is significantly high for every small industry. Standard validities of given credits include  3-6 months period.

Thus, Georgian banks. like in western countries must inevitably develop assisted financial services for small and average businesses. First of all, it includes detailed treatment and examination of any kind of projects independently from credited funds and improvement for abilities of banks in estimation of loans. The same time, they must rely more on the knowledge of potential resources for enterprises and markets than in the amount of funds and guarantees.

Who Helps and How to Developa Small Susiness.

Noticeably developing non-governmental specific structures formed for supporting small and average industries are also of great importance. The first similar structure was founded in 1992. It was an agency, supporting small and average businesses. Its purpose is to increase industrial activity among the population with the  help of consulting, informational and expert services provided not only for small and average industries but for pioneer implcyers as well. It includes issues on economic, financial and taxation policy; recommendations about keeping a ledger; support for composing constituent documents; registration of enterprises and allowance of their activities; elaboration of a firm mode, teaching business; (hobbits based on special programmers, worked out  of the agency together with foreign experts). for  the successful development of their own activihes; (business planning; marketing; commercials; industrial experience etc); informational support for the operations of external trade. customs issues and other normative juridical problems. Agency constantly tries to expand its  own activities. It mainly includes issues on the support  of activity of small and average business industries. Special investing department is created in the structure of agency for this purpose, which is directed towards the preparation, training and conducting of recommendations for composing  business plans, investing projection and financial management; working and conducting of examination for investing projects; researches of their financing sources. The given department is an official agent of the federal fund for supporting small industries, that is directed to the selection of industrial projects for providing credits.

In the beginning, the functions of agency were distinctly oriented on the demands of developing small and average businesses in Tbilisi region, but now it has begun to play the role of informal-methodical – coordinative organizational structure throughout the country.

Realization of this role is significantly depended on the formation of corresponding regional agencies and their active participation in the country. Above mentioned activity of  the agency must necessarily be established by state departments.  Namely, it is advisable for the government to elaborate a special document about “regional agencies for supporting small industries”. In this document, it is necessary to be mentioned the labor financing scheme of the regional agencies’ net at the expense of assignation from the state budget. Formation of regional agencies supporting small and average businesses   is decisive to serve physical and juridical persons in creating small and average enterprises and to provide their effectiveness. Such schedule of services is defined by developing quality of agencies which may include practically all types of support for small and overage businesses including informational services,  legal advice and participation in investments. As a rule, the purpose of agencies is not receiving profits and that is why their quite high level of services  compared with ones of other organizations are relatively cheap, but in some cases it is  absolutely free of charge; if agencies function into contact with the government and authority organizations of all level. and are based on the assistance of these organizations.

Herewith, the first task is that the agency of small and overage business supporting, leads the work to form united  informational net of regional agencies, that will take active part in the field of modern informational technologies, highly quailfield organizations. It is a significant stage of business, for united as well as regional agencies. Practice showed that, distinct division is the most essential task for separate regional agencies and affective organizational development of their net. It implies the gradual development according to the accumulation  of organizational experience,  stabilization of financial situation and  equipment with modern organizational-technical means and so forth. At the some time, determined service must be formed gradually and  successively, not only in accordance with the principle of senseless expansion of above men toned factors, but also selecting  the variants which are the most profitable and essential for the agencies in this or that concrete region. It must be said that estimation of perspectives in small and average business support activities is connected with the fact, that its significance is constantly outlined by the central government of the country as well as regional authorities. Of course, it clearly gives the chance to make optimistic prognosis. Unfortunately, in reality, the existed mechanism to support small and average businesses can’t still put into practice not only present-day objective demands, moreover the tasks which are not only possible to be solved but should be , for the development of its investing activities.

Wat is the Programme of Small and Average Business Investment Support?

As it is know, programme realization of investment support in small  and average businesses, may have double substantiation. The first assistance of a small  enterprise development, represents the effective way of solving social and foremost, employment  problems. Thus, conception of social direction for financial support in small and average business fields, follows that, grant realization of socially useful functions in a small business, must be fulfilled by state and society. The second-progress of small and average businesses are significant factor from the standpoint of effective use of people’s economic resources. Due to such approach , from the position of market   economy, defined means for small and average businesses must be considered as profitable investments.

Nowadays, systematical crisis is proceeded in our country. Factual unemployment problem instead of falling is rising steadily and it requires of taking vast  and active measures for small and average business  development. Simultaneously, tensity of central and local budgets  and lack of foreign investments do not give chance to form such material-financial basis, that includes all the above mentioned factors.

It’s clear that the way out of exiting situation can be found in the treatments of conception, such is investing support (and realization)  of small and overage businesses, when all the possible funds used with this purpose will  be spent on forming organizations and such financial machinery, that has high level guaranteeing aptitude for the feedback of invested resources. For the realization  of this conception, several main directions can be singled out, for the fulfilment of investing activity in small and average businesses.

1. Scientific-analytical and informative provision development of investment support mechanism  in small and average business fields.   Here, main goal is to study priority system of financing  for small enterprises, according to essential directions of development  and substantiation of their realization activities with the purpose of reflecting aims at each level. (central, regional as well as small and average enterprises). Strategic research organization and financing, forming development conceptions and treatment of inter-active mechanism for investing support system in small and average businesses. In addition to the point above, the following must be taken into account.

The first and foremost, the mechanism for investment support in small and average businesses must be based on state structural and industrial policy, financing of private investments or definition of essential directions for stimulation, in the section of divisions,  subdivisions and enterprises – definition of so called dot priorities.

Second – towards the formation of mentioned mechanisms, maintenance of scientifically proved approach is accessible as far  as it reflects the real peculiarities of economic development and  investing processes in this or that region.

Third – Improvement of scientific -methodic and informative supply for investment activities, mostly in small and average businesses is simultaneously connected with the existence of investing projects of small enterprises in order to restrict existing risks. The most is financial, technological and marketing accompaniment, i.e. financial analysis, technical examination, and marketing research of investing projects of enterprises in small and average businesses.

2. Reinforcement of objective direction and transfer the obstacle centre of topping-up process of investment activities in small and average enterprises at regional level. It must be taken into consideration that, formation of regional politics of investment support of these enterprises, in accordance with this qualitative index of region economy, that creates the peculiarities for small and average business development and support. Simultaneously, the development level of industrial production, resourceful base, consumers market provision, regional problems of population employment and social  defence must be taken into account. Only complex  consideration of all these factors, gives chance to study those activities that provide attraction of owners of industries for people’s demands in the most suitable fields and stimulation of economic development, first of all at the expense of local possibilities.

Nonexistence of financing, due to the deficit of state and local budgets, is one of the main reasons, that  represents the obstacle for the outcome of central and regional programmers in supporting small industries. In such cases, it is advisable, not only subsidization of industries, but also the assistance for the development of infrastructure in small and average enterprises. (marketing as well as industrial). It must also be admitted, that the state should do its bit to establish special regional banks, innovational funds, informational analitic centers and such organizational-regional structures that serve small and average businesses and keep their interests by means of preferential duties privileged regime of transferring buildings to the possession, licensing, etc.

3. Development  of perspective forms of small and average business support and financing. In this field, for reinforcement of purposeful direction of investing process and raising its effectiveness, local administrations should orientate on the creation of main tendencies of progressive investment infrastructure for small and average businesses. Great attention should be paid to the following factors:

Grade 1. Development of crediting system for the purpose of increasing the number of financial support receivers and simplify the way of giving commercial credits to small industries, implies the expansion of financial institutes net, that realize small and average business crediting with preferential conditions. It includes: lowering interest, extension of crediting term, reduction of demands at the expanse of guarantee and free consultations.

Grade 2. Development of guarantee mechanisms of investing credits, given to small and average business industries must include given state guarantees  to commercial banks, which took part in financing these enterprises. Compensation of  some parts of interests rate. at the expense of commercial credits of banks, could be considered as the significant tendency of using guarantee reserves,  especially at the initial stage of project realization, when returning of funds is still delayed in small and overage business field, for the support of investing business activity.

Grade 3. Financial crediting mechanism of small and average business support, implies the assistance of development, including cooperation of small enterprises and establishment of new mutual – crediting forms of societies in crediting field.

Grade 4. Leasing  development, as the most perspective form, is inevitable process as the most perspective form for small enterprise investors. In industrial countries, leasing includes 25-30% of direct investments annually, but in our country it is not still well expanded. for moving complicacy centre of financial operations from circulation field into real sector of economy in leasing development, it is essential that the participation of reliable commercial banks and insurance companies to be actively stimulated.

Grade 5. Establishment of industrial and technological service  system  in small and average businesses, implies the consideration of this fact that, nowadays, actual reserve of  forming  some element of infrastructure of small businesses, can be usage of industrial capacities and properties of poor  industries, after their liquidation, reorganization and changing profile. (namely, it is possible to locate supporting units of small groups of ownership and enterprises on their base). Distinct experience of realization of such approaches is already existed in a number of regions from the standpoint of industrial-technologic support of industries.

Grade 6. The problem of developing modern tendencies in small overage and large business cooperations has already been matured, e.g. franchise development of small industries in Russia will help to solve many essential economic  and social problems. Here, first and foremost is meant the creation of new working places and broad involvement into business of all these people, who can’t manage it independently, without any support and getting suitable knowledge. In modern conditions, a range of obstacles arised against the franchise development in  Russia: non-existence of special normative-legitimate base and suitable informational insurance, owners insufficient knowledge of running business  by means of peculiarities of such skills and possibilities; nonexistence of sufficient consultative structures; and common financial-crediting problems.

In the development of modern tendencies of cooperation in large and average businesses, financial-industrial groups play a drastic role. According to the practice of development countries, such groups grow the stability of economy and give chance  to solve investing problems. It’s especially important  for the regions, where there are outnumbered branches and subbranches with high investment capacity. Such as: (fuel-energetic complex, wine-making, mineral waters, etc) and conversional enterprises. Financial-industrial groups can become the significant means of realization of state selective structural politics, as with the help of these large integrated structures, it  is easy to carry out rational manoeuvverability in industrial sector; among them, definition and support of prioritative  fields and enterprises.

Grade 7. It’s necessary to put ventural financing schemes into motion and develop investment insurance system in small and average business fields. During realization of the above mentioned schemes,  effectiveness of scientific-research and experimental-constructive works are significantly increased in small enterprises. Innovational campaigns of a small business, in most of the countries function by direct backing of the state, that really estimates their great national-economic importance and due to this is ready to assign corresponding  financial expenses. Innovational small enterprises, technological development funds, incubator of technologies etc. nowadays, in Georgia,  experiments of a range of ventural financing programmes realization, in small and overage business fields take place from foreign financial institutes. These are: European World Bank, Inter-American Development Bank, Development Credit Bank and so on. In the realization of ventural financing of small business, their experience can be acceptable for Georgian banks and financial institutes. In a country market, the most vital subject is insurance problems. In western countries, the insurance is considered as unavoidable mechanism of risk redistribution. Its increased level in small and average industries, causes a number of difficulties in the working process of insurance companies: herewith, simultaneously insurance and reinsurance, also guarantee systems of credit returning can be created. Perhaps, it is necessary, these systems to be supported distinctly by central and regional organs. (e.g. for specialized risk insurance companies, checking privileges or compensation of their loss). In perspective, Georgian financing crediting system must be filled with specialized net of risk insurance, connected with investment credit issue.

4. Establishment of united investment infrastructure in small  and average businesses. Specialization of financing-crediting system in small and overage businesses can be carried out in two ways: a) Investment. In the way of forming financial organizations, specialized at the expense of investing operations: 6) In the way of orienting, just connected with small business operations. Different combinations of the above mentioned directions of specialization for financing-crediting organizations in small and average  business fields, are also possible. But in any case, these organizations   must be given distinct privileges by  federal and regional organs. Unfortunately, for fear of next “financing pyramids”, at present, population don’t have  eny confidence in establishing these specialized investment banks and sharing investment funds, that assemble the private investors’ funds and after, these are put in small enterprises as well as in small and average infrastructural units as the investment portfolio. Thus, at initial stage ideological training for the sharers of small business and population is necessary. It’s not less important that such specialized investment organizations, for the  purpose of guarantee and getting confidence must be created on the initiative of these state, social and commercial organizations, which are highly qualified in successful running of small business industry field and have authority over this field.

5. The role of small and overage business support agencies in the development of crediting and investment mechanism of this field. In  the regions,  these agencies characterized by a range of peculiarities due to their status, that creates quite profitable atmosphere for them, during the corresponding service. First regional agencies are fully specialized in their field. With  the difference from many other organizations, for which small and average business support is either temporary or accompanying with essential business. These agencies can use their priorities for getting experience and advices, attracting highly trained  specialists, having permanent relationship with  administrative organs and  so  forth. That is why, the service of regional agencies is famous for its quality. Their consultations and other forms of small and average business support are high trained in all, and recommendations – useful and practically acceptable. Second, such agencies have right to use all the various forms and methods of small and average business support, that on its side securing the complexity of their service. Third, from the very beginning regional agencies are involved in federal, regional and local systems of small and average business support; That is very important for the successful realization of their registration, investment and other functions. Fourth, regional agencies take objective part in the whole net of intercommunicated and inter useful organizations, that is practically expanded all over Russia.

In the case of successful development of regional agencies’ net, this advantage can be essential for small and average business support, due to their specialization and professionalism,  treatment of regional politics, development of proper federal and regional programmers and also because of having participation ability in creating similar regional bases.

To maintain the special status and role of their organizations, the staff of regional agencies must take into consideration  well, a main point of the politics of small financial industries  support, that must be realized on different levels of state government, clearly elucidate all the varieties of useful forms, methods and institutes, necessary for the development of this politics; They must easily manage to orientate on the proper segments of investment-financing,  momentary-crediting and stock markets.In the formation and  realization of regional politics of small and average business subjects, the first condition for successful  participation of regional  politics is to know as much as possible about real financial demands of concrete enterprises. But the problem is not only in the manifestation of the demands of additional finances, but also in structural-problematical analysis of the  above mentioned and also in the manifestation of these small enterprises,  that require financial support most of all; afterwards, selecting the most long-range enterprises from the standpoint of future profitability.  (after getting financial support).

The role of regional agencies in deciding these  problems will be shown in working out unavoidable systematic-analytical instruments, in leading proper date basis, creating informational guide and findings fulfilled by general as well as individual orders on the basis of their own estimation. Above mentioned  orders can be as   from enterprises themselves, as from authority and government organs and financial-crediting organizations.

Other direction of activity of the above mentioned  agencies, according to the regional politics context of financial support of small industry, must be the research of possible sources of free funds in the region and in solving financial problems of small and average business or working out principal schemes of their usage in investments.

Evaluation of regional politics structure for financial support of small industry. without the arrangement of systematic monitoring of this sphere, its constructive and in-time correction is impossible.

During the time of special and regular researches of industries, regional agencies can evaluate  programmer realization results in small and average businesses – (for different level budgets and enterprises, which require assistance) in the concrete regions. Also, practical results of giving credits and establishment of regional taxation privileges for small industries.

Thus, regional agencies can take part in the realization and formation of regional politics of financial support in small enterprises and play a mediator role and such a performer, who has to carry out a range of  the functions, which were not paid any proper attention by any kind of elements of regional  infrastructure in small and average businesses. With the help of all these, they would like to assist the growth of investment activity of this field.

The Funkcions of Regional Agencies in the Development of Small and Average Businesses.

Functions of above mentioned agencies, for small and average business support, enquire essential  analysis  in line with the development of progressive investment forms; and in the realization part of prioritative tendencies  of its state support.

1. The role of regional agencies in the development of leasing and franchise. In the development of these progressive forms of small and average business investment, participation forms of agencies can be absolutely different. There are united activities together with the organs of federal level, for getting normative acts and working out methodical  materials; forming statements about taxation privileges, establishment of specialized data banks etc; Parallel  activities at regional level, that supplement central authority actions (e.g. initiative of sentence study about getting privileges for local tax payment , also, independent steps for the development of leasing and franchising.

Such steps represent the following: a) making contact to these firms in Georgia, which are potential organizations of leasing and franchise, working out typical documents jointly (contracts, methodic, checking procedures etc). b) organization of juridical, consulting and informational assistance. (Search and selection of partners, consultations, assistance in teaching and control, etc). c) organization of international cooperation (leaseholders and  franchisers ‘ search in Russia and abroad, assistance in market research, selection of potential clients, adaptation of foreign system of leasing and franchise to Russian conditions, assistance in arranging these technical questions, which include partners separation a long way off, corresponding..service..etc). d) Organization of leasing and franchise propaganda. (Conferences, Seminars, Symposiums, Coarses, Press and Televise etc.)  Participation in establishment of their supporting centers and also in the development of leasing and franchise association in regional departments. e) Participation in establishing those specialized mediatory  firms, which duty includes: selecting of partners, working of different tasks of leasing and franchise assistance and development on the commercial basis; f) organizational   assistance for the participants  of leasing and franchise system by transmitting buildings and constructions with preferential conditions.

2. The role of small and average business support agencies in the development of industry in innovative field. These agencies can play an important role in getting contact among innovative firms and their providing with necessary  information; They can render assistance to such industries, expressed by investment support. from the side of agencies, main directions of small industries support in innovative sphere are the following: information base development in innovative small enterprises, assistance to establish such data base, were advices about the publication are given in the proper scientific fields; notifications about introduction of distinct types of techniques, about perspective development of scientific-technical approaches. b) rendering assistance of preparing investment projects, in estimation of perspectives of offered scientific-technical projects, in creation and introduction of new techniques and risk determination connected to above mentioned factors. c) in assistance of providing small innovative enterprises  with industrial buildings and equipment and for scientific-research realized by them. d) ensuring of small innovative enterprises with consulting and teaching services and keeping intellectual questions: e) assistance in finding partners and making contact with those enterprises, which work in a joining fields.

The  law on   “supporting the development of small enterprises”   adopted on  23  Jule   1999   is  considered to be the next step toward supporting  the  development  of country’s small and medium enterprises. The law helped to create “the center for supporting and developing small business”. The year 2002 was very important for providing Georgia’s business enviornment with legislative basis and adopting new normative acts.Much attention is presently given to the changes in the law on supporting small and medium enterprises.The law defines the status of small and medium enterprises according to workers’ requirement and annual turnover of their funds. In the same year small and medium business support program 2002-2004 was finished and adopted on president’s descreet.From then on the law has been improving,but the desirable result hasn’t been achieved yet.It is noteworthy that in 1991 there were 600 small enterprises registered .In 1994 their number increased to 12000,in 1995 to 17000 and in 2000 it increased by 20%, in the year 2006 the total number of small and medium enterprises amounted to 22000,thought 28% of the enterprises are inactive.[

In Georgia, mastering new skills for industrial development  in small and average business fields, gives chance to make conclusion that, this field of economy gives vast possibilities for effective investment and its future progress. But it is essential to reveal and put into practice energetically, the most  effective ways of using these possibilities. In connection with this , it must be said, that state policy must be more flexible in the tasks of forming own financial sources of investment, which are the most important at present, for the small enterprises. These industries must be given free rein, while establishing amortization norms, which defines the structure of internal financial  sources of investment (in the job of using internal sources of investments, except the state legislative  support, the effective consultative assistance of small business support organs is also unavoidable). Active  state support is very important for the attraction of external financial sources of investment by small and average business enterprises. Small business characteristics, such as flexibility and mobility, implies that small industries must have ability to increase their financial resources  fast, in any proper time. Its realization is only possible at the expense of borrowed funds. On its side, it includes organizational state assistance in getting funds, guaranteeing commercial funds given to small industries and accomplishing other supporting activities . It is natural that, the progression of this support must be accompanying process of state control reinforcement from the view point of using investment sources and overall development of small and average businesses.

Thuse, the analysis of current social- economic  conditions in Georgia and valuable experience gained from foreign countries show that during transitional period small and medium business must play on important role in forming national economy.

   Small business representis one of the main structures of business, that must establish market economy provide the creation of private business as well as new social class- small and medium business managers and help to overcome the crisis in economy.Small and medium business proved its viability. Their exsistence encourages the mobilization of labour and material resourses creation of jobs,quickly reacts on investments and meets market needs and takes part in state and local budget fulfillment process.

   We must hope that if we use the experience gained from foreign enterprises,we will be able to support small business. From this point of view the structure “Business incubations” is the most effective. Business incubations hasten the development of small business and reduce fail in business by 22%. This question deserved our particular attention because the conditions of small and medium business in Georgia are unfavorable. We approve the creation of business incubations for supporting the small enterprises that have been chosen for some reasons, and their support is exercised by providing them with machinery, services, consultanting and

education.They act to establish contacts between other sectors of economy,grow innovative  activities of business that makes diversification of economy possible and on top of all encourages the growth of small and medium business and their viability.

   Business incubations are flexible structures and merge with infrastructural complexes of region very well. The analysis of functioning business incubations based on world experience and especially of those,like Georgia  enables us to prevent negative consequences and over come current difficulties. Business incbations proved to be fruitful in Post Soviet area. In Russia,Azerbaijan,kazakhistan and Lithuania,but from this point of view Georgia has significanthy dropped behind. We have to do our best to introduce this progressive infrastructural elements in our economy.

Our recomrndations:

   Based on these recommendations we set the goals and main directions of small and medium business development in the following way:

1.    To create a stable enviornment for business with the help of business incubations.

2.    To create  new highly  paid jobs in small and medium business.

3.    To introduce specialized multilateral business incubations.

4.    To provide small and medium business with informational,consulting and financial – credit means.

5.    To Supporing the increase of  independent traders’ number in small and medium business.

6.    To meet the consumers’ needs immediately.

7.    Formation of the enterpreuners’ class that should become the stable guarantee for economic security and overcoming poverty.