Archive for March, 2011

Start Up Business Plan Day #3

Business & entrepreneurship

If you have followed me over the past couple of weeks, you know that I am currently writing a series on how to write a start up business plan. The first article was about getting a start up business idea. Then I discussed how to use the SMART method to build your start up business plan. Now that you have a clear idea of what your start up business will look like, it is time to go deeper into the plan to look at the positive side of things. Today we are going to work on What is Going to Work in your Start up.

Start with your strengths

Your business will have some assets; the biggest of all will definitely be: YOU. Therefore, it is important to make a list of all your strengths that will help you succeed with your new business. Among these strengths, you will find:

– Your knowledge

– Your talent/abilities/management skills

– Your qualities as an entrepreneur

– Your network

– Your financial means

Making a list is a good thing, but then, you need to write down how each strength can help you to make more money with your business. This will give you an idea of how much you can expect to sell/generate in the upcoming year. This part of your business plan is very important especially if you need financing. Banks love to see what you are going to do and that your start up is well organized. They see too many start ups failing because the owner had a good idea hampered by poor planning/management.

Who will be your first clients?

If all things go well, who will be the first people to contact in order to make a sale? This is another important part of your plan; define who needs your product/service. By determining your segments, you will be in a better position to assess how much sales revenue you can generate within your first year of operation.

Think of all the opportunities, groups of influence and leaders that may be interested in your business. Think of special ways to reach each segment you are targeting. If you think that your product/service is for everyone, think again. Go deeper in your market analysis and target people that are more likely to deal with you upfront.

While knowing your potential clients is pretty useful to draw your first financial plan, it will also help you in setting smart goals. In this part of the plan, don’t be shy to enter optimistic numbers. The goal of this part of your start up business plan is to do away with your mental barriers and aim for the stars, you can do it!

Start Up Business Plan: Day #2

Business & entrepreneurship

The next thing to do when you are building your start up business plan is to consider each one of your goals in order to make them achievable. A start up business idea is a good start, but it’s far from being enough if you want to succeed in creating a side line income. You might have heard of the method I am presenting today as it is clearly one of the buzz words in the management field. This buzz word is “SMART”.


This is a simple method to define each of your goals. In order to explain it, we will take the example of someone who would like to start repairing and selling computers on the side.

S for Specific

Offering a good quality service in computer reparation is not a specific goal. A specific goal would be to repair computers along with providing an analysis of the computer’s performance and offering a delivery service. This is what I call “good quality service” ;-) .

M for Measurable

“leave me your computer and it will be repaired and ready shortly”… WRONG! Instead, use “leave me your computer and you will receive a call within 48 hours to get the analysis. Instead of making useless promises (as repairing all computers within 48 hours), just commit yourself to completing the analysis. Don’t forget that repair times can depend on new hardware orders ;-).

A for Achievable

You can’t beat Walmart in terms of price. Don’t try to be the cheapest computer reseller around. However, you can set an achievable goal of growing your monthly sales to $400 within your first 6 months. While this is a challenging goal, it is achievable.

R for Relevant

When you establish your goals, they must help you to earn more money. Don’t try to have the best logo or business card. Concentrate on value creating goals such as quality service, repair time commitments and additional services that can increase your revenue (by providing a performance analysis, you may be able to sell more hardware or software to  improve the computer).

T for Time-bound

If you want to make $400/month with your computer repairing business, you better set a timeframe. An ultimate date will set the feeling of urgency inside of you. Therefore, you will be more likely to take action towards this goal.

So as you are building up your start up business plan, you have to use the SMART method for each of your goals. You will then become more efficient and work on what creates value. I guess this is the most important point of having a start up; make sure your effort amounts to something. I have seen too many people working very hard… but on the wrong things.

Start Up Business Plan: Day #1

Business & entrepreneurship

People that know me well would describe me as an entrepreneur. Since the age of 17, I think about start up business ideas continuously.  I have tried several start up business ideas so far; some with success, others with failure and even more with mas o menos results ;-). In the end, I have learned a lot of things about start up business plans. In fact, if you don’t have a plan for your start up, you won’t have much success with it. This is why I am writing this series of 5 articles about Start Up Business Plans. These are 5 articles that will require action from you if you want to generate your own sideline income. In order to be effective and have the time to generate something that is worthwhile, I suggest you take 1 article per day and use them to build your start up business plan. So here we go with day #1:

Start up Business Plan Day #1: Define Your Mission

This sounds pretty basic. I’ll go even further; we hear about the company mission so often to the point where nobody really cares about it. Most employees see their employer’s mission as another quote to plug in annual meetings to cheer them up. The thing is; your mission is way more important than a cool quote and you can’t consider yourself as just an employee anymore.

What is the mission of your Start up?

In other words; what do you want to achieve?

How are you going to achieve it?

Why should you be the one doing it?

Why is it so important? (Does it solve a problem, comfort a fear or is it born from your passion?)

How are you going to make money from it?

Is there a market for it? (is it an important mission?)

All these questions will define what your start up business will become. This is by far the most important step of your start up business plan. Without a mission, without a clear vision of what you want to do, your start up business plan will be nothing but words in a business plan template. And your start up will be nothing but a good idea that has not been developed.

The problem with the mission

Most people have a good start up business idea before they think about their mission and business plan. The problem is that most people leave their idea as is. They leave the rock and forget to polish it; to cut the rock to transform it into a beautiful diamond. This is why most start up fails: the business plan was based on a rough and unpolished idea instead of being built on a solid and powerful mission.

I know all of this because I had made the very same mistake; I started my business without a clear mission. At first, I was just writing financial articles on my blog for fun and I was waiting to see where I was going with it. This is why my blog was a non generating money hobby for about 2 years before becoming a 6 figure revenue business in 2010. When I clearly defined what I wanted to do and how I was going to do it back in 2008, the whole game plan changed. I had achieved my start up business plan Day #1, I wrote down my mission.

A trick to make sure your mission is complete

Discuss your business mission with a friend or with family. Tell them about your project, describe it. If you can do it within 15 minutes, you know that you have a clear and concise mission. If you can’t do it and your mate has several questions, don’t argue with them, write down all their questions and go back to the drawing board to work on your mission.

Most people will challenge you on your ideas, don’t get discouraged. Use their questions and their defeat for not having the courage you have to motivate you; to polish your mission. Here again, don’t argue, just jot down their observations and their questions and answer them in a better, improved start up business mission. This should be enough to take you an entire day ;-).

Upcoming; start up business plan Day #2; Be SMART

Start Up Business Ideas – Where To Begin?

Business & entrepreneurship

After all these calculations for my ETF asset allocation model, I have decided to leave the ETF world for a moment to go back into another area of experimentation; Business Start Ups! Between a struggling economy and employers always looking to get more from their employee while paying less, starting up a small business on the side seems like a logical alternative.  Getting a  start up business idea will definitely be the first step to financial independence.

When I started up my web business, the goal was to eventually reach financial freedom. I wanted to create a business big enough to sustain all of my basic financial needs. While I am not there yet (I can’t quit my day job to live solely from my online income, yet), I have reached another level of freedom; I am not dependant of my employer anymore. Having an MBA combined with a side income gives me the possibility to sleep well at night and not having to worry about losing my job.

We hear a lot of stories like mine. Some of them are even better because the start up business leads directly to financial independence. But before dreaming of working with a laptop on the beach, one must find his start up business idea. I’ve started to think about where I get all my ideas and they come from 3 specific places. Here they are;

Start Up Business Ideas – Where To Get Them

A) Solve a Problem – Start Up Business Ideas from Problems

The first place where to get start up business ideas is to look at problems and ways to solve them. For example, I have noticed that many people are financially uneducated. This is why I have decided to share my financial knowledge and try to help them. My start up business idea came from a real problem; people don’t know much about finance and finance is important. The way I am trying to solve this problem is to write about financial strategies on different websites.

Finding start up business ideas based on solving problems is quite easy as we encounter annoying things in our lifes every day. The key is to be aware of these problems and try to find solution to them.

B) Comfort a Fear – Start Up Business Ideas from Fear

We are all afraid of something. Some people are afraid to get robbed (home security system), some others are concerned about being overweight (Açai berries, exercise machines, etc.). If you find a way to relieve people of their fears, you will have something that people are willing to pay for.

The best way to design a start up business idea from a fear is to start from something that YOU are not afraid but that people around you are. Why? Because you probably know the how to comfort others and relieve them of it ;-).

C) What is Your Passion? Start Up Business Ideas from Passion

This is my favorite way to find a start up business idea. Think about what you love in life. Most of the time, you know more about this topic than most people around you. Your goal then is not to become the most knowledgeable individual on the planet about this topic, but to share what you know with young people starting up.

I love writing and I love finance. What do I do? I have started up a business that enables me to help younger personal finance bloggers to grow their blogs and make money online.  This is my start up business idea; beginning from my passion for writing to transmit my knowledge and methods to others. There are tons of bigger bloggers than me in the blogosphere. However, it doesn’t mean that my tips are not good for a young blogger. This can be applied to any kind of topic from gardening to mechanics.

So What is YOUR start up business idea?

ETF Asset Allocation Applied To The Ivy Portfolio A Detailed Example, Part 3


I have taken some time to look at my ETF asset allocation model and the results generated by the Ivy Portfolio trading method. Some of you mentioned that the recent years were very hard to predict and such a simple trading technique (trading with the moving average) should not be able to make sense in such high volatility market.

In fact, it’s the complete opposite; the Ivy Portfolio works better with highly volatile markets. I was surprised to see that the ETF asset allocation model works very well when market goes up and down many times. Surprisingly, it has less success when the ETF follows a steady trend over several years. In order to better understand this trading technique, here are my conclusions after looking at a 10 year history (from 2001 to 2011):

#1 You Will Trade Several ETFs

When you look at the Ivy Portfolio calculation details, you notice that there are several “unnecessary” trades where you sell and have to go back in the market only a few days later. This will not only affect your pocket since you are paying for trading fees each time the ETF price crosses the moving average but will also annoy you as an investor. If you don’t have a solid trading system where it triggers an alert each time you have to make a trade, you may lose some great investing opportunities.

#2 The Ivy Portfolio is at its best to avoid a downfall

If you look closely to the trading tables, you will notice that most ETFs were been sold in July 2008; right before the major market plunge. I find it quite interesting since you could have avoided almost the whole market crunch simply by following this very simple rule.

#3 The Ivy Portfolio is not too bad to catch the uptrends either

Considering the stock market index ETFs I used, most of them were sold in July 2008 and bought back in March 2009. If you ignore the few transactions done in between, you can see that you not only avoid most of the downfall, but you can also capture most of the uptrend as well.  The latest years have been a great example to show how great the Ivy Portfolio works well in times of high fluctuations.

#4 In Steady uptrend, the Ivy Portfolio is not impressive

If you look at the Canadian ETF for example, it is one of the very few (besides the emerging markets ETF I have used) to show a worse result than if you would have kept it for 10 years. This could be easily explained; the Canadian market was trending up most of the time. Therefore, there wasn’t many downfalls to avoid and you “lose” a part of the uptrend (which you can’t gain back since the stock is continuously rising and you missed the bottom price).

#5 Overall, the Ivy Portfolio Shows Better Return

I guess this is why it is so important to build a solid ETF asset allocation since some ETFs won’t work in the Ivy Portfolio. However, if you look at the overall portfolio I have built, it has outperformed individual indexes. The important point to consider before trading with the moving average is the trading costs and the system you will use to receive alerts.

In this regard, I know that INO offers a triangle trading system that is very similar to the moving average technique. They offer a service where you add the ticker you want to follow and they send you an email each time the stock or ETF is on an uptrend or downtrend.

I have used it in the past and it works very well… but you have to trade each time they send you an email. It’s the same thing with the Ivy portfolio method. If you want to learn more about it, you can take a look here: