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This is a service business with excellent growth potential,
indications of strong stability, a nationwide market with a
growing demand and a risk factor that's rated average or less
than most new business ideas. Temporary Help Services are well
suited to absentee ownership situations; require no experience or
technical knowledge on the part of the entrepreneur; and have
only minimal equipment needs. Net profits before taxes for some
established temporary help services have been reported as high as
$500,000 per year.
There's a difference between regular, private employment agencies
and a temporary help service. The employment agency is a
"brokerage" office that matches unemployed persons with available
jobs. The temporary help services hires people onto its own
payroll, sends them out on contract jobs, and pays them
accordingly.
Temporary help services make money "off the top." They send out
temporary workers on one or two day only jobs paying $15 an hour
to the worker, and collecting $20 an hour for the time the worker
spends on the assignment. More and more, businesses are willing
to pay the premium costs for a trained person for just a few days
at a time, than to accept the burden of a 40-hours per week
payroll obligation and the task of finding enough work to keep
such a person busy enough to justify a fulltime salary and the
attendant support costs. Businesses everywhere are finding it
easier to pay more for "temporaries" that hire 40-hour per week
"permanents." That's the secret of success with this kind of
business, and the point to keep in mind when selling your
services.
The successful temporary help services recruits as many skilled
and qualified workers as possible. These workers differ from the
regular job-seekers in that they're looking for "temporary" work
only. For any number of reasons, they're only willing to work on
jobs lasting from one to five days, or perhaps two or three
weeks, on any one job assignment.
These persons are ideal for the employers needing help but not
wanting to hire and train fulltime employees. Your task will be
to find and attract top people and to maintain complete files on
them. What kind of jobs they specialize in, their attitudes about
work, and when or how often they're willing to wok would be
essential information to have in your file.
Each person should be tested in your office, sent out on a few
assignments to build a favorable reputation as a good worker, and
then offered a permanent listing on your roster of available
specialists.
Work hard to build your roster of available workers. Within
ninety days of start-up, you want to be able to send someone out
to fill any employer's needs, regardless of the job requirements.
Job assignments will range from loading dock to light clerical
work to word processing and even master-of-ceremonies work.
Depending on the size on your market, you could conceivably
specialize in temporary help for data-processing, the medical or
legal professions, or perhaps the retail trade; and you'd still
make a lot of money. Generally, though, we are going to show you
here how to start a "full-service" temporary help agency.
You'll need a good mix of employers in your area for best chances
of real success. Your area can be one of high unemployment or one
with relatively few unemployed. Whichever the case, the thinking
of the business community and the work force available should be
non-traditional; there should be an undercurrent of thought
toward the idea of calling in specialists to handle a job
quicker, and more efficiently, that the fulltime worker.
The people wanting to affiliate with you as workers will be
housewives, college students, retired people and a large number
of people who like to work, but don't want to be tied down to a
regular job. When you explain the concept of your service, you'll
be pleasantly surprised at the number of traditionalists you'll
convert to temporary workers.
First, you should visit your local Chamber of Commerce office.
Explain the philosophy of your service, meet the chamber officers
and ask for their help. You'll find that they have a listing of
all major businesses in the area, plus the names of the 'right"
people to talk to in selling your service. If you request, you
might be invited to Chamber meetings and introduced to the
business leaders in your community. The only kind of information
it is likely they will be able to help you with is a listing of
doctors, lawyers and small, home-based, one person enterprises.
However, don't neglect contacting these people; they have a need
for varied specialized help just as the larger, more widely known
firms in your community.
You can locate your offices just about anywhere. You'll find,
however, that your greatest success will come if you locate in a
modern office building housing professionals such as lawyers,
accountants, investment counselors, insurance company offices,
etc. Project a professional image. Locate in a downtown or
business section of your town when you are able to do so.
Basically, you'll need 6000 to 700 square feet of office space.
You should have a reception area, two offices and a room to store
supplies. The more prestigious your business address and office,
the better caliber clientele you'll attract. people looking for
temporary work, and employers considering using your services,
will doubt your abilities if they aren't favorably impressed with
your image.
It is possible to start this business in your home, but make sure
you have the space for a reception area, and at least a
semi-private interview area. Most of the selling efforts will be
conducted by mail, phone and personal visits to the employers
place of business, so you won't have any problem there. However,
you may run into zoning problems if your city zoning people
discover a large number of cars parked at your house every day.
It certainly always helps to be a good terms with your neighbors,
and further, working by appointment will keep traffic under
control.
So, practically speaking, starting your business from home will
require a much smaller initial investment. in this particular
business, rent and advertising will be your largest expense, so
beginning the business from your home is definitely worth
considering if your start-up funds are limited.
In actual operation, have the applicants interested in your
services contact you by phone. You would then set up appointments
either in their homes or your own, thereby eliminating congestion
of cars in front of your home, as mentioned above. If you began
on a part-time basis, you could have a family member or friend
answer your phone and set up appointments for you. If you do
begin part-time, and working out of your home, you might look
into the advantages of a professional telephone answering
service.
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Another idea for saving on costs might be to rent unused space
from a business already established. These businesses might be
sales and distribution offices, suburban insurance agencies,
quick print or copy shops, and repair service shops. Look around;
many businesses have had to take what was available at the time,
and would be more than happy to lease or share their vacant
space. Keep in mind though, that you'll do much better with an
office of your own, and you should move into one just as soon as
you can afford one. Proper facilities that convey a professional
image should be number one on your list of priorities.
Your business image is projected by your address and the
appearance of the building in which you locate. Your reception
area will set the mood of professionalism and efficiency. The
reception area will should be inviting--walls painted in light
pastel colors, wall prints, floor lamps and wall-to-wall
carpeting. It should also feel comfortable while being
functional. Comfortable modern chairs and sofa; perhaps a floor
planter or two, reception desk and ask trays all help to achieve
this effect.
The main office need have only a desk and a comfortable chair,
facing the door, a chair beside or in front of the desk, and a
file cabinet. A print or two on the walls, and perhaps a bookcase
are the only "extras" you might use to dress up your office.
Your second office equipment will be for testing your applicants.
You can inexpensively build a table along the length of two
walls, partition it into cubicles and have an electric
typewriter, an adding machine and maybe a headset connected to a
dictaphone/recorder, and another set up for testing short hand
capabilities. Later on, you'll probably want to have a word
processor and a computer.
Ideally, you should also have a sales office and a storage room.
The sales office will be where you greet and talk with employers
who drop in to look over to find out about your business. Mainly,
this office will be where your people will work from when calling
prospective clients and selling your services by phone. The
storage room needs only shelves to hold various forms, mailing
pieces, envelopes and business records.
One way to hold your start-up costs to a minimum is by leasing
your office furnishings and equipment. Whatever you do, remember
that you're projecting an image, so don't settle for less than
the best. This is absolutely imperative in regard to any
equipment used for testing your applicants,. You might be able to
work out an arrangement with the business department of a local
college, or business school, to send you applicants to them for
testing on their machines. Such an arrangement, even at a cost of
$5 to $10 per test, could save you several thousand dollars in
start-up costs.
The first person you hire should be either an experienced manager
or someone you can quickly train to assume those duties. It's
best to hold out for a person with at least one year experience
as a bona fide personnel manager. This person should be outgoing,
detail-minded, people-oriented and able to work well under
pressure without losing his sense of humor. You don't want
someone likely to blow this cool when confronted with a difficult
situation.
Your manager will be responsible for organizing the interview and
testing systems, for setting up your sales solicitation program,
and for supervising the temporary workers, as well as your office
staff. It's a highly responsible and demanding position, so don't
be reluctant to spend the money necessary to get the best. You
will need to research to determine what salary such a top manager
receives in your area.
The next member of your staff should be an enthusiastic, hustling
sales person. This employee should be experienced and adept at
selling by phone as well as in person. Unless you can afford to
pay a good direct mail advertising copywriter to create you
mailing pieces for you, it would be wise to look for direct mail
advertising or copywriting experience in the background of the
sales person you expect to hire.
Your sales person should spend the mornings calling prospective
employers on the phone, and the afternoons making in person sales
calls. With this kind of work routine in mind, look for sales
people with high ambition and energy levels. Try to pick the kind
who'll come in early and stay late to work on his direct mail
efforts, clearing the decks so that he uses his time during
regular business hours to close sales by phone and in person. You
need and want a "closer"---not an order taker. Be as selective as
you have to be in choosing this sales person.
In addition to the going rate which a sales person of this type
should be paid, you should also consider paying a 5 percent bonus
for each new account brought in. When you find the right person,
it will be worth it, so make it worthwhile to join your staff.
Not all sales people will necessarily develop into good sales
managers, so try to find one who fits ALL your requirements. The
sales manager would recruit, organize, develop, motivate and
supervise your sales staff. With those responsibilities, you'd
want to offer a salary plus override on the sales production of
his staff of sales people.
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You'll need an efficient and foolproof bookkeeping system to keep
track of your payroll, client billing, income taxes, work
schedules, hours worked and all the money that comes in. For this
chore, I suggest that you contract with a company that handles
this type of work for a number of independent small businesses.
Explain to them everything you think you need; ask them to set up
a system, and then instruct your receptionist on how to keep it
up to date on a weekly or monthly basis.
You'll save money in the long run if you will consult with an
accounting firm and have them set up a system that not only
works, but can be interpreted and computerized from the
beginning. Later on, you may want or need to hire a fulltime
bookkepper just to keep up with the daily entries. If so, check
out salaries paid in your area for that kind of work.
The last member of your staff will be your receptionist. This
person should be a lady better than average looks, a lot of
empathy for people in general, and an easy smile. She should
dress stylishly, but not provocatively. When she isn't answering
the phone or greeting customers, she can be administering tests,
doing miscellaneous typing, making folders for the records of
your workers, and general office filing. And if you have an
accounting system set up, she could also assist with the daily
bookkeeping.
The kind of temporary workers you'll want to attract will fit
into several general categories, and can be recruited in a number
of different ways. Good places to look first will be in the
business, secretarial and technical schools in your area, and
perhaps also the colleges. To sustain your efforts, have a
brochure and your company made up, and make sure the placement
directories or counselors always have an ample supply on hand.
Many schools stage "career days," when employers are invited to
set up booths on campus and talk to the students, pass out
literature, and invite the students to visit their companies.
Make sure that you know about these, and that your firm is
represented.
Another group will be housewives who perhaps held regular jobs
before marriage or the birth of a baby, and now want to get back
into the job market. You can bring these people in by posting
bulletin board notices, arranging announcements at meetings, or
guest speaking engagements. And of course you can try for guest
appearances on local radio or television talk shows.
Another group to recruit will be the "bored with life" people.
These will be in the 45 to 55 age group, not satisfied with the
future where they are, and looking for a better opportunity.
It is imperative that you begin recruiting and signing workers as
soon as possible; at least a month before you open for business
is not too early. According to industry surveys, the most common
reason for the failure of temporary help services is not enough
workers lined up to fill the client demand. When you get a
request for help, you should be able to send out a qualified
person.
Each market area differs in the number of different types of
workers a temporary service should have available, but in every
case, it's best to have more than you figure to be a basic need.
You must establish a maximum number of people within any one
occupational field that you'll sign up, or else you won't be able
to keep everyone busy. Unless you keep the workers you have
registered working pretty much as often as they want to work,
you'll begin to lose them.
It's not hard to determine when a person is losing interest in
temporary job assignments through your firm. Whenever you call to
give an assignment and you can't reach the person you're calling,
try several follow-up calls. It should become obvious to you that
he's no longer interested if you still can't reach him with your
follow-up calls. It's a good practice to ask for notification of
vacation or other plans that will affect their availability for
work.
If you call and a job assignment is refused with a lame excuse,
come right to the point and ask if he wants to change his
availability status, or if you should drop him from your list of
available temporary workers altogether. Never coddle a temporary
worker. if he's not available when you call to give an
assignment, or he gives you a less than valid excuse for not
accepting, flag his "call assignment" card and move onto your
next available worker. You might call a couple days later to
check his availability and interest in continuing to work, but
don't waste too much time. You can always reinstate such a
worker, but it is probably better to spend the time recruiting a
replacement.
As mentioned earlier, one of your major expenses will be for
advertising. Your manager and sales people should keep you
advised on your current advertising impact and results, and from
this you should have a good understanding of how to use your
advertising budget most effectively. Your advertising should be
'double-barrelled," aimed at both the employer and the worker.
Generally, your efforts to add new employers to your client list
should focus on direct mail. Advertising efforts to recruit new
temporary workers should be almost exclusively devoted to
newspapers. Years ago, some radio stations sold sixty-second
commercials to a few temporary help agencies. The agencies talked
to prospective employers, playing up to the fact that they had
skilled workers to handle overload and deadline situations. These
commercials were broadcast in the mornings before 8 o'clock. Then
they followed up during the afternoon hours with commercials
inviting people seeking temporary help to come in and sign up.
Everything worked well except that not enough prospective
employers called often enough to justify the expense. This
advertising method is being followed on a small scale in some
areas even now, so watch for it.
For really professional results, you should get a freelance
advertising copywriter to do your direct mail piece. This should
be a 4-page brochure making these points.
1. All employers have a sudden work overloads; face deadline
situations; or are suddenly left with a mountain of work for
specially trained employees just when they are home sick, on
vacation or off for an emergency.
2. Your company understands these workload problems, and has
available skilled professional replacement workers who can
quickly step in and get the job done.
3. Your company thoroughly test each of the specialists hired for
these special staffing crisis situations, and can assure the
employer that they are tops in their individual areas of
expertise.
4. Your company is well aware that many businesses would like to
save the expense and headaches of hiring a full-time specialist
of the same caliber of your people on a "temporary" or "on-call"
basis. YOUR people cannot be hired by the prospective employer
because they already work for you; but if and when a temporary
worker is needed, your company stands ready to fill the need,
regardless of the job specialty required.
5. Even if he doesn't need one of your people today, the need
could arise at any time, and suddenly. So he should just keep the
brochure and your telephone number handy, and don't hesitate to
call you personally for whatever help is needed.
Once you have the copy written, decide on the layout and type
style you want to use; if and what color will be used; and take
it to a quality printer. Your brochure should be printed on
60-pound coated paper, and folded to suit your needs by the
printer.
Your complete mailing should consist,of a short cover letter
inviting the recipient to avail himself of your services; a
brochure explaining your services in greater detail; postage paid
business reply card. The mailing envelope and the cover letter
should addresses to each business owner or personnel manager by
name.
Pay the cost of a bulk rate postage permit; have your permit
indicia imprinted on your mailing envelopes; and organize your
mailings to get between 200 and 500 letters into the mail three
days a week, every single week. Don't skimp on your direct mail
advertising efforts, because this will be the lifeblood of your
success.
Your newspaper ads for qualified workers looking for temporary
assignments should be display ads in the "Help Wanted" section.
Most such ads are one column wide by 3 to 6 inches deep. Be sure
you have an ad running in the Sunday paper, and at least one more
on Wednesday or Thursday. Before you even start soliciting
accounts, you could run an ad one column by 6 inches deep every
day for a month.
These ads should invite the readers to come in and register with
your company. Work with your freelance copywriter to say what you
want to say. Overall, though, these ads should explain that you
have plenty of jobs going begging; that the worker sets his own
days to work, and can take jobs as often or as seldom as he
likes. Stress the real advantage of "paychecks on your
terms"---an impossibility with a nine-to-five job. (We have had
reports of employed persons coming in to interview, going back
and quitting regular jobs, and becoming great "temporaries.")
Don't forget to send out news releases to all the media in your
area when you open for business. Leave yourself open for
broadcast talk show interviews, and when you promote someone,
pass special milestones or become involved in unusual stories in
connection with your business, at least telephone the media and
give them this information.
The most important requisite for success, however, is consistent
advertising. In a city of 100,000 population, you should budget
$10,000 for your first year advertising. Plus, get involved in as
many promotions and as much public relations contact and
publicity coverage as possible. Once you're beyond the
"break-even" point in your business, you will allocate funds for
advertising based on your gross income.
In day-to-day operations, your manager will interview applicants;
do testing; talk with clients; solve problems; take orders from
employers; and make job assignments. Usually, his busiest time
will be right after lunch when job orders start to come in. With
this in mind, you might want to arrange for him to take an early
lunch period.
While your manager is "running the show" your sales person will
be making telephone calls in the mornings, and in person during
the afternoons. It's a very good idea to send out your direct
mail advertising one week, and then call on these same people,
either by phone or in person, the next week. Remember that you
sales calls should be relaxed visits, allowing the prospects to
learn more about your business and the kinds of people you have
available. During each sales call, the prospect should be left
with the feeling that your company can save him money, solve a
lot of production and scheduling problems, and take the
exasperation out of his personnel requirements.
As a rule, you'll find that most jobs are called in during the
afternoon hours. With this in mind, it would be wise to have a
set procedure for your specialists to call you each afternoon to
let you know where they can be reached thru 5:00 p.m. if they are
available for a job assignment the next day. You might want to
set a policy of "no call from you---No assignment for you."
Most temporary help agencies give their workers a supply of a
3-part time card when they're hired by the agency. When the
request for a worker comes in, the most qualified in the required
category is called. Job, name of company, location, approximate
length of job, and salary are all explained. If they agree to
take the offer, they fill in the time card for the day the work
begins. When they report for work, They have the time card signed
by the employer to verify starting time, and finishing time. One
copy of the time card stays with the employer; the temporary
worker keeps a copy; and the other copy is mailed to your office.
Smooth and simple, but make sure you've got everything worked out
before you begin.
Your bookkeeper notes the proper information on the ledger for
that employee, files the time card, and sends a ledger duplicate
to accounting for billing. Of course a reminder call should be
made first, but as a rule, any account that hasn't paid within
thirty days should receive a personal visit. As to the hard-core
delinquent account, no more employees furnished, and a collection
agency to clear up the account will be your policy. You may want
to look into the advantages of selling your accounts receivable
to a factoring company.
Run like the brokerage type employment agencies, your temporary
help agency will not require licenses other than those required
by any other business in your area. You should, however, bond
each of your employees in order to protect yourself from any
possible liability or other legal entanglements. And of course,
you'll need to carry a standard business insurance policy.
That's it, the HOW, WHAT, WHY and WHERE---of getting started with
your own profitable temporary help services! Remember it takes
solid and consistent advertising, earnest recruiting, and
selling. So don't stop or let up until you have everyone in your
area registered, and every possible employer as a client, aware
of your business. It's a big job with lots of challenging work
involved, and you'll need good people to help. It is worthwhile
to search out these people with care, to be sure you have good,
reliable employees---the rewards will be worth it! Organize your
business for success, and get with it. The WHEN is NOW!!!
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