Is Now the Time to Open up a Small Business?
As the economy looks to gain steady traction, national unemployment hovers around 9.2 percent and the debt ceiling talks drag on in Washington, D.C., some potential small business entrepreneurs wonder if this is the time to open up their first venture. Read more
5 Tips You Wish Someone Told You Before Starting a Small Business
If you are thinking about starting a small business, clearly you have an idea that you think will sell. However, that idea will remain just a concept unless you take a few steps to ensure that you can make that idea a successful reality. Read more
Tips for Small Construction Business Owners
If you are interested in construction, starting your own business may sound like a dream. However, running a construction company is not as easy as you may think. In order to create a successful business, it is essential you develop a strong business plan, secure financing and make sure that your company is properly licensed and insured. Luckily, you don’t need a construction management degree to accomplish these tasks. Simply follow the tips below, and you will have your construction company up and running in no time. Read more
The 5 Major Pitfalls of Business Start-Ups and How to Overcome
Entrepreneurship demands the ability to understand, appropriate and make use of risk. Successful entrepreneurs are those men and women who can develop a gut feeling, hunch, instinct or curiosity into a tangible project. Among the obstacles facing entrepreneurs, one must include self-doubt, hesitation and the inability to make wise decisions. New entrepreneurs in particular can be faced with a particularly powerful kind of doubt, one that suggests that an entrepreneurial idea “cannot be done”.
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An entrepreneur must engage in intelligent, proactive risk-taking in order to succeed in a new start-up. Paying attention to the process involved is crucial, and this article explains five major pitfalls and how to overcome.
1. Failure to Transform an Idea into a Sound Business Plan
Entrepreneurial success begins with two key factors: a good idea and its subsequent development. However, having a good or unique idea is not enough to form an entire business or launch a project. Your idea must be analyzed for its weaknesses, its strengths, and how it will unfurl into a marketable and potentially profitable project.
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For this to happen, you must transform your idea into a disciplined and thoughtful business plan. Your business plan outlines the execution of your idea. It takes the abstract aspects of an idea and transforms them into something tangible. Your business plan must include a cost analysis, a timeline of potential growth with various benchmarks, the expertise required to launch your project, and an analysis of the risks involved.
2. Failure to Overcome Fear
Fear is healthy and understandable but do not let it cripple your potential success. The obstacles you face are not yet mistakes! They are simply challenges.
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For young entrepreneurs, facing the rounds of self-doubt can be particularly daunting. Consider your status as a uniquely affirmative one: you are a maverick and not a wallflower. Act as such and you will start to believe it.
3. Failure to Find the Right Mentors
As you create a business plan and conquer self-doubt, be sure to surround yourself with people who complement and enhance your project. You cannot accomplish everything on your own. Recognize where your expertise lies and where it does not and form alliances with those who add what you do not have. This can include hiring experts in finance, negotiation, marketing, business strategy, law and tax. Engage such experts from the start to optimize your project’s potential.
4. Underperforming by Over Committing
Part of recognizing where your expertise lies involves recognizing what you can and cannot do in terms of personal resources, time and effort. As a new business owner you may also have an active family life, which may include raising children, running a household and holding down a job. These responsibilities will not lessen. Understand early on how to balance entrepreneurship with the rest of your life, or else both your project and your family life will suffer.
5. Overexposure
Whether male or female, first-time entrepreneurs run the risk of encountering untrustworthy individuals who are prepared to rob you. In your business start up you may face additional hazards because some may assume that you are a novice when it comes to business negotiation. Careful preparation of your business plan and your projected capacity for work and growth should help limit your exposure to swindles and scams. However, taking a small amount of time each week and reviewing the trust you have invested in certain people, companies, facilities and practices is crucial. Do this on your own or with your most trusted advisor. The key is to weigh the risk you are taking when dealing with any person or company.
About the Author: Alex Papa is an investor and owner of several offline and online businesses. He often helps people find new business ideas, build their own small businesses and enjoy the lifestyle they desire. In his blog he also offers a business start-up audio CD course and the latest Norton 360 Coupon Code.
Photo Credit: Michael | Ruiz
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7 Ways to Save Big Money When Starting Your Business
Do you think you have a great new business idea? It is easier than ever to start a great company that looks and sounds professional for peanuts. With all the virtual services available today, you do not need many of the things that were traditionally required in years past. And to top it off, some are even free.
There are countless business owners starting companies with very little money and turning them into a multi-million dollar companies years later. Here are some tools and services you can use to help start your adventure.
Business Identity
First things first. Before your business can have any sort of existence, you need a company name, logo and identity. You can have a professional custom logo made for as low as $99 to $149. Thelogocompany.net has an impressive portfolio and are relatively cheap compared to others for how many different mockups you receive. Once you have a logo, you will need some business cards printed. Overnightprints.com will do it for as low as $10.
Office Space
If your business requires a place to conduct your work and meet with clients in a professional atmosphere, the cheapest way is to use what they call executive office suites. You are renting an individual office or room in a building housing a number of other offices all rented to other business owners. Many of them have common amenities such as furniture, phone, Internet, kitchen and meeting rooms. Web sites like readyoffices.com should help you find what is available in your area.
Telephone System
Technology has really improved and help advance telecom systems. Do you want your business to sound like a fortune 500 company with a phone system? You can with a service they call a virtual pbx or phone system. You can have your own toll-free number with an auto attendant. No matter where you are, you can sound professional and stay connected. Companies like grasshopper.com have plans starting at only $10 a month. There is also a service called Google Voice that is fairly cool and free. It allows you to pick a local number that you can have forwarded to as many land lines or cell phones as you want.
Faxing
Buying a fax machine is so 1990 and using a digital or virtual fax service online is so 2010. You can receive faxes and download or have them emailed to you. Faxesanywhere.com is a good choice for only $7.95 a month.
Credit Card Merchant Services
Like most businesses, you may need to accept credit cards as one of your payment methods. If you need this ability, we recommend obtaining a merchant account. This is a professional way to accept credit cards as well as having the most products to choose from to process your cards. Such products can be terminals, Internet gateways, wireless terminals, electronic registers, etc. There are hundreds of processors to choose from including many of your local banks. MerchantMaverick.com is a great review site that has reviewed almost a hundred different processors and should help you find a solid, reliable processor.
Making it Legal
Many businesses should opt to incorporate their business. Forming an LLC has become the most popular option in recent years. It has a lot of benefits over other structure types and is relatively easy to do. You can use a service like legalzoom.com or do it yourself for free. You will still have to pay the state fee regardless of how it is done. To do it yourself, simply go to your Secretary of State’s web site. Follow their instructions on how to file, fill out the articles of organization form and submit the papers. If you are a sole operation, it is not necessary to file the Operating Agreement. This agreement spells out the financial and management rights & responsibilities of the LLC members. You can file this anytime after you form your LLC, but it is recommend to work out the details before hand with any other partners to avoid any agreement issues. You can find templates for this file online for very cheap and even free possibly.
Number Crunching the Easy Way
Hiring someone to do your book keeping can be expensive. You can do it yourself for not very much. There are several online services that charge very reasonable prices, such as outright.com and freshbooks.com. Freeshbooks even has a free plan to get you started.
About the Author: Curtis Stevens is with Gotmerchant.com, a merchant account provider that helps merchants accept credit cards. They also provide ecommerce tips to businesses through their company blog.
Photo Credit: krossbow
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How to Decide to Quit the Day Job to Start a Business
Today is the first part of our four part series in response to a reader’s question. Today we’re looking at how to decide it’s worth quitting the safe, well paid day job to start a business.
I’m choosing to focus on the personal, emotional, side of that question and in the upcoming parts to this series I’ll cover the economical side of going into business.
You have a lot to think about and consider when transitioning from full time employment to starting your own business…let’s get started.
First Things First
The first thing you have to consider when contemplating starting your own business, and thus leaving the creature comforts of the “day job” is: Do you really want to quit your job?
When I finally took the leap and started my company I thought there was no way I would miss the 9-5. And for the most part I didn’t, but every so often I’d miss work friends, or the “steadiness” of it.
I don’t regret the decision one bit, but I still had to work through the emotional side of not working for anyone but myself.
Think about the following:
For many the jobs people perform define them. They are an Accountant, a Nurse, or a Cab Driver. When someone asks what they do for a living, they have a concrete response. There is self identity there, and some comfort, comfort they wouldn’t get from saying “oh, I’m starting a business”.
It is hard to accept that yesterday you were a successful Construction Manager, and today you are a struggling business owner.
Jobs are a big part of our social lives. After college you don’t have as many opportunities to meet new people…this is where the job comes in. Most people have a close network of colleagues, and some genuine friends in the workplace, and giving up that social outlet can be daunting.
Also, whether it be good or bad you are getting human contact day in and out, which strengthens our social associations and makes us feel “connected”.
A job provides a comfortable, structured lifestyle. You have structure at work, usually clear expectations, time off each year, and benefits. When working for yourself a lot of that structure and stability go out the window.
No such thing as coming in at eight and leaving at five with the mentality of “oh well, what I didn’t get done today will get done tomorrow”. Two weeks off a year, guaranteed? Forget it! You could have more time off than that, or you could work years without ever taking a day for yourself.
Believe it or not, like it or not, there are social stigmas that exists for people starting their own business. When I started my first business I was amazed at the reaction I got from some of my friends and family. Genuine concern about my well being, and utter amazement that I was “throwing my successful career out the window to be a dreamer!”
Some people thought that I was literally throwing it all away, and giving up! For people who don’t understand the entrepreneurial spirit I’m sure it seemed that way, while from my perspective staying in my job was giving up.
As a would be entrepreneur you’ll need to make the decision for yourself if giving up the above is worth it to pursue your dreams of working for yourself.
Is Starting a Business Right For You?
After you’ve come to terms with some of what you’ll be “missing” by giving up the day job, you’ll still need to assess if starting a business is right for YOU. It may be a dream, it may be something you think you need to do in order to better your life, but unless you have some of the characteristics listed below you will have a long road ahead of you.
- Do you enjoy making decisions and being in charge?
- Are you willing to take risks and accept the outcome?
- Are you adequately capitalized?
- Are you flexible, and can you adapt to change well?
- Are you good at short and long term planning?
- Do you have strong people skills and build relationships easily?
Let’s look at these one by one.
Do you enjoy making decisions and being in charge?
From the first day you decide to go into business you will be the decision maker for your operation. From your business name, to who you will use as a supplier, to whether or not to hire help, these decisions and more you will need to make.
Also as your business grows you will continually be accessing and making decisions that could positively or negatively affect the success of your business. When running your own business there is nobody to hand off the tough decisions too or escalate an issue. You will need to be comfortable in this role, and able to act decisively when needed.
Are you willing to take risks and accept the outcome?
The key word here is to accept the outcomes of the risk you take. Many people say they are okay with risk, or that they don’t have a problem taking a risk, but the more important side of that equation is the acceptance of the outcomes those risk involve.
If for example you choose to put your life savings into a business venture because you think it’s “worth the risk” then you must be able to accept the outcome of loosing your savings if the business does not perform as you thought it would. I’m not saying you will loose your life savings if you start a business, but even something that has a 90% chance of success still has a 10% chance of failure and you need to be able to accept the downside possibilities.
Are you adequately capitalized?
This isn’t to say you need to be wealthy or rich to start a business, but you will need to have some money. While starting a business on a shoestring is possible, to give your business the best chance for success having some money as reserves is a must.
While there are programs to get the money you need to start your business, buy products, and market, some emergency reserves are a good idea in case personal expenses creep into the mix as well. I can’t tell you exactly how much money is enough (that will depend on the type of business you start and what your personal financial needs are), I can say without a doubt the more the merrier.
You will have a little more leeway if you intend to keep working while setting up your business, but if you intend for your business to support you and your family from day one cash reserves are necessary to bridge the gap until your business replaces your earned income. The last thing you need is to be worry about how to pay the mortgage when you should be focusing on building your business, and concentrating on operational efficiency during the startup phase.
Are you good at short and long term planning?
Planning is extremely important when starting a business. You will need to be comfortable planning 1 month, 6 months, 1 year, 5 years, and even 10 years down the road to properly address the needs of your business. The last thing you want to do is start your business without a plan for the future only to see a successful idea get blindsided 1 year down the road because of something you didn’t plan for.
Do you have strong people skills and build relationships easily?
This many be the most important skill a business owner can have. All businesses are built around relationships with people…I don’t care what product, or service your business sells, or what market you operate in, your ability to make connections with people and build relationships are the cornerstone to being successful in the long term.
Hedge Your Bets
After assessing all the above if you still want to take the leap from 9-5 to business owner, you may consider hedging your bets a little bit. You don’t have to jump from steady pay check to business owner all in one day.
- Can you slowly transition into working for yourself before leaving your regular job?
- Can you cut your hours back at the regular job in order to work on your biz as a side project?
- Can you contract what you currently do with your employer, freeing up more time to work on your own business?
You may want to see if you can baby step your way into your own business. You’ll have a bit of a safety net if things don’t work out, and you’ll get a flavor for what running your own company feels like.
When you do decide to transition to full time business owner you’ll have more confidence that it will work out, and you’ll be sure that the business fits your needs emotionally, as well as financially.
Putting it All Together
The decision to quit your job goes a lot farther than just coming up with a good business idea. And as you can see there is a lot to think about. A good business idea and a plan will get you a long ways, but knowing yourself and working through all the above will lay the foundation for an easier transition.
None of this is here to scare you, or to talk you out of making that leap, but the more prepared you are emotionally, and the more you know how a business will fit with your personality, goals, and lifestyle, the better chance you will have of making it a success.
Coming Up
Coming up next in this series we’ll look at:
Stay tuned…
Photo Credit: A National Acrobat
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Listen to Yourself Sound Crazy
Below is the fourth article of six in our $100 competition, submitted by Chloe who you can find at sistp.blogspot.com. Good luck to everyone who contributed an article!
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I’ll preface this by stating that I don’t have a business of my own, yet. I’m in the ‘idea phase’. Actually, I have the idea, a great one (in my humble opinion) at that. I’m in the ‘learning phase’, to be perfectly honest. I’m trying to gain as much information about starting up a business as I can; attending open coffees, learning about different forms of capital, joining the appropriate networking sites and groups to build my network, and maybe most importantly, allowing myself to sound ‘crazy’.
There are so many things that would point someone such as myself away from starting a business at this point:
a) I’m 25 (too young! Too risky to start your own business!)
b) The economy sucks (no way to get financing! Money cannot be found!)
c) Just started my current dream job (you just started a great job! Focus on that!)
d) I’m in graduate school (you have no time! That ‘after 5pm’ time slot is filled with school work!)
e) DEBT. (hello, student loans and your amazing non-profit, low-paying job!)
So, at this point, when I have the great idea that also seems feasible, it is most daunting to tell my friends, colleagues, family, and fellow classmates, that yes, actually, I am planning on starting my own business. “Oh, really?” they say. Sometimes it is as though they are just entertaining you. But, and there is always a ‘but’, it is crazy. And that is okay. The world is changing, businesses new and old and large and small all are trying to figure out how to adjust to a changing world, when no one knows exactly what the world is changing into.
So for someone, such as myself, to say ‘hey, I want to build a business that can help people and other businesses work and adapt to these changing times NOW, not later’, it is crazy. But at the end of the day, it’s the crazy ones who will survive these times. It is the crazy ones who can make successful businesses develop, grow and thrive out of situations that seem impossible to overcome. Because if we don’t, who will?
My goal is to create a coworking space in Washington, DC that also provides a space for job retraining, and youth IT/entrepreneurship development. Ideally, the space would also turn into an incubation space for new businesses as well. In this day and age, communities and businesses need to get better at sharing and utilizing resources in ways that are beneficial to the business and also to the larger community or world (for example, start-ups sharing resources such as printers to cut costs or entrepreneurs hiring youth to perform some of their administrative tasks and provide mentorship). So, while I am working on picking up and building skills that will help me start this new venture, I am getting used to hearing myself sound crazy and reminding myself that not only is it okay, but necessary.
Is Starting a Business Right For You?
One of the first questions to ask, and the hardest to answer, before starting any business venture is “Is starting a business right for me?” By starting your business after some serious self reflection you’ll be getting off on the right foot and giving your business a chance at success from day one.
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Consider This:
- Do you enjoy making decisions and being in charge?
- Are you willing to take risks and accept the outcome?
- Are you adequately capitalized?
- Are you flexible, and can you adapt to change well?
- Are you good at short and long term planning?
- Do you have strong people skills and build relationships easily?
- Plus many others…
Let’s take a look at these one by one so we can illustrate the importance of each before you jump head first into the deep end of business ownership.
Do you enjoy making decisions and being in charge?
From the first day you decide to go into business you will be the decision maker for your operation. From your business name, to who you will use as a supplier, to whether or not to hire help, these decisions and more you will need to make. Also as your business grows you will continually be accessing and making decisions that could positively or negatively affect the success of your business. When running your own business there is nobody to hand off the tough decisions too or escalate an issue. You will need to be comfortable in this role, and able to act decisively when needed.
Are you willing to take risks and accept the outcome?
The key word here is to accept the outcomes of the risk you take. Many people say they are okay with risk, or that they don’t have a problem taking a risk, but the more important side of that equation is the acceptance of the outcomes those risk involve. If for example you choose to put your life savings into a business venture because you think it’s “worth the risk” then you must be able to accept the outcome of loosing your savings if the business does not perform as you thought it would. I’m not saying you will loose your life savings if you start a business, but even something that has a 90% chance of success still has a 10% chance of failure and you need to be able to accept the downside possibilities.
Are you adequately capitalized?
This isn’t to say you need to be wealthy or rich to start a business, but you will need to have some money. While starting a business on a shoestring is possible, to give your business the best chance for success having some money as reserves is a must. While there are programs to get the money you need to start your business, buy products, and market, some emergency reserves are a good idea in case personal expenses creep into the mix as well. While I can’t tell you exactly how much money is enough (that will depend on the type of business you start and what your personal financial needs are), I can say without a doubt the more the merrier. You will have a little more leeway if you intend to keep working while setting up your business, but if you intend for your business to support you and your family from day one cash reserves are necessary to bridge the gap until your business replaces your earned income. The last thing you need is to be worry about how to pay the mortgage when you should be focusing on building your business, and concentrating on operational efficiency during the startup phase.
Are you good at short and long term planning?
Planning is extremely important when starting a business. You will need to be comfortable planning 1 month, 6 months, 1 year, 5 years, and even 10 years down the road to properly address the needs of your business. The last thing you want to do is start your business without a plan for the future only to see a success idea get blindsided 1 year down the road because you didn’t plan for it.
Do you have strong people skills and build relationships easily?
This many be the most important skill a business owner can posses. All businesses are built around relationships with people…I don’t care what product, or service your business sells, or what market you operate in, your ability to make connections with people and build relationships are the cornerstone to being successful in the long term.
Do yourself a favor, and make sure you think through each of these questions before you make the leap into business ownership.
