starting a business

How to Turn Your Expertise Into a Side Hustle

Nick Wharton — Tue, 12 Jun 2018 08:30:33 +0000

As the old saying goes, "knowledge is power," and the rise of the internet has created many opportunities to turn your knowledge into cold hard cash. Maybe you're looking for a new career, or perhaps you're just looking to build a side hustle that will bring in a few extra bucks. Either way, selling what you know online could turn out to be a great little earner for you.

There are various ways to sell your knowledge over the internet, depending on what you are selling and the format you use. A few years ago, it might have required an advanced understanding of technology or a load of cash to get your idea off the ground, but these days, there are plenty of ways to get going with minimal upfront investment — making it easy for anyone with a computer and an internet connection to start a side hustle. (See also: How to Build a Side Business While Keeping Your Day Job)

1. Write an ebook

It used to be that if you couldn't find a traditional publishing house that accepted your manuscript, then you'd have no other choice but to pay to have it printed yourself. Luckily, ebooks have blown the publishing world wide open and have enabled almost anyone to produce and sell a story directly to readers with very few costs attached. It also means that books are extremely quick to create. You can have your ebook ready to go not long after it's written.

To go through Amazon, you can write the ebook in your normal word processing software, then format it with Kindle Create, and create a cover for it in a free design program like Canva. You can then self-publish it through Amazon's Kindle Direct Publishing.

But for wider distribution, look also at NookPress and Kobo Writing Life, which are other self-publishing platforms. For the widest reach possible, it's best to publish with all of the major players rather than sticking to a single one.

2. Host webinars

Hosting live webinar sessions allows you to share your knowledge to an audience without the need for them to be physically present. It's like a conference or seminar but done on a remote basis, saving learners the cost of travel and accommodation. The real benefit of webinars is that you can interact with your audience as you go, by allowing real-time questions or holding a Q&A session at the end. This ensures that everyone gets exactly what they want from the session.

Webinars can be simple presentations carried out on Skype or even Facebook Live, but more advanced tools will allow you to create better, more engaging seminars. Google Hangouts is free to use and has numerous collaborative features perfect for hosting web sessions.

Alternatively, there are various paid software tools such as GoToMeeting or Cisco Webex that are specifically for designing and conducting webinars. You need to have an audience large enough to make it worth your while, so it helps if you already have a following on social media or a website to allow you to publicize the event. (See also: 13 Ways to Make Money Teaching Your Skills to Others)

3. Become an online consultant

For people with a sought after skill set that businesses want to access, online consulting works extremely well. There are many reasons why businesses prefer to work with online consultants rather than those who physically come onto the work premises. These range from not wanting to upset the workforce with an outsider's presence while still benefiting from a pair of fresh eyes, to the simple reality that it's often less costly to hire an online consultant while still receiving an expert level of service.

It helps to have a niche skill that you have proven expertise in, as this will lend you much needed credibility. Getting started in online consulting can be difficult, so it's vital to use any and all contacts you already have to get your first break. Once you have your first few contracts secured, you will hopefully begin to get referrals or recommendations and see a snowball effect.

4. Provide online tutoring

Online tutoring is a great way to share your experience with people who want to learn one-on-one with an expert in their chosen subject. You don't need to have a degree in education, but you’ll need skills or knowledge in something that people are willing to pay to learn. Subjects like English, math, and science, are particularly in demand. However, it's possible to tutor online on other topics such as foreign languages (or English as a foreign language), or even learning an instrument.

There are numerous online agencies that match people with tutors in their chosen subject, so you won't have to actively search or advertise for clients. Generally, you fill out an application and they decide whether they accept you or not. Once you've been accepted and have registered, they will send you jobs as they become available. (See also: How to Earn $1,000 a Month or More as an Online Tutor)

5. Create an online course

If you have knowledge that you want to spread far and wide, and know there's an audience there to lap it up, then an online course may be the right path for you. Online courses allow you to reach more people than you could on a one-on-one basis, both from a time perspective, and also because you can sell a course much cheaper than individual tutoring.

It's a huge amount of work initially to design and build your course, but once this is done, the course should provide passive income with little to no further effort. There are various delivery methods that you'll have to select, depending on what you want to achieve. Courses that email your lessons to students are easy to set up with providers such as MailChimp, or you can put your materials out in module format with the Udemy marketplace. (See also: How I Made $400 in 10 Days by Selling an Online Course I Created)

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This article is from Nick Wharton of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

This Is the One Skill You Need If You Want to Work for Yourself

Jacob McMillen — Fri, 23 May 2014 08:00:44 +0000

Thanks to popular media and the glamorous success of entrepreneurs like Steve Jobs, Mark Zuckerberg, Richard Branson, and even Mark Cuban, the idea of entrepreneurship is all the rage these days.

A 2012 study showed that 54% of millenials want to start a business, despite only 8% actually running a business at the time of the survey. When we think of entrepreneurship, words like "freedom," "wealth," "passion," or "fame" might come to mind. We love the idea of being our own boss and the sole beneficiary of our own labor. (See also: Starting a Dream Business Is Easier Than You Think)

Few, however, understand what entrepreneurship really is. At its core, being an entrepreneur comes down to your ability to make one key sale.

You're the Product

Think of a sales pitch. The presenters walk in, introduce themselves, and pitch their product. Each of you have a product to sell, and the product is... wait for it... you!

Regardless of profession, we are all required to sell ourselves in some capacity. In the context of our lives, we are our own most valuable product.

For entrepreneurs, the ability to sell themselves is their single most important skill. At no point do entrepreneurs stop selling.

Product pitch? Selling
Investor meeting? Selling
Top talent hiring? Selling
Customer acquisition? Selling

If you've ever attempted to acquire a small business loan, you know your business plan is only half the story. The bank wants to know if YOU are a good investment. Ever watch Shark Tank? Those investors will laugh at a product and then fork over $100k, simply because the entrepreneur was able to sell him or herself well.

The truth is you cannot be a successful entrepreneur without the ability sell your most valuable product — you.

How to Sell Your Most Valuable Product

So what does it look like to "sell" yourself like a product? How can you influence people to buy into you?

1. Identify Your Value Proposition

Your "value proposition" is a fancy way of describing your selling point. What makes you uniquely valuable? What specifically do you have to offer? What makes you irreplaceable?

If you think you don't have a value proposition, you're wrong! No one else on Earth has the exact same combination of experiences and talents as you. You might need to spend some time investing in yourself (acquiring education, skills, and experience), but you have something to offer. Identify it! And then offer it!

2. Fall in Love With Yourself

The best sales people truly believe in their product. They know it inside and out and can't stop talking about it. Once you've identified your unique selling point, it's time to fall in love with yourself. It's time to get excited about you!

If you don't believe in yourself, there's a better than average chance no one else will, either. Don't limit this idea to the positive thinking routine. When I'm confident in myself, I impart that confidence to others. People around me get a gut feeling that I have what it takes. Confidence and passion are infectious.

Don't sell yourself short. Get excited about you!

3. Get Out There and Sell

Success in sales is all about playing the numbers.

Entrepreneurs know the more people they pitch their product to, the more customers they'll acquire. You'll never accomplish your dreams from the couch.

Selling requires action. You have go put yourself out there. You always have to risk a "no" if you want a shot at getting a "yes." In five years, you probably won't regret "wasting" a day on failed interviews. You might not feel the same way about those daily six hours of television.

4. Always Be Closing

This old sales adage is a classic for a reason. Every successful salesman and entrepreneur knows you can't make a sale without closing. The close is the point in your pitch where you bring your audience to a point of decision. This is of the utmost importance. You have to bring people to a decision. You have to request them to take an actionable step.

Without the close, the presentation was nothing more than an informational experience. Your audience now knows about one more thing they'll never buy. But the close changes everything. As you convince others to buy into you, bring them to a point of action. Require a response.

I've witnessed firsthand the power of this technique. At the beginning of my career, I’d send informative emails out to prospective clients, detailing my experience and inquiring about their needs. I’d hear back from 1 in 15... maybe.

The entire goal of my emails wasn’t to get hired. It was simply to achieve a response. I realized that describing my qualifications just offered another sheet of information for the recipient to glance at and move on. I wasn't closing in my copy.

So I changed my approach. I started using wording that forced the reader to form an opinion and influenced a response. Sometimes it was a direct pitch, other times a suggestion, question, or offer. Each target requires a slightly different approach, but the point is, I’m attempting to close the target within my email.

This change in approach has increased my response rate to 1 in 5. For segments where I’ve discerned a trending problem I can fix, it's as high as 1 in 2.

Conclusion

The point is, if you want to be successful, you must be willing and able to sell yourself like a luxury product. The sales process can be applied to virtually any business relationship (I'd advise you to leave it out of your personal ones). You are your own most valuable product, and you’ll never stop selling.

Are you considering starting your own business? Have you thought about how you are going to sell yourself?

This article is from Jacob McMillen of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Starting Your Dream Business Is Easier Than You Think — Here's How

Jim Wang — Thu, 13 Feb 2014 11:36:35 +0000

One of the great pleasures of owning my own business and working for myself is that I get to talk to a lot of aspiring entrepreneurs.

They want to be entrepreneurs, but they aren't quite there yet. They read all the business articles online, they constantly make plans, they aspire to own their business and maybe one day they will get there. (See also: 10 Home-Based Side Business Ideas)

I've heard Mark Cuban, and others, call them "wantrepreneurs" on Shark Tank because they are perpetually in the pre-business phase. Having ideas is great, but executing them is what separates true entrepreneurs and wantrepreneurs.

Unfortunately, so many of them never start a business because they put up barriers in their own mind. One of those barriers is that they think "starting a business" is an arduous task that will take them months and months, if not years, of planning and preparation.

In reality, the paperwork of starting a business is almost trivial compared to everything else you'll need to do to start and run a business. But before you embark on filing anything, make one sale.

Make One Sale

Before you go down the route of "starting" a side business, make a sale. Just one.

If you wanted to start a snow shoveling service, would you start by incorporating your business, getting insurance, paying for advertising, or opening a bank account?

No, that's crazy. You would find a shovel and go door to door looking for people to pay you to shovel their driveway.

That's what you should be doing with whatever business you're considering. Make one sale. You will learn a tremendous amount about your market by selling your product or service to one person. After you make one sale, sell it to a second.

After you've made the first dozen sales, you'll know whether you have a business on your hands, a nice hobby, or a dream that can't be realized. It's valuable to do this before you waste time and money doing the paperwork of forming a business. (See also: Awesome Money-Making Hobbies)

Also, it's important to actually sell a product or service, not ask people if they would buy it. Most people are polite and tell you they would buy. But few people are so polite that they'd actually pay you for something they don't want.

Once you've made enough sales to be sure this is a business, it's time to make it legitimate.

Startup Paperwork

So you've made some sales and you're ready to make it official. You need to do some paperwork. (See also: 250+ Tips for Small Business Owners)

State Licenses

The first step is to research the licensing and bonding requirements of your state. Some businesses need a license to operate. If you're starting a blog, you don't need to get a license or a bond to operate. If you're starting a tattoo parlor in Maryland, you need a Tattoo License before you can do business. Check your state's laws for what you'll need as it's different for each state.

Insurance and Bonds

The next step is to research your insurance needs. A surety bond covers guarantee of service but liability insurance protects you from accidents, lawsuits, and other business disasters. Some businesses need a surety bond, nearly all businesses should have liability insurance. If you intend to hire employees, workers comp insurance may also be necessary, as it protects your business from any medical or legal expenses associated with accidents on the job.

LLC, EIN, and a Checking Account

If you're starting a simple business that has no licensing, bonding, or major insurance requirements, the rest is easy. It's a three step process:

Incorporate as a Limited Liability Company (LLC)
Obtain an Employer Identification Number (EIN)
Open a Business Checking Account

Do you need to incorporate?

It depends. Incorporating is a must if there are any potential liabilities associated with your business because it shields you from your business, if set up properly. You are often not required to incorporate and can operate as a sole proprietor. As is the case with any type of legal advice, check with a professional and with the requirements of your state.

Incorporate as an LLC

Incorporating is often a straightforward process, but it depends on your state because the complexity varies. In Maryland, it's a one-page form (Articles of Organization) with a handful of fields.

One minor bit of advice, in the area where you write in the "purpose" of the company, use this: "To engage in any lawful activity for which a limited liability company may be organized."

Some states leave this Purpose field blank, some states automatically fill it out with a similar phrase (California automatically fills it out with "The purpose of the limited liability company is to engage in any lawful act or activity for which a limited liability company may be organized under the California Revised Uniform Limited Liability Company Act." Don't get caught up in writing something descriptive here, it'll only slow you down.

The cost associated with incorporating will include the one-time filing fee. In some cases, it may also include annual fees too. In Maryland, every business has to file a personal property tax return that has a minimum $300 tax. (See also: Is Starting a Small Business for the Tax Deductions Worth It?)

Obtain an EIN

An EIN is like a Social Security Number for your business — you can get one for free by applying with the IRS.

Once you get an EIN, use this instead of your Social Security Number on all forms for your business. Congratulations! You've graduated from sole proprietorship to an LLC.

Open a Business Checking Account

Once you have the incorporation confirmation letter (original with stamps) and your EIN, go to your favorite bank and open a business checking account. Look for one with low minimums and no fees. Most banks make their money off business accounts with merchant processing and other add-ons, so the base checking product shouldn't cost you anything. (See also: Best Credit Cards for Small Businesses)

Use this checking account as the center of your business banking world. Any revenue you receive should go into this account. Any bills you pay should come out of this account.

Now Go Back to Selling

Once you do those three steps, you're officially a business. Don't forget to file the necessary tax forms and get back to the important part of business, getting more of it.

Good luck!

Guest Post Blurb:

Jim shares insights and lessons learned with new bloggers at Microblogger.com. Be sure to sign up for his free (and very in-depth) Create a Lifetime Income Blog course to learn from his experiences.

This article is from Jim Wang of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is Starting a Small Business for the Tax Deductions Worth It?

Thursday Bram — Fri, 05 Oct 2012 09:48:44 +0000

I’m pretty notorious in my circle of friends for making sure that I get a receipt for anything I could conceivably write off as a business expense — I want every last tax deduction I qualify for. As big a fan as I am of business deductions, though, there’s a piece of financial advice that crosses my desk on a regular basis that may not make as much sense as it seems to on the surface — starting a small business for the tax deductions. It just isn’t as simple as it sounds. (See also: 16 Great Tax Deductions You May Have Overlooked)

A Question of Qualifying Deductions

The logic behind starting a business to get a few more tax deductions makes sense at first glance. You can write off some of the gas for your vehicle, maybe some of your rent or mortgage for a home office, and even the occasional meal. Maybe you’ll even make a little money along the way.

But the reason that the IRS will let you write off business expenses is because you’re spending money beyond what you normally would for your personal life, with the intention of building up a business. You don’t have the option to write off any of the expenses you already have before you start up this hypothetical business. And if the IRS even suspects that you’re writing off personal expenses as part of your business, you can be required to pay additional taxes, plus penalties.

You’ve Got to Make Money

On top of being able to prove that your expenses are directly related to your business, you have to be able to show a profit from your business. It’s true that the IRS doesn’t require you to make money off the bat. There are even provisions in place to make sure that a bad year doesn’t cause the IRS to reclassify your business as a hobby. But you do have to turn a profit for three out of five years when you’re operating your business. Otherwise the assumption is that you’re not motivated by profit and therefore not really running a business.

Actually, operating a business that turns a profit is hard. Even if you’re just working on the side and you’ve got a full-time job that can subsidize your business, it’s a big time commitment. If you aren’t interested in running a business — if you’re just after a tax shelter — it’s just not worth the effort.

Better Tax Options

There are much easier ways to save money on your taxes than starting a whole new business. Anyone who tells you otherwise probably didn’t start a business exclusively for the tax benefits, if they’ve followed all the rules when it comes to operating a business in the first place. You’d be better off from a tax point of view by looking for opportunities to donate to nonprofits.

This article is from Thursday Bram of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Techniques for Escaping Long-Term Unemployment

Kate Luther — Thu, 27 Sep 2012 10:24:43 +0000

No one has to tell you that the job market is a little tight these days. The mass layoffs that followed our recent recession put millions of people out of work and our recovery has been slow-going to say the least.

The problem with these extended periods of unemployment (besides the obvious crimp it puts on your finances) is that the longer you stay unemployed, the harder it is to get a job. That’s because some employers hesitate when they see long gaps in your resume, assuming that if you were worthy of being hired, someone would have already snatched you up. (See also: 7 Tips for the Newly Unemployed)

That’s not always true, of course — especially in a recession — but it is what it is. Your job then, is to do what you can to limit those gaps so that your resume has that nice “steady” feel to it. Here’s how you do it.

Consider Starting a Business

My last corporate job was at a small insurance agency. They said they were family friendly, and I had two kids. Match made in heaven, right?

Turns out, we had different ideas of what “family friendly” actually meant, and when it became apparent that the relationship wasn’t going to last, I began contemplating what I might do if things didn’t improve. The problem was, I knew that I would be hard-pressed to find anything better, because let’s face it — “family friendly” and corporate just don’t mix.

So instead of reverting to my usual go-to move of scouring want ads and mass-mailing my resume, I took a different approach — I thought about what I’d like to do instead of just what would pay my bills.

And that’s when I realized that I didn’t actually want to do insurance anymore; I wanted to write and design and code, all of which I could do independently from home. That was about 10 years ago, and I couldn’t be happier about the decision to become self-employed.

Now I realize that I had the benefit of making that choice myself versus having it forced upon me by a layoff but rest assured, that layoff was coming. I just beat them to the punch.

My point, though, is that you look at your situation from a different perspective. You now have an opportunity to start a new chapter in your life and set your career on a brand new — and potentially more profitable — path.

Being self-employed means that you’re in control of how much you make. You get to decide what services you’ll offer, what products you’ll make, and how much money you’ll charge for your efforts. You also get to decide how far and how fast you want your business to grow. Yes, it’s challenging and yes, it can be scary venturing out on your own, but that’s a small trade-off for the personal freedom and professional satisfaction you can gain. Plus, should you decide to go back to work for someone else in the future, you won’t have to explain a large gap between jobs and you might even discover a more enjoyable way to earn your living in the process.

The point is that just because you’re no longer working for someone else doesn’t mean you can’t work at all. It just means you now have more options about the work you do.

Change Professions

If starting a business doesn’t sound like your cup of tea, then maybe changing the type of job you’re looking for is enough to shake things up.

Yes, breaking into a new industry can be difficult, but there are ways to sort of “sneak in” the back door. Start with your resume for example, and see what skills are transferable.

Before I worked in the insurance industry, I spent several years as a paralegal and two years as a legal administrator. What’s interesting about that is that I don’t have a college degree, nor do I have a paralegal certificate. In fact, I got my first position in the legal industry by parlaying my strong secretarial skills into the job I wanted.

I also did my research and submitted a few timely case briefs I had written with my resume. No one asked me to write those briefs — I just picked out some seemingly notable cases, wrote them up, and attached them to my resume as a “reference.”

And using that same research, I called some of the law firms that I had my eye on to see if any of their attorneys would be willing to “share some insight” on recent cases for a paper I was writing. A couple said yes, many said no, but that didn’t really matter…my name was now “popping up” in the legal industry, no matter how subtle it might have been. And incidentally, that first paralegal job was for one of those attorneys who said yes.

If I were going to use this tactic today, I’d employ the Internet and put all those case briefs online, or I'd create a blog that covers legal issues and court cases. Doing something similar with your dream profession allows you to establish your knowledge and expertise about the industry well before you ask them to employ you. You can then point to that expertise when you apply for the job.

The point is to get your foot in the door. Once you’re there, it’s much easier to close the sale.

Volunteer

Volunteering offers a few unique benefits.

The first is that you’ll feel good about yourself, which can be a nice change from the daily frustration of not finding a job.

The second is that it offers you the ability to network without really being obvious about doing it. People see the job you do, and they get to check out your skills and abilities first hand. This makes them great references, and many will even network on your behalf, wanting to help you in the same way you’ve helped them by volunteering.

The third benefit is, of course, that volunteering fills the gap in your resume by showing that you were productive with your time off.

And if that isn’t enough to persuade you, consider this — many volunteer opportunities are the equivalent of on-the-job-training. That means that you could potentially learn some new skills along the way, making the experience even more worthwhile.

Go Back to School

Everyone knows we’ve endured a recession. Saying you took advantage of the slow economy by going back to school and building on your skills and knowledge is just another way of saying that you know how to turn a negative into a positive.

I’ve yet to meet an employer that didn’t appreciate a desire to further one’s education, especially if that education helps you become a more valuable employee in your field of choice.

The good news is that it doesn’t matter if you head off to a four-year school or if you just attend classes locally at your community college. Schooling is schooling in this instance, and it will fill the gap in your resume nicely.

The last tip I want to offer is this — regardless of whether you choose to stay within your own industry or branch out into something new, you’re going to have to get a little creative if you want to stand out from the multitudes of applicants that are vying for the same jobs you’re applying for.

Don’t be afraid to try different things to see what gets you the best response and most importantly, find ways to stay active and be “out there.” Sitting in front of your computer all day emailing resumes is certainly a valiant effort, but it doesn’t do anything for your self-esteem and it certainly doesn’t get you in front of the movers and shakers that can help you turn things around.

Maybe you take a lesser position to break into (or get back into) your chosen industry, or maybe you just need to revamp your resume and highlight different skills or experience. Try joining a professional organization to help you broaden your contact base or get involved in your community by chairing a committee and showing off your leadership skills.

The point is, get busy and be seen. The more you do — the more you reach — the more opportunities you'll have to choose from.

This article is from Kate Luther of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Business Lessons I Learned the Hard Way

Mikey Rox — Tue, 16 Aug 2011 09:36:17 +0000

When I started my own copywriting and creative consulting business two years ago, I wasn't prepared for all the stress that came with it.

Naively, I thought I could name the business, create marketing materials (like a website and business cards), and start working.

Not so much.

There were several hurdles that I had to jump to get the business up and running, and I'm still encountering hurdles to this day. Perhaps if there were a blog post for newbies, like this one, many of these situations could have been avoided.

If you have entrepreneurial aspirations like I did, this one's for you. Study my mistakes to (hopefully) avoid your own. (See also: 3 Questions to Ask When Starting a Business)

1. Research the legal aspects of starting a business.

My first blunder was creating marketing materials based on a business name I hadn't registered. As it turned out, the name I chose, Paper Rox Scissors, was already being used by another incorporated business, but I didn't know that until I had already established the business as a sole proprietorship with New York City and sought incorporation after the fact.

I had several meetings with the Small Business Association and one with my local representative to try to convince New York State to let me incorporate, but the powers-that-be wouldn't budge on their decision to deny my request — despite the fact that the other business whose name was similar didn't offer the same services that I did, and their business name was spelled differently from mine. To this day, I'm still registered as a sole proprietor. It was an unnecessary headache that could have been avoided if I had known what to do from the start.

2. Contracts are 100% necessary 100% of the time.

For some dumb reason — usually when the project was small — I chose not to draft a formal contract for a client because I didn't think the project warranted one. Surely the client won't stiff me on a few hundred bucks, right? Dead wrong. Not drafting up a contract for even the smallest project is practically begging for the client to walk away without paying for the final product. I've skipped the contract a couple times, every time to my dismay. As they say — fool me once, shame on you; fool me twice, somebody punch me.

3. Don't be timid when it comes to getting paid.

In the beginning I was afraid to ask clients to pay overdue bills. I didn't want to embarrass them or cause friction in our relationship. But after six months of getting the run around, I got over it. I will work with clients who communicate about late payments, but if I've sent several emails and placed multiple phone calls to no response, I have to hit where it hurts.

Recently, I took to Facebook to let a client's fans know that he doesn't pay his bills. I didn't want to do that, believe me, because that's absolutely burning a bridge. However, I deserve to be paid for my work and, at the very least, communicated with if there's a problem. I received no response to my queries for more than six months, yet it took less than six minutes for someone to respond to me after I took the issue to a public forum. Sometimes you have to play hardball. Of course that client won't work with me again, but whose loss is that? I'm doing just fine with the clients who actually pay their bills on time.

4. Trust your gut.

Every now and again a prospective client will contact me whose demeanor doesn't sit well — just something about them I don't like. Against my better judgment I took on a client who, during our first meeting, badmouthed a former freelancer she had hired because that person posted unflattering comments on a few blogs about the client's work ethic. I gave the client the benefit of the doubt because I understand how petty some folks can be and because she made a great case for how she was the victim.

She should have won an Oscar for her acting skills. Months after we started a project it still wasn't finished because she was unresponsive, bossy, and downright rude. When we finally finished and I billed her, she threw a fit because she didn't think she should be billed for research and time spent emailing her, billable hours that were discussed prior to the start of the project and clearly stated in a contract. After days of haggling, she then told me that she was going to bill me if she had to print out the invoice on her own. Lady was crazy, and I should have trusted my instincts. As soon as she paid me, I let her know she was fired. She was way more trouble than her account was worth.

5. Don't get suckered in.

These days, people want to pay as little as possible for high-quality work. There have been several times when I've presented a proposal with fees to a prospective client and they audibly scoff — and then go into their sob story about how the economy is affecting their business and they can't afford my services. Guess what? The economy affects my business too, and if you can't afford my services, seek someone else.

I did give in once, though. I agreed to take on a project for far less than it was estimated because the client was a master of flattery. As a man of my word, I stuck with the project until eventually the client stopped using me because he couldn't pay even the lowest of fees. On the bright side, at least he didn't stiff me.

6. Hire an accountant.

Once I started signing clients, I was invoicing left and right in addition to spending money on business expenses. When tax time rolled around, I had a binder full of invoices, an accordion-style folder full of receipts, and several 1099 forms from clients. I had no idea what to do, and if I had done the taxes myself I'd probably be in jail right now. To cover my bases, I hired an accountant who knew what he was doing in terms of filing the necessary documents and making the most of my deductions. The $225 I pay the guy every year is worth every penny.

7. Pay quarterly taxes.

Mo' money, mo' taxes. This year my tax bill was fairly hefty, even with the attention to detail my accountant has when it comes to deductions. After I paid the lump sum back in April, he set me up with estimated quarterly taxes, which will help soften the blow when it's time to file next year. I'd much rather pay several hundred dollars four times a year than several thousand at once — especially when it's unexpected.

Do you own a small business? What are some lessons you've learned the hard way. Let me know in the comments below.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Start a Business With Your 401(k)

Darwins Money — Wed, 08 Jun 2011 09:48:15 +0000

While many people would scoff at the notion of using 401(k) funds for anything other than retirement, for the entrepreneur who absolutely MUST get a business off the ground immediately, there is an option to use 401(k) funds to start a business.

There's a little known, but increasingly popular provision in the tax code referred to as the Rollover as Business Startup (ROBS). It allows someone to start up a new business venture with funds from an old 401(k) account without incurring the dreaded early withdrawal penalties meant to deter people from using their 401(k) accounts like piggy banks. Chances are, you might already have some retirement funds stashed in an IRA account as well. (See also: 4 Reasons Why a Roth IRA may be better than a 401(k))

There are various ways to structure the transaction, but if you engage an experienced and reputable accountant or tax attorney, they should be able to guide you through the recommended process for your particular situation. Given the potential complexities and tax liabilities if this isn't enacted properly, I haven't listed out step-by-step instructions. But it IS possible and legal, and thousands of Americans are doing it.

When Would Using 401(k) Funds to Start a Business Make Sense?

Tapping retirement funds for any endeavor requires careful consideration, but there are a number of plausible scenarios where one might actually be better off going the 401(k) funds route than other conventional means.

To Avoid Going Into Debt

If you're an entrepreneur who is going to pursue an idea no matter what, nothing will stop you, not even going into debt. So, rather than borrowing money at a high interest rate or using questionable means to gain access to capital (like peer lending or deferring payments from other mandatory sources) this might make more sense and keep you out of debt.

When You're Going in a New Direction

A common example in this economy might be someone who was laid off. Let's say you're a highly paid executive with a sizable 401(k) who was just laid off, and the odds of you finding work at a similar salary are quite low. Maybe it makes sense to take a new direction in life and start up a small business. With the right funding and opportunity, you may be able to parlay your experience and leadership into a better opportunity as a small business owner.

If You Have the Most Incredible Idea Ever

Of course, the history books are written by the victors, so we've all heard the proverbial stories about the entrepreneurs who mortgaged their homes and borrowed from friends and family to start businesses, and now they're multi-millionaires. This doesn't happen often, and most small businesses don't make the big-time. But if you have a unique business that really could take off and you don't have access to capital otherwise, this might be your best option.

A decision to raid your 401(k) shouldn't be taken lightly, but when opportunity knocks, Americans often answer the door. We're an entrepreneurial bunch. If the opportunity is right and you have other means to fund your retirement, this might just be the mechanism to make it happen.

Would you ever use 401(k) funds to start a business?

This article is from Darwins Money of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

3 Questions to Ask When Starting a Business

G.E. Miller — Thu, 17 Feb 2011 13:00:13 +0000

I'm thinking of starting a business. And as I'm brainstorming ideas for this business, I'm focusing on three questions, and only three questions:

Will there be a demand for what I would offer?
Do I enjoy what I would offer (or at least a major component of it)?
Is what I'm offering making the world a better place in some way?

I'm not worried about exactly how I'd monetize it, how I could fund it, logistics, marketing, or anything else. (See also: The Real Deal: What to Expect When Starting Your Own Business)

I simply want to know that people will want what I offer, that I enjoy it in some way, and that it will help make the world a better place. Maybe I'm naive in keeping things this simple, but I don't think so. If these three questions were asked at the outset of every new business, we would have a much more engaged and thoughtful capitalist economy. I want to dissect each of the questions to show you why.

1. Will There Be a Demand for What I Would Offer?

Most businesses start out with this one question in mind. You have to make money somehow, and the best way to do that is to give people what they want or need via a product or service. The really adventurous and creative entrepreneurs will anticipate demand before it happens or manufacture a demand that did not exist before. Either way, it's all about creating a value that people are willing to purchase. Any sustainable business has to make money, right?

Unfortunately, it's often the only question that is considered when most businesses are conceived.

2. Do I Enjoy What I Would Offer (or at Least a Major Component of It)?

Many business "gurus" like to give the advice that you should not create a business around something you love. Their reasoning often follows one of the following three paths of thought:

You can't make money doing what you love, otherwise we'd all be laying on the beach somewhere expecting money to show up at our doorsteps.
Your love for something clouds your judgment of anticipation or demand for that product or service.
You'll stop enjoying it once you do it for a living.

There may be some truth in these lines of thought, but how much fun is that? In one hour, I was able to come up with a list of 55 hobbies you can get paid for — things that people love doing and that there's a demand for. You can't tell me that making money and enjoying what you're making money from are mutually exclusive. I've seen too many people "have their cake" to believe that.

How many times have you dealt with business owners who seemingly hated what they did or were at least indifferent to it? Did you want to buy from them again?

Many people will disagree with me, but I'm of the opinion that there's more to business than just making money. I want to enjoy something, be interested in it, and be passionate about it. Is that expecting too much?

3. Is What I'm Offering Making the World a Better Place in Some Way?

There is presently a small, yet seismic, shift in how many businesses are thinking about their roles in society. Capitalism has always had the guiding principle of "make money and all else will be solved." Most of us are smart enough to know that's a dangerous philosophy.

Fortunately, a few businesses are catching on as well. They are realizing that "max profit" and "good for the planet" can co-exist, and max profit might even be MORE likely to exist if products and services are designed with "good for the planet" in mind.

What Questions Guide Your Entrepreneurship?

Like I said, I'm a novice at this, but I can't think of any other questions I should ask when dreaming up my business ventures that should have a higher priority than these.

What questions have you asked or would you ask when creating your business?

This article is from G.E. Miller of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Tips from Bootstrapping Entrepreneurs

Thursday Bram — Fri, 11 Feb 2011 12:28:22 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/10-tips-from-bootstrappin...

When you're bootstrapping, money is tight — but that doesn't mean that there aren't plenty of ways to get the full value of your business's resources. These ten tips from bootstrapping entrepreneurs can help you get started.

1. Do a little marketing every day.

Ceri Ruenheck of It's Your Call makes marketing an on-going part of her routine. "My best tip is to make sure a bit of marketing is done everyday. One old fashion way to get business is to make phone calls. This is a proactive approach to marketing instead of reactive (like social media), which in the beginning an entrepreneur doesn't have the luxury to do so. Also, a website can be built these days by oneself for very little costs. There are still businesses that don't have one and should."

2. Look outside of your own geographic area.

Christian Arno, managing director of Lingo24, says "Export is the best way to radically increase your customer base, and the most economically sensible way to export is using the Internet. The web is now the first port of call for many people looking for goods and services, and with translated websites you can target customers in many countries. Crucially, you get a better ROI with internet marketing in languages other than English, due to there being less content online in other languages and therefore less competition. With a minimal investment, bootstrapped entrepreneurs can test the water in foreign markets by translating, localizing, and optimizing their websites and, using internet marketing strategies, will see their sites climb the Google rankings much faster in foreign languages than in English, delivering greater conversions."

3. Think about more than price with your vendors.

Brian Hamlett, the founder of mPower Consulting, looks beyond just what he can pay his vendors for. "Build a close network of providers that offer complementary products or services to your own or that carry skill sets that your business needs. Then, look to see how you can form packaged offerings with those alliances and/or be ready to trade favors to get their skills applied to your projects. Not everything can be free, but it can be paid for in favors by other businesses needing what you have to offer."

4. Only pay for what you need.

If you don't need every feature under the sun, why pay for them? John Childs from Adventurefy points out that there are often cheaper versions of the software that you need that will do until you actually require the more robust version, such as choosing Batchbooks (priced at $10 per month) over SalesForce (priced at $60 per month).

5. Go for free help.

It's easy to assume that you can't get anything for free, but there is help out there as Sandra Holtzman, the principal of Holtzman Communications, can tell you. "Look for free resources — they are there but require some searching. For instance if you are in NYC, SIBL, the business library part of the NYC Public library system, is an extensive resource offering access to a lot of very expensive-to-purchase books and databases that will help with business plans, market research (including competitive research), and other background information which will cut a huge amount of time (and save a huge amount of money) from your startup activities. Additionally, most cities have a small business office dedicated to offering free services, including some time with accountants, attorneys, etc. to help you on your way."

6. Make use of social media.

While social media will cost time, it requires a lot less money than alternatives, notes Tiffany Aliche, the founder of CLD Financial Life. "Use social media as if your business depends on it, because it may. Social media is a free, easy way to reach a wide range of potential consumers. 70% of my business is generated via facebook and twitter. I post daily financial $ tips of the day and answer financial questions several times a day. This has generated a lot of buzz, which has translated into requests for seminars and workshops. I have been able to generate income with little to no money, using social media."

7. Don't worry about scaling right away.

Graham Lawlor, the founder of Ultralight Startups, says: "Focus on revenue first and scale second. If you are not financed, scaling an unprofitable business will just make you go bankrupt faster. You need to find a business that will produce revenues and profits even with very few customers/users. Some businesses do this much better than others."

8. Find a mentor.

The right mentor can make a world of difference in your business, as Bob Negen, the expert behind WhizBang Training can attest. "Find a non-competing mentor in your business. Business builders, as a whole, are kind and generous people. Find someone who is willing to help you. It will takes years off your learning curve...find someone in your industry. Advice from someone in your own industry is much more valuable to the bootstrapping entrepeuer than general business advice. Find more than one. Keep calling and keep asking. Call the director of your trade association and ask who would be good to call. They have a bead on who is smart and who would be most willing to help. Offer to pay. Most people won't accept it, but will appreciate your offer anyway. Be sure to respect their time and be sensitive to the limits of their generosity. Especially if they are helping you free of charge. Follow up with a thank you gift! A bottle of nice wine, flowers, or even a handwritten note showing your appreciation is in order here. Make sure that when youve made it you help someone who needs help, just like someone helped you."

9. Don't buy the cheapest option out there.

Brett Brohl built up Scrubadoo and knows that cheap isn't always good. "Don't always go 'cheap.' Many times it is better to purchase the best, or nothing at all. We have learned the hard way (on multiple occasions) that when you go cheap you are many times just throwing the money away. The only solace you have when you wasted money is 'at least I didn't waste too much.'"

10. Try negotiating.

Joanne Lang, the founder of AboutMe.com, suggests not taking prices at face value. "Negotiate with everything, you will be surprised what people will offer for a bootstrapped start up."

This article is from Thursday Bram of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Is Now the Time to Start Your Own Business?

JoAnne Berg — Wed, 22 Dec 2010 14:10:20 +0000

Link:

http://www.openforum.com/idea-hub/topics/managing/article/is-now-the-time-to-sta...

"Nothing else in the world... not all the armies... is so powerful as an idea whose time has come." — Victor Hugo

“Timing is everything.” — William Shakespeare

Starting a business is not for the faint of heart. It takes a large investment of money, time, and hard work. Like many other things in life, your chances of success are much better when the timing is right.

So, how will you know if “the time has come” for your idea?

Here are a few things to consider:

Why do you want to start a business?

You would be surprised how many potential business owners can’t respond to this clearly. The time is right when you understand the answer and have put together a plan for the business that shows how it meets your business and your personal goals.

What is your risk profile?

Be honest with yourself about how much risk you can tolerate. Many entrepreneurs fail several times before creating a successful business. You’ll know it’s the right time to start your new venture when you’ve carefully analyzed the risks of the new business idea, and you are comfortable with taking that amount of risk.

What type of business is it, and what will it cost to get started?

Some businesses don’t require a lot of investment and prove themselves relatively quickly. Many service businesses fall into this category. With a good business plan and a solid marketing approach, they can be profitable in less than a year, especially if the business owner is also the service provider.

On the other extreme are businesses that are formed to market a new proprietary product. The investment required is significant, and it is often years before a profit is expected.

Your idea may fall between these two extremes, but remember, it all takes time. I heard recently of a new restaurant that had to wait almost a year for its city permits in order to open. This delay nearly caused the business to fail, because by the time it was able to open, the owners had gone through most of their working capital.

Even if you have already lined up funding or investors, you will need at least some money to get off the ground. If your available funds are tight, wait until it’s clear where the money is going to come from to keep both the business and your personal life afloat.

You’ll know the time is right when your cash flow projections show that you can make it to profitability or a first investment round with the money you have raised to get started.

Remember: Running out of money is the number one reason that good business ideas fail.

What is your family situation?

Starting a business very quickly becomes a 24/7 project. For entrepreneurs without family responsibilities, this is not much of issue, although it means there is no one to support their efforts.

For those with families, it is more complex. You will need your family’s full support to get a business off the ground. Your spouse may need to step in to cover some family obligations for you, and you will need to make sure you set time aside for your family.

The time is right to get started when your entire family is excited about the new venture and committed to seeing it succeed.

What is your education and experience?

We’re all inspired by the stories of young, inexperienced entrepreneurs dropping out of school and ending up on the list of the richest Americans. Unfortunately, most of us don’t fall into this category. Get the education and experience needed before starting your own business. Take your time, work for someone else first, and learn all that you can; then the time will be right to go out on your own.

How unique is your idea?

The most successful businesses offer something new to a market that no one else is serving in quite that same way. If your business idea doesn’t fit this description, you may want to consider revising your product or service so that it is truly an idea whose time has come.

Is there potential competition?

If you’re relying on “first mover advantage,” then you’ll want to get started sooner than later. The previous questions still apply, though — the more you have timing on your side, the sooner you’ll be successful.

When your timing is right, many of the typical roadblocks that startups run into will be easier to navigate. I hope your launch is successful, and your business brings you everything you hoped for!

This article is from JoAnne Berg of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Dropping Cost of Entrepreneurship

Thursday Bram — Thu, 09 Dec 2010 18:21:17 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/the-dropping-cost-of-entr...

Starting a new business sounds like an expensive proposition — creating a new product, printing up business cards, and all the other nuts and bolts that go along with setting up a company — but the cost of entrepreneurship is dropping. It's not uncommon for a new business owner to pay for a website and little more; if the business offers services rather than products, there may be nothing else necessary. Depending on where you're based, you may need a business license, but you can skip renting office space, printing business cards, and many other steps in the short term. You may need all of those things down the line, but technology has made it possible to start a business without them.

Not Just for Service Businesses

The renaissance in entrepreneurship is caused by the sheer number of alternatives to starting with a big investment to manufacture your inventory before you start selling. Four years ago, Shai Atanelov started Bigtime Wireless with less than $1,000. He had an idea for targeting a niche within the cell phone market — unlocked phones — and launched a home business to pursue it. Now Bigtime Wireless has eight employees and has provided a base for Atanelov to launch two more businesses. "My initial investment was around $900. It included the fees to open up a business in New York and depositing $100 into a business bank account. The rest of the money was used to hire a website designer and to use for Volusion's shopping cart fees, a SSL certificate fee, and a merchant account setup fee. I did not have to buy any inventory, as I made contacts in the cell phone industry in the USA and abroad that agreed to dropship cell phones for me."

Dropshipping — arranging for a manufacturer or wholesaler to ship your product directly to buyers — is one of the simplest ways to quickly start a business focused on selling products. There are others, of course, including selling affiliate products, arranging for a limited manufacturing run, or creating and manufacturing your product yourself (most common among businesses selling information-based products). With these methods, starting your business is often reduced to building a website and putting a marketing plan into action.

Keeping Costs to a Minimum

For many entrepreneurs, there's one simple way to reduce costs: Do everything yourself. Atanelov said, "I did all the product listings for about 500 cell phone models manually. It took me about two weeks to complete. That probably saved me well over $1,000, since the cell phone listings were quite technical, and a freelancer or company would have charged me at least $2 per listing."

It's worth considering what your business will need to run and seeing where you can invest time if you're looking to cut costs. Marc Anderson, the owner of Talk to Canada, kept his initial investment under $200. "Before I built my first website for TalktoCanada.com, I bought a book at the local book store about Macromedia Dreamweaver (now Adobe). It wasn't a book on theory but based on creating a sample website from start to finish. So I spent the next three months, when I had time, trying my best to follow the sample instructions from start to finish in order to build a website. After mastering the basics, I used this knowledge to create a very simple website for our business which has now been updated four times. The fourth time, we had enough cash flow to finally hire a professional company to make it," says Anderson.

It was a large investment of time for Anderson, but beyond his website, he needed little else: "I spent $60 for a business license here in Ontario, Canada, and another $100 or so on setting up my domain name and hosting account." As his business has grown, Anderson has also reinvested profits in the company, paying for not only ordinary operating expenses but investing money in search engine optimization, advertising, and other marketing opportunities.

The True Cost of Entrepreneurship

It's worth noting that while the cost to start a business is less than it might have once been, the costs associated with actually running a business remain. No matter how little you started your new venture with, you'll still be expected to pay taxes. Management costs, such as those associated with keeping your books or running payroll, will still be present, especially as a new business grows. The real dropping cost of entrepreneurship is what it takes to get in the game and start earning income to offset those expenses. Since Atanelov launched, he has put more than $20,000 into the business, taking a portion of his profits and investing them back into the business.

The odds of being able to keep startup costs to a minimum while growing a business fast enough that you can afford to reinvest part of your profits and still support yourself are also improved if you have a good working knowledge of business. Anderson took on a few odd jobs after completing a business degree, then jumped into running Talk to Canada. While Atanelov was a teacher prior to starting his business, he had already been selling cell phones through eBay in 2003, which allowed him to study the market before diving to running a full business.

This article is from Thursday Bram of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

11 Business Lessons from the Heart

Tom Harnish — Thu, 25 Nov 2010 18:16:00 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/11-business-lessons-from-...

Here are some lessons I learned while attending the Business School of Experience. Keep in mind, "experience" is really just another word for mistakes. Learn from my experience, so you don't have to learn from yours.

Do Your Homework

Bright ideas are common; people who can turn them into a business are not. Don't let your enthusiasm keep you from doing your homework.

When starting a business, ask yourself:

Is there a real market? Can I really create this product/service?
Can I win? Can my company and product be competitive?
Will it be worth it? Will it be profitable? Will it support my philosophy, strategy, goals, and objectives?

Build a low, likely, and high model in your spreadsheets, and do some sensitivity analysis. If start-up or roll-out takes longer and costs more than estimated (it always does), what effect will it have?

A clear view of reality, more than anything else, will determine your future. Business is no place for wishful thinking. Dreams, yes. Fantasies, no.

Dig Deeper

Google is your friend. If you think what you have is unique, think again. Dig around and find out what else is out there that's similar to what you're contemplating. Learn what works (or doesn't) from others who have tried it. Indirect competitors can be as fierce as direct ones, and they don't even do it on purpose.

Find an association that covers what you do, join it, and wring out their reports and statistics. Order a franchise package for a company or product similar to what you have in mind. They're required by law to tell you the downsides and upsides of the business. Ask for advice; you'll be surprised how willing people are to help.

Think It Through

Play a movie in your head about how this all will work, and write the script to make it happen. The written document isn't the point, the thought process is. If you can't envision success, how can you achieve it?

It's very easy to become enamored with an idea and focus on the product, not the market. Spend a lot more time thinking about the market than you do on developing intricate details for your product/service. Who are you going to sell to? What do they look like? Where are they? How will you reach them? Will they buy? What will they be willing to spend? You probably will improve your concept because of this thought process.

Keep in mind that you are a bad market sample; if you like it or your family likes it, it doesn't matter. Will other people be willing to spend real money to buy it? That's different than someone saying they like the idea if you ask them on a street corner or in a meeting. Hold out your hand and see if they put money it. If they do, you're on the right track.

Do the Numbers

Figure out what your budget needs to be. Be realistic; if you don't have a lot of money, you can't just spend less on development, production, promotion, or staff. If you don't spend enough, quality, market awareness, or distribution will suffer.

Ignore what you have in the bank, define an accurate budget, and then compare what you think you need with how much you have to spend. If you don't have enough, don't just do it anyway and hope for the best. And remember, when (if) you move forward, you have to stick to these numbers! If you spend twice as much on ads, production, or rent than what's in your plan, you're headed for trouble.

Plan your cash flow, not your profits. You can't spend profit. You can grow so fast, you go broke. If you don't understand how that can happen, visit FindingMoneyAdvice.com.

Make a List

Create an action plan. List the things that need to get done, and then make sublists for all the big things. Keep doing that until you can't break the tasks down any finer. Then put them on a time line. Some things have to be done long before others. There is no point in rushing off to market when your product won't be done for another six months, for example. This mental process is almost like a business simulator. It allows you to think through what it would really be like to run the business. Who's going to answer the phone? What if you need more cash for supplies or raw materials? Who will be the company spokesperson for TV interviews? Involve other people who will be working with you so they can help think it through too.

Prototype

Test, refine, test some more, and then build. Remember, when you test, a "no" answer is as useful as "yes." Few ideas are perfect right out of the box. And many successes are discovered by accident. If your idea works and the market likes it...go! If people don't, make some changes, big ones if you need to. If you can't or won't...WALK AWAY. Don't be pig-headed and press on because you can't accept that the whole thing is a bad idea. You'll be tired, broke, and angry when you fail.

Entrepreneurs are notorious for not taking no for answer. But two thirds of businesses fail within 10 years.

Promote It

Success isn't just about products and markets, it's about making sure people know you have a product that will solve a problem for them, it's worth the money, and you can be trusted to deliver it. Publicity is cheaper than advertising, so do something (tastefully) outrageous. Attract some attention.

Be Involved

You're a key member of the team. If you've convinced your spouse, a bank, or a VC that you have a good idea and you've created a company or launched a new product, your job has just begun. Sitting in your office pouring over spreadsheets won't build a success. Your enthusiasm, dedication, and knowledge will. Share it. It will rub off on employees, advisors, investors, and even customers. Then hire people who are smarter than you are.

If you don't like the people you're working with, or if you don't trust them, something's wrong. Start by taking a careful look at yourself. Are you trustworthy? Are you a hard worker? Are you fun to be around? Life's too short; have fun and encourage the people you work with to have fun too.

Measure performance based on results, not attendance. It doesn't matter where, when, or how people work as long as they get the job done. If you can't define what acceptable results are, how can your people possibly be successful? Remember, if they aren't, you aren't.

Look Both Ways

After implementation, look back at where you've come from and ask yourself what you might have done differently. Learn from mistakes and successes. And look ahead; the road may have changed while you were busy starting up. Make changes if you need to, be agile, and adjust. Managing change is the hardest job you'll have.

Celebrate

You only have one life to live, so enjoy it. When you have a little success, celebrate! Make sure the people who contributed have a chance to enjoy your success too. You couldn't have done it without them.

Share It

“All who would win joy, must share it; happiness was born a twin.” — Lord Byron

"Thousands of candles can be lit from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared." — Siddhartha

This article is from Tom Harnish of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Finance Your New Business: It's Not as Complicated as You Think

Tom Harnish — Wed, 27 Oct 2010 23:44:17 +0000

Link:

http://www.openforum.com/idea-hub/topics/money/article/finance-your-new-business...

These are tough economic times, but despite that (in some cases because of it) people are trying to find money to start a new business. If you're one of those people, and you've never done it before, the process can seem impossibly hard — but fundamentally, finding money really isn't complicated.

There are only three ways to finance your dreams if you don't have enough money to start it yourself:

You can ask someone to write you a check, with the understanding that you'll have to pay the money back. You also have to accept that you'll have to give them a bit extra, too. Think of the interest on a loan as rent you pay to use their money. In financial language, that's called debt financing.
You can ask someone to write you a check, with the understanding that you're trading the money for part of your company. You also have to accept that you will have to give them some control because now they're an owner too. In financial language, that's called equity financing.
You can do both.

However, you can't just march into a bank, ask for money, and walk out with it. You also can't just stick out your palm and expect someone with a lot of money to peel off hundred-dollar bills. It would be nice if it were that easy, but people who give you money first want to know if you can do what you say you will.

So, what about borrowing from someone who already knows you, likes you, or loves you? Turns out they are the most common source of startup money after the owner's own. Borrowing from someone you know can be intimidating, though, because we all know at least one person with a strained relationship because combining family and business didn't work out. Still, consider this option carefully because it is the way many people finance a new business...just keep in mind it could make Thanksgiving dinner a bit awkward.

Debt Pros and Cons

The good news when it comes to lending institutions (banks, credit bureaus, finance companies) is that you don't have to marry them. The bank has no say in how you run your company, and when you pay the money back, the relationship is over. You can get short term and long term loans, and you know how much you have to pay each month, allowing you to plan and budget — plus you can deduct the interest you pay from your taxes.

The bad news is you have to pay the money back in a certain length of time, and you can't miss a payment regardless of how your business is doing. Bad weather, flu epidemic, and "my dog ate my homework" are not acceptable excuses. Plus, if you have too much debt, investors will consider you a risk and that will make it hard to raise equity capital, even if business is good. Yes, you will have to pledge your first-born or at least your house as collateral. If you aren't willing to stand behind the deal, why should they?

Equity Pros and Cons

Investors are in for the long haul. They won't expect monthly payments or a financial return in the short run, and you don't have to pay investors back, even if things go sour. What's more, investors can add credibility to your business, especially if you manage to find some that bring connections or expertise you don't have.

The bad news is your dream company isn't just your dream any more. Your investors have a stake in its success, and they will take steps to protect their investment. We're not talking Guido from New Jersey (usually), but we are talking some heavy-duty "discussions" if you and your investors don't agree on the direction the company is going. In fact, you could actually lose your company if investors don't like what you're doing and collaborate to force you out. We said debt financing doesn't require that you get married. Equity financing does — until death or bankruptcy do you part.

Reality

Let's get serious here. If you're looking for equity capital from investors, you better have a track record, a dynamite team, and a marketing plan that kicks butt...or a rich uncle. Notice we didn't say anything about a great product. A clear understanding of your market and how to sell in it with a foggy product idea is much more important than an exquisitely defined product without a market.

Professional investors and angels are offered more deals than they can afford. What's more, only about 15 percent of startup businesses are financed with professional equity capital. Your business has to be very, very special.

If you're looking for debt capital, you'd better have a great credit record and property you can pledge as collateral. But only about 20 percent of startups are started with bank loans, er...debt financing, and only 20 percent more are started with loans from friends, family, or business associates.

So how do you find money to start a business?

Most new businesses start with less than $10,000, and four out of five are self-financed. Sell your toys, get a second mortgage, tap your life insurance, raid your IRA, take a part-time job, rent a room, borrow against your credit cards, sign up for medical tests, sell your blood, and sweet talk your friends and family.

The road to success is to build a nest egg, start small, and stay lean. You don't need a fancy office, business cards, and letterhead — you need customers. Don't burden yourself with debt, plan ahead, and focus on cash flow. As your business grows, you'll have the proof you need for people who don't know you: You can do what you say you will.

Research shows that people who have to wait in line to see a movie enjoy it more than people who walk right in to the same movie. I'll wager the same is true for people who pull themselves up by the bootstraps and build a successful company by making it happen on their own.

You can do it.

This article is from Tom Harnish of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Start a Business for Next to Nothing

Jason Kay — Thu, 27 May 2010 11:00:06 +0000

Starting a business is an intimidating prospect. It involves a level of commitment that few other goals require. Typically, one of the major commitments in business startups is a hefty financial commitment. However, there are ways to start a business for next to nothing. Knowing how to do so can make an intimidating project much more doable.

1. Location, Location, Location

For many brick and mortar businesses, location is essential to success. However, if your goal is to get your business off the ground as inexpensively as possible, you should strive to start your business from home to eliminate the cost of renting a location. If you need to have a professional address, you can use a virtual office for a very affordable price. If you need an office for meetings, you can do so inexpensively by renting an executive suite on occasion.

2. Professional Guidance for Free

It is important to have plenty of help from professionals as you embark on the adventure of starting your own business. You could go out and hire lawyers, accountants and business consultants to help you, or you could get their help for free. Through organizations in your area, such as a small business development center, you should be able to get help from professionals who can answer all your questions quickly and easily.

3. The Importance of a Virtual Assistant

By hiring a virtual assistant to answer phones and take care of some of the time-consuming yet necessary tasks in your business, you can also give the appearance of being a larger enterprise while using a very cost-effective form of assistance. Because virtual assistants work on contract, you have none of the typical expenses that you would come to expect with employees. You can also adjust the hours you delegate to your assistant depending on your workload.

4. Website Builders Slash the Cost of Creating a Website

Your website is critical to the success of practically any business these days. By using a website builder you can create your own website using one of the templates provided. The choices available to you allow you to customize it so that users will never know the difference. This type of website creation is a fraction of the cost of hiring professionals to create a customized website. You can even find free website builders online. In today's business world a website is one of your most important business tools, no matter what type of business you are looking to start.

5. Web Stores Require No Inventory

If sales are a part of your business, a web store is the most cost effective way to go. By creating a web store you can avoid high inventory costs associated with traditional stores. By becoming an affiliate for the products and services you wish to sell on your site, you do the selling and the company you are affiliated with takes care of delivery.

6. Putting Technology to Work for You: Free Online Tools

There are numerous different resources at your disposal when starting an online business or simply even the online portion of your traditional business. Many of these resources are completely free of charge, such as email accounts, social networking site memberships, auto-responders, payment processors, HTML editors, converters for Word to PDF and server hosting for shared files. While many of these resources do not have the speed and full capabilities of the more expensive versions, they are sufficient for many startup businesses.

7. 800 Numbers

An 800 number for your business allows you to give a more professional impression to potential clients. You can easily look like a much bigger business by offering the convenience of a toll-free number. Luckily, such numbers can be gotten online for practically nothing. Many of the online providers offer a free trial period of up to six months. Monthly fees thereafter start at less than $15.

8. Marketing

Marketing is a very important aspect of any business. In fact, it is crucial to the very success of your company. Marketing ranges from the very basic things, such as just talking about your business, to more strategic marketing aimed at the unknown consumer. It has never been easier than it is now to find low-cost and even free ways to advertise a business. Starting a business for next to nothing means you will need to avail of all these techniques.

Take advantage of the Internet and local marketing through Google and other free listing sites. Make sure your online information is correct, as many people start their search for providers there. Utilize every social networking site that you can. They are free and are an excellent way to spread the news that you have a new business and something valuable to offer. Make sure you use other online marketing tools that just require your expertise, such as blogging or article marketing.

Word of mouth, networking, flyers placed strategically and joint venture marketing, where you work with another firm that offers something complimentary to yours, are also excellent low-cost or free ways to promote your new business. Also, don't neglect the value of direct sales.

9. Don't Compromise on Professionalism

If you want to come across as a serious business looking to grow in the marketplace, a lack of professionalism is a detriment. In every contact you have with potential clients, make sure you give the best possible impression. While you are trying to start your business on a shoestring, you don't want to appear cheap. For this reason, it is essential to have professional-looking business cards. If you are just starting out or expect to change contact information rather quickly, free business cards that you order from online suppliers are acceptable. Homemade business cards that have perforation ridges along the edges are not acceptable. You do not want to look like a fly-by-night operation.

10. Money Pitfalls to Avoid When Starting a Business

It is crucial to create a tight budget when starting a business and stick to it. Even if you have a sole proprietorship, it is important to have a trusted individual in your life who can help you weigh your decisions about where to spend money and where to save. Some of the most costly aspects of business startup can definitely be avoided with some common sense advice.

Avoid lawyers, accountants and other professionals. Reliable free advice is easily found.
Do not subcontract jobs that you can do for yourself, unless they take too much time away from other more lucrative tasks that must also be done.
Do not hire full-time employees until you are sure you can afford to keep them.
Stay away from long-term contracts that lock you into payments that continue over years. Many B2B providers will try to get you to sign leases for locations, machines, services and more in order to give you the best price. Find alternatives that are willing to provide what you need on a month-to-month basis.

Starting a business for many is a lifelong dream. For others, it is a solution to unemployment. Whatever your reasons for starting your own business, it is incredibly easy to do on a shoestring. By choosing the right kind of business, starting small and following a budget, you can build a strong business that will be bound for success.

Guest Post Blurb:

This is a guest post by Jason Kay. Jason is a professional resume writer and owner of a home based business. He's learned many tips over the years for saving money, improving professional image, and increasing website traffic. Here are more resources to help you start a business on a shoestring:

This article is from Jason Kay of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Six Tips to Good Business Management

Nora Dunn — Wed, 16 Apr 2008 22:29:47 +0000

You don’t have to be a fortune 500 (or even a fortune 500,000) company to take advantage of these tips for good business practice. In fact, some of the best small businesses have evolved and succeeded by implementing some of these principles.

I will be using the restaurant industry as anecdotal examples throughout this article, but you will see that the principles below apply to any industry. Maybe you will identify some restaurants in your area that aren’t following these tips. Watch them struggle for business, and ultimately close down as a result.

Know-How is Not Enough.

Just because you’re an expert in your field doesn’t mean that you have what it takes to be a business owner. When you hang out that open sign on day one, it is unlikely that customers will flock to you right away just because you know what you’re doing. You’ll need marketing and administration (at the very least) to grease the wheels of your company.

How many chefs or self-professed foodies have you met or known to open a restaurant because they love food and cooking, only to have it close down months or years later because people weren’t beating a path to their door when they opened? Making good food isn’t enough; people have to know about it to experience it. You also have to run a tight ship financially, which requires the advice of tax and financial experts, and ultimately an experienced general manager at the helm.

Hire the Right People.

If you are technically proficient in your field but lack marketing knowledge and expertise for example, then be prepared to hire the right people to fill in the blanks. This will start the trend of people beating a path to your door. The next trick is to keep them coming back and referring their friends.

Don’t Hire your Friends!

This may seem obvious to some, yet I’ve seen it done over and over again. Not only can it compromise (and in some cases destroy) a perfectly good friendship, but it can do the same to the business.

Sometimes, it works. But hire with caution, and a heck of a lot of communication (both in the friendship and business). Be prepared to wear different hats while at work and after work.

Don’t Make Snap Decisions. Planning Strategy is Everything.

I have an acquaintance who recently stepped in as part-owner of a restaurant. The restaurant is well-situated and ultimately successful, but with a slow-down in businesses in the area, they have to work extra hard to keep enough customers walking through the door and keep them leaving happy.

After one particularly harrowing night when everybody in town decided it was the place to dine and not enough wait staff were scheduled, their patio was drowned out with rain, and one of their head chefs walked out, the owners made some snap decisions during the aftermath. One of their decisions was to double the number of wait staff on shift all the time. It is my feeling that they didn’t truly see this idea through to conclusion before implementing it; they now characteristically have way more wait staff than necessary on shift. The hourly wages paid out are increasing exponentially (and unnecessarily). Each servers’ share of the tips has significantly decreased, and often a number of them get cut before the night is over. The restaurant will likely lose their best servers because of this.

You may say “so? Big deal. Hire more servers,” but servers are the front lines of a restaurant. Poorly trained or inexperienced servers can be the death of a perfectly good restaurant; retaining the good ones is crucial. This was a snap decision may be a critically detrimental one.

Hiring/Promoting From Within isn’t Always Good.

Although promoting from within encourages staff to “reach for the stars” and gives certain personality types something to work for, it isn’t a good idea to categorically hire from within. Sometimes the skill sets just aren’t there within the existing employee base.

A bar/restaurant I know of only hires bartenders from within. If a server has proven themselves with blood, sweat, and tears, they may be so lucky to be promoted to bartender. Sadly though, servers and bartenders are not one and the same. The skills are not transferable, and not all servers understand the finer points of tending a busy bar. Hence, their bartenders are more often than not under-skilled and unprepared for being in the trenches. They don’t have mixology knowledge at their fingertips, they can’t make drinks quickly, and they don’t have the rhythm to manage a fast-paced bar when it gets crowded. They are simply thrown into the fire and made to survive by trial & error or go down in flames, ultimately quitting or being fired.

They are losing business because they insist on promoting servers from within to become incompetent bartenders, instead of hiring proficient bartenders to begin with. And when you’re running a busy bar, a good bartender is an essential element to make things run smoothly.

Good Business is in Consistency.

This could be the very key itself to good business practice. If you do nothing else, be consistent. E-Myth is an excellent book by Michael Gerber centered around this crucial concept.

Consistency is what franchises are built around. McDonald’s pioneered and epitomizes this idea. When you walk into a McDonald’s anywhere in the world, you know exactly what you are going to get when you order a quarter pounder, right down to the exact ingredients, quantities, and order of toppings.

A fledgling restaurant I worked for many years ago liked to think it was fancier than it was. The chef often played around with both presentation and ingredients for their standard entrees, thinking that he was adding variety and constantly improving upon the dish. Unfortunately when I ordered the salmon I never knew how spicy it was going to be, what it came with, and even how it was prepared. You don’t create a loyal clientele or repeat business with discrepancies; you do so with dependability and consistency.

With consistency, professionalism, proper planning of strategies, and alignments with the experts, you can run a top-notch successful business. Don’t reinvent the wheel, or ever find yourself saying “my business is different, I don’t have to follow that rule”. Because the wheel is pretty darn efficient, and I’m sorry to say, your business just isn’t that different. Good business management equals good business. Period.

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This article is from Nora Dunn of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: