2007 September
Most new businesses will require a substantial amount of money in start-up costs. Obtaining money for a business can be challenging, but not impossible. Before considering financing, it’s important to make a detailed list of your start-up expenses and their cost. This will give you a good idea of how much money you will be able to cover on your own, and how much you will need to finance. Once you’ve figured that out, consider these strategies to help you get the financing you need.
Borrow from yourself. True, you may not have an over-flowing savings account but there are other options. If you own your own home, chances are you will be able to obtain a home equity loan. They are usually easy to secure with reasonable rates, as the bank is using the equity in your home as collateral. Another self-financing option is a 401(k) loan. If you have a 401(k) plan, then most likely you can borrow against the money you have contributed. About 90 percent of 401(k) plans allow loans. Typical restrictions allow a maximum loan of $50,000, and no more than 50 percent of your total account balance at the time of the loan.
Small business loan. Since your business is new and without a track record, obtaining a loan from a bank might be difficult. However, the Small Business Administration (SBA) has a Basic 7(a) Loan Program that, if you qualify for it, can help you secure a small business loan. While the SBA doesn’t give loans, they do guarantee them, which lowers the lender’s risk and makes them more willing to grant new business owners a loan.
Use credit cards . This is definitely the riskiest of options, with high monthly fees that quickly accumulate; however, if you are desperate for financing this may be your best option. Google founders Sergey Brin and Larry Page used plastic to finance their new business. It worked for them but for most, credit card financing is a slippery slope that, if used, needs to be carefully monitored.
Borrow from friends and family. For obvious reasons, this is not usually the best option; however, for some it may be the only one. If you can’t borrow from yourself, and don’t have good credit or even the ability to get a credit card, then borrowing from friends and family may be your last financing hope. Just be sure to consider all the serious downsides to this option, including: What if the business fails (over 90% do) and you are unable to pay your friends and family back?
Getting financing is not always easy but if you truly believe in yourself and your business you will most likely find a way. Starting a business is hard work and it doesn’t end with getting financing. There will be plenty of other obstacles, hard work and excruciating tasks ahead. However, as any successful business owner will tell you, "It’s all worth it in the end."
Tags: Accounting, Finance, loans, start up loans, Starting a Business
Posted on September 28th, 2007 in Finance and Accounting, Starting a Business | No Comments »
Everyone has an idea that they are certain will change the world. However, although the idea for an invention may come from one person, it takes a world of "interested parties" to truly get the idea up and going. Bringing an invention from idea to fruition requires the work of designers, licensing agencies, manufacturers, marketing experts, and distributors. This article assumes that you have already completed the proper paperwork to patent and license your invention.
Target your worldwide market
If you have spent any time in the social circle of other inventors, you are already familiar with the phrase "target your market." No matter how beneficial or practical, an invention doesn’t have a chance if it’s not marketed to the right people. Since you’re considering international distribution, you will have to put some creative thought into your marketing campaign. Each country is culturally, socially, even scientifically unique. For example, electrical devices run off a different voltage and current system in Europe and Asia than they do in the United States and Canada. While this might seem like a trivial fact, it can mean the difference between success and failure if you have invented an electronic device.
When you’ve decided where you would like to sell your invention, it is time to begin the marketing process itself. But because you cannot know all of the traditions or taboos of each country you’re marketing in, you might want to consider working through a foreign sales representative. This person is already familiar with market conditions in the country you’re trying to appeal to. He or she might even have connections to local distributors. Of course, a foreign representative works on commission, and will often ask for a multi-year contract, so it is in your best interest to choose your representative carefully.
Trade shows are a good place to find a foreign representative. You can find out when and where a show is in your area. By calling ahead, you can find out what sectors are represented and how many booths are set up. This will tell you if the show is worth your time and money. But don’t go to a trade show expecting to find that perfect rep. Just as you had to sell your idea to your friends, family, designers, or capitalists, you will have to convince this person that your invention is the best thing to come along since the wheel. If you’re lucky, you might even meet foreign buyers, who often frequent trade shows to scout out products that they would like to distribute in their country.
If you don’t have the resources to attend trade shows, which may be counties or states away, you can often find a foreign representative by contacting your local Department of Commerce for a list of leads. By going this route, you bypass some of the legwork of the process, but you’ll still have to sell your idea. You may find someone who expresses an interest in your product right away, but don’t let your excitement lead to an impulsive decision. You want someone who has as much passion for the potential of your invention as you do.
Export Management Firms
For some, going it alone is just too much to handle. If you are one of these types, you can try to find an export management firm to serve as your invention’s agent. This firm will represent your product to foreign distributors. However, an export management firm won’t work with you if you cannot prove that your invention will be in demand where you plan to market it. This means you’ll have to do your research before approaching them with your product. You will also want to consider the business atmosphere of the country you’re planning to work with. In the United States, business owners often make decisions on their own, but many foreign entrepreneurs are attached to a group, and must have their approval before accepting a new product.
Having an export management firm doesn’t mean that you are free from the menial tasks of marketing. New products need exposure, and that means putting them out for everyone to see. Place advertisements in popular magazines, develop a direct-mail campaign using lists from the Office of International Trade, attend international trade shows, or hire a translator to help spread the word about your invention. If you’re patient–and a little lucky–your product might just become the "next big thing."
Tags: distribution, doing business internationally, export, global business, trade shows
Posted on September 28th, 2007 in Uncategorized | No Comments »
Drop shipping is one of the best ways to supply products for your online business without worrying about manufacturing processes or warehousing costs. You get to concentrate on marketing your business while someone else handles the shipping. A drop shipper sends the goods to your customers, so you don’t have to. Another advantage of drop shipping is that you don’t have to pay for products until you sell them. That translates to less risk for you.
Selecting the right drop shipping vendor is important because a good supplier won’t let you down when you make sales. So how do you find a reputable drop shipper for your online business?
First, before you even begin, it’s important to set your business up properly. Even though you’ll be working online and someone else is going to have their hands on the actual products, it’s a good idea to apply for a business license and tax ID number. Treat drop shipping as a real business - this means you will have to pay taxes and cover yourself legally just as you would if you were running a more traditional business.
Secondly, search for reliable and reputable wholesale drop shippers that provide stellar products you can sell in large volumes to a wide variety of people. With drop shipping in particular, making a large amount of sales is crucial to turning a profit.
Once you’ve found a good drop shipper, make sure you invest a lot of time to properly market your business online and through Internet auction sites such as eBay. This will also allow you to test out your drop shipper and make a final decision about whether or not you want to work with them. If the experience doesn’t work out from the start, when you’re still growing as a business, it may be a good idea to look for another drop shipper and save yourself some trouble down the road.
So how exactly do you find a drop shipper? A good way to start is to create relationships with wholesale drop shippers. You need to create solid contacts so that your business will thrive. Source out drop shippers through your own local research, as there are many scams online that you should avoid at all costs. The best way to start looking for drop shippers is to research companies and contact them to find out whether or not you can strike a drop shipping deal.
If you do decide to search for a drop shipper online, make sure you research them thoroughly and peruse drop shipping review sites to find out which companies are the most trustworthy. Try to work with a company that will allow you to sell products in large quantities so you can make a good profit. With drop shipping in particular, you have to sell in large volumes to be successful. Look for a drop shipper that offers products in demand.
When choosing a drop shipper you really have to avoid companies that act as middlemen. You won’t find good prices with these companies, which falsely sell themselves as drop shippers. It’s very important to do your homework. Research the drop shippers on your short list and try to find the best company for you. One sign of a good drop shipper is their willingness to communicate with you quickly and efficiently. You don’t want a drop shipper to leave you in the dust when you need them the most.
In the end, as long as you do your research and find a reputable drop shipper, you should be able to build an online business that will continue to grow into the future.
Tags: advice, drop ship, drop shipper, drop shipping, Product Sourcing, Tips
Posted on September 27th, 2007 in Product Sourcing | No Comments »
Face it, there’s a lot of online competition out there, and more and more websites are popping up each day. Price comparison sites have closed the gap on retail pricing, so consumers are now basing their buying decisions on what kind of customer service a website offers.
Here are 5 customer service tips that can help you win new customers and keep existing ones long-term. Lucky for you, most websites offer absolutely no or very little customer service, so even by implementing just one of the strategies you’re putting yourself ahead of the rest.
1. Easy-to-navigate site - Nothing frustrates a potential customer more than a jumbled mess of a website: buttons with unclear meanings, dead-end pages that won’t allow you to get back to the homepage and checkout pages with far too many steps. So many sites like that exist and it’s amazing that any visitors stick around to order. Ordering from a website should make a customer feel like you’re holding their hand through the entire process. They shouldn’t have to ever wonder "Hmm, now how do I buy this?" It should be painfully obvious how to look at a product, learn more information, put the item in the shopping cart and checkout. Have several friends or employees enter your site as a visitor and go through the entire process. Talk to them about their experience and find out if any changes need to be made.
2. Right amount of information - This is probably the most common offense for websites. They either have way too little information or way too much information. Expecting a customer to purchase with only a few lines of basic information is a lot to ask. Customers want to be sure they are purchasing exactly what they’re looking for, so give them all the details in an easily-readable format. Now, on the other hand, too much text tells customers you didn’t want to waste your time sifting through all the information to pull out just the important stuff, so you just put it all in there. Not exactly putting the customer first, right? Take a look at successful websites in your product category and take a lesson from them.
3. Company information - It happens all the time; a website expects visitors to shell out their hard-earned money for products, but won’t give them "piece of mind" by displaying a company phone number or email address. Having one of those online submit forms doesn’t count for anything because customers can’t trust that you’ll even get that message. They want a real phone number or email address, so they can get a hold of you if something is wrong with their order, or if they have a question.
4. Clearly defined policies - To avoid disappointing or leading on customers, it’s best to have your return and warranty policies clearly written and easily found on your website. Be sure to have a detailed explanation of who pays for shipping on both returned items and items replaced through warranty.
5. Fast response - If a customer emails you with a question, they shouldn’t have to wait hours during normal business hours. They should receive some sort of response, whether automated or personal, so they know their message was received and will be taken care of in a swift manner. It’s very important that you make your customers feel relieved that you are handling their issue.
All of the above strategies are easy to apply to any website and don’t take much time or effort to add. A great way of making sure your website is visitor-friendly is to have several people you know visit your site and take a look around as if they are new customers. Have them take notes on what parts of the site are good and what needs improvement, and most importantly, listen to what they have to say!
Tags: customer service, ebusiness, ecommerce, online business, Tips
Posted on September 27th, 2007 in Uncategorized | No Comments »
The word or words you choose for the name of your business can sometimes make or break a company. Many times, when choosing a store, business or product a customer only has a company name to help them decide which one to pick. Most likely, you’ve been in that situation yourself. It’s doubtful you would choose Candy’s Law Services or Grampa Joe’s Spa, if given other choices.
Ideally, your name should be simple, distinctive and reflect your business image. For instance, if you are a high-end clothing store your name should be able to convey that upscale image. Your business name is what potential customers will be basing their first impression on. If the name turns them off, they may decide to take their business elsewhere.
Should you do the naming yourself?
If you’re on a tight budget, then yes. Just be sure to 1) get feedback from potential customers and 2) check to make sure you are not infringing on an existing trademark name. Now, if you have some extra money for business start-up costs, then hiring a professional naming company is typically money well spent. Naming consultants use time-tested, proven strategies for coming up with the perfect name for your company. However, naming companies don’t come cheap so be prepared to spend upwards of $1,000. The upside is you’ll come away knowing your name was thoroughly researched, tested and developed - giving you piece of mind.
Tips for choosing the best name for your business
Reinforce your company’s impression - Whether that’s upscale, bargain, friendly, intelligent, funny or comforting, your name should convey that image to the customer.
Make your name memorable - A distinctive name will not only allow for high-level trademark protection, but it will also help stand out to customers. Typical (and forgettable) names are those with person’s names (Janet’s Hair Supply or Mackenzie’s Auto Parts), geographic terms (Eastend Pet Supply) and overly descriptive names (Leather Shoe Repair). Remember, the goal is to separate yourself from the competition.
Keep your name simple - Creative is good, crazy is bad. Too many words, combinations of letters and numbers and words that are hard to spell or pronounce are all common mistakes made when naming a business. Your name should be easy to remember and pleasing to both the ear and the eye; something customers can easily remember and repeat.
Avoid silly or trendy names - Unless your business is a joke, then your name shouldn’t be. What’s funny today will inevitably become annoying and stale a year from now. Anything cutesy like Wreck-O-Mend or trendy like Records Palooza might seem clever at the time, but they will eventually turn run their course, leaving customers to question the quality of your business.
How to check if your name is already taken
Search engines - By entering your proposed business name on Google, you can quickly do a search for the business name you want to use and see if anyone is using it. However, it’s important not to end your search there if you come up empty, you’ll need to do a more thorough search-see below.
State trademark registers - A great place to look if you are a local business. By checking your state’s trademark registers, you can see if a business in your state is using a particular trademarked name. Just go to the secretary of state website and you should find a link to the trademark registers there.
Federal government website - Here you can check the corporate, LLC, or partnership name or service or trademark for the business name you want to use and to see if it’s already in use by any other company. The United States Patent and Trademark Office has a free online service called TESS (Trademark Electronic Search System).
Professional trademark search - If you would prefer to hand the trademark search over to a professional, there are a plenty of companies that will do a thorough search for you, such as Legalzoom.com and Name Protect .
Choosing a business name may not be rocket science, but it takes a lot of thought, research, brainstorming and outsider feedback to come up with the right name. It shouldn’t be taken lightly or decided in just a couple of hours. Your company name is the first thing your potential customers will see or hear and, therefore, it is an important way to distinguish your company from the rest.
Tags: legalzoom.com, name protect, naming your business, Starting a Business, Trademark Electronic Search System
Posted on September 26th, 2007 in Starting a Business | No Comments »
As more and more people take advantage of the options that the Internet offers as far as business, new applications are developed. One of the very latest is the concept of e-procurement . This concept involves using software to source products and supplies online for businesses. Let’s take a look at some of the advantages of this process.
The Biggest E-Procurement Advantage: Saving Time!
While it may be easier to conduct business today than it ever has been before, the old adage that ‘time is money’ still applies. You want to spend as little time as possible on the smaller details of running a business in order to maximize the time you spend actually making a profit (i.e., selling or producing).
Procuring supplies and products electronically will mean that you shave a lot of valuable time off of the procurement process. You will not have to look all over for sources of products and supplies; instead, the software will provide a list of reputable wholesalers who can make the supplies or products available to you. This can save a lot of time in the future.
For example, a wholesale company has access to your inventory as it is kept on a day to day basis. Instead of you having to call them and order a certain amount of product each time, you specify a level at which an amount of product or supplies will be shipped to you.
Saving Money
Time is money, so when you save time you save money, and using e-procurement means that you will be able to save some real cash. First of all, you will not have to worry about paying an employee or purchasing agent to secure products and supplies for you; the software takes care of this itself, effectively acting as the middleman between the wholesaler and you.
Second, you might find that as you sell more goods, you are offered better prices. Offloading goods is the goal for most wholesalers, so if they can count on your business to provide a steady stream of sales, it is more likely that they will be willing to offer your business discounts, bulk savings, and so on. Paying less means you make more when you sell.
Saving Hassle
There are a lot of considerations to take into account with a business, and using an e-procurement system will mean one less thing you have to think about or decide on in the course of a week. The automation of the supply chain process will allow you to make decisions about frequency of purchase and quantity once a month - or less! - instead of the frequent communication that must occur using a traditional procurement process.
In short, there are several advantages of using e-procurement to source products and supplies. In the end, the advantages all add up to money saved in some form or another, equaling great profits for your business.
Tags: advice, e-procurement, ebusiness, ecommerce, online, Product Sourcing, sourcing products, Tips, wholesale
Posted on September 26th, 2007 in E-Commerce and E-Business, Product Sourcing | No Comments »
If you want to ship internationally there are several things you need to take into consideration before doing so.
First of all, keep in mind that shipping costs, packaging, time, and condition of arrival are all crucial when it comes to keeping your customers happy with your product. In a sense, last impressions count more than first impressions! Good shipping polices ensure that the customer remains satisfied with what you have offered them.
So how do you determine what to charge for shipping? First, decide if you want to have flat or calculated shipping rates. Allow your customer the option to choose how fast they want the item shipped and for what cost. For example, for international shipping , offer three options, each with a different price and shipping time. Include a shipping calculator that lets the customer know exactly how much shipping is going to cost them, so they don’t feel left out in the dark. Never get greedy and charge more for shipping than what it costs to cover handling fees as well as costs, supplies, and time.
Another tip involves shipping and postage labels. Use an automatic program for shipping labels straight off your printer and your life will become much easier. There are many postage printing services online as well, so when you actually make the trip to the post office, everything will go much faster and more smoothly.
Choosing a reliable and trustworthy shipping company is another important factor in making sure the shipping services you provide to customers are satisfactory. Select a company that you think will work well with your business. One consideration you might make in this regard is whether the company services the countries you plan to ship to. In any instance, don’t be afraid to stick with the tried and true USPS. One advantage of this option is that they provide free priority and international shipping boxes, complimentary pickup service, and a wide variety of box sizes.
UPS is another option for international shipping. The UPS Global Advisor is great for timely international shipping tips and advice for packaging.
If you are planning to ship a lot of heavy items, you may have to carry out extra research into the cost of shipping and how it needs to be done. Larger items are a wholly different ballgame, and require more effort on the part of the business selling this type of product.
Generally, figuring out shipping costs doesn’t have to be the most difficult task in the world - if you put a little time and effort into it before you get the business up and running, everything should go smoothly from the first day of operations.
Of course, you may come across a few hitches before you fully get into the swing of things, but if you keep at it and place customer service and satisfaction at the forefront, you will be rewarded with a loyal customer base and increasing sales. Ultimately, choosing to ship internationally is the right choice for most online entrepreneurs simply because it allows you to reach a larger market. You can increase your profits in no time and develop customers in places you could never have reached with traditional methods. In most cases, choosing to ship internationally is the right choice.
Tags: calculated shipping rates, doing business internationally, Freight, International shipping, shipping, UPS
Posted on September 26th, 2007 in Uncategorized | No Comments »
A lot of people consider getting into the franchise business because it allows you to operate a business by simply paying a franchise fee and taking on another arm of an already established brand name and product. You are given the right to use the franchisor’s name, as well as help in running and setting up the business.
Franchises can be a good investment if you want to start your own business without as big a risk initially because you are setting up an already established business. Although start-up costs and fees can go up to hundreds of thousands of dollars, and you won’t have total control over how your business operates, many people are willing to take what a franchise has to offer and run with it.
When deciding whether or not a franchise opportunity is right for you, take the costs involved into consideration specifically, for each franchise you are interested in.
Research the initial fees and expenses expected of you - usually the first franchise fee is not refundable and can be quite costly, running into hundreds of thousands of dollars for major franchises. It can also be costly to rent, build, and equip the location and get started with your first round of inventory. Operating licences can also cost a pretty penny, as well as insurance coverage. Some companies make you pay a grand opening fee to fund the cost of promotion for the new location.
On top of all the initial fees you may be required to pay, you have to take into account royalty payments down the line. Royalty fees are usually based on a percentage of your weekly or monthly gross income, so it’s important to research royalty percentages and fees thoroughly before signing the dotted line and making a full commitment.
Sometimes royalty payments are due even if you fail to earn a substantial amount in a month - make sure you know what you’re getting into before making a final decision. Oftentimes royalty rates are levied just for the right to use the company’s name, so fees may remain due until the franchise agreement expires.
Advertising fees are another cost to consider. Some franchisors require that you pay into an advertising fund to help with the cost of national advertising or for the purpose of attracting new franchise owners to the business.
When researching different franchises, ask yourself the following questions so you can discover whether or not being a franchisee is the right decision for you:
What are your life and business goals?
How do you define success?
Will you need a certain level of annual income to get by?
Is there a specific industry that interests you that you would love to run a franchise in?
Is retail or selling a service product important to you?
How much time are you willing to commit to the venture?
Will you be running the business entirely yourself, or do you want to hire a manager?
Do you expect owning a franchise to earn your entire income for the year?
Is running a franchise something you want to do for a very long time?
How many outlets do you want to operate?
In the end, the decision is purely personal, so if opening up a franchise is right for you, go for it!
Tags: advice, entrepreneur, franchise, Start ups, Starting a Business, Tips
Posted on September 25th, 2007 in Starting a Business | No Comments »
Q: When I worked for Mercy Corps, it was a very entrepreneurial enterprise. For instance, if we wanted to take on a new project, we had to own it. Isn’t that how most small businesses are run?
Mara
A: Unfortunately, I think the answer is ‘no.’
The question above came from a conversation I had at dinner one night when I was in Jordan last month while eating kebabs at a breezy outdoor Lebanese restaurant. The woman who posed it had previously worked for that great humanitarian-assistance non-profit Mercy Corps (MercyCorps.org) for a number of years and I was fascinated with her explanation of how the organization is run.
Essentially, much of what they do is based on what they call "social entrepreneurship;" an idea that is, ironically, too often missing in most small businesses. Let me explain:
Let’s say my new friend had what she thought was a great idea for a new Mercy Corps program. Like any Mercy Corps employee, she was free to suggest it, but that was just the beginning. If she really liked the idea, she had to think and act like an entrepreneur:
* Like any entrepreneur, she had to show there was a genuine need for the program (i.e., her product), a need that wasn’t being already met;
* She had to figure out the best way to implement her idea;
* She had to figure out what it would cost;
* And, maybe most interestingly, like any great entrepreneur, if she could do the above, and could implement the program and solve a problem, she also had to take long-term responsibility for it and own it.
What became obvious to me over the course of the evening was that by treating its employees as entrepreneurs, Mercy Corps empowered them to be more than just employees. They were able to be creative individuals with the chance to think big and implement their vision when it made sense.
Isn’t that what we all want from the people we work with? People who think beyond merely doing their job and look to see how the whole can be improved? Yet how many of us have actually created organizations and businesses that empowers the people we work with in that way? I would venture to say not many of us.
Is it not ironic that entrepreneurs rarely foster entrepreneurship in their own businesses? I think most are so busy, happily being the boss, that the idea of people acting entrepreneurially is almost scary.
Am I wrong? Please let me know if I am, but I don’t think so.
Now, the best big businesses often get this idea; a new program won’t be implemented unless someone owns it and budgets for it accordingly. In fact, one such corporation created a whole new management system based on the idea of turning employees into stake-holders. Called Open-Book Management, it originated at a manufacturing company called SRC by a business owner named Jack Stack. As the name implies, Open Book Management ends the traditional practice of hiding the financial ball. The rules for Open-Book Management are that you must
* Give employees the training necessary to understand how their job, financially, ties into the overall business plan
* Give them all relevant financial info for the company - everything from what it costs to do their own job to what the CEO makes
* Give them responsibility for their own numbers, and finally
* Give them a financial stake in the overall company bottom-line
The result is that employees, by not having the financial ball hidden, and by having an ownership stake in the outcome, become more productive and entrepreneurial and the company flourishes.
What I am suggesting today is that this is not a bad idea for small businesses to look at. What would happen in your business if employees were encouraged to look for projects that could help the business, decide if those projects make sense, prove it, and then were given the responsibility for implementing and owning the project? A revolution in productivity and interest, perhaps?
Entrepreneurs, maybe it’s time to create an entrepreneurial business from the inside out.
Today’s Tip: For more information on Open Book Management, you might want to pick up The Open-Book Experience: Lessons from over 100 Companies Who Successfully Transformed Themselves by John Case.
Steven D. Strauss is one of the world’s leading small business experts. His latest book is the Small Business Bible. A lawyer, author, and public speaker, Steve has spoken around the world about entrepreneurship, including at the United Nations, and he has been on CNN, CNBC, MSNBC, The O’Reilly Factor, and many other television and radio shows. If you would like Steve to speak to your group, help your business grow, or if you would like to sign up for his free newsletter, "Small Business Success Secrets!" please visit his website - www.MrAllBiz.com .
Tags: entrepreneurs, growing your business, MrAllBiz.com, small business, Starting a Business, steve strauss
Posted on September 25th, 2007 in Starting a Business | No Comments »
Most people starting a new business are overwhelmed by the amount of work and the number of steps required to get their business off the ground. They have questions about everything from financing to knowing when to start. This article tackles 5 of the most common questions from small business entrepreneurs.
1. Where can I get money to start my business? By far, this is definitely the most asked question. Unlike in decades past, banks today expect you to share in the risk before they are willing to give you a loan. So, unless you have equity in your home, a 401(k) plan or backing from the Small Business Administration, you’ll have to find other options. You might consider borrowing from friends and family or using credit cards.
2. Do I really need to write a business plan? Whether or not you are trying to secure financing, the answer is most definitely yes. A business plan forces you to organize all your thoughts, ideas and plans and test the viability of your idea. To do it right, you’ll have to put a good amount of time into researching competition, costs and potential profits. It may turn out that your idea isn’t as perfect as it once seemed. In that case, abandon the idea and start fresh. It’s better to find out before you invest money then months after.
3. Is the risk of my business failing avoidable? No matter what kind of business you have, whether it’s existing or new, there will always be risks involved. The risks are certainly more inherent to start-ups for a number of reasons: lack of experience and track record, insufficient finances, small customer base, etc. However, there are plenty of things you can do to help minimize the risks of your business failing: write a business plan, educate yourself on the industry your new business will be in, on your competition and on your target market. You can never do too much research. Also, be sure to always check the references of any company you will be dealing with and giving money to. There are far too many shady companies who make a living out of scamming entrepreneurs and small business owners, and it never hurts to check references and talk to past clients.
4. Will making my company a corporation protect me from liability? In can, but in order to have that "corporate veil" of protection, you have to conduct your business like a true corporation. That means having a separate business checking account and credit card. Also, you’ll need to have board meetings, take notes and publish your minutes. This is true for a corporation of 1 person or 10,000 people-if you want your business to have the legal protection of a corporation, then your business has to act like a corporation.
5. What’s the best time to start my business? Honestly, the best time is when you have enough free time and energy to devote your full attention to it. It’s best to get the other stresses in your life under control before beginning a new business, as getting a new business off the ground takes a great deal of focus.
Tags: Accounting, business plan, Finance, start up, start up loans, Starting a Business
Posted on September 24th, 2007 in Starting a Business | No Comments »
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