The best small business to start isn't always the sexiest idea, or the flashiest, or even the cleverest. It isn't even necessarily the one that will make you the most money.
It is often the one that you can afford.
All too often entrepreneurs reach further than they should when starting a business, buying more stuff, getting a bigger store, hiring more people, going after too much money. And it doesn't stop there. New businesses are vicious mistresses, demanding more and more money all the time. There are always things that you just didn't think about before you started, and those things are always expensive. That's just one of the rules.
Most business advisers say that businesses fail because they don't plan properly, or they don't have enough money. That's just not it. I would wager that most fail because they try to start too big out the gate. They want success NOW, not a year or two from now. They need to brag about the big new office they have, the dozens of new employees they have, the venture capitalists they are talking to.
Well, balderdash. That just isn't the formula for success. Success is based on creating a solid foundation, and building on that foundation over time. If you can start your business as a one person business, do it. If you can start by creating an online business, do it. If your cousin laughs, fine. You aren't in business to please your cousin; you are in business to create a solid, long term business for yourself and your family.
The best small business to start may even be one that you start parttime, from home. YOU control what it will be. Don't let your business become the demanding one in this relationship!
Wednesday, September 30, 2009
Tuesday, September 29, 2009
Microfinance Conference at Cambridge
The Cambridge Microfinance Initiative hosts a conference every so often to help local entrepreneurs, and one is coming up on October 11, 2009. Here is the announcement:
If you are in the neighborhood, do stop by. Loads of great information on microfinance and small business financing will be available!
We are pleased to announce that we will be hosting a free web, marketing, presenting, and legal issues conference on October 11, in partnership with Accion Bank and the Harvard Law School's Wilmer Hale Clinical Center. The conference will focus on building the skills that entrepreneurs need in order to successfully promote their businesses and market their products, with an additional emphasis on learning about the myriad of web and legal resources that can aid in this task. The conference will also feature opportunities to network with fellow small business owners as well as with representatives from our partner organizations.
The event will take place from 10-3 on October 11 at the Harvard University Yard at Sever Hall, Room 113. A more detailed map showing the location of Sever Hall can be found at www.map.harvard.edu.
Please RSVP at http://tinyurl.com/cmi-conference if you are interested in attending this free small business workshop, and we hope to see you there!
If you are in the neighborhood, do stop by. Loads of great information on microfinance and small business financing will be available!
Wednesday, September 16, 2009
$100,000 Up For Grabs in Indiana Business Plan Competition
Keyword for this post: Business Plan Competitions
Should you live in Indiana, more specifically near Purdue University, you are welcome to join The 23rd annual Burton D. Morgan Business Plan Competition. Teams of faculty, staff, graduate students, alumni and area business people will compete in the Gold Division, while students will compete in the Black Division.
While we are on the topic, if you should live near any sort of university, especially one with a business school, do check and see if you are eligible to join a business plan competition. Most universities do hold such competitions, and many open them up to non-students, especially businesses in the area. This is one of the more esoteric alternative ways of funding a new business, but if it works for your business, go for it!
Should you live in Indiana, more specifically near Purdue University, you are welcome to join The 23rd annual Burton D. Morgan Business Plan Competition. Teams of faculty, staff, graduate students, alumni and area business people will compete in the Gold Division, while students will compete in the Black Division.
While we are on the topic, if you should live near any sort of university, especially one with a business school, do check and see if you are eligible to join a business plan competition. Most universities do hold such competitions, and many open them up to non-students, especially businesses in the area. This is one of the more esoteric alternative ways of funding a new business, but if it works for your business, go for it!
What's Your Motivation In Starting A Business?
Keyword for this post: Best Small Businesses To Start
What motivates you? What motivates your employees? The immediate -- and often WRONG -- answer is "money".
I know you are not in business for the money because most entrepreneurs earn less than their corporate counterparts. Honest. No, there are other reasons.
AUTONOMY. That's a good one. It may, in fact, be the most important reason. You simply like being your own boss. I personally know a number of entrepreneurs who just cannot make it in the corporate world. They are too independent, think too far out of the box, don't like red tape. I know one person who was fired from every single job she had over a 20 year career. She opened her own business and is a roaring success. Obviously, she works extremely well autonomously, and was a lousy employee.
CREATIVITY. It is an axiom that most corporations stomp on creativity. Most employees are little more than paper pushers and pin counters. And that is such a waste of a good mind. You needn't be daVinci to be a great entrepreneur, but odds are that you are far more creative than your present job allows you to be.
RESILIENCE. Entrepreneurs can bounce back. Corporations fire. Entrepreneurs learn from their mistakes, and go on to make stronger businesses. Corporations, well ....
These are just three of the many very valid reasons that you are an entrepreneur at heart, even if you are not yet starting a business. You know what you want, and you are ready to go after it.
And what about your employees? How will you treat them? Did you realize that money doesn't motivate most of them either? It is true. Money is not the motivator that most people seem to think it is. Take a look at this video . I was amazed. Like most people, I had always assumed that if you pay people more, you get more. Not true. Not true.
How willing are you to follow in the footsteps of Google and grant your employees time to make their own discoveries? (That's a real conversation stopper, isn't it.)
If you are not dealing with electronics in starting a business, but retail, then how willing are you to let employees design displays or otherwise step out of their assigned jobs?
Giving serious thought to this issue before starting a business means that you may have the pick of the litter when it comes to hiring. You can't offer employees what BigCo offers. But you can offer more, just as you want more yourself.
What motivates you? What motivates your employees? The immediate -- and often WRONG -- answer is "money".
I know you are not in business for the money because most entrepreneurs earn less than their corporate counterparts. Honest. No, there are other reasons.
AUTONOMY. That's a good one. It may, in fact, be the most important reason. You simply like being your own boss. I personally know a number of entrepreneurs who just cannot make it in the corporate world. They are too independent, think too far out of the box, don't like red tape. I know one person who was fired from every single job she had over a 20 year career. She opened her own business and is a roaring success. Obviously, she works extremely well autonomously, and was a lousy employee.
CREATIVITY. It is an axiom that most corporations stomp on creativity. Most employees are little more than paper pushers and pin counters. And that is such a waste of a good mind. You needn't be daVinci to be a great entrepreneur, but odds are that you are far more creative than your present job allows you to be.
RESILIENCE. Entrepreneurs can bounce back. Corporations fire. Entrepreneurs learn from their mistakes, and go on to make stronger businesses. Corporations, well ....
These are just three of the many very valid reasons that you are an entrepreneur at heart, even if you are not yet starting a business. You know what you want, and you are ready to go after it.
And what about your employees? How will you treat them? Did you realize that money doesn't motivate most of them either? It is true. Money is not the motivator that most people seem to think it is. Take a look at this video . I was amazed. Like most people, I had always assumed that if you pay people more, you get more. Not true. Not true.
How willing are you to follow in the footsteps of Google and grant your employees time to make their own discoveries? (That's a real conversation stopper, isn't it.)
If you are not dealing with electronics in starting a business, but retail, then how willing are you to let employees design displays or otherwise step out of their assigned jobs?
Giving serious thought to this issue before starting a business means that you may have the pick of the litter when it comes to hiring. You can't offer employees what BigCo offers. But you can offer more, just as you want more yourself.
Monday, September 14, 2009
When Someone Buys Your Business With An SBA Loan
Keyword for this post: SBA loans
So you are ready to sell. And your buyer will be asking for an SBA loan to help in the purchase. What will the buyer need from you?
Financial. Yes. As far back as you've got them.
More importantly, the buyer will need to establish a value for your business, one that will support an SBA loan. Be sure the following things are in order:
Customer List: For businesses with a great deal of repeat business from its clients, the database of clients certainly has value.
Proprietary Processes: Businesses whose success is partly due to proprietary processes, technology, or methods, have value in those processes or technologies. These processes should be documented in such a way as to be transferable and repeatable by a new owner.
Location and Facilities of the business: I know one retailer who sold three different businesses solely on the basis that he had negotiated great lease terms. If yours are great, they do indeed provide value to your company.
Patents and Copyrights: Make sure all patents and copyrights are in the name of the business, not your name. They add real value to business. Doing this before you are asked to do it shows your cooperative nature.
Goodwill: Make sure your employees are trained in all the skills they need to keep the business running without a hitch. Keep media contacts in place. Keep supplier contacts in place. Be ready to sign a non-compete agreement. If you leave the business, and the business leaves with you, your buyer will go under in no time.
Reputation: If your company has been selected to sell to high profile companies or agencies, it is assumed that you acquired this business through having a solid reputation. More than that, the more solid your clients are, the more solid you are as a company. Flaky clients make a flaky business.
There is a lot more the appraiser will ask for -- your lease, your various agreements, etc. All that is pretty standard. Just make sure he takes into consideration the items listed above. It will make an SBA loan go through much easier.
So you are ready to sell. And your buyer will be asking for an SBA loan to help in the purchase. What will the buyer need from you?
Financial. Yes. As far back as you've got them.
More importantly, the buyer will need to establish a value for your business, one that will support an SBA loan. Be sure the following things are in order:
Customer List: For businesses with a great deal of repeat business from its clients, the database of clients certainly has value.
Proprietary Processes: Businesses whose success is partly due to proprietary processes, technology, or methods, have value in those processes or technologies. These processes should be documented in such a way as to be transferable and repeatable by a new owner.
Location and Facilities of the business: I know one retailer who sold three different businesses solely on the basis that he had negotiated great lease terms. If yours are great, they do indeed provide value to your company.
Patents and Copyrights: Make sure all patents and copyrights are in the name of the business, not your name. They add real value to business. Doing this before you are asked to do it shows your cooperative nature.
Goodwill: Make sure your employees are trained in all the skills they need to keep the business running without a hitch. Keep media contacts in place. Keep supplier contacts in place. Be ready to sign a non-compete agreement. If you leave the business, and the business leaves with you, your buyer will go under in no time.
Reputation: If your company has been selected to sell to high profile companies or agencies, it is assumed that you acquired this business through having a solid reputation. More than that, the more solid your clients are, the more solid you are as a company. Flaky clients make a flaky business.
There is a lot more the appraiser will ask for -- your lease, your various agreements, etc. All that is pretty standard. Just make sure he takes into consideration the items listed above. It will make an SBA loan go through much easier.
Small Business Financing -- Four Top Approaches
Small business financing in the Age of Bailouts
We just heard President Obama's speech to the financial world, admonishing them for creating the financial mess we are in and setting out the warning sign that the next time it happens there probably won't be a bailout. He didn't say that, but that is the truth.
It IS small business that has really felt the brunt of the lousy decisions made on Wall Street. It IS small business that can no longer access lines of credit. It IS small business that is having immense problems exporting products.
Each of those small businesses is owned by real people. People who may have also lost their homes due to the greed of Wall Street.
Sadly, however, I don't think it is Wall Street that is going to bail us out. We are going to have to do it ourselves. The fancy execs in their fancy suits and expensive cars wouldn't take so much as a 10% cut in bonuses to provide funds to lend to small business. They are truly Greed Personified.
And the next time they get us in this kind of mess, I'm certainly not going to be so willing to bail them out. Nor, I think, will most other entrepreneurs. If small businesses have to fail, then so should big businesses.
Even now, we are pretty much on our own. In spite of the President's admonishment, I don't really expect any changes from the self-serving SOBs on Wall Street.
So what can we do about small business financing? Here are a few quick ideas:
BOOTSTRAP GROUPS. Join a bootstrap group if you haven't already. These groups are composed of small businesses helping small businesses. Ask when you need something, and be willing to provide help too.
WORK THROUGH YOUR REPRESENTATIVES IN CONGRESS. Work with others in your geographical area to tell your Representatives and Senators exactly what is happening in your area. Can't get loans? Document your case and send it to your representatives. If anyone has influence with local bankers, it is your Representative.
SHARE STUFF. You don't need your whole warehouse right now? Rent out part to another business. Likewise, don't be shy about renting part of a warehouse for your own business. This is the Age of Ingenuity not the Age of the Braggard, so be as ingenious as your can in running your businesses and cutting costs.
PETITION YOUR CITY COUNSEL. This is another group that should respond to the needs of small business. If you go out of business, the city loses tax revenue. Let them know what you need in terms of loans and/or other assistance. Get them on your team.
One more thing: Watch for ads promoting small business. There are a few banks that I have noticed lately that are looking to attract more small business clients, such as Bank of America and Wells Fargo. There may be more out there. When you see these, ads, support those companies. You may not qualify for a loan, but you can open a checking account or have them process your payroll. Give them whatever business you can.
These steps won't guarantee that your business will be successful, but they sure will help. Small business financing is never easy, and the past year has made it nearly impossible. Now is the time to show the country just how creative we are.
We just heard President Obama's speech to the financial world, admonishing them for creating the financial mess we are in and setting out the warning sign that the next time it happens there probably won't be a bailout. He didn't say that, but that is the truth.
It IS small business that has really felt the brunt of the lousy decisions made on Wall Street. It IS small business that can no longer access lines of credit. It IS small business that is having immense problems exporting products.
Each of those small businesses is owned by real people. People who may have also lost their homes due to the greed of Wall Street.
Sadly, however, I don't think it is Wall Street that is going to bail us out. We are going to have to do it ourselves. The fancy execs in their fancy suits and expensive cars wouldn't take so much as a 10% cut in bonuses to provide funds to lend to small business. They are truly Greed Personified.
And the next time they get us in this kind of mess, I'm certainly not going to be so willing to bail them out. Nor, I think, will most other entrepreneurs. If small businesses have to fail, then so should big businesses.
Even now, we are pretty much on our own. In spite of the President's admonishment, I don't really expect any changes from the self-serving SOBs on Wall Street.
So what can we do about small business financing? Here are a few quick ideas:
BOOTSTRAP GROUPS. Join a bootstrap group if you haven't already. These groups are composed of small businesses helping small businesses. Ask when you need something, and be willing to provide help too.
WORK THROUGH YOUR REPRESENTATIVES IN CONGRESS. Work with others in your geographical area to tell your Representatives and Senators exactly what is happening in your area. Can't get loans? Document your case and send it to your representatives. If anyone has influence with local bankers, it is your Representative.
SHARE STUFF. You don't need your whole warehouse right now? Rent out part to another business. Likewise, don't be shy about renting part of a warehouse for your own business. This is the Age of Ingenuity not the Age of the Braggard, so be as ingenious as your can in running your businesses and cutting costs.
PETITION YOUR CITY COUNSEL. This is another group that should respond to the needs of small business. If you go out of business, the city loses tax revenue. Let them know what you need in terms of loans and/or other assistance. Get them on your team.
One more thing: Watch for ads promoting small business. There are a few banks that I have noticed lately that are looking to attract more small business clients, such as Bank of America and Wells Fargo. There may be more out there. When you see these, ads, support those companies. You may not qualify for a loan, but you can open a checking account or have them process your payroll. Give them whatever business you can.
These steps won't guarantee that your business will be successful, but they sure will help. Small business financing is never easy, and the past year has made it nearly impossible. Now is the time to show the country just how creative we are.
Wednesday, September 09, 2009
New Business Ideas For Troubled Waters
Seems like everyone is looking for new business ideas. "Green" is gold, and gold is out of fashion. And if you really want "fashion", try "personal style". It seems like everything is topsy turvy.
In fact, the business world is settling down.
In recent history we have had the dotcom boom and bust of the '90s. We have had the roller coaster ride of real estate of the '00s. And we've had the economic tsunami that plagues us still. It sounds like everything is busting up. So where are the great new business ideas?
Simple. Look back. And look forward. Take an business idea from the past and give it the boost of the 21st century, and you've got a whopper of a new business idea.
Look at tutoring. For decades -- yea, for centuries -- tutors have shuffled up the steps, books in hand, overflowing with Knowledge. Not the 21st century tutor. This tutor spotlights his/her talents on the web and garners clients from around the globe. With online meetings, email, voice and video connections so readily available, tutors in all disciplines can now reach out further than they ever imagined. This is such a strong business that we have identified it as one of THE top new business ideas.
Or look at the revolution in the wholesale business. This used to be the property of large warehouses and printed catalogs. No more. Now closets are the storage space and wholesalers market goods online. Goods are anything from miniature dollhouse furniture to tie clasps to jewelry to paints for model airplanes to teddy bears. Anything goes! Well, anything goes as long as it fits in the garage.
The revolution in marketing is not in the new, New, NEW business idea, but in taking the old tried and true and giving it a new spin. Thousands upon thousands of entrepreneurs are finding success who never before dreamed it possible.
What a time to be alive! and be an entrepreneur.
In fact, the business world is settling down.
In recent history we have had the dotcom boom and bust of the '90s. We have had the roller coaster ride of real estate of the '00s. And we've had the economic tsunami that plagues us still. It sounds like everything is busting up. So where are the great new business ideas?
Simple. Look back. And look forward. Take an business idea from the past and give it the boost of the 21st century, and you've got a whopper of a new business idea.
Look at tutoring. For decades -- yea, for centuries -- tutors have shuffled up the steps, books in hand, overflowing with Knowledge. Not the 21st century tutor. This tutor spotlights his/her talents on the web and garners clients from around the globe. With online meetings, email, voice and video connections so readily available, tutors in all disciplines can now reach out further than they ever imagined. This is such a strong business that we have identified it as one of THE top new business ideas.
Or look at the revolution in the wholesale business. This used to be the property of large warehouses and printed catalogs. No more. Now closets are the storage space and wholesalers market goods online. Goods are anything from miniature dollhouse furniture to tie clasps to jewelry to paints for model airplanes to teddy bears. Anything goes! Well, anything goes as long as it fits in the garage.
The revolution in marketing is not in the new, New, NEW business idea, but in taking the old tried and true and giving it a new spin. Thousands upon thousands of entrepreneurs are finding success who never before dreamed it possible.
What a time to be alive! and be an entrepreneur.
Thursday, September 03, 2009
The Business Plan For Non-Successes
Keyword for this post:
Start Up Business Plan
There's an interesting post in Entrepreneur.com's blog. They asked "50 top bloggers" for "top recommendations". What makes it so interesting is things like this:
There was a surprising amount of this in the list. Like there is no good advice. Like the experts don't know what they are talking about. And, guess what? The experts DON'T know what they are talking about.
Truthfully, there is no one "right" way to start a business, or run one. The "right" way is the way that suits your style. Some people feel most comfortable trusting their gut. Others need numbers to back up their decisions, or even to make decisions. The key is to find YOUR style, and stick with it. Don't let bullies try to tell you what is "best". They aren't you. They don't know what is best for you.
(Here's a brief commercial.) That is all very comforting, because that is how we constructed our "start up" series. There's not a lot of lecturing. But there are a lot of questions. Lots. Entrepreneurs need to answer these questions for themselves. If you really need to be told everything, you are not meant to be an entrepreneur. Go work for someone else -- they will tell you what to do. But for creative, intelligent people, entrepreneurship is a wonderful adventure. (end of commercial)
Perhaps that is why so many of us aren't a roaring success the first time around in business. We need time and experience to develop our own center, our own style. It is sad that so many banks won't look at business people who have these "less than success" stories in their background, for that is where we learn about our style. We learn about how we work best. We learn how to make a success of what we've got.
Should you be faced with constructing a business plan, and someone on your team has been less than 100% "successful", focus on what the successes really were. Never, ever lie. But focus on the plusses. Lots and lots of entrepreneurs make great comebacks, and you could truly be one of them.
Start Up Business Plan
There's an interesting post in Entrepreneur.com's blog. They asked "50 top bloggers" for "top recommendations". What makes it so interesting is things like this:
18. "If you don't enjoy planning your business' future, you must be doing it wrong; ease up on the business plan document, do just the planning, just big enough to run your business and control your own destiny."
19. "Measure EVERYTHING in your business that you care about and use your findings to drive your decisions so they are based on facts, rather than emotions or seat of the pants guesswork."
There was a surprising amount of this in the list. Like there is no good advice. Like the experts don't know what they are talking about. And, guess what? The experts DON'T know what they are talking about.
Truthfully, there is no one "right" way to start a business, or run one. The "right" way is the way that suits your style. Some people feel most comfortable trusting their gut. Others need numbers to back up their decisions, or even to make decisions. The key is to find YOUR style, and stick with it. Don't let bullies try to tell you what is "best". They aren't you. They don't know what is best for you.
(Here's a brief commercial.) That is all very comforting, because that is how we constructed our "start up" series. There's not a lot of lecturing. But there are a lot of questions. Lots. Entrepreneurs need to answer these questions for themselves. If you really need to be told everything, you are not meant to be an entrepreneur. Go work for someone else -- they will tell you what to do. But for creative, intelligent people, entrepreneurship is a wonderful adventure. (end of commercial)
Perhaps that is why so many of us aren't a roaring success the first time around in business. We need time and experience to develop our own center, our own style. It is sad that so many banks won't look at business people who have these "less than success" stories in their background, for that is where we learn about our style. We learn about how we work best. We learn how to make a success of what we've got.
Should you be faced with constructing a business plan, and someone on your team has been less than 100% "successful", focus on what the successes really were. Never, ever lie. But focus on the plusses. Lots and lots of entrepreneurs make great comebacks, and you could truly be one of them.
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