Saturday, September 18, 2010

Going It Alone

“I can’t find work so I guess I’ll just go into business for myself” are words that I am hearing more and more often. Hold your horses! It all sounds like a great idea, heaven only knows we need more small businesses, that will be what finally helps pull this country out of our present economical situation. In today’s job market, with many people unable to find work, they are stepping out in faith and starting their own businesses. This can be an exciting adventure which unless thought out thoroughly, can have its’ pitfalls as well.

What Type of Business Will You Start

If so many other people are out of work and those who are working are watching their spending like a hawk, what product or service can you offer them at a reasonable price? Will what you offer be something they need vs. something that they just want? What makes you think they will deal with you over and above another company? Hard questions to ask yourself I know, but ones that must be asked and evaluated.

It will be important to not only consider what your passions are, which will be a driving force to help you through the lean times of getting started, but you also must think long and hard about the type of business you want to start. We hear a lot about niche marketing, it is a buzz word that is used often by those who are setting up Internet businesses. Is this what is truly needed in today’s economy? If you are too “specialized” the need for your services are going to be very limited.

Be sure to put together a business plan, outlining the structure of your organization, the advertising and marketing program, the bookkeeping system, demographics of the customer base and projected sales and income.

Look At Your Customer Base

What can people afford to pay for the services that you will render with your new company? Will the company carry high priced items and services that only a few clients can afford or will you want to appeal to a larger client base? What products and/or services are needed by the majority of people right now?


Consider how much can you afford to lose not how much you expect to gain. How much can you personally afford to invest in starting your company? Do you have cash on hand or will you have to attempt to borrow funds from a bank or credit union? Right now if you don’t have A-1 credit, the chances of securing funds from a lending institution are slim. Do you really want to use money from your savings account or worse yet, remove funds from a 401K or IRA before maturity to fund this venture? If you are considering these options, think of not what the potential might be to replace those funds quickly, instead think about it as funds to never be regained and replaced. As money lost! Now are you still ready and willing to take that risk?  Invest what you only  can afford to lose.

Your Business Structure

Will you be purchasing products to start your business or will you be utilizing your own personal set of skills to provide services?

Are you planning to be a sole proprietor, a limited partnership or an S Corporation. Consider the advantages and disadvantages to each type of business structure available. Some will give you more personal protection both tax and liability wise than others. Research and then make the decision either on your own or with the assistance of an attorney and a tax adviser. This is one area where making an extremely wise decision is important.

Hidden Initial Expenses

There are numerous expenses that are not often thought about when beginning one’s own business. There is the physical location of the proposed business, the contract arrangements for leasing or purchasing the store front. The cost of deposits for utilities and insurance on the structure, the materials to display merchandise, such as counters, racks and of course a cash register for those sales you are anticipating. Setting up a bookkeeping and inventory system along with a marketing program. This could take months to put into operation before you can even open the doors to the public.

There is also establishing your inventory. Are you going to be paying cash upfront to stock items in your store or perhaps having items drop shipped; what is their return policy on items that don’t sell?

What? Still No Paycheck?

That’s right, be prepared not to pay yourself a pay check for at least six months if not a year. It is going to take that long to get the business established. Mortality rate on new businesses is extremely high. Figures have changed over recent years from stores closing in five years to seven years if they are not making a profit. So don’t expect to come out of the starting gate being able to pay yourself as well as possibly any employees, replenishing merchandise stock and meeting all the expenses of the operation  with monies brought in from sales to customers. It just isn’t going to happen!

Getting Up and Starting Over

As one who ventured out and followed my passion of starting my own business, I feel I can advise you honestly of what some of the upsides and downsides are. Was I successful? Let’s put it this way, it was fun while it lasted and I spent way too much money before I had to acknowledge to myself that this just wasn’t profitable. I thought I had done my homework, started with enough capital, had a good business plan and marketing and advertising program in place. Then disaster struck, something totally outside of my control and sharply business dropped, I lost several good accounts that were the backbone of my business and I eventually had to close up shop. Lesson learned, be prepared for the unthinkable and unforeseen problems that lay ahead. I suffered like many others because of 9/ll, because products I was purchasing came from back East where the Anthrax scare was. Two of my largest accounts were in the housing and real estate sector and there was a major slow down and cut back in that area. Within months, even with heavy advertising to try to develop more accounts, I saw my business caving before my eyes.

Having a Plan B or Plan C If Necessary

So what do you do when the bottom falls out? You consider your options first of all. Have going out of business sales and liquidate the stock, or try to find a buyer for your business as is. Sell your business name and all the stock intact if it is a long established company. Perhaps you have just an Internet business and you can sell just the business name if it has been getting good traffic up until now.

Consolidate your bills, refinance your home and get enough money to cover the outstanding debts you have incurred. Become as debt free as possible so that once again you have breathing room.

Go to work for someone else as you decide what to do about starting over again if you think you want to try another business venture of your own.
Find work that you can do from home to bring in an income.

Decide on another business venture and find investors who will be willing to take a chance on you and back the business; or form a partnership with others and build on the strength of all of your expertise and credit ratings to secure a loan to begin again.

There are plenty of opportunities out there and believe me, I am not trying to discourage you from taking that step venture out on your own. I do want you to be informed and ready for all the challenges that you will be facing.

Monday, September 6, 2010

Is It Time Yet?

How Long Has It Been?

How long have you now been out of work?  Are you really starting to fall behind in your bills now?  Have you had to make arrangements to start paying only partial payments on your utility bills? Has the credit card company canceled extending you any more credit on your card? Is the car payment and the house payment behind or soon will be?

You better be ready to start taking some drastic action in order to play catch up now before you get so far behind that you feel you will never see the light at the end of the tunnel.  The further behind you get the harder it will be to catch up. This frustration and panic will also carry over into your job searches and you won’t go through your interviews appearing confident and self assured. The fear will show through the lines on your face and the dark circles under your eyes from lack of sleep because you are worried sick!

Face it, you are ready to hit rock bottom or already have.
Now is not the time to let your pride stand in your way. It is time to let go of “stuff!” It might just be enough to pay your bills and put food on your table if you do it now. Look at it this way, after you get a job and back on your feet, you can always replace the “stuff” that you sold but by then you might realize it really wasn’t that important to have anyway.

Lighten Your Load

Sure easier said than done you say! I am going to give you some real practical suggestions here so hear me out!

Quick Cash

When I say lighten your load, lets take a good hard look at what you have in the way of personal possessions that you can sell right now, through a free ad on a trade paper, through one of the Internet groups that you belong to (ie: Yahoo groups, business forums, etc) or on Craig’s List or even spend the money and do an ad in the newspaper.

Pawn Shop Here I Come!

Another place you might find some instant cash is at the pawn shop. You can either take a loan ticket on the item (if you think you really might want it back) which of course won’t give you as much money as it would if you sold it outright to them. If it is something that you really don’t care about continuing to own, sell it outright and get the top dollar you can barter for.

Have Mower Will Travel

Depending on where you live, there might still be a couple more weeks left to where some of your neighbors might need their lawn mowed. By now they are probably tired of doing it themselves (so many this year went this route because of the economy) and are now willing to pay someone to do it for them. You’ve probably been approached yourself by someone knocking at your door, looking to mow your yard. You may have actually taken time to ask them how much they would charge. I know that I’ve had estimates anywhere from $30 to $15 to do both the back and front yard and I live on a large corner lot! Get out your lawnmower and go hunt down some jobs!
Have a Garage Sale

Now this will probably take some preparation, so get your other sources of quick cash started first while you work on this project. Start making a stack of items that you can sell in a garage sale. If you have something you haven’t used in 6 months or clothes that you’ve been holding onto that are either too large or too small, put them in that stack. Get them priced reasonable, go get you a garage sale permit from the city (if required in your area) and have a big old sale!  Put out signs on street corners directing people so they can find you easily. Advertise it in the local paper.

Helping The Elderly and Getting Paid
Maybe there are some elderly people in your neighborhood or at your church who would be willing to pay to have some work done around their home. Maybe they would pay to have you drive them to a doctor's appointment or to take them to the grocery store. Approach them and see what type of response you get; you might be surprised.

Barter Your Services

Barter your services like they used to do in the olden days. Perhaps you can exchange your abilities of fixing a car or painting a fence for some groceries that you might need. This would release money that you would have spent for groceries to be used to pay one of the utility bills, or perhaps help with part of a car payment.

I have a friend who is quite a good artist, but right now people are not buying art work to hang in their homes. But she also paints business signs and has contacted local shop owners about making signs for their stores.

I have another friend who makes jewelry. She has all her supplies but sales over her Internet website have been down. So she has taken some of her wares to small independent boutiques with a marketing plan. Put these on consignment in your store, if people purchase them, we will split the sale 60/40 or even 50/50, your only investment will be keeping track of the sale from the ticket item# and providing space to show the jewelry.

These are just a few ideas to ponder. Put on your thinking caps, before you get in such a panic that you can no longer think straight. I am sure you can come up with some ideas also.

Friday, September 3, 2010

Working at Home - Discipline and Determination

Distractions and interruptions are to be expected but can be minimized when you work from home.
Let your friends, neighbors and grown children that don’t live at home that you do work from home and tell them if you aren’t answering your home phone, the answering machine will catch the call but don’t be offended if you are not available to take their call immediately.

Putting a note on the front door that says you are a day sleeper, “do not ring bell“, will keep people from ringing the door bell or knocking on the door.

Decide how many hours per day you are going to work or how much money you want to earn each day and then work until you have reached that goal. Remember just because you do work at home, you really are entitled to breaks and a lunch time, just like you would in a brick and mortar job. One thing you do need to be aware of is that working at home, at the computer, you do actually have a tendency to sit longer than you should, or world, in a regular office job. You actually are not aware of how often you get up and down when working in a regular brick and mortar office. This can actually be a health hazard, affecting your circulation and your heart so be sure to get up and move around at least every two hours for a minimum of 15 minutes.  This break would be a good time to go throw that load of clothes in the washer or dryer, or do that stack of dishes in the sink.

This brings me to the time management or flexibility of your new job and they really do go hand in hand. Working from home requires you to actually be very disciplined and flexible also. The children are not taking their naps today, you are home alone and no-one there to help care for them. There is no way you are going to be able to have a quiet home to work in. You have to cancel your shifts and just go play with the kids. But you will have to figure out when and where you are going to make up that time lost working, whether it is later in the evening after they go to sleep or on another day.

25 million people are out of work or underemployed just in the US and the figures continue to rise this week. Where and when it will end no one knows. In the meantime, unemployment benefits are running out for those who have been unemployed the longest. There will soon be no government assistance and you are going to have to find a way to take care of yourself and family members if you have a wife and children. Take action now before it is too late. Find something, anything to help bring money into your home.