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?

Investment

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.

Finding Your Inner Talents

In past articles, I have discussed working at home for other companies either as an Independent Contractor or as an employee. Of course as an Independent Contractor you are self employed and you are able to set your own work schedule, controlling the number of hours you wish to work and what time of the day or night you wish to work.

Now let’s take inventory of your skills and see how they can be turned into positions where you can work at home but starting your very own in home business. I am going to tell you about some people who have successfully started their very own businesses and I want you to mentally go through your own skills and see how they could relate to some of these people.

Sally worked for a local doctor’s office where she did all of the insurance claim work. She not only did the transcriptions of the medical files but she also handled the medical coding of all the paperwork that was submitted to various insurance companies in order to get paid for the company’s service to their patients.  Sally loved her job; she worked Monday through Thursday from 9am to 4pm with an hour for lunch. On Fridays they only worked from 9am until Noon.  Then Sally learned that she was pregnant and was concerned about working after the baby was born. The doctor that she worked for gave her a wonderful suggestion. Why not set up her own business at home doing medical transcriptions and medical coding for a group of doctors there in the building where she now works. She thought many of the other doctors would be receptive to the idea because they would not have to put her on their payroll as an employee, she would be an independent contractor. Sally followed up on this suggestion by making phone calls to some of the doctors to get their opinions on this idea. She didn’t actually ask them if they would hire her to do their work, all she did was ask for their opinions. They were extremely interested and gave her some great suggestions. By the end of the conversations she had many of them telling her to contact them when she was ready to start her business.

Sally ended up working for her doctor from home the last couple months of her pregnancy reducing her schedule to part time but enough so that she still had her insurance coverage for the delivery of her baby.  On weekends Sally designed her brochures and price list to give to her potential clients. She made her contact list of doctors and drafted the cover letter she would use to introduce her new business. When her baby was 6 weeks old, Sally launched her business. She started out with just a few offices to work for which was fine, it allowed her to have time to spend with her new son as well as brought in income for the family. As her son grew, so did her business and she is no longer able to accept any new clients at this time.

Ed was a Navy man, having worked aboard a submarine tender for over 10 years repairing submarines.  He was also a family man and loved to tinker around the house building and repairing things. But now he was retired and what was he going to do with his time?  After several years of working as a consultant to many large companies, he decided he wanted something a little less stressful where he could utilize his skills in doing home repairs and maintenance so he started his own business where his company would go into homes or apartments after the tenants moved out and would do all the repairs and repainting work. Then the recession hit and business tapered off and he wasn’t sure what he was going to do. You have heard the expression of taking a sow’s ear and making a silk purse out of it?  That is what he did.  He contacted the different banks and mortgage companies that had repossessed homes and offered his company’s services to restore them so they could be put on the market and resold.

Fred was a free-spirit, a loner with an entrepreneurial spirit. He didn’t like working for someone else and was very inventive about finding ways to be self employed. At one time he drove a delivery truck for a company that delivered supplies to the Indian reservation in Flagstaff, Arizona. He loved that job it gave him lots of freedom, he worked alone basically, doing his route in the truck. Then his son was injured in a terrible automobile accident. He wanted and needed more flexibility and that is when he decided to become a taxi driver with his own cab, subcontracting with a company there in Flagstaff.  He could set his own work schedule so that he could be off when his son needed him.

David and Jennifer were terrific cooks. David had worked for some VIP’s in Texas as their personal Chef as well as working for several Country Clubs. Jennifer didn’t have professional experience as a cook; she was just darn good at it, specializing in French cooking and elegant deserts.  They purchased an established restaurant that was for sale in a small tourist town in Arkansas. They redid the interior themselves since both of them have that wonderful interior decorating talent. They established a new menu and business flourished. They had the business for several years when an offer was made to purchase it that they couldn’t refuse!  They sold the restaurant and returned to Texas to be near family.

Mary runs a licensed in-home day care business. She originally worked for a bank until she married and had her first child. They had decided that once they started their family that she would work from home so that she could spend time with their children. Mary did her day care up until after her 2nd child reached school age. At that time she became an independent contractor working at home for several companies doing customer service work. After several years, she became pregnant again so she temporarily shelved her independent contractor positions and has returned to operating her day care business. She has enrolled in online college classes that began this January and is now working towards her degree in Elementary Education. She figures that she can work in the classroom or as an online tutor over the Internet.

Anne has two children in school and two at home who are still in diapers! She wants to bring in extra money to help the family budget but her time to work is limited. To relax she loves to sew, making baby accessory items and personalized baby gifts which are monogrammed bibs and blankets. So why not take that talent and turn it into an on-line internet business? There is a website called Etsy.com which specializes in letting you set up a “store” on their website very reasonable and the nice thing is that your products must be handmade. Right now many people want to purchase items that are handmade or handcrafted. She is now in the planning stages of starting her own on line shop.

As a youngster Scott learned to be a magician. He had mastered the art of sawing people in half, pulling rabbits out of hats, doing levitation tricks and the ability to perform these tricks at parties and get paid to do so.  He had a gift of gab and was a wonderful entertainer.   I knew him when he was only 15 and he was able to put on a wonderful magic show at that age.  I’ve often wondered what he ended up doing when he grew up.
If you are out there and reading this Scott McKeon from Grand Rapids, Michigan, give me a shout!

What I have tried to show you here are ordinary people who have taken their personal God given talents and used them to make a living for themselves. Now not all of them are millionaires for sure, but they are doing what makes them happy and gives them the feeling of fulfillment. You can do this too!

I go to the craft shows where I am in awe of all the wonderful products for sale. Everything from handcrafted soaps, homemade honey, candles, household goods, interior decorations for your home, to homemade quilts and hand knit or crocheted items.

I am constantly answering my door to people who have started their own businesses from tree trimming to lawn mowing or as an independent carrier for the local newspapers. Now tell me why one of those lawn mowing people didn't buy a shovel or two and do snow removal this past couple of weeks?

We have one local grocery store here who has a terrific service. You can contact them by phone or the internet and give them your grocery order. One of their employees will do your shopping for you. Once completed, they call you and give you the total to which a delivery fee or pickup fee is added.  You pay for it by charge card or debit card. You can come into the store and your order will be waiting for you, or if you paid for delivery,  your groceries will be delivered right to your front door. I personally see how this could be turned into your own home business. 

Are the wheels spinning yet?  I hope so!

Starting your own business, using your natural given talents

Do you remember that homemade doll that Aunt Sally gave you?  How about the homemade stationery your cousin made for you for your birthday? Or the hand tooled leather purse or belt that your son made for you?  The picture that Grandma hand painted that hangs proudly in your living room?  That wooden wagon or rocking horse that your Grandfather gave you when you were little?

Perhaps you are a person who has natural craft talents that you may not even be aware of yourself that you can sell.

Have you ever given a homemade gift to someone and had them say to you "you really should sell this" or "I can't believe that you actually made this yourself."

As our economy tightens, so does our buying power but also so does our desire to help our fellow countrymen.  There seems to be a big influx of people wanting to "buy American" right now.  They are looking specifically for products that are made here in the United States. They are also looking for items that are basically nostalgic, which bring back fond memories of better times or of their own youth.

I've heard many people speak of "days gone by" and how many of the natural talents that were once taught either in school or passed down from mother to daughter or father to son are no longer done.I know personally that if you asked either of my daughter's how to darn a sock they would laugh because neither of them would have the faintest idea on how to do it. The skills of darning, sewing, knitting, crocheting, tatting, and embroidering have all seemed to but disappeared. How many know how to make homemade butter, jams and jellies, do canning and preserving of food products. How many would have the slightest idea on how to make their own soaps or candles or make your own yarn and do your own weaving? Do you paint, make your own pottery or jewelry? Can you bake a cake, plan a party, make a piece of clothing?

The same with the skills that were passed from father to son, they too seem to have gone by the wayside.  How many young boys know the art of fishing and which type of bait to use, tracking game such as deer or rabbits, how to set a trap or shoot a rifle, gut a fish, dress out a deer or skin a rabbit for food?  Do many know how to tan hides or tool leather goods? A handful, if we are lucky.   How many have been taught the art of woodworking?  Do they know how to use carpentry tools or mechanical tools? Could they build a birdhouse or a bench or fix a car?

I know that I myself am lacking in many of the above skills, especially when it comes to the culinary skills. I hardly knew how to boil water when I first got married!

As a teenager, I knew a young man who was an excellent magician. He started his own business doing magic shows at childrens parties. His brother and a group of friends put together a band and they started playing at parties, weddings and high school dances.

A friend of my mother's came to America from France as a WWII bride and spoke little english, but she was an excellent seamstress and started her own business making and altering clothes for people just by word of mouth, operating out of her home. Her business became so well known, she eventually opened up her own shop. 

What I am trying to get you to do is make you realize that you do have some natural given talents that are saleable.

You will need to do some researching to find out the laws in your particular state about getting a license for your products. Most states will require you to get a business license and collect sales tax from your customers and forward them to the state either quarterly, semi-annually or annually.

If you produce food products, many states will require that you have a separate commercial kitchen to prepare your products, not allowing you to use your own personal kitchen.  You will be required to have a health permit and inspections either by the city or state health department. You will need to get the guidelines for labeling the contents of your products as to the ingredients and calorie content.

When it comes to making clothing, you will need to be sure if making items for infants that you follow guidelines on using materials with flame retardants when it comes to making night wear.   Be careful using licensed materials such as disney prints or college insignia prints when making products for resale. You may be in violation of copyright laws and subject to fines.

If you make pottery goods, you will need to be sure of the properties of the clay, that if making products that will be eaten off of that there is nothing in them that will harm a person such as lead content.

When starting your very own business, be sure to put together a good business plan. Launching your own business without one is like a ship without a rudder and a sail.  Depending on how tightly you structure the business plan will help keep your business on target, help you reach your goals and be the sail to your business ship. Also having a good business plan is an asset if you need to go to a lending institution to apply for operating capital.  They can see your projections in black and white of what you feel the potential profits are for your business over a period of time. You should have figures together for years one through seven as this is when most new businesses will fail if they are not capitalized properly or structured soundly.

I guess what I am trying to say is what might sound like a wonderful idea on paper could not turn out so well if not thoroughly thought out and researched ahead of time but if you have done your homework and it all looks good, proceed ahead and launch your dream business.

Reference Resources:  Check your public library for books on how to sell your crafts, Amazon Books and Borders Books also carry a nice selection of books on the subject.
Check the Internet for articles.