Hire Yourself - Start a Business

In this section:

• Take a Good Look in the Mirror
• Want to Get More Specific?

Hire yourself by starting a business, even on a shoestring budget. It's possible!

If you can’t find someone to hire you, consider hiring yourself. Not only can entrepreneurship bring great personal fulfillment, launching a small business doesn’t have to break the bank. Here are some of our favorite resources to help get you started.

Your goals from Day One, should be: provide a top-notch service, get the word out to the target audience, and sell it.

Take a Good Look in the Mirror

One thing is certain in business: THERE ARE NO GUARANTEES. There are a lot of risks inherent in starting a business. However, you can greatly increase your chances of success with careful preparation and a smart plan.

Most entrepreneurs start out working long, difficult hours with very little pay. They must display extreme self-confidence in order to handle all the risks inherent in operating their own business. In order to be successful, entrepreneurs must have the ability to think on their feet and make wise decisions. Change occurs often when you own your own business: entrepreneurs thrives on change and they're able to make the business grow despite sometimes scary obstacles. Although entrepreneurs focus on profits, this often comes second to the drive toward personal success. Certainly though, all successful entrepreneurs have the profit margin in sight and know that their business success is measured by it.

Do you think you fit that description or would you rather pick up your paycheck and leave the headaches to someone else? Once you've decided that you're cut out to start your own business keep in mind one last thought: MORE BUSINESSES FAIL THAN SUCCEED.

Sometimes a lack of experience, insufficient capital, poor management, and excess personal use of business funds contribute to a company's collapse. Now, this is not meant to discourage you. On the contrary, it is meant as a careful reminder so that you DON'T UNDERESTIMATE the difficulty of starting a business. Success in business is never a given, but if you are patient, willing to work hard, and take all the necessary steps it can be yours. A little luck always helps too.

The first thing you need to do is assess your strengths and weaknesses as a potential owner of a business.

Evaluate

Are you motivated? Since you're going to be the boss it will be up to you to organize your time, come up with assignments and follow through on details. Some owners burn out quickly from having to carry all the responsibility for the success of their business on their own shoulders. Running a company can wear you down, and a healthy enthusiasm will help you survive the slowdowns.

Can you plan and organize? Lack of planning is one reason most businesses fail. Thorough planning and careful organization of your finances, assets, staff, schedules, and production will help you avoid many pitfalls.

Do you consider yourself decisive? Small business owners have to make decisions regularly—usually independently and sometimes under tremendous pressure. You have to have faith and confidence in yourself but also have the wisdom to know when to seek advice.

How is your health? Running a company can be exciting, but it's certainly a lot of work. It won't be a 9 to 5 gig. You'll often be working six and seven days a week for 12- and 14-hour stretches. The physical and emotional toll will wear you out.

How will the business affect your family? Starting a business, especially the first few years, can be trying on family life. Financial difficulties could arise until the business becomes profitable, and this could take months or years. In some instances you may have to get used to a lower standard of living in the short term. Family members must understand what to expect, and you need to be able to have faith that they will support you during hard times.

Do you work well with others? Business owners need to establish successful working relationships with a range of people such as customers, employees, bankers, lawyers, and accountants. How well will you be able to deal with a moody secretary and a challenging client when your business depends on them?

If starting your own business is right for you, get started today!

First step: put it in writing. Write a brief plan outlining your goals. You don't need anything formal unless you're going to seek substantial capital. In fact, researchers at Babson College found that in businesses started between 1985 and 2003, there was no difference in performance between those that launched with or without a written business plan. Go through a simple exercise of putting a few things on paper for your own good: Describe your business in one sentence. Who will buy your products or services? How much money do you absolutely need to get started? How much can you realistically charge for your product/service? What will it cost you to deliver that product or service? In the worst-case scenario, how much can you make?

Don't assume the best-case scenario because more often than not, you won't meet those projections. A baker may dream of selling 100 cakes a week, but isn't 5 a more realistic estimation to start with? A dog walker might assume he can handle 10 customers a week, but is 2 more realistic to aim for?

Know the competition. Don’t worry about reinventing the wheel. Chances are you’re going to provide a service or product that already exists. That’s ok. There are multiple banks, coffee shops, clothing stores and restaurants on every street. There are thousands of doctors and dentists in every major city. It’s wise to know your competition, but don’t be intimidated, especially if you offer a quality product or service.

Create marketing materials. You need a marketing plan to target the right people about your business. Since you aren’t going to run expensive newspaper ads or Super Bowl commercials, think free and inexpensive.

Web site. When you’re looking to buy something – from a haircut to a custom cake – you likely hit the Internet. So even if you’re not selling online, every business should have a Web site. Before you decide on a name for your business, check the availability of domain names because it could impact the name you choose.

A Web site can cost as little as $10 a month and many hosting companies offer free site-builder templates to get you up and running in just a few hours. (Try Register.com or GoDaddy.com .)

Google’s AdWords program is an affordable and measurable way to attract visitors to your Web site. Sign up for free and set a budget for how much you want to spend to appear in search results when Google users look for content related to yours.

Print business cards and flyers.VistaPrint.com and GotPrint.com provide high quality printing services at affordable prices.

Phone system. If you worry about your kids answering your business calls but you don’t want to install a dedicated phone line for your new business, consider a service like RingCentral.com to have calls routed to an 800 number with voicemail exclusively for your business starting at $10 a month.

Use free social and business networks. Facebook, LinkedIn, MySpace and others are valuable tools for spreading the word about your business.

Establish mutually beneficial partnerships. Recently a Good Morning America viewer asked us for ideas on how to spread the word quickly – without spending a dime – about her new pet massage business. We suggested partnering with the most popular pet store in her area to host in-store events every Saturday where owners could bring their animals for on-the-spot mini massages. It’s good for the store because it brings new and existing customers into the shop, and it’s good for attracting awareness – and customers – to this new pet massage business.

A cake baker might offer to do fundraisers for her kids’ school. She could talk to wedding vendors about offering affordable alternatives to new brides. She can visit local coffee shops with samples of her baked goods to convince them to carry her stuff.

Generate free media coverage. One of our favorite new resources is Help A Reporter Out , which enables anyone to sign up for a free email alert, delivered three times daily, listing the immediate needs of writers and producers from major TV and print outlets to blogs and books. By registering for the daily emails, you can respond to queries from journalists that relate to your business and your expertise – without hiring a publicist to do this work for you.

Find free helping hands. When you have little to no money to start, you have to be resourceful to get as much as you can for free. In addition to begging family and friends, contact colleges in your area to post internship opportunities (or post them on Craigslist) for students who’d welcome a compelling role in assisting with your start-up.

Tap free expert resources. Contact the Chamber of Commerce in your area, Small Business Association or SCORE , all of which provide free and low cost advice on every aspect of your business, including the licenses you may need to operate and the tax and insurance considerations.

Among our favorite resources for small business owners: Make Mine a Million , StartupNation , SBTV , and Collective-E .

Finally—just do it. If you can’t get out there and sell your product or service, you don’t have a business. It doesn’t matter how fabulous your offering, your expertise or your Web site, if nobody will pay you for it there’s no business. Get your ducks in a row and then get in front of your target audience. Nobody will have the same passion and enthusiasm as you, and your passion is priceless.

Want to Get More Specific?

The Business Plan

In order to start and manage a business it takes motivation, research, preparation, and talent. Before beginning take the time to evaluate and explore your business and personal goals. Once you do that, you can use the information to create a thorough and thoughtful business plan that will help you achieve these goals.

Developing a business plan is a great way to force yourself to think about things that you may not otherwise consider. The plan will become an important tool as you set out to raise capital, and it will provide a guide to gauge your success along the way.

Get a Plan

Write a business plan—even a simple one to figure out who is your market, what are your costs, what you can sell monthly and annually, and what kind of money you can make. Answer these questions first—before you commit everything you have to an idea. Not all ideas can make enough money to support you and the cost of running a business.

Business Plan Checklist

Think about the following before you write your plan:

Products and Services

• You need to determine what type of business you're starting. What are you interested in doing?
• What service or product are you going to sell? Have a clear definition of your products and services.
• Understand the strengths and weaknesses of your business. Who is the competition? Why is my product or service better?
• Know your costs for producing items or rendering a service.

Market

• Who are your target customers? Think of niche markets and a specific target customer.
• How will you publicize and promote your business?
• This is one of the most underestimated aspects of a business. Advertising does not always bring clients. You must think of both traditional as well as non-traditional methods for attracting customers.

Consider taking a class or classes so you can understand all the aspects of running a business. There are many free classes offered by a variety of institutions, nonprofit organizations, and government programs. Free information could save you time and money later.

Online Women's Business Center: (http://www.onlinewbc.org/ ) Click on business—they have tons of useful links to online programs and tutorials related to business education.
U.S. Small Business Administration: (http://www.sba.gov ) Maintain and strengthen the nation's economy by aiding, counseling, assisting, and protecting the interests of small businesses and by helping families and businesses recover from national disasters.

Business Plan Outline

There is no one formula for developing a business plan, but some elements are universal. The body can be divided into four distinct sections:

1) Description of the business
2) Marketing
3) Finances
4) Management
BPlans.com (http://www.bplans.com/sp/businessplans.cfm ) They offer a comprehensive list of more than 500 sample business plans.

Essentials

1. Cover sheet
2. Statement of purpose
3. Table of contents

I. The Business
A. Description of business
B. Marketing
C. Competition
D. Operating procedures
E. Personnel
F. Business insurance

II. Financial Data
A. Loan applications
B. Capital equipment and supply list
C. Balance sheet
D. Breakeven analysis
E. Pro-forma income projections (profit and loss statements)

• Three-year summary
• Detail by month, first year
• Detail by quarters, second and third years
• Assumptions upon which projections were based

F. Pro-forma cash flow

III. Supporting Documents

Tax returns of principals for last three years
Personal financial statement
For franchised businesses, a copy of franchise contract and all supporting documents provided by the franchisor
Copy of proposed lease or purchase agreement for building space
Copy of licenses and other legal documents
Copy of resumes of all principals
Copies of letters of intent from suppliers, etc.

The Small Business Administration offers help with writing your plan: http://www.sba.gov/starting_business/planning/writingplan.html

Law

What will the legal structure of your business be? You need to determine if you're better off as an S-Corp or whether you should form a limited liability company (LLC).

Register the name of your business with your state. Most states have a process on line for registering names. Try Business Gov (http://www.business.gov/ )

My Corporation.com (http://mycorporation.com ) allows business owners and entrepreneurs across the U.S. to start, protect, market, and manage their businesses quickly and efficiently. They also offer a free trademark search.

Find a location for your business. Shop around for the best deal and location for what you are doing. Read leases carefully and get advice if you need it.

Get business cards and stationery printed.

Determine whether your business requires any local business licenses and apply for them.

Obtain a sales tax number from the state if you have to charge sales tax.

Obtain a federal tax ID number if you have employees or are incorporated.Visit (http://irs.gov ) or call the Internal Revenue Service at 1-800-829-3676 for its free Small Business Tax kit.

Set up your office with phone lines, computer line, etc.

Create job descriptions, salary levels, and benefits before hiring.

U.S. Department of Labor: (http://www.doleta.gov/ ) This site has useful information that assists employers with filling job vacancies and facilitating the matching between employer and jobseeker need.

Financing

Sufficient capital is probably the single most important factor in starting a new business. It usually makes or breaks a new venture and is the source of most of the stress associated with getting a business off the ground.

Even without a strong financial track record and great personal wealth, raising the funds necessary to start up are within reach for many.

In beginning your search for financing first determine your strategy for obtaining the money to start your business. How much of your own money can you afford to put into the business? Remember you might not be generating income for a while so you've got to have your personal finances in order.

Can you approach family and friends?

How about using credit cards or a bank loan? Make sure you've got good credit. It will be difficult to get a loan if someone feels you cannot manage your own money. Pay off as many bills as you can, save some money, get a copy of your credit report to understand what it says about you, and build a solid record. Make sure you have credit cards with unused limits—this gives you a better credit rating—and you can use it in an emergency. Visit, http://www.myfico.com , to obtain access to your credit report.

Open a separate banking account for your business. Find a user-friendly bank and open an account. The bank may require seeing a copy of your business license before opening the account.

There are a host of organizations dedicated to assisting small businesses in securing financing.

Check out http://www.count-me-in.org . Count Me In provides loans from a few hundred dollars to $5000 for your first loan and up to $10,000 for your second loan. Their loan application is online with instructions on how to complete it. Count Me In will take into consideration the type of business you are starting, your prior experience, and how you intend to use the money.

The Association for Enterprise Opportunity (AEO)
http://www.microenterpriseworks.org , the national association of organizations committed to micro enterprise development, provides its members with a forum, information, and a voice to promote enterprise opportunity for people and communities with limited access to economic resources.