Small Business Startups

Choose the Right Credit Card for Your Business

June 1, 2018 By Twila Van Leer

Business Credit Card — Don’t begin using your business credit card without being firmly conversant with the card’s interest rate, payment terms and fees

A credit card is a handy tool for your small business, but you first need to study the options and choose the card that best fits your needs. It provides a convenient way to establish credit, manage cash flow and keep your business and personal expenses separate.

According to the Small Business Administration, there are numerous possibilities, including teaser rate cards (among the most popular), low interest rate cards, rewards cards, airline or frequent flyer cards, unsecured business credit cards, secured cards and prepaid cards.

Start by analyzing how you spend money in your business. Do you want to pay the charges monthly or over time? What grace period does the card you are considering allow?

Expect a credit check when you apply for a business credit card. In most cases, a personal check will be conducted as well as your business credit. Find out if you will be personally liable for outstanding debt on the card. That may depend on whether the card carrier offers commercial liability, joint or several liability.

Don’t begin using your business credit card without being firmly conversant with the card’s interest rate, payment terms and whether it requires fees. Do the benefits offered outweigh the fees? Fees may be charged for cash advances, late payments and foreign transactions. If you expect to carry a balance, what is the annual percentage rate? Create an action plan for using the card, including payoff limits on the balance.

If you will use the credit card for company travel, you might look into a card that offers airline-mile rewards. Look at other awards a card offers, such as internet and phone services, shipping services, gift cards and discounts to selected retailers or simple cash rebates. If your business spends consistently in particular categories, compare cards and get the most benefit for the way you spend company dollars. If you tend to carry a large balance, you could pay more in interest than you earn in perks.

Getting Your Small Business Out of the Starting Gate

July 18, 2014 By Kevin Mercadante

The hardest part of starting any business is getting it up and running and out of the starting gate. Just the thought of that obstacle is enough to keep a lot of people from even trying in the first place. But there are ways that you can make your business startup easier, especially financially.

There are two areas that you have to pay close attention to – expenses and income. That’s more than obvious, but it’s the tactics that you use for each that will largely determine whether your business is a success or failure.

Keep a Tight Lid on Your Expenses

A common mistake that many new business owners make is spending a lot of money upfront, often before they even launch the business. With bricks and mortar type businesses that’s par for the course. But since most businesses today are Internet-based, you should be able run your business on an absolute shoestring.

Here are some tactics to help you do just that:

Work out of your home for as long as you can. You should avoid buying or renting any business-related space until you’ve first established a healthy cash flow. Work out of your home for as long as you can, and if you do need extra space rent or sub-let it on a short-term basis at the very lowest price possible. In the meantime, working out of your home will allow you to have all the trappings of an office – electricity, phone lines, and Internet connection – without the added expense that you have if you need to hook them all up in a remote space.

Unless it’s mission-critical buy secondhand. Equipment is another area where you need to be cost conscious. Unless equipment is absolutely essential to the basic operation of your business, you should avoid heavy investment until you have a demonstrated cash flow coming in. Buy secondhand equipment and use it for as long as you can, until your income allows you to trade up.

Don’t hire – subcontract out instead. One of the toughest parts of starting a new business is having to do every job connected with your business. If there’s no income, you can’t possibly hire anyone to do certain jobs for you. Instead, sub-contract work out on an as-needed basis. For example, you can bring in someone with accounting experience to help you close out your monthly books. You can also hire someone for a couple of days to help you with your accounts receivable.

Partner where possible. Sometimes there’s a major function in your business that you simply cannot handle on your own. If that’s the case, look into partnering with somebody who is strong in that area. Since the partner will get a share of the profits – rather than a fixed salary – the arrangement should be much easier on your budget.

When you are starting a new business, you should be very conscious to avoid creating fixed expenses that you will need to pay even if you don’t have any income. That can put you out of business before you even get started.

Building Your Income

There’s no delicate way to put this, but until you have a cash flow, you don’t have a business. This should make creating a cash flow Job 1. There are ways to do this when you’re first starting out and operating on a shoestring.

Get a cash flow going before going full-time. In most businesses, it’s completely unnecessary to quit your job and start running the business on a full-time basis. It will be better if you hold onto your job – that way you have a cash flow for your living expenses – and build up your business as a side venture. If you can create a cash flow of just a few hundred dollars a month in this way, you will not only have an income when you go full-time, but you’ll also have the confidence of knowing that your business concept will be successful. Yes, it will slow the start of your business, but at the same time it will improve your chances of success. Those are the kinds of trade-offs you will want to make.

Concentrate your time on the activities that generate the most income. This needs to be a core principle of anyone who is going into business for themselves. Starting a business, you might have 20 tasks that you have to perform each week. If four of those tasks are the ones that will generate income, or the lion’s share of it, then those are the tasks that you need to be concentrating on most heavily. You’ll need to do this at least until your business reaches a point where it’s generating sufficient income for you to begin paying others to do the tasks that are not bringing cash in the door. Your business will succeed to the degree that you are successful in concentrating on activities that will generate the most income.

Implement low cost/free marketing. Marketing is generally the most important activity in any business, but especially at upstart. Marketing is what draws people’s attention to your business, so that you can convert them into paying customers. You will need to come up with low-cost and therefore very sustainable marketing activities that will make this happen.

Some of the methods that you can try that will be easy on your budget include:

Networking with people who represent natural clients for your business.
Using the social media to draw people to your website and business – they’re free to participate in.
Email blasts to everyone in your email address book – even if they’re not prospective customers, they may forward your email on to others you are.
Ask everyone you meet who do you know who is looking for (my product or service)? Many business arrangements are started by informal conversations.
Have a supply of custom-made business cards or business flyers that you can pass out to anyone you meet. You need to have something tangible to help people remember you after you meet with them.
You should create a website – even a simple one – as soon as you start your business. Everyone is on the web these days, and you need to be as well. A simple (and free) WordPress format can get you started until you have enough income to build a top-quality site.

The whole purpose of marketing is to get people’s attention so that they are looking for you even when you’re not out prospecting. Some of the best customers and clients you will land will be third-party referrals, or people who saw your flyer or website. These are all inexpensive marketing methods that will help you to create a customer base until you can afford to invest serious money in marketing.

Concentrate your efforts on building your cash flow, as well keeping your expenses at the absolute bare-bones minimum level. That combination will help to give you the time that you need to get your business established.

Finding the Right Business Idea For You

May 1, 2014 By Kevin Mercadante

The 600,000 plus franchised small businesses in the U.S. account for 40% of all retail sales and provide jobs for some 8 million people. SBA.gov — The 600,000 plus franchised small businesses in the U.S. account for 40% of all retail sales and provide jobs for some 8 million people.

A lot of people want to start their own business. There are a number of obstacles to doing so, but the first, biggest one is usually finding the right business idea. There is good reason for this concern – finding the right business idea is often the most basic difference between the success and failure of any upstart business venture. Go into the right business and you can be on an elevator ride to the top. But the wrong business can be a one-way ticket into bankruptcy court.

How do you go about finding the right business idea for you? The best ideas are always the simplest, so we should keep the searches as close to home as possible. It’s generally a mistake to think that a business venture has to be into something exotic. Quite the contrary – the more familiar you are with the idea, the easier it will be to make it a success.

Use the following as starting points to help you find the right business idea.

Converting what you do on your job into a business

Very often the best business ideas can be found in the job you’re in right now. If you can take what it is you’re doing for your employer, and convert it into an activity that you can sell to clients and outside customers, you may have landed on the best business idea possible.

There are a number of advantages to doing exactly this:

Since you are already doing on your job the kind of work you will do in your business, you probably won’t need to get any additional training.
Since you have experience and even a routine, you’ll have the kind of confidence in your work that all business owners need.
Converting your job to a business will be a lot less risky than plunging into something completely new.
If the new business venture fails, you can always go back to your old job or to a new one, with no break in your work experience.

An example of converting your job skills to a business will be someone who is working as a bookkeeper on their job, offering their services out to multiple clients and customers on a retail basis. Another example is a person who handles IT on the job, that offers his or her services out the general public.

See what skills you use on your job that you could sell to the public.

Doing what you know – but don’t do on your job

For some people the best skills they have are ones that they never use on the job. For example, you might be an accountant who is also a whiz with computers. You may not get much of an opportunity to use those computer skills on your job, but you may be able to take them and use them as the basis for starting side business. As the business grows, you can begin thinking about quitting your accounting job and making your computer business your full-time occupation.

Make a list of all of the skills that you have, but don’t forget to include those that you don’t use on your job. It may turn out to your best and most marketable skills – from a self-employment standpoint – are not at all related to the work that you are currently doing.

Doing what you love

This is more risky than converting your job skills to a business, but it can also be a major reason why your business will be more successful than you ever dreamed.

In most cases, our highest income earning capability will be found in doing work that we like best. While that may seem self-evident, most people take a job in order to meet financial obligations, then settle into it and make it a career. Whether or not they actually like the work never enters into the equation.

The typical outcome of that arrangement is either job burnout, or planning your career around retirement (usually early retirement). On the retirement side, the idea is often that you’ll begin doing work that you actually like once you retire, and can afford a pay cut.

But what if you didn’t wait until retirement to start doing what you really like to do? If you like the work enough, you may actually find that you no longer have interest in ever retiring at all! And once again, if you really like the work that you are doing in your own business, there’s a better than even chance that you will make more money than you ever have.

Doing work that you actually like to do is a greatly underestimated “secret” to business success. So along with inventorying your skills, spend an equal amount of time determining what it is you actually like to do.

Trying something entirely new

This is where the truly high risk business ideas come from. Since you are stepping out of your comfort zone – often well outside of it – the risks are increasing commensurately. For that reason, this is not the recommended course in determining the right business for you – even though it may be the main method people use to find business ideas.

But if you are going to go this route, there are some steps you can take to minimize the risks:

Thoroughly research any new business idea before taking a plunge into the business itself.
Find a mentor who could help you learn the business.
Apprentice into the business before entering it – a good example would be taking a part-time job in the kind of business you want to go into.
Start the business as a side venture, that way you have your full-time job in case the business fails.
Avoid putting serious money into the venture until you can prove that you can first generate a cash flow.
Make sure you have a well thought out back-up plan – failure is a definite possibility here.

If none of these suggestions look scientific, that’s because finding the right business idea has a definite hit-or-miss quality to it. Consider using each of these methods to come up with the right business idea, or better yet, blend two or three methods. If you find a business idea doing work that you love, where you already have tangible skills, your chances of succeeding in the business will multiply dramatically.

Social Networks Can Boost Business Start-Ups

April 16, 2012 By Twila Van Leer

Getting the word out about a new e-business can be a considerable challenge for a beginning entrepreneur. Social networking on such sites as Facebook, Twitter and LinkedIn can be an inexpensive and effective way to promote, but there are some things you need to know before setting out.

In a recent Wall Street Journal column, Sarah E. Needleman offers advice for the uninitiated, with the underlying message being to take time to understand how the networks work and use good judgment in choosing where to post your messages to get the biggest payback. The sites are free and “wildly popular,” she says, but diving in without a little know-how might be counterproductive. Among the dozens of choices, the newcomer to the game might spend a lot of time spinning wheels without the desired results. Some of the fast-growing newer sites, including Google+ and Pinterest are attracting scores of competing businesses, all of them vying for attention.

The average Facebook user spent seven hours on the site in February, according to comScore, a market research firm. That’s powerful incentive to get your company’s name before the social networking public.

However, those in the know recommend that you hold off using the social network until your start-up is functional. Spend your limited time and energy on establishing the business at the outset. Networking shouldn’t rob from the demands of your start-up during the tricky challenge of getting it in motion. Acting too fast might end in embarrassment or adverse reaction. One bad reaction from an unhappy customer could “go viral” and be re-posted many times, spreading negative information about your business in the exact opposite manner you desire. Needleman quotes Kevin Ready, an Austin, Texas entrepreneur who has learned from experience, as saying: “Your first priority is to get your operation started. . . Social media is a long-term investment and not magic. It’s hard work.”

With that in mind, when you think you are ready to launch social networking in your company’s behalf, look for a network that will get your message to those most likely to be interested. LinkedIn, for instance, is an outlet that has a membership made up primarily of companies and business professionals — a logical place to post if your business sells goods or services to businesses. A few days or even weeks spent in research could multiply the benefits when you are ready. There are plenty of examples of start-ups that found themselves consumed by networking while still in the throes of getting off the ground. Some reported they had to back up, become better prepared and begin again. Your preliminary research should include noting what your competition is doing on the network you are likely to use. Looking at the competitor’s messages also will give you a consumers-eye view that may guide you in creating your own ads.

Before using a network, you should secure your business name. There is the possibility you could lose your name to another business of another individual as you concentrate on building your company. Claim your name on the network you are considering so you avoid potential frustration. Post a “coming soon” message to hold attention while you prepare the real thing.

Long experience has shown that the most popular company profiles are those that attract visitors with contests, surveys and special offers, Needleman noted. Store shopping or social networking, buyers are assessing what’s in it for them.

For business start-ups, make sure you have adequate checking account supplies

Big Break For Small Business Suppliers

March 29, 2012 By Sherry Tingley

An exciting new opportunity has been created for small business owners. The ability to offer their products or services to large corporations is a big boost to businesses that would otherwise not be able to even put their foot in the doors of big companies.

Supplier Connection, a program recently put into effect by the U.S. Small Business Administration is a program offered by the IBM foundation and was created as a way to improve part of the Obama administration’s American Supplier Initiative. The public-private effort involves 15 major corporations that are willing to consider ordering supplies and services from the small businesses registered with them. The corporations collectively have more than $300 billion in purchasing power.

It is expected that the initiative will grow small businesses, create new jobs and add strength and diversity to America’s supply sources, said SBA administrator Karen Mills.
“While it is clear that becoming a corporate supplier can lead to business growth, breaking in can be a challenge for small businesses,” she said.

The administration recently sent letters to more than 50,000 small businesses outlining the new program and providing tools to smooth entry into the process. Supplier Connection is available to interested small business owners and registration is free online. There, they are able to register their company name and include details about what kind of products they offer. The hope is to provide small business owners an opportunity to become suppliers to larger corporations.

Among the 15 companies that have signed on to the program are Wells Fargo, UPS, Pfizer, Office Depot, Kellogg’s, John Deere, J P Morgan Chase, Dell, Facebook, CitiGroup, Caterpillar, AMD, AT&T, Bank of America and Caterpillar. They have agreed to look at the services and products of small businesses that register online. They then will determine which services or products warrant their financial investment. Small businesses can learn to supply large corporations with their unique offerings.

Small business owners often have no idea how to connect with large corporations and thus never get the chance to get contracts with corporations who have large amounts of capital. This free service can help pull small companies that have real potential into the mainstream of American business and put them on the road to success. The new revenues coming from a business relationship with successful corporations may prove just the needed edge to grow revenue to new levels. On the other side of the coin, the corporations that are purchasing goods and services will have better insights on the pulse of emerging businesses. Everyone wins.

Small businesses connect with business checks suppliers for ordering discounts.