Category Archives: Thinking

Starting

5 Ways to Help Young Entrepreneurs Finance Their Business Ideas

Today is International Youth Day – so what better way to celebrate than to talk about the incredible potential of our young entrepreneurs? In 2012, young entrepreneurs ages 20-34 comprised more than a quarter of the total new entrepreneurship activity in the United States (according to the Kauffman Foundation). That was 26 percent of first-time entrepreneurial efforts being led by the youngest age bracket.

Entrepreneurship can be an exciting adventure, and it can be easier than you might think for the young. The barriers – including cost of entry – are low (working at home, online, etc.), and younger people are often unconstrained by the commitments of family and marriage.

So, do you have a winning idea on which you want to establish a business? While you don’t need a business degree or years of experience to succeed, you will likely need financing to get your idea off the ground. Here are some tips to help you secure the funding you need to launch – or ease the burden of trying to finance – your small business.

1. Deferring student loans

If your student loan repayments are preventing you from starting your own business, the Student Startup Plan (through the White House-led Startup America initiative) enables college graduates, including those looking to start a business, to lower student loan repayments. Its Income-Based Repayment (IBR) Plan can help you keep your loan payments affordable with a sliding scale to determine how much you can afford to pay on your federal loans. This can give you the freedom you need to take risks with new opportunities.

2. Borrowing startup funds from friends and family

With a lack of strong credit history, it’s sometimes challenging for young entrepreneurs to obtain traditional loans through banks or private lenders. In these cases, it’s not uncommon to reach out to friends and family – those who know and trust you already. This is a definite pro, but the flipside comes if something goes sour with repayment or terms and the potentially compromising situation that may develop for you. Check out this blog post for details about best practices and how to work with your friends and family in this capacity.

3. Consider crowdfunding

An increasingly popular method to obtain financing is crowdfunding – a collective cooperation of people who network and pool their money and resources together, usually online, to support efforts initiated by other organizations. Crowdfunding gathers multiple, smaller investments as opposed to a single source of funding. Learn more about crowdfunding here and in this other recent blog post.

4. The peer-to-peer potential

Like crowdfunding, peer-to-peer (or P2P) lending allows you to make your business case to others with the hope that someone will make an investment. The biggest difference between the two approaches is that P2P lending typically focuses on one individual lending to another (versus the “crowd” of lenders). P2P sites allow you to determine how much you need to borrow, define the purpose of the loan and post your listing online. Read about how to prepare your request in this blog post.

5. Avoid overinvesting

If you’re relying on your cash reserves, credit cards or savings to start a business, try to avoid some of the overinvestment traps that young entrepreneurs fall into – whether it’s a swish office, computer systems or inventory overload. Focus instead on building a good product and a positive customer experience. Starting a business from home or online are cost-effective ways to avoid some of these pitfalls. These two guides from SBA can help you get started:

One little known option for setting up your new business is to purchase government surplus products. Just about anything you can think of that your business might need is sold by the government at or below cost, or fair market value.

Click here to view the original article.

Thinking

Business USA

Our “Start a Business” wizard provides a checklist for emerging businesses that is prepared according to specific characteristics of their business. The customized checklist includes licensing and permit information for your state, a tool to develop a business plan, and connections with local business counselors.

Starting

Tips for Veteran Owned Small Businesses

An Original Article from SBA.gov

Are you a veteran-owned small business and thinking of selling to your former boss – the U.S. federal government?

Part of the mission of the SBA is to provide assistance to veterans and service-disabled veterans who return home to start, resume or grow their businesses. In addition to supporting veteran business owners through entrepreneurial training, and providing access to capital, the SBA also provides resources, tools and support to help veterans start and grow businesses through government contracting.

If you are a veteran-owned small business, check out these 10 tips for getting started selling to the U.S government and winning a government contract.

    1. Boots to Business – Get Help Starting Your BusinessBoots to Business is a public-private partnership program that gives service members support to help them learn the nuts and bolts of how to start and grow a business and access SBA tools and resources available to them.
    2. Find a Veterans Business Outreach Center – The SBA’s Office of Veterans Business Development oversees multiple Veterans Business Outreach Centers across the country. In addition to helping veterans build a business plan and start a business, these centers can help veterans land government contracts, get access to mentoring services, and find training.
    3. Review your Financing Options – In addition to a range of other loan programs, SBA’s Patriot Express Program is specifically designed for small businesses that are more than 51 percent owned or controlled by veterans or members of the military community and are available up to $500,000.
    4. Yourself with Small Business Incentives for Government Contracting – The law mandates that government agencies establish contracting goals that require them to reach out and consider small businesses and service-disabled veteran-owned businesses for procurement opportunities. Currently, 23 percent of contracts must be awarded to small businesses and three percent to service-disabled veteran-owned small businesses. These opportunities will help open doors, but you must still be able to sell your business on performance, price and ability. Contact your Veterans Business Outreach Center to learn more about these and other incentive opportunities.
    5. Learn About How the Government Buys – The government applies standardized procedures to buy products and services it needs from suppliers that meet certain qualifications. The primary contracting methods used by the government include micro-purchases, simplified procedures, sealed bidding, contract negotiations and consolidated purchasing. Learn more about these in another SBA online training course, Government Contracting 101: How the Government Buys, or read a quick overview of the process in my earlier blog: Government Contracting – Learn how the Government Buys from Small Businesses.
    6. Understand the Rules – Understanding the government’s procurement rules is critical to your success as a government contractor.  The FAR, or Federal Acquisitions Regulations, is the roadmap for doing business with the government. Check out these resources on SBA.gov to help you become familiar with the regulations that apply to most federal contractors.
    7. Size Does Matter – As a small business, certain government programs may apply to you. The question then becomes: What is a small business, or, more specifically, is your firm a small business? Over the years, SBA has established and revised numerical definitions for all for-profit industries, and this numerical definition is called a “size standard.”  Use SBA’s Size Standards Tool to help determine if your business is truly “small” and qualifies for government contracts.
    8. Learn the Process of Selling to the Government and Find Opportunities – Selling to the government is not as big of a mystery as you might think. There are several fundamental steps you should follow:

For a deeper dive into this process, read Selling to the Government – Get Started with These 5 Steps or check out SBA’s information about Registering for Government Contracting, which explains the easy steps you need to follow to being bidding on government proposals.

  1. Find Subcontracting Opportunities – An alternative to seeking prime contracts is to explore subcontracting opportunities. Subcontracting with a prime contractor can be a profitable experience as well as a growth opportunity for a business. To help small businesses find opportunities, SBA maintains SUB-Net, a searchable database of available subcontract opportunities.
  2. Have a Question? – If you have questions about the federal marketplace, government contracting methods, contract opportunities or winning recovery and other federal contracts, check out the following resources:
    • SBA’s Government Contracting Guide – Explore the process of government contracting with easy how-to guides and resources.
    • Government Contracting Classroom – Available via SBA’s Learning Center, these self-paced, free online courses cover the fundamentals of selling to the government as a small business owner.
    • Get In-Person Assistance and Training – SBA and its resource partners can answer your questions about the federal market place, government contracting methods, and finding contract opportunities. Find your local SBA office, Veterans Business Outreach Center and more with this interactive map

Click here to view the original article.

Starting

Take on Venture Capital and Keep Control of Start-Up

An Original Article from SBA.gov

Considering options for funding your start-up? Wondering if now is the right time to seek venture capital, but worried about losing control of your business?

Here are some tips for weighing your funding options, finding the right venture capital firm for your needs, and working with them once you’ve received your first injection of seed money.

Is Venture Capital Right for Your Small Business?

If you are looking for funding under $200,000, smaller angel investors (this could include borrowing from family and friends) or peer-to-peer lending or crowdfunding might be better options than a larger VC firm. Other alternatives include SBA loans. SBA doesn’t provide the loan; instead, they provide a repayment guarantee to banks, removing much of the risk of lending to small businesses. If your business is engaged in a high-tech industry or R&D, another option is a Small Business Innovation Research Grant. These federal funds support the critical start-up and development stages of small businesses.

Finding the Right VC Firm

If you have a proof of concept and are ready for a significant investment to fund your next stage of growth, then venture capital (VC) might be for you. But how do you find the right VC firm with which to align your business?

Given that a VC firm is going to be involved in your business’ funding and management, choosing one that provides a good match for your business is critical. Look for companies that have experience with businesses and industries like yours. Since a VC is going to be actively involved in your business, other factors such as its personality and core values are also important. A VC that is located close by might also be important.

So where can you find potential VC investors? If you have a good network then there’s a strong likelihood you can pinpoint potential investors via this route. Start locally and extend your search from there. Here are some tips and resources that can help:

  • Start in your Community – If you are involved in a local Chamber of Commerce or other small business group, start your search here. Talk to experts and business peers alike. Small Business Development Centers (SBDCs) and Women’s Business Centers may also be able to help introduce you to local investors. Find a center here.
  • Talk to Your State Economic Development Agency – At the state level, State and Local Economic Development Agencies may be able to help refer you to investors in your region.
  • Consider Trade Associations – Most industries are represented by a trade association, this is another great place to expand your search and meet potential investors. You can also look into national and local investing and venture capital groups like the National Venture Capital Association and the Angel Capital Association.

Your next step is to present any potential investor with a business plan.  SBA’s online Build a Business Plan tool can help you create one.

How to Maintain Leadership Control of Your Company

Many small business owners are reticent to invite VC funding because they’re concerned about losing control of their business. While it’s true that a VC firm will insist on controlling more than 50 percent of an early-stage entrepreneurial enterprise—does this mean you actually relinquish control of your business? Not necessarily. VC deals are structured around mutual incentives and milestones that are beneficial for all, and are rarely about one-sided control. VCs want business founders to aspire to grow and succeed, and they structure the financing deals to ensure this. For example, the terms of typical VC financing dictate that the investors don’t realize a profit until management does (assuming that they’ve already seen a return in capital invested) and vice versa.

Another emerging trend, as reported by the New York Times, is that VCs are increasingly putting a premium on young, visionary entrepreneurs who grew up with the Internet, social media and mobile technologies. With this clout behind them, these young founders are becoming more assertive in funding rounds, securing better terms and even cashing out their investors before an initial public offering.

That’s not to say your VC can’t move to replace you if your business isn’t performing or hitting key milestones. Some other things you can do to ensure you retain some level of control include the following:

  • Insist on an Employment Contract – This can minimize the risk of founders getting fired by their board of directors. Negotiate this before any seed money has exchanged hands.
  • Hire Stellar Employees – Poor staff will compromise the success of your business and jeopardize your position on the management team. By hiring right, you’ll ensure key milestones are understood and met, and profits are realized.
  • Collaborate with your Investors – In addition to funding, investors bring a wealth of experience. Capitalize on this and treat your VC as a partner—not as a threat.

For other tips, read Surprising Ways to Maintain Control of Your Business with Investor Approval from Yahoo Small Business Advisor.

Click here to view the original article.

Starting

Fringe Benefits

An Original Article from SBA.gov

You love your staff and want to show it by giving them more in a tangible way. Increasing their pay may not be the best strategy for you or your employees. Added pay is taxable to employees, so they net less (how much less depends on their tax bracket). And added pay has additional costs to you in the form of payroll taxes. What to do? Think about giving them fringe benefits.

Overview

You’re not obligated to provide any benefit (starting in 2014, employers with more than 50 full-time employees will have to provide health coverage or pay a penalty for not doing so). If you choose to give fringe benefits, it’s a win-win for you and your employees:

  • You reward your staff without incurring additional employment taxes, such as the employer’s share of FICA (covering Social Security and Medicare taxes) and state unemployment insurance. Some benefits won’t even cost you a penny because you merely arrange for workers to buy them on their own with favorable tax results to them (explained later).
  • Your employees get valued benefits that do not increase their taxable pay. If they’d had to buy these benefits on their own, they would have had to earn enough, after tax, to cover the cost. For example, say you offer dependent care assistance of $2,500 annually for all employees. If an employee in the 25% tax bracket had to pay this cost on her own, she should have had to earn about $3,350 more in wages to cover this cost.

If you provide any fringe benefits, you must do so on a nondiscriminatory basis (with few exceptions). This means that benefits cannot go merely to owners and highly-paid employees; they must be available to rank-and-file employees as well.

Tailor your benefits plans to the needs of your staff and to your pocketbook. Remember that health coverage and retirement plans are the top two most-valued employee benefits.

Transportation fringe benefit

Employees know that their commuting expenses are not deductible, regardless of the length of the commute or how much it costs. However, you can pay for certain transportation fringe benefits that will be tax free to employees. For 2013, transportation fringe benefits are:

  • Free parking, transit passes and vanpooling up to $245 per month
  • Bicycle assistance (to maintain and store the bicycle) up to $20 per month

Alternative: Instead of paying these benefits, you can arrange for employees to pay for them on their own on a pre-tax basis (i.e., the portion of their wages used to pay for the benefits don’t count as taxable income). Your cost: only minimal administrative costs. For more about this, look at *TransitChek or the websites of other companies that arrange for transportation fringe benefits.

Child-related benefits

You can help your staff with family obligations in a tangible way by paying some child-related costs:

  • Dependent care assistance. You can pay up to $5,000 of assistance for each employee each year; this amount is tax free. Alternatively, you can enable workers to pay for their dependent care needs on a pre-tax basis by setting up a dependent care flexible spending account (FSA). The funds in this FSA cannot be combined with funds in a medical FSA.
  • Adoption assistance. You can pay up to $12,970 for adoption assistance in 2013 (the limit increases annually for inflation).

Small employers may not be able to offer these benefits and enjoy them personally. The law prevents “highly-compensated employees” (e.g., owners) from excluding company-paid benefits if the plan skews benefits toward them. In other words, the plan must be nondiscriminatory for all workers.

Cafeteria plan

Workers usually prefer to have a menu of benefits from which they can choose. A cafeteria plan lets employees choose between cash (or taxable benefits) and tax-free benefits; they are not taxed on the tax-free benefits merely because they could have opted for cash.  Some of the benefits you can offer under the plan include:

  • Adoption assistance
  • Athletic facilities
  • De mimimis (minimal) benefits
  • Education assistance
  • Employee discounts
  • Employer-provided cell phones
  • Health benefits
  • Meals
  • Moving expense reimbursements
  • No-additional-cost services
  • Transportation commuting
  • Working condition fringe benefits

As a small employer (no more than 100 employees), you can opt to use a simple cafeteria plan. A simple cafeteria plan is presumed to be nondiscriminatory. You must make minimum contributions (e.g., at least 2% of worker’s pay) to workers in the plan who are not highly-compensated employees; all employees can enjoy benefits under the plan. Your contributions to the plan are tax deductible.

You can find more about cafeteria plans in IRS Publication 15-B, Employer’s Tax Guide to Fringe Benefits. (The 2013 version is not yet out but should be shortly.)

Conclusion

Whether you offer benefits, what they are, and how much you pay depends on your company’s financial situation. Obviously, you can only do what you can afford to do, no matter how generous you may want to be. Always discuss your benefits plans with a knowledgeable tax advisor.

*denotes non-government website

Click here to view the original article.

Starting

Paying Yourself When You Start a Business

An Original Article from Businessweek.com

(Clarifies sixth paragraph to show two types of taxes would be owed.)

I recently formed a recording studio as an LLC, but I am anxious about all the income going into accounts receivable and having less immediate income for me and my family. Does this money circulate within my business only to pay business expenses, or can I use some of the money to enjoy the fruits of my labor without putting myself on the payroll right away? —J.U., Phoenix, Ariz.

Since you formed your company as a limited liability company, as the owner you are considered a “member” of the LLC by the Internal Revenue Service. If you’re a one-member LLC, the IRS will treat your company the same as a sole proprietorship for tax purposes. While you can hire employees, you will never put yourself on the company payroll since you are not considered an employee.

Instead, when you want to take money from the company, it will be in the form of an owner’s draw, says Jim Sharvin, a CPA with McDowell, Dillon & Hunter in Torrance, Calif. It is as simple as writing a check from the company to yourself and depositing it in your personal account, which should be kept separate from your business accounts.

“You may use money from the business for yourself, but know that the money you take out of the business will be subject to taxes at the individual tax filing level and subject to self-employment taxes,” says Lisa Schwartz, a CPA with Mitchell & Schwartz in Camarillo, Calif. In 2012 the self-employment tax rate is 13.3 percent for business owners on the first $110,100 of income and 2.9 percent on any income more than that amount.

For practical purposes, this means you’ll need to keep track of all your draws and set some of that money aside for taxes if your business is profitable. After your business gets established, you will pay self-employment tax in estimated quarterly payments to the IRS—something that can come as a shock if you’re used to being an employee and having taxes withheld from your paycheck.

Along with self-employment tax, you’ll need to remember that your recording studio’s 2012 profit or loss will be reported on your personal income tax return next April. If you make a profit, you’ll pay both self-employment and income taxes on that amount whether you have taken it for personal use or not.

All this will be much clearer if you work with an accountant familiar with small business, says Gregg Landers, managing director at accounting firm CBIZ MHM in San Diego. A trustworthy accountant can help you forecast your balance sheet so “you can understand what your studio’s cash-flow needs will be in the future and have an idea how much money you can take out of the bank and still have sufficient money left in the company,” Landers says.

With your business just getting started, it’s best to forgo removing funds immediately if you can. “The business should be adequately capitalized to carry itself through the startup phase,” says Richard Clement, a certified financial planner with Campbell Wealth Management in Alexandria, Va. You “should ideally have enough personal savings or other income sources available to cover personal expenses until the business gets established.”

Michael Eisenberg, a CPA and personal financial specialist at Eisenberg Financial Advisors in Los Angeles, advises clients to keep a minimum of six to eight months’ worth of working capital in their company accounts. That cushion will keep your business up and running through any seasonal revenue downturns or the general rough stretches that inevitably crop up, he says.

Once your business is established and profitable, you should begin to take regular draws—even if they are no more than $1,000 a month, Clement says. “Start small and build in a regular amount for yourself over time, both to establish discipline for your business and so you have a true picture of the business and how it’s doing” financially.

Another issue to discuss with your accountant, once you hire one, is that as your business grows, your draws will no longer be optional. That’s because the IRS requires business owners to pay themselves a “reasonable” salary, says Steve Sahlein, co-president of the American Institute of Professional Bookkeepers. “The IRS is going to challenge any annual salary that is less than the Social Security wage limit—$110,100 for 2012—to catch those who are trying to avoid paying Social Security taxes,” Sahlein writes in an e-mail.

While most people think of salary and payroll issues as mundane office chores, they are much more complicated than that because they involve tax law, Sahlein notes. Do yourself a favor and get some professional advice so you don’t make decisions that come back to haunt you.

Click here to view the original article.

Starting

Is Starting Your Own Business For You?

What an incredible experience! Owning your business, being your own boss, doing what you love, working on your own time, and getting paid!

Sounds exciting, but is it really for you? Do you have what it takes to be successful? Are you willing to do work for yourself? Be the chief, be the worker and be the accountant?

Take a minute and consider these skills and traits that lead to success in a small business. Be honest, you might surprise yourself with your readiness to start!

ARE YOU:

  1. Comfortable with taking risks: Being your own boss also means you’re the one making tough decisions. Entrepreneurship involves uncertainty. Do you avoid uncertainty in life at all costs? If yes, then entrepreneurship may not be the best fit for you. Do you enjoy the thrill of taking calculated risks? Then read on.
  2. Independent: Entrepreneurs have to make a lot of decisions on their own. If you find you can trust your instincts — and you’re not afraid of rejection every now and then — you could be on your way to being an entrepreneur.
  3. Persuasive: You may have the greatest idea in the world, but if you cannot persuade customers, employees and potential lenders or partners, you may find entrepreneurship to be challenging. If you enjoy public speaking, engage new people with ease and find you make compelling arguments grounded in facts, it’s likely you’re poised to make your idea succeed.
  4. Able to negotiate: As a small business owner, you will need to negotiate everything from leases to contract terms to rates. Polished negotiation skills will help you save money and keep your business running smoothly.
  5. Creative: Are you able to think of new ideas? Can you imagine new ways to solve problems? Entrepreneurs must be able to think creatively. If you have insights on how to take advantage of new opportunities, entrepreneurship may be a good fit.
  6. Supported by others: Before you start a business, it’s important to have a strong support system in place. You’ll be forced to make many important decisions, especially in the first months of opening your business. If you do not have a support network of people to help you, consider finding a business mentor. A business mentor is someone who is experienced, successful and willing to provide advice and guidance. Read the Steps to Finding a Mentor article for help on finding and working with a mentor.

If you liked your answers and you think you are ready, then go to the next section and answer our Top 25 questions to answer before you start a business!

Starting

Thinking of Starting a Business?

An Original Article from RetirementJobs.com

Why Do You Want To Do It?

Have you always wanted to start a business? Do you have a lifetime of experience to draw on? Have you seen how good businesses operate? Would you like to relive the famous story of Colonel Sanders who started the Kentucky Fried Chicken business while in his sixties? Could you write a list of the ten most important things a business must do to succeed?

If you answer ‘yes’ to one or more of these questions, you are a candidate for starting a business.

Laying The Groundwork

The first step is to get your finances in order, understand your assets and liabilities and determine your financial risk tolerance. Only one in five new businesses survives more than five years. Even venture capital firms, with their significant financial and managerial assets, are considered successful if one in five investments succeed. You must be prepared to lose whatever money you put into a business.

Once you have your financial resources in order, the next step is to line up your human resources. Be sure your spouse and other immediate family members are ready for you to disappear into the business for two or three years. Even if you are planning only a part time venture the above statement will still apply. You might also line up friends for support, potential trusted advisors and sounding board members and anyone else willing to help. If you see yourself more as a Mr./Ms. Inside or as a Mr./Ms. Outside, you might think now about finding a complementary partner. Very few people can do the whole thing themselves.

You might also devote a little time to determining whether you should start a business from scratch, purchase an existing business or acquire a franchise. There are pluses and minuses to each but roughly speaking, there is a higher risk in starting a business, somewhat less risk in buying an existing business, and even less risk in acquiring a tested franchise.

What Type of Business?

Now the real fun begins… figuring out what business to start or buy. If you have decided on a franchise, the International Franchise Association in Washington, D.C. is the place to start. If you are looking to buy a business, talk with your accountant about his/her client companies and which ones might be for sale, and also ask for introductions to other accountants.

To identify an idea for starting a business from scratch, start by looking at successful businesses and think about whether they could be replicated or even improved upon. Look inside yourself at your experience and expertise, interests and passions and the “I always thought it would be a good idea to….”. Also look at markets and demographics. You may be reading this article because you are a pre- retirement Baby Boomer looking for alternatives, a very large market about which you already know a lot.

Getting Started

Once you find that million dollar idea, be it a new chili recipe, an Internet start up or an iPod application for businesses, or whatever, write a brief executive summary or business plan defining the market, the market’s need, how you are going to sell to that market, the product itself, the financial plan, the unique value proposition and any other key factors (an alternative to this thoughtful approach is to just start the business, wing it and adjust on the fly. There isn’t much evidence to indicate that one approach works better than the other).

Next, write a short action plan, a list of action items with a time schedule and assigned responsibilities. Add in contingencies for what will go wrong, because major problems and challenges are virtually guaranteed.

Next, do a reality check. Find the competition (and no matter how unique the idea, there is always competition). Then talk with customers. Ask them whether and how much they would pay for the product or service you are contemplating. Remember nothing happens until money changes hands. You must be sure money will change hands.

Lastly, test the idea with professionals. Talk with your banker, accountant and lawyer. If you need financing, talk with potential investors to see if they will write a check. Check with your Chamber of Commerce, your local business college, entrepreneurial networking groups and other resources, such as the Service Corp of Retired Executives.

Are You Sure?

Starting a business really is a great adventure. Whether you fail or succeed, it will be an exciting experience. It will be particularly exciting if your old friends and business associates get to read about you in Inc. Magazine’s List of the 100 Most Rapidly Growing Small Companies. But keep in mind; you won’t get there without a lot of hard work and determination.

Click here to view the original article.

Starting

9 Things to Think About BEFORE You Start a Business

An Original Article from Allfinancialmatters.com

The economy stinks right now. Lots of people are losing their jobs. If you are one of them, should you start your own business? Only you can make that decision.

That said, today’s Houston Chronicle offered 9 tips for starting your own business (sorry, no link for these tips) that I would like to share with you (along with my thoughts on each one). All of these are awesome tips.

1. Identify your talents.

What are you good at? Don’t know? Ask your friends and family? Take some self-assessment tests.

2. Consult with colleagues.

BE CAREFUL with this one. If you have a good idea, you might be picky with who you share it with.

3. Research, research, and more research.

Before you jump off the deep end, make sure you know how deep it is.

4. Know your money.

Better have some up-to-date financial statements. A budget and net worth statement will help you get a good idea of where you are starting from.

5. Know yourself.

In my opinion, this goes with the first tip.

6. Keep records.

Make record-keeping a habit. You’ll need them for taxes and other financial decisions.

7. Talk about lifestyle changes.

Before you take the plunge, make sure everyone in your family is on the same page. Nobody likes nasty surprises. Everyone in the family needs to know in advance what the outcome could be and the sacrifices that may be required.

8. Find necessary resources.

Financing? Employees? Equipment? Suppliers? Where are you going to get the necessary resources?

9. Write down why you decided to become an entrepreneur before you start a business.

This one made me laugh when I read it but it is SO TRUE! It’s kind of like the investment policy statement that you should refer back to when times are tough. Writing down why you are doing what you are doing will help you get through the hard times and help you stay focused during the good times.

According to the Chronicle article, these tips were provided by Score.org.

Click here to view the original article.

Starting

Is Entrepreneurship For You?

An Original Article from Small Business Administration (SBA.gov)

Starting your own business can be an exciting and rewarding experience. It can offer numerous advantages such as being your own boss, setting your own schedule and making a living doing something you enjoy. But, becoming a successful entrepreneur requires thorough planning, creativity and hard work.

Consider whether you have the following characteristics and skills commonly associated with successful entrepreneurs:

  • Comfortable with taking risks: Being your own boss also means you’re the one making tough decisions. Entrepreneurship involves uncertainty. Do you avoid uncertainty in life at all costs? If yes, then entrepreneurship may not be the best fit for you. Do you enjoy the thrill of taking calculated risks? Then read on.
  • Independent: Entrepreneurs have to make a lot of decisions on their own. If you find you can trust your instincts — and you’re not afraid of rejection every now and then — you could be on your way to being an entrepreneur.
  • Persuasive: You may have the greatest idea in the world, but if you cannot persuade customers, employees and potential lenders or partners, you may find entrepreneurship to be challenging. If you enjoy public speaking, engage new people with ease and find you make compelling arguments grounded in facts, it’s likely you’re poised to make your idea succeed.
  • Able to negotiate: As a small business owner, you will need to negotiate everything from leases to contract terms to rates. Polished negotiation skills will help you save money and keep your business running smoothly.
  • Creative: Are you able to think of new ideas? Can you imagine new ways to solve problems? Entrepreneurs must be able to think creatively. If you have insights on how to take advantage of new opportunities, entrepreneurship may be a good fit. 
  • Supported by others: Before you start a business, it’s important to have a strong support system in place. You’ll be forced to make many important decisions, especially in the first months of opening your business. If you do not have a support network of people to help you, consider finding a business mentor. A business mentor is someone who is experienced, successful and willing to provide advice and guidance. Read the Steps to Finding a Mentor article for help on finding and working with a mentor.

Still think you have what it takes to be an entrepreneur and start a new business? Great! Now ask yourself these 20 questions to help ensure you’ve thought about the right financial and business details.

Click here to view the original article.