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Archive for the ‘Small Business’ Category

Here are 8 tips from Melinda F. Emerson, SmallBizLady, that small business owners can implement now to save money.

1. Track Expenses Using a Budget.   Budgets are about planning and tracking spending – you need financial information to make business decisions.  Track business expenses by month or by quarter.  Ideally, you should have a twelve month budget, but at the very least, make a three-month budget.

2. Eliminate Unnecessary Expenses. Club memberships or services with monthly fees can add up over a twelve month period.  Evaluate whether you actually use the private dining room, the postage meter, the online credit alert service, or your merchant services account.  Sometimes a private memberships club will allow you to park your membership for a reduced fee.

3. Relocate to Cheaper Office Space.  Overhead is one of the largest monthly fixed expenses for a small business.  If you have a long term lease, start first with trying to renegotiate with your existing landlord.  If that doesn’t work, look for other space or consider retreating back into your home.  Contact the county where you are located to seek out HUB Zone space or see if they offer any tax abatement for locating in a certain area.

4. Lower Interest Rates on Loan Payments.  Work with your bank to arrange for automatic debit payments.  Your bank will lower your interest rate if you agree to automatic debits.

5. Investigate if You Are Eligible For a Reduced Fees For Shipping. I recently learned that my membership in the National Association of Women Business Owners (NAWBO) made me eligible for discounts for shipping and with rental car companies.  Check member benefits with your local chamber of commerce and any other small business organization where you’re a member.

6. Lease or Buy Used Equipment. Unfortunately, there are many businesses large and small going out of business these days. There are plenty of opportunities to pick up gently used office furniture and equipment.  You might also be able to pick additional office supplies.  Try second hand furniture stores, too.

7. Consider Bartering Services. You never know who might need your services.  Start with business contacts, but do not overlook your personal day care provider, law professional, hair stylist or mechanic.  You can also join barter network organizations.  The key to bartering successfully is good verbal or written communication between the two parties. Whatever you agree to, be sure to communicate it in writing.

8. Comparison Shop for Everything. Just as large companies require three bids to make a purchase, so should your business.  Search the internet for deals, but beware of shipping fees.  Sometimes the cost with shipping is not a better deal.  Use the internet price to haggle with your local vendor for a better price for services, such as free delivery and installation.

Melinda F. Emerson, SmallBizLady, is one of America’s leading small business experts, whose mission is to end small business failure.  Forbes Magazine recently named her one of the Top 20 women for entrepreneurs to follow on Twitter where she hosts #SmallBizChat, Wednesdays 8-9pm ET for emerging entrepreneurs. She publishes a resource blog www.succeedasyourownboss.com and is also the author of the national bestseller Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works. (Adams Media)

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African-Americans are starting new businesses in record numbers.

If you’re planning to launch a company in 2011, here are seven do’s and don’ts to help ensure your entrepreneurial success.

1. Do plan to start with your own money, not someone else’s
“Unless you win a business plan contest or inventors’ competition, for the most part there’s no such thing as finding a grant to start a business,” says Melinda Emerson, author of “Become Your Own Boss in 12 Months: A Month-by-Month Guide to a Business That Works.”

“The money to start your business will come from your right or left pocket. In fact, there are three pools of money you should have before your start a business: an emergency savings account, enough budget to go from 12 to 24 months without a paycheck, and the first year of operating capital to run your business.”

Thinking of buying a franchise? “There are some franchises that provide funding,” Emerson notes. “But 20 percent to 30 percent of the loan must come from your resources.”

2. 
Do request major funding long before you need it
Maybe you recently saw “The Social Network,” the movie about the launch of Facebook, and thought that you could score big dollars fast from venture capitalists? Think again.

Realize that getting money from “VCs” and “angel” investors can be a longer-than-expected process, sometimes more like 6 to 12 months to secure.

Plus, if you’re seeking money from more traditional sources, like a bank, “You need to be in business for two to three years to qualify for even a line of credit,” Emerson says.

3. Do seek “trade credit” from vendors and suppliers
Too many entrepreneurs dream of going to a bank and getting a business loan or line of credit for their enterprise. But maybe you don’t need a traditional bank loan at all to launch or grow your business. If you can get your vendors and suppliers to agree to provide you with trade credit — i.e. the ability to pay for goods and services over time — you can creatively and more frugally run your operations.

4. Do get “buy in” from your spouse/partner
Many new (and veteran) entrepreneurs will tell you one of the biggest dream killers they’ve encountered is an un-supportive spouse. Make sure your partner is on board with your entrepreneurial ambitions. If not, you’ll face a host of financial arguments and money-battles that will be counter-productive to you building a business.

5. Don’t feel compelled to buy everything
Ask yourself: Do I really need to purchase equipment, furniture, computers, etc? You may be able to get by, temporarily, by bartering, or even by renting and leasing equipment. And that’s OK!

6. Don’t let your personal credit rating lapse
Amid the current environment, your credit standing is more important than ever. Guard it jealously. Pay all bills on time. Only take out loans/credit when you truly need it. The higher your FICO credit scores, the better loan rates and terms you’ll get when it is time to do business with a bank — or even just getting a corporate credit card. To check your credit report at no charge, go to AnnualCreditReport.com. If you haven’t seen your credit scores lately, read this article on how to get your FICO credit score free.

7. Don’t “bet the farm”
Smart entrepreneurs don’t “roll the dice” and risk everything. They take risks — but they’re calculated risks. Don’t gamble everything: 100 percent of your savings, your credit, putting your home up, etc. in the hopes that you’ll create a successful business. Be willing to invest in your business of course, but not foolishly, and not at the expense of everything else.

Making the leap from employee to entrepreneur is a challenging feat. But you can make your transition a lot less financially stressful and a lot more realistic by following these tips and preparing yourself for economic success.

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By Lynnette Khalfani-Cox, The Money Coach

If are  living paycheck to paycheck and need some extra cash, there are lots of ways to raise money. Here are a few of them.

Sell Stuff You Don’t Want, Need or Use

Are there pants, sweaters, dresses or suits in your closet that you haven’t worn in a month of Sundays? That clothing would be far more valuable in the hands of someone less fortunate than you. Here’s a case where you can do well by doing good. Donate unused or unwanted clothing, electronics and other household goods to charity – and get a tax deduction for your generosity. Alternatively, you could have a garage sale and instantly pocket the cash, then use the money toward vanquishing your credit card debt. In addition to clothes, you can sell unwanted or unused toys, furniture, appliances, and other household items.

Turn a Hobby Into Cash

Whether you turn a hobby into a cash-making business, sell new or used products online, or stuff envelopes for another business, the key is for it to be a no-cost or low-cost venture that can be operated exclusively from the privacy of your own home.  Why these characteristics?  For starters, you don’t have the money to buy tons of products. You also don’t want to have to hire anybody or lease space. You want to keep all the money you earn, right?

Adjust Your Withholdings at Work

If you’re getting a big income tax refund from the government each year, you are squandering a precious financial opportunity. Currently, the IRS reports that the typical tax refund check tops $2,500. For those of you who routinely receive tax refunds, instead of giving the government an interest-free loan, get your money now. Go to your HR office at work and adjust your W-4 withholdings so that your employer takes less money out of your paycheck. This way, you’ll have more money coming in every pay period, and you can use that extra money to knock down your debts. Check out IRS publications 505 and 919 at www.irs.gov to learn how to properly adjust your withholdings so that you don’t take out too much money and end up owing taxes.

Get a Second Job

I realize that most people already work really hard, and might even be covering for recently laid-off co-workers, but if you can fathom the idea, consider getting a second job or part-time work, even if just for three months.  This may seem like a burden, but trust me, this option can work wonders. Having additional income can not only provide you with money to eliminate credit card debt, it can also help you build an emergency savings fund – hopefully before you’ll ever actually need to tap it.

Squeeze money from your residence

Whether you rent or own, getting a roommate or housemate is another way to generate income. If you can tolerate having an extra person around, you’ll likely find takers willing to lease out a spare bedroom or space in your attic or basement, especially given the high rate of people being put out of their homes these days due to foreclosure or inability to get a mortgage for their on place.  Taking in a roommate will provide you with extra cash to pay toward your debts. However, before forging ahead if you are a renter, be sure you’re not violating any clauses in your rental contract by letting someone else live with you.

Leverage The Internet To Spend Less

Many of us routinely may too much for goods and services that we could get for far less money, if only we’d take the time to comparison shop. Thankfully, with the power of the Internet, you can easily cut your spending and apply the savings to your debt by comparison shopping online. Here’s what to do: Come up with a list of at least five things you can do to curb your spending. Also think about major categories of spending where you’d like to be able reduce your costs. Then visit the financial website http://www.lowermybills.com, which helps you comparison shop to save money in 18 categories of household bills, ranging from home equity loans to auto insurance to long-distance telephone service. They do the hunting for you to make recommendations about where you could be saving money. But don’t rely exclusively on leveraging the Internet. Consider this area a unique challenge. Get creative about your finances. Look at ways you can save money by shopping around or by modifying some of your spending habits, whether it’s checking out books from the library instead of buying them at a bookstore, or using a movie service like Netflix instead of going to the movies.

Whatever cost savings you achieve – including doing things like clipping coupons or canceling unnecessary magazine subscriptions – make sure you apply that “extra” money to your debts, save it, or spend it in a positive way, as opposed to just blowing the money.

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The best resource to find grants, loans and financing for entrepreneurs is the federal government’s website http://www.business.gov. There, you will discover a wealth of resources for all kinds of small business owners, including:

• those just starting a business
• current entrepreneurs trying to grow their operations
• women
• minorities
• people with disabilities
• those in rural communities
• home-based business owners
• members of the military
• individuals seeking government contracts, and more

For Minority-Owned Businesses
For example, here is a link to the section of the website that offers help for minorities who are launching a business, or trying to expand one: http://www.business.gov/start/minority-owned.

For Women-Owned Businesses
Here is a link to the area within the site that lists dozens of programs specifically for women: http://www.business.gov/start/woman-owned/.

The U.S. Small Business Administration also has a list of Women’s Business Centers that can be a great resource. It’s a network of entrepreneurship centers found all around the country, where people can get in-person help and educational support to grow a business. Click here to find a local Women’s Business Center.

For Non-Profit Entrepreneurs
Additionally, here’s a link to information for non-profit entrepreneurs: http://www.business.gov/start/non-profits/.

In addition to traditional grants and loans, those starting a non-profit organization are eligible for benefits such as tax exemptions, government surplus, and discounted products and services from the government. Be aware that the majority of financing programs for entrepreneurs from the U.S. government involve loans. But there are many grants too. You have to do your homework and hunt around for what’s available.

Do Your Homework
Start by using the Loans and Grants Search Tool on the business.gov website. Find the search tool by clicking this link.  It will track down specific programs you may qualify for, based on your industry, your personal background, where you live, etc. Don’t forget to inquire about specific government programs that may be available in your own state, county and city as well. You can usually find these programs through your state’s Office of Minority and Women Business Assistance.

Does The SBA Offer Grants? Mostly No, But Sometimes Yes
According to the SBA’s website:

the “U.S. Small Business Administration does not offer grants to start or expand small businesses, though it does offer a wide variety of loan programs. While the SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments.”

So does the SBA offer grants to small businesses or not? The short answer is: Not really, since grants only go to a limited group of entrepreneurs. To see if you qualify, visit this SBA link for more information on specific federal grant programs from a multitude of government agencies: http://www.sba.gov/services/financialassistance/grants/index.html.

If you really want to be an entrepreneur, and you truly need financing, you must be willing to take the time to explore any and all legal options available for raising capital. In addition to the business.gov and sba.gov websites, try exploring grant programs at: http://www.grants.gov and the U.S. Department of Commerce’s Minority Business Development Agency (http://www.mbda.gov), which offers resources on everything from financing opportunities to landing government contracts.

Good luck with your business!

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Q: I am interested in trying to own my own business but don’t want to use loans. What types of grants are out there and how do I get my hands on them?

A: We asked small business expert Melinda Emerson, author of Become Your Own Boss in 12 Months to answer this question:

“It’s a good thing you don’t want to use loans to get your business started because banks do not lend money typically to start-up businesses. You need to be in business for two to three years to qualify for even a line of credit. Unless you win a business plan contest or inventors competition for the most part there’s no such thing as finding a grant to start a business.

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