bizthreads.net: Business Information for Entrepreneurs by an Entrepreneur

Solving a Common Home Business Problem

Small business owners know that when you work for yourself you usually work harder than those who work for someone else. This point is often lost on the friends of such business owners - they sometimes think that working at home means you sit in your bathrobe and play video games all day.

Many work-at-home business owners complain that their friends don’t understand why they can’t drop everything and run out for a long lunch several times a week. Others say they are asked to pick up kids from school or wait for the cable guy.

While many small business owners do have a flexible schedule, they also work more hours on average than those who work for someone else.

Here are some tips for managing unreasonable requests on your time.

Work Phone vs. Home Phone

Have a work phone that is just for work, and don’t give the number to your friends. During your workday, do not answer your home phone.

Set Hours

Give yourself set hours, just like you had when you worked for someone else. When someone asks you for a favor, simply say, “I can’t. That is during my working hours.”

Eventually, they will stop asking.

Just Say No

For some who have never run a business, it’s difficult for them to understand the demands such a venture takes on you. The bottom line is that your small business is more important than your friend’s cable - and they would find a way for their kids to get picked up from school if you weren’t readily available.

The simple answer is that you’ve got to learn to say “no” to requests that take you away from the task at hand.

If someone has no consideration for your needs, then it’s safe to say you probably don’t owe them any favors. Your real friends will understand and want you to succeed.

Finding That Elusive Work-Life Balance

Small business owners who find success do so because they are willing to work hard and do whatever it takes to make it. This type of work ethic is wonderful, but it’s also important to find balance in your life.

Working 18-hour days is sometimes just part of the deal when you’re struggling to get a new business off the ground.

But to keep up that kind of pace continually over any length of time is not a good idea as relationships with family and friends – as well as your health – can suffer.

Make a Schedule

Instead, try setting working hours and stick to them whenever possible. Of course, as a business owner there will be times – a lot of times in fact – when you’ll need to work outside of those set hours, but at least you’ll have some sort of guidelines.

Even on the days when you know you’ll be pulling an all-nighter, you still have to eat. Why not just step away from the grind and go home for dinner with the family or meet them at a restaurant for a quick bite.

Doing that will not only remind your family that you still love spending time with them, but it will also help you step away from the task at hand and return with a fresh set of eyes.

Take a Break

Not taking vacation is another mistake that many small business owners make. Naturally it is important to be 100% dedicated during the start-up process, but you can still try to get away, even if only for a weekend.

With the technology that is available today, you can keep in touch with the office from most any location in the world. If your type of business demands that you be present, then consider using the holidays as a time to close up shop and head out of town for a few days with your loved ones.

Be dedicated to the success of your small business - but work hard to be sure that you’re not consumed by it.

Need Creative Help? Try These Online Resources

When you start a small business, you need to advertise, brand and create business materials. Many people do this on their own, but often it is best to hire creative professionals to assist with these tasks.

Graphic artists, writers, software professionals and technical experts can be of great use to you in the beginning phases of operation. However, you may not want to hire them on as a permanent employee.

There are many places where you can find creative professionals to help you temporarily.

Web Forums

Forums are a great resource for finding creative professionals to help you with your small business.

Often forums have a section in which you can buy, sell or trade services with creative professionals.

These forums are often crawling with individuals who freelance and are looking for work.

Hiring Sites

There are a number of sites online like Guru.com that allow businesses to connect with creative professionals looking for work.

These sites allow you to place want ads and browse professional profiles and portfolios. They also help facilitate a smooth transaction with easy-to-use user tools and feedback.

Free Classifieds

There are a number of websites online that allow you to place free classified ads on their site. This allows you to place a help wanted ad when you are looking for creative professionals.

Just keep in mind you may get flooded with responses using this method - so it is wise to give yourself adequate time to go through them all.

Hiring a creative professional to help you with your small business can be tricky. It is important that you see samples of their work before hiring them and see feedback or review references.

The most important thing is that you protect yourself and your small business by using a careful hiring process.

How to Succeed as a Small Business Owner

Owning your own business is much different from working for someone else in a 9 to 5.

Indeed, small business owners are a rare breed – and having the following traits will definitely help you to succeed.

Take Calculated Risks

As a small business owner, you will have to make decisions. No one is going to tell you what decisions to make and when.

Some decisions will undoubtedly work out better than others – that’s the nature of the beast. And sometimes, you’ll need to take a calculated risk in order to progress.

Although taking risks can be stressful, it can also be satisfying and enjoyable – especially if you trust your own judgement. Being a good problem solver can give you lots of self-confidence, something you need a lot of as an entrepreneur.

Have Enthusiasm

To run your own business, you also need lots of enthusiasm. You can’t be half-hearted about your new venture; if you are, then you will definitely have problems overcoming difficulties – financial or otherwise - when they arise.

When you’re enthusiastic about what you do, you inspire others – employees, vendors and customers – and it will probably be reflected in your bottom line.

Most people would rather do business with someone who is enthusiastic about their work and enjoys it. This goes double for clients.

Display Ambition

Most small business owners’ best asset is their ambition. This is a drive to achieve, financially and otherwise.

Having ambition isn’t a negative thing – it’s a good one. Ambition helps you to overcome obstacles and setbacks, which will happen when you have your own business.

Being a small business owner isn’t for everyone. But if you have what it takes, you can definitely be successful at it.

Do You Have What It Takes To Be An Entrepreneur?

Being an entrepreneur takes more than just having a good business idea – you also need to have the necessary skills to drive your company to succeed.

Technical Skills

Technical skills are those that you need to make or deliver your company’s products and services.

If your company is in a highly technical field, you’ll need to have some experience and perhaps a professional designation or certification. Examples of technical fields are accounting and engineering

For other businesses, such as ecommerce or import-export, it may not be necessary for you to have lots of experience.

The bottom line here is that whatever type of business you have, you’ll need the skills to deliver good quality products and services. That is, if you expect people to pay you for them.

Managing Finances

If you are going to run your own business, you’ll need to know how to manage your finances.

Being your own boss means having skills such as budgeting and inventory control. If you don’t feel that your skills are strong enough, then you can hire a professional to take care of the financials for you.

However, you may want to at least take a basic course, because you need to know the basics of what is going on in your own business.

Marketing Expertise

Marketing is one of the most important skills that you can have as an entrepreneur. You can have the greatest products and services in the world, but that won’t matter much if you can’t sell them successfully.

Are You A Good Manager?

Whether or not you’ll have a staff that you need to manage, having good management skills is paramount when you have your own business.

Not only will you need to manage your time, but you’ll also need to learn how to manage your vendors and suppliers.

Being an entrepreneur is tougher than it looks – making sure you have the right skills is the key to success.

Sole Proprietorships and Small Business: What You Need To Know

If you are doing business in your own name and are in business by yourself, then you have a sole proprietorship.

As a sole proprietor, you have unlimited personal liability for the debts and obligations of the business. You are allowed to use debt to finance your operations, but you are also personally liable for repaying the money.

Advantages

A sole proprietorship is easy to set up and operate. There are no forms to file with the state, and therefore, no organizational expenses.

However, if you are using a fictitious name for the business, a notice should be filed with the county or state in which you are doing business. There are no initial or continuing annual reports to file with the state, and there are no separate income tax forms to file—you simply file a Schedule C with your federal Form 1040 Individual Income Tax Return and applicable state income tax returns.

You should keep accurate records of your business income and expenses and make sure to keep those business items separate from your personal expenses.

Disadvantages

A sole proprietor is personally liable for all debts and obligations of the business. There is no limited liability as there is in a corporation or an LLC.

If things go badly, you will be required to pay off creditors. In addition, there is no continuation of the business if you become disabled or die—the business simply goes away.

As a sole proprietor, you can deduct all expenses reasonably attributed to the business from business revenues and all profits are directly taxable to the sole proprietor at individual income tax rates.

If you are planning on starting your business as a sole proprietor, consult your tax attorney to make sure this is a wise choice.

What is a Limited Partnership, Anyway?

A limited partnership has characteristics similar to both a corporation and a partnership.

The general partners have control and unlimited personal liability, but the limited partners, who put up money have their liability limited to the amount of their capital contribution to the partnership (like corporate stock).

A limited partnership must have at least one general partner and one or more limited partners.

Advantages

A limited partnership usually only needs to file a one-page document, called a Certificate of Limited Partnership, with the state upon formation and pay a fee. In a handful of states, however, the limited partnership is also required to file an initial report and continuing annual reports with the state to update the contact information for the partnership, resident agent, general partners, and in some cases, the limited partners.

Capital can be contributed by limited partners who have no control over the business and no liability for its debts or obligations.

Just like general partnerships, limited partnerships have higher maintenance costs than a sole proprietorship because they must track assets and liabilities as well as income and expenses.

Disadvantages

Like a general partnership, your attorney should prepare a limited partnership agreement to define the ownership and sharing arrangements of the partners.

In a limited partnership, the general partner is personally liable for partnership debts and for the business-related acts of other general partners.

Limiting Liability: To limit the general partner’s liability, use a corporation or LLC as the general partner.

Limited partners give up most of their control over the business in exchange for limited liability. When limited partners take an active role in the running of the business, they jeopardize their protection from liability and can be held liable as a general partner.

In recent years, the limited liability company has overtaken the limited partnership as the tax-advantaged vehicle of choice, because everyone involved has limited liability and investors can participate in the decisions of the company.

General and Limited Partnerships – Know the Differences

Typically, partnerships can be placed into two categories—general partnerships and limited partnerships.

In a partnership, all profits and losses are passed through to the partners according to their percentage of ownership (in the absence of a special allocation), even if the profits remain in the business to fund continuing operation or expansion.

Beyond this basic principle, partnership tax law is a complex subject to understand and is fraught with traps for the unwary.

Unless limited by the partnership agreement, each partner has full managerial control over the partnership. In addition, each partner has unlimited personal liability for the debts and obligations of the partnership.

To form a general partnership, prepare a written partnership agreement to set forth the ownership and responsibilities of the partners.

Unless otherwise stated, any new partners will have the same rights, responsibilities, and liabilities of the original partners.

Advantages

General partnerships have higher maintenance costs than a sole proprietorship because they must track assets and liabilities as well as income and expenses. However, they have lower maintenance costs than a corporation because they are not required to follow the same formalities as corporations.

In addition, the business can continue after the disability or death of a partner if there are more than two partners.

Disadvantages

A general partnership is potentially a dangerous form of business entity because each partner is jointly and severally liable (meaning together and separately liable) for the debts of the partnership and the acts of other partners within the scope of the business.

It is often hard to get rid of a disgruntled partner.

A carefully drafted partnership agreement prepared by an attorney can help you avoid the disadvantages inherent in partnerships.

Implement Your Business Idea in 4 Simple Steps

For your business idea to be successful, you will need to take some concrete steps to take it from the drawing board to the market.

Here are 4 simple steps to implement your business idea.

1. Conduct Thorough Market Research
   
   Even though your idea might be technically perfect, you will still need to evaluate if there is a need for your idea.
   
   Consult your friends, relatives, and any mentor to find out their reaction to your idea. Also, compile a sample list of your target market and get their views.
   
   Find out if there are any competitors that are already in the market and their mode of business.
2. Calculate the Time Factor
   
   Some ideas have a limited shelf life before they become obsolete or are overtaken by newer ideas.
   
   Calculate the time required for you to introduce your idea in the market and the approximate period that your product or service will take to flourish.
   
   Also, calculate the time required for you to come up with any new ideas to keep the show going.
3. Calculate the Cost Factor
   
   You will also need to arrange for financing to convert your dream idea into reality. If you do not have ready funds, then you will also need to explore the option of taking out a loan.
   
   Calculating the interest payable on that loan is crucial to your business’ long-term viability. A proper technical and financial plan is also necessary if you do not want to run out of funds after a couple of months.
4. Determine Your Skills
   
   You will need to determine your technical and selling skills in order to successfully sell your idea.
   
   Your products or services should also have something more to offer than the competition does.
   

   Bringing a new product or service to market isn’t easy. By following the 4 steps above, you can give your new small business a fighting chance.

How to Negotiate a Business Deal over a Business Meal

Negotiating a business deal over a business meal is not only a good way to save precious time, but it can also create a personal bond with your client.

In addition to your selling skills, it is essential to polish up your social skills too, as illustrated by the following tips.

Plan in Detail

If you can obtain details of the likes and dislikes of your client, then book your table in a restaurant that you know your client would love.

Ensure that your table is well away from the hustle-and-bustle of the kitchen or aisle so that you can talk and eat in privacy.

The restaurant should have a peaceful atmosphere and comfortable seating arrangements along with excellent food.

Re-Confirm Your Booking

You should re-confirm your booking on the day of your appointment with the restaurant and your client.

You should also reach the location before your client to make sure that everything is in order. You can also confirm with the server that you will be paying the bill.

Do Not Jump Into Negotiations

Engage in some small talk to make your client feel relaxed before you get down to business.

Depending on the nature of your business and the expected length of your negotiations, you can either start your business discussion during the main course or wait until you order dessert.

Stay Away From Alcohol

Even if your client drinks alcohol, you should stay away from it, or consume a minimum quantity in order to concentrate at the task on hand.

Negotiating business deals over business meals is a very old tradition. If planned and handled correctly, then you can ensure that you have a client for life.