How to Start a Business With Little or No Money

September 12, 2011

September 12, 2011 –

You may have a good idea for a business — but not the cash to back it up. How can you get your new business off the ground?

Contrary to popular belief, you don’t need a huge outlay of cash — or any cash at all — to launch a business.  Here’s how to bootstrap your way to entrepreneurship:

  1. Stay at home. Renting office space is expensive — and unnecessary — during the first few months of a new business. If your home is not conducive to concentration, create a movable office by working in coffee shops or other locations with free wi-fi. For professional meeting arrangements, pick a reasonably priced, but nice, restaurant for lunch. If you absolutely need an office, see if your town or city’s economic development office provides low-rent incubator space for new businesses.
  2. Go solo. Hiring employees is another expense you can avoid in the start up phase of your business. If you don’t have cash to hire experts, but desperately need a graphic artist, writer or web designer, see if there is a pool of students you can draw from a local college or university internship program. Or, learn to do it yourself until you are making enough money in your business to hire a professional.
  3. Get free advice. Tap into the resources of SCORE ( for a wealth of free insight from retired professionals. You can also surf the Internet for business advice through articles, blogs, groups and business networking communities such as LinkedIn.
  4. Learn financials. It is helpful to know how to read financial statements even if you plan on hiring a bookkeeper or accountant when your business takes off. Learn the basics of balance sheets and income statements. Take a QuickBooks class at your community college, or self educate through the web. For a primer on financial statements, visit the this Small Business Administration’s page.
  5. Go viral. Once you have a website, start a page on Facebook and sign up for Twitter. Let all your friends, neighbors and family know you have started a business (and include a link to your site); encourage them to forward the news on to their friends and business associates.
  6. Become your own PR person. Learn the basics of writing a press release and send out an announcement to your local newspaper and trade publication about your new business. Post helpful advice (just don’t blatantly self promote) on blogs or online networking groups about your area of expertise.
  7. Don’t quit your day job. While it’s hard work, you can launch a new business while still working at a full-time job since it’s a good idea to have a revenue source to keep a positive household cash flow. You will be doing a lot of research and laying groundwork your first few months anyway, so you might as well keep earning a paycheck. The second best option is to have several month’s salary tucked away to tide you over until you start earning money from your new business.

A shoestring budget does make launching a new endeavor more challenging. But remember these frugality lessons will pay off in creating a sustainable company once your business starts making money.



Laid Off? Start a Business

April 28, 2011

If you have been laid off, you have joined the ranks of millions of unemployed Americans directly affected by this recession. With so few jobs available, many people are launching their own small businesses despite the recession.

If you’re starting your own business, consider the following tips as you transition from unemployment to self-employment:

A home-based business, as compared to one requiring the leasing of a small office, will minimize both your initial capital outlay and your ongoing monthly expenses.

Consider freelancing within your field of expertise. An ideal first client, assuming you were downsized and left on positive terms, could be your former employer.

Determine if you qualify for a small business loan. Another source of start-up monies could be a percentage of your severance package.
If you are collecting unemployment and live in Delaware, Maine, New Jersey, New York, Oregon or Pennsylvania, you can qualify for the federal Self-Employment Assistance Program, which was designed to encourage dislocated unemployed workers to create their own jobs by starting small businesses.

Consult with sources such as Business Advisor and Counselor Inc., SCORE or the U.S. Small Business Administration to determine, for example, what type business structure (for example, an LLC or sole proprietorship) might be best.

Starting a small business requires that you comply with numerous state and federal regulations. You may need to register your business with county or state agencies.

Also, you may need to establish an employer identification number and deal with sales tax licensing, insurance, accounting and zoning permits, among others. Even a modest cash-intensive start-up will require some initial capital outlay.

If you work as an independent contractor, your clients will not deduct, for example, federal income taxes or social security payments. Being disciplined with setting aside money for Uncle Sam is critical in this case.

You’ll have the opportunity to name and market your business. Keep your business’s moniker simple and direct. If it’s catchy, that’s even better.

Creating a blog, which can be done for no charge, is a fine way to start branding your business. Later, after you have generated some income and see that the business offers some long-term possibilities, you can hire a company to create a website.

Stay positive. Remember that there are millions of others like you, folks who have lost their jobs through no fault of their own. Sometimes referred to as “rebounders,” these Americans can serve as both motivation and — to an extent — competition as you start your small business.
Unemployment does not need to create stress and uncertainty. In fact, a loss of work could actually open doors to opportunities such as a career change or your return to school to learn new workplace skills.

Most importantly, being laid off might be exactly what is needed to spur you to take on the challenge of something you’ve always considered: starting a small business.


Starting a Home-based Business—Is It Right for You?

April 1, 2011

April 1, 2011

Hundreds of thousands of individuals decide to start a home-based business each year. Many succeed. About 70 percent of all home based businesses are in operation after two years. Before entering this venture, entrepreneurs should consider several key questions:

* Can you operate the business alone with little help?

* Do you have contact with buyers or your services?

* Is the location such that distributors, sales staff, clients and others can reach it without difficulty?

* Is start-up and operations capital available for the first year?

* Can the business really be operated from the home?

* Do you have separate spaces for storage, records, isolation, parking, etc.?

* Can a business in the home compete with similar businesses?

As in most businesses, there are advantages and disadvantages to the home-based business. A business in the home permits flexibility of working hours, lower start-up costs and allows family affairs to continue during business hours. There are also disadvantages—zoning restrictions may prohibit business, the IRS may raise tax questions, it may be difficult to get materials and customers to the location and financing the business could be challenging.

The IRS specifies that a home-based business must have its own location away from the family living space that is devoted exclusively to the business. The business must be in regular operation, profits must exceed expenses in order to claim deductions, the business must be conducted almost exclusively in the home and the motive must be profit.

A major challenge in operating a home-based business is isolation from distributors, merchants, clients and interested parties. Modern communications help to alleviate the problem—a computer is a necessity. A fax machine and Internet access are almost certainly necessary for communications within the business community. In addition, separate telephone phone lines must be installed for telephone, fax and Internet access and the business phone needs some type of answering service.

In summary, the business must be run as a business not as an extension of the home. It is essential that the prospective business owner have a good business and financial plan, separate from the family finances, that clearly spells out the present and future of the business.

Be aware that many neighborhoods have deed restrictions forbidding the operation of a business. Some require extra off street parking, others forbid deliveries and signs, etc. It is wise to check with your Home Owners Association and with your local government for a complete survey of your city or county regulations.

It may be difficult to raise capital. The average home-based business requires about $10,000 in start-up costs. Although this may be much less than opening a business outside the home, both the start-up and operating funds should be in hand before beginning the business operation.

Help is available. The National Association of the Self-employed (NASE) can provide help and information, as well as your local SCORE office. Find SCORE on this Web site to meet face-to-face with a professional business counselor.

This article was written by J.H.U. Brown, a counselor with the Houston SCORE Chapter, and a former director with the National Institutes of Health and a health care administrator.


60-Second Guide to Financing Your Start-up Business

December 20, 2010

What’s standing between you and starting your own business? If it’s a lack of money, relax. There are a number of reasonable start-up capital options available to aspiring entrepreneurs. The key is planning. Your financing strategy must make sense to both you and your prospective lender.

In just 60-seconds, we’ll show you how to build a sound financial foundation for your start-up business.

0:60     Identify Your Needs
Estimate what you will need to launch and sustain your business—equipment and supplies, inventory, office or manufacturing space, franchise fee, etc. Then, consider what portion you can reasonably provide from your own resources (e.g., savings, contributions from family or friends). Be careful. You don’t want to over or underestimate your needs, nor do you want to endanger your family’s financial security and relationships.

0:48     Look at the Options
Commercial banks are the most visible lenders to small businesses, offering a range of conventional loans, as well as Small Business Administration (SBA) guaranteed loans. You can also look to venture capital firms, commercial finance companies, partnerships, etc. Be sure to learn as much as you can about the evaluation criteria and payback requirements for each.

0:36     Build Your Case
Most lenders will require a business plan, a resume detailing your education and practical business experience, a credit history with references and specific loan documents. Develop your business plan with sections describing the nature and type of your business, available resources and how they will be used to meet specific goals, timelines, financial objectives, analysis of your competition and how your business will fit in the marketplace.

0:25     Fill in the Blanks
Lenders may also request cash flow projections that illustrate both the viability of your start-up and your ability to repay the loan. Remember that the data plan needs to be realistic and supported by facts to validate your estimates and projections. Don’t cut corners on research.

0:13     Practice your Pitch
Every request for start-up financing will involve some sort of presentation.  Even if you’re comfortable in these situations, organize your thoughts and practice with people who will provide objective feedback. Fielding any and all types of questions ahead of time will build your confidence and prepare you for any issue that may arise.

0:03     Ask Questions…and More Questions
Talk to your potential lenders about their processes and loan expectations. Your local chapter of SCORE also has a wealth of resources and expert counselors to guide you through the steps of start-up financing.


5 Tips for Effective Business Planning

November 1, 2010

1. Clearly define your business idea and be able to succinctly articulate it. Know your mission.

2. Examine your motives. Make sure that you have a passion for owning a business and for this particular business.

3. Be willing to commit to the hours, discipline, continuous learning and the frustrations of owning your own business.

4. Conduct a competitive analysis in your market, including products, prices, promotions, advertising, distribution, quality, service, and be aware of the outside influences that affect your business.

5. Seek help from other small businesses, vendors, professionals, government agencies, employees, trade associations and trade shows. Be alert, ask questions, and visit your local SCORE office.

Article Here:

5 Tips For Avoiding Legal Problems

October 29, 2010
  • Arm yourself with basic knowledge of business law so that you’re alert to your company’s obligations and rights.
  • Practice prevention. Have your attorney review contracts and agreements before they’re signed.
  • Get your attorney’s opinions on documents you have drafted—such as employee policies—before you put them in place. You want to make sure they meet the requirements of the law.
  • Familiarize yourself with trademark and patent laws so that you don’t violate them. Learn how to apply for a trademark or copyright should you need to do so.
  • Understand the law as it pertains to your organizational structure. Your legal obligations as a C corporation, for example, will differ from those as a sole proprietor.

Article here:

Roberts Rules of Entrepreneurship

October 29, 2010

By Flori Roberts

You believe in yourself. You have ideas and dreams. Use these convictions to create a rewarding and fulfilling business life, where you are the boss. During the agonies and ecstasies of starting my own company, I learned these “rules of entrepreneurship” the hard way…on the job! Perhaps it can help those of you who are just beginning, to start on the right track and to avoid the road blocks along the way.

You probably need a break from the complexity of starting a business. Here is some fundamental business advice—simple, straight forward and easy to implement.

1. Find a need—be ahead of your time.
Find a niche where the Giants won’t bother to go.

2. Identify your market and learn all about it.
You have to know everything about your business at the start.

3. Prepare a business plan…yes you have to.
No bank will take you seriously without a plan for profits.

4. Have adequate financing to start and to stay.
Success does not happen overnight, so be sure you’re financially fit.

5. Pay for the best professional advice.
Lawyers, accountants, insurers do work on an as needed, fee basis.

6. Keep your overhead low and your standards high.
Work from home or at a low cost, convenient location.

7. Establish a clearly defined distribution network.
Whatever your product or service, how will you present and sell it?

8. Be creative—your new idea does count.
Depend on marketing strategies rather than costly advertising to grow.

9. Seek and hire the most qualified people.
From the first employee, look for someone who knows more than you.

10. Know your competition and work to win.
Be persistent, focused and flexible…anything can happen.

11. Learn from the success and failure of others.
Read, watch trends, and observe what is “hot” in your industry.

12. Use technology as a tool for building your business.
From computers to telecommunications to the Web-use them all.

13. Don’t be sensitive and don’t take it personally.
Be prepared for rejection, but never give up your dream.

14. Never underestimate the power of passion.
You will need to take risks and believe when no one else does.

Starting a business requires discipline and discipline requires rules. You may want to follow my “rules of entrepreneurship” or create your own set of rules. But you must clearly identify your goals and live by them. Use them as a road map to your success. Good luck!

Flori Roberts is creative advisor to The Roberts Group, a cosmetics sales and marketing company. Roberts co-founded Flori Roberts Cosmetics and Dermablend Corrective Cosmetics. As an entrepreneur, she launched and grew two businesses to multi-million dollar proportions.

Article here:

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