Archive for March, 2010

#Smallbizchat takes place on Twitter on Wednesdays 8-9pm Eastern.  We use tweetgrid.com to conduct the chat.

The target market for #smallbizchat is emerging entrepreneurs 25-54, who are less than five years in business.  We try to balance topics on the chat between challenges for start-ups and issues that would challenge a business with 20 or fewer employees. 

We have a fantastic don’t miss line up in April!

April 7 Jeff Pulver @jeffpulver Founder and organizer of the #140 Characters Conference will talk about How the State of NOW Has Changed Small Business.  Jeff Pulver is the Chairman and Founder of pulver.com, and one of the true pioneers of the VoIP industry.  Pulver is a globally renowned thought leader on new media, author and entrepreneur. His blog is well read within high-tech communities around the world. He is the publisher of The Pulver Report and and creator of the industry standard Voice on the Net (VON) events. Additionally Pulver is the founder of Vivox and is the co-founder of VoIP provider, Vonage.

April 14 Lora Kolodny @LoraKolodny New York Times Small Business Blogger on the You’re the Boss Column on the topic: How to Win a Business Plan Competition   Lora has been a working journalist in web and print media since 2002.  She currently writes You’re the Boss blog for the New York Times online business section, Ecosalon.com the women’s environmental news and lifestyles site, and RecessionWire.com.  Previously, she worked on staff as web editor and business reporter at The Hollywood Reporter, and at the Inc. magazine as the Inc. 500 project manager and a staff reporter.

April 21 We’ll celebrate the 1 Year Anniversary of #Smallbizchat with special guest Michael E.Gerber @michaelegerber International Best Selling Author, The E- Myth Revisited  Michael E. Gerber is the founder of E-Myth Worldwide, the coaching, training and education firm he created in 1977 to transform the development of small businesses worldwide. Now approaching its 32^nd year, Michael E. Gerber’s extraordinary work has achieved stunning results by transforming more than 65,000 businesses worldwide. Gerber is the author of 13 business books, including the mega-bestseller The E-Myth Revisited.

April 28 Wayne Hurlbert @WayneHurlbert will discuss SEO Basics for Your Small Business Website and Content   Wayne Hurlbert is an expert in business blogging, search engine optimization SEO, marketing, public relations and entrepreneurship. Launched his first blog in 2003, he is one of the most influential business bloggers today. Wayne’s influence is quiet and unassuming. Yet, he’s influential nonetheless. In fact, he’s been referred to as the “Yoda” of business blogging.  He brings to the table great wisdom and sound business advice about using strategic content to grow your business.

How to participate in #SmallBizChat: http://bit.ly/S797e

Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter.  Melinda also publishes a resource blog on small business best practices at www.succeedasyourownboss.com  Her first book, Become Your Own Boss in 12 Months was released by Adams Media in March 2010

Everyone has good ideas.  Some of them may even be million dollar ideas, but if you live from paycheck to paycheck or way beyond your means, you may never be able to quit your job and start a business.

As the Smallbizlady, often I get emails, facebook messages and DM’s on Twitter from people asking me to help them start a business.  My first three questions are usually something like this. 

• What is your business idea? 
• How much money do you have saved?
• How much money do you think it will take to launch this business? 

If question two brings on a case of stuttering, I start shaking my head.

You should have three pools of money before your start a business. 

• An emergency fund for the household
• 12-24 months of budget to run your household
• 12-18 months of money to launch and operate the business.

Now hear this, “Your ability to save has everything to do with your ability to start a business!” 

Money is not everything.  It’s just a tool, but it is certainly the beginning of a business plan.  Banks rarely, if ever, loan money to start-up businesses.  Banks will typically not deal with you for a loan or line of credit until you’re been in business 2-3 years and can show growth in the business with your financial statements and business tax returns. 

There are some franchising opportunities that will provide some working capital, but 30-50% of the money will still come from you. And by the way, you will need to have significant net worth and assets to collateralize the loan.  Think of it this way, no credit = no business.  When you are first starting out in business, you are your business’s credit.

So what do you do if you have a great idea and no money? There are other sources of funds to start your business. There’s the 3 F’s Family, Friends, Fools.  Your family loves you and hopefully believes in you enough to invest in your business.  If you are fortunate enough to have a family that can afford to invest in you– you are fortunate, but beware.  Your rich Aunt Sally may think she’s your boss and might call you up every 30 days to check on how her $50K is doing.  You may not want that kind of pressure in your new business. 

Then there are your friends. Nothing can kill a friendship faster than borrowing money that you can’t pay back.  I have a rule.  I do not loan money to friends, I give it to them.  I make sure that I do not give away any money that I can not afford to lose.  Would your friends do that for you?  If so, they could be an option. 

Every once in awhile, a hungry entrepreneur will come across a rich guy who’s an idealist about business, who falls in love your idea but doesn’t wish to run the business.  That is an angel investor— who will invest money in the company for an equity stake and lend his or her network to help you.  Do not get your hopes up about finding an angel investor in this economy.  It can happen, but let’s just say you are better off using your own funds that you save to start your business.  Family, friends or an angel investor can be fools for investing in a half-baked business idea.  Invest your time, to make sure you have a sound business plan before you take anyone’s money.  And do have a plan to show them—for when and how you think you’ll pay it back.

If you do have assets, you are in a different situation.  You can borrow against your 401K, you can take out a home equity loan, you can sell your home or rental property, you can cash in a Roth IRA.  The money must come from somewhere—its best when it comes from your own coffers.

It’s essential that you start your business from a position of financial security. Otherwise, you’re finished before you get started.

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Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat on Twitter.  #SmallBizChat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business.  Melinda also publishes a resource blog on small business best practices at www.succeedasyourownboss.com  Her first book, Become Your Own Boss in 12 Months was released by Adams Media in March 2010.