Tag Archives: start a business
How Small Businesses Can Make Money

How Small Businesses Can Make Money

by on July 15, 2010 in Before You Start, Q & A Interview, SmallBizChat

Every week as @SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat.  The show takes place every Wed on Twitter from 8-9pm ET.  This is excerpted from my recent interview with Ramit Sethi @Ramit. New York Times bestselling author of I Will Teach You To Be Rich. He co-founded PBwiki and graduated from Stanford.  His blog, I Will Teach You To Be Rich is a community focused on personal finance and entrepreneurship and hosts over 250,000 readers per month. http://www.iwillteachyoutoberich.com/

Smallbizlady:  60% of all small businesses are not profitable by any measure. Why are so many people in business not making money?

Ramit Sethi: There are a lot of possible reasons. A big one is that most people don’t do any sort of market testing to verify that their business idea is viable. They’ll throw themselves at the first brilliant idea that comes along when a simple Google search would have shown that there were 10 other people that had the same idea beforehand, and that they all failed.

Another is that some businesses and industries simply have higher costs and lower margins than others. If you start a coffee shop, for example, you’ll be paying a lot of money before you can earn it all back, and you might go bankrupt before then. But if you start a freelance business, you can be profitable from day one because your business expenses can literally be zero.

There’s nothing wrong with starting a high-cost business, as long as you’re aware of what those costs are and you’re okay with the risks.

Smallbizlady:  What are three things every business owner should do daily to make sure their business is making a profit?

Ramit Sethi: Market, sell, and do less of everything else. Getting paying customers is everything. As business owners, we all have a tendency to waste too much time Twittering, Facebooking and going to random one-off networking events because they feel good, not because they make us money.

Smallbizlady:  Why is your program called Earn Your First $1,000 on the side?

Ramit Sethi: $1,000, because it’s a nice, round and meaningful goal for most people.  On the side, because most people have jobs and can’t just drop everything to start a business that may or may not work out.

Like you mentioned, most businesses don’t make any profit. We want to change that by helping you make your first $1,000 as quickly as possible, and you don’t even need to quit your job to do it.

Smallbizlady:  What would you say to someone who says they don’t even have a business idea yet?

Ramit Sethi: If you don’t have a business idea, that’s fine. But there’s a big difference between waiting around for a business idea to miraculously come along, and actively seeking out ideas.

What have you done today to find a business idea? Anybody can come up a few new ideas every day. Then it’s a matter of learning about those fields to see they’re right for you, and maybe trying one or two out until you get some traction.

And finally, the “perfect idea” is a myth – it doesn’t exist. People will wait around for the perfect idea because they’re afraid to take action, when in reality any of their “just average” ideas could have earned them thousands of dollars.

Smallbizlady:  Once you have a business idea, how do you know if it’s a good one?

Ramit Sethi: Assuming you’re starting a service-based business like freelancing or consulting, you’ll want to first decide who it is you’re going after, whether it’s moms, internet startups or accountants in San Diego. Then find a few potential customers and contact a few and talk to them without trying to sell them anything. Just talk to them – figure out what they do, the problems they face, and how they feel about your service – as in would they pay for it?

Smallbizlady:  What are the most common mistakes people make starting out in business?

Ramit Sethi: Trying to do everything else except getting clients. Most people have an imaginary checklist of things they have to do before they can officially be open for business: get business cards, start a website, start a Twitter account. Oh wait, I have to start a blog too. Get real – you’re just procrastinating. Start calling, emailing and getting in front of clients as soon as possible. It’s scary, but you have to do it.

Smallbizlady:  So how do you go about finding your first few clients?

Ramit Sethi: Come up with a short list of people you want to work for. That’s not hard – look at popular blogs, Google them, read Inc magazine.

Write a short, descriptive and personalized email introducing yourself, your service and most importantly, what you can do for them. Busy people don’t care about you, they care about “what’s in it for me?”

If you already know what it is your market desperately wants and needs (which you should have figured out when you were doing your market research) you should at least get a few interested responses. Jump on the phone with them or meet for coffee and see how you can help them with what they need.

Smallbizlady: Lots of freelancers say it’s hard to find clients willing to pay them enough. How much should you charge as a new freelancer?

Ramit Sethi: There’s no wrong answer. You should charge what you think you’re worth and not worry so much about scaring people away. When you’re new, it’s okay to charge a little less, because your goal should be to increase your rates as fast as you can with each new client you get.

Smallbizlady: What if the client objects to your rates, saying “I can get someone else for half the price?”

Ramit Sethi: Just say, “That’s okay. In my experience there’s always someone willing to work for less, so I’m not surprised. I’ve already laid out why I think this is a great investment for you and I believe my rates are reasonable. It’s fine if you’d like to explore other options, but unfortunately I don’t lower my rates.”

The thing is, the client will probably want you even more when he thinks he can’t get you. Having a high cost and standing by it will give you high perceived value.

Smallbizlady: So what are the best ways to market your business and get the word out there after you’ve gotten the ball rolling?

Ramit Sethi: Referrals, referrals, referrals. They are by far the most powerful marketing tool at your disposal. The thing is most people have a passive, inactive approach to getting referrals. You should make getting referrals a key part of your marketing strategy by asking for them, expecting them and incentivizing them in a way that gets your clients actively participating.

Smallbizlady: So how does someone go from working on the side to taking their business full-time?

Ramit Sethi: Minimize as much risk as possible before doing so. I wouldn’t quit a full-time job without having at least 6 months of minimum living expenses on hand, and ideally 12.

Second, make the transition as gradual as possible and it won’t be so hard. Instead of quitting outright, maybe work with your boss to get a more flexible working schedule so you can spend more hours on the business. When you do quit your job, cash flow might be tight, so it wouldn’t be a bad idea to pick up a part-time job to cover your living expenses as you grow your business.

Finally, the first person I’d get in touch with is an accountant who specializes in small business. At least talk to one and see if there’s anything else you’re missing before you make the leap.

Smallbizlady: Any other advice you’d give to someone thinking about starting a business?

Ramit Sethi: Don’t make excuses. I’ve heard them all: I’m too young, I’m too old, it’s the economy, I don’t have a big network, etc. The truth is anybody, even someone with no skills or connections, can learn something valuable in three months and earn plenty of money.  Complaining might feel good for a while, but it won’t change your life. So take action today.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter.

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com

Melinda F. Emerson, known to many as @SmallBizLady is one of America’s leading small business experts. As a seasoned entrepreneur, professional speaker, and small business coach, she develops audio, video and written content to fulfill her mission to end small business failure.  As CEO of MFE Consulting LLC, Melinda educates entrepreneurs and Fortune 500 companies on subjects including small business start-up, business development and social media marketing. She has been featured on NBC Nightly News, the Tavis Smiley Radio Show, in the Wall Street Journal and Black Enterprise Magazine. Melinda 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 2010)

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8 Tips to Become Your Own Boss

by on June 28, 2010 in Become Your Own Boss Tips, Before You Start, How to Start, Mompreneurs, My Recommendations, Pink Slip Entrepreneurs, Solopreneurs, Your Small Business

It’s more than a notion to launch your own business. Nowadays it’s common for folks to leave a job via layoff or early retirement and jump right into starting a small business.  Some become small business owners because they always wanted to do it…and others are hanging their shingle out of necessity.  Regardless of how you found your path to entrepreneurship, you need to keep these 8 tips in mind as you Become Your Own Boss.

1. Figure Out What You Want Out Of Life. It’s just like when you are driving a car – places are so much easier reach when you know the route. Take the time to map out a plan for a successful life. Get clear about what will make you happy. In order to have a successful business, you need a life plan before you ever write a business plan.

2. Get Your Money Straight. Many businesses do not get off the ground because of too many financial obligations in a business owner’s personal life. You need to be prepared financially to go without a paycheck for a year or two in order to make your business dream a reality. Then you’re going to need money to run your new business. You must consider whether you can afford to become an entrepreneur.

3. Evaluate Your Business Concept. Many people who are struck by the entrepreneurial bug have more than one business idea. Make sure that you don’t just follow the idea you love the most. Make sure there’s a real market for your product or service. There’s a big difference between need, want and willing to pay for. I’m all for finding your passion and making it a business, just make sure your passion has a profit center.

4. Get Yourself a Kitchen Cabinet of Advisors. I think you need a fan club of people who believe in you and will tell you the truth about your business ideas. This should be a 3 to 4 people, including an existing entrepreneur, a friend who’s a potential customer, a retired executive who has a rolodex that can assist you and a lawyer or accountant that can give you advice that you otherwise probably couldn’t pay for. I call this group a kitchen cabinet of advisors because they will usually work for food.

5. Spend Time Building Your Network. In business your network is your net worth. People do business with people they like and know. If you are known more internally at your job, you must get out there and start networking at least six months before you start your business. Your first customers will be people who know you or referrals from those same people.

6. Know Your Niche Customer. In this new economy, it’s more important than ever to have a niche target market. Niche to get Rich is a saying, but it is true. The more specialized your target market, the better for your business. You should be able to see the face of your customer and write a story about him or her. Even if you’re using social media you need to know who you want to talk to before jumping out there.

7. You Need a Marketing Plan. Use your marketing plan to clearly identify that there’s a market for your product or service that you can actually reach. You need to figure out who’s buying and why. You also need to develop a signature move or signature service as you are developing your marketing plan. If you can answer those simple those questions you should move forward with your business plans.

8. You Must Have a Business Plan. You must plan for success, it will not just happen to you. You need a business plan to give yourself a road map to run your business. Do not treat your business plan like a historical document. Your first business plan is your hypothesis of what you think will happen in your business. Your assumptions will change once your business is exposed to the market place. In the early years of your business, you should review and update your business plan every 2-3 months to make sure your business is on the right track. 

Do you have any more tips on How to Become Your Own Boss?

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE?  You may, as long as you include this complete blurb with it:

Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Coach and Social Media Marketing Expert 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.

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7 Questions Hobbyists Should Consider When Starting a Small Business

by on June 14, 2010 in Become Your Own Boss Tips, Before You Start, How to Start, My Recommendations, Your Small Business

This is the last of a two part series on how to turn a hobby into a small business. Sometimes people with great hobby do not have the right amount of business acumen to run a business. Everyone has good ideas — it is the business of running a business that gets some people in trouble.

Here are seven questions that one should consider before diving head first into entrepreneurship.

1. How committed are you to being a business owner? Successful small business owners are fully committed to their businesses. Are you the type of person who has lots of interests? Do you have lots of unfinished hobby projects around the house? Would you be easily distracted by the next business idea that you dream up? Successful entrepreneurs are disciplined.

2. Do you have a competitive attitude? Are you willing to charge people enough to make money from your products? Many people with hobbies have been giving away their homemade goods as gifts and presents for years. You must really change your mind set to turn into a real business person. No more hook-ups, friend discounts or freebies.

3. Are you a glass half full or half empty kind of person? Your business will live or die based on your own personal optimism. Most successful entrepreneurs are optimistic people. Can you see a positive opportunity or lesson in an otherwise challenging situation? When you don’t have optimism in your business, it is very difficult to sell to anyone or motivate employees. Most of all it is difficult to run a small business; you need optimism to survive the lean times.

4. How big of a business do you want to run? When you start a business, you also need to know in the beginning how much responsibility you are really trying to take on. It is also important to always know how much money you need to make to be happy.  Do you want to make enough money to pay your bills and go on a few nice vacations per year, or do you want to buy your own island? Do you want one great restaurant or a regional chain of pizza shops? Do you want your product sold in high-end boutiques or at Wal-Mart?  These are all decisions to be made up front as you are starting your business.

5. Do you like to make decisions? One of the main differences between having a hobby and running a small business is making critical decisions with financial implications. In business there are many roles you will need to take on. The average business owner does 10-13 jobs starting out. Will your accountant do payroll or will you use a service? Will you hire employees or make everyone a 1099 virtual employee.  Will you hire a booker to source a foreign manufacturer or run a local manufacturing operation that will great increase your cost per unit.  Will you be a home-based internet business or have a retail storefront?

6. Do you have the money to start a business? Once you’ve written a marketing plan and then a business plan, you will know if there’s a market for your hobby to become a profitable small business. The next step is to start saving to finance the launch of your new business.  Will you start with product or will you need to develop a few more to generate the money that you need to sustain the business. You should not quit your day job until you have sufficient money to fund your business plan and your household. In fact, there are three pools of money you should have in place before you start your business full-time. 

A) You need emergency savings for your household.

B) You need enough money to go up to two years without a paycheck.

C) You need the first year of operating expenses for your business.

Start saving 20-40% of every paycheck to save the money you need to become your own boss. Often, things do not work out exactly according to your business plan. These pools of money will be your contingency plan to ensure that the business and your family financially survive your small business endeavor.

7. Do you like to sell? As an entrepreneur YOU are the chief sales officer. You must be the best sales person in your company.  Not only do you sell your products–you also sell your vision for the company and most importantly you sell yourself.  And you will need to sell every where you go, and make sure that those close to you know what you do. If you love selling, entrepreneurship really could be for you.

If you didn’t have strong answers to most of the questions you might need to plan a little more or consider getting a business partner to help you make your business plan a reality.  The key is being honest with yourself about what skills you have and need to turn your hobby into a full-time business.

What other questions do you think a person with a hobby should ask themselves before making their entrepreneurial dreams a business reality?

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Her first book Become Your Own Boss in 12 Months was released in March 2010.

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How to Dream BIG in Your Small Business

How to Dream BIG in Your Small Business

by on June 10, 2010 in Business Inspiration, SmallBizChat

I’m Melinda Emerson and every week as @SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wed on Twitter from 8-9pm ET. This is excerpted from my recent interview with Paul Wilson Jr @pwilsonjr.  Paul is the founder and Chief Inspiration Officer of Biznovations, LLC. The company inspires and designs creative solutions that empower individuals and companies to maximize financial and social profitability. They design and implement innovative strategies and processes that help organizations reach their operational, financial, and community goals.  He also authored the book, Dream B.I.G. in 3D: How to Pursue a Bold, Innovative, God-Inspired Life! For more information http://www.paulwilsonjr.com.

Smallbizlady:  What’s the difference between a vision and a dream in business?

Paul Wilson Jr: I’ve heard it said that a vision is a dream with a deadline. A dream is all about creating a mental picture that stretches the boundaries of your imagination for what you believe is possible. A (business) vision brings clarity, specificity, and direction to the dream.

Smallbizlady: Where do you find inspiration to dream big in business?

Paul Wilson Jr: Faith in God. Other big dreamers. Vision boards. Imagining the benefits and results of the lives that my business is targeted to reach. Driving through areas of the city that I want to see transformed. Praying for the people that I want to impact. In essence, putting myself in situations to have my mind stretched, including different types of learning environments, listening to those who inspire me, reading books, and other things.

Smallbizlady: How do you shift from dreaming big to doing big things in your business?

Paul Wilson Jr: Vision without execution leads to frustration. One vision is often a combination of many (complimentary) ideas. List all the different ideas needed to realize your vision. Choose one to work on first and build your business plan for that. Implement, grow, and perfect that idea and then build on it with another complimentary idea going through the same process.

Smallbizlady: What is one key of success for implementing a big dream?

Paul Wilson Jr: One key to long-term business success is that there’s alignment and congruency between the vision of the business and the dream/mission/purpose of the individual.

Smallbizlady: How can you ensure that your life plan is aligned with your business plan?

Paul Wilson Jr: Your business plan should be an outgrowth of your life plan. This also ensures that you’re in the right business for the right reasons.

Smallbizlady: How can you assess if your business is the right fit for your life plan?

Paul Wilson Jr: Evaluate and assess the alignment of three things in relation to your business: 1) Your purpose, your passions, and your professional skills. 2) Your purpose involves your personal vision, mission, and values. 3) Your passions are key areas that drive and stretch you to be excellent – no matter what it takes. Your professional skills combine your talents, knowledge, education, experience, etc.

Smallbizlady: What hinders big dreamers from having successful businesses?

Paul Wilson Jr: The person is more important than the plan. Don’t get intoxicated with the dream and then not be willing to following through on the execution to implement it. The best business plan is only as good as the people who are executing it. Develop yourself so that you are the best person you can be to execute your business plan.

Smallbizlady: How do you keep doubts out of your dreams?

Paul Wilson Jr: For some people dreaming can inadvertently cause doubt when you stop dreaming and starting thinking about all the reasons why you can’t do something. Reverse that with thinking about all the reasons you CAN do it. Dominate your doubts or your doubts will dominate you.

Smallbizlady: How do you overcome F.E.A.R. in order to dream big in business?

Paul Wilson Jr: Focus your thoughts in a positive direction – for me it’s God’s power. Evaluate your obstacles thoroughly to assess their validity. Attack the enemies “in-a-me” (silence the negative voices). Respond to the challenge.

Smallbizlady: How do you ensure long-term sustainability of your big business dream?

Paul Wilson Jr: It’s not about you – it’s about what you leave for someone else to build on. That’s legacy. Build a business where you are focused on the size of your significance versus the significance of your size.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter.

For more tips on how start or grow your small business subscribe to my blog www.succeedasyourownboss.com.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs. #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Her first book Become Your Own Boss in 12 Months was released in March 2010.

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How to Turn a Hobby Into a Small Business

by on June 7, 2010 in Become Your Own Boss Tips, Before You Start, How to Start, Your Small Business

This is the first of a two part blog series on how to turn a hobby into a small business.

Hobbies are fun personal interests that people pursue out of love. Some use hobbies to spend quality time with loved ones, friends or themselves. Some people use hobbies to relax. Popular hobbies including scrap booking, fishing, quilting or writing. Some people make scarves, bake cakes, party favors or frame special mementoes. If you are someone who has a hobby that people line up for—you could be on to a profitable business idea. It’s ideal to do something you love to do and get paid for it. But there is a big difference between making some extra pocket change at holiday time and running a business full-time. Here are some tips on how to turn a hobby into a small business.

There are many ways to turn a hobby into a business.

You can sell products, but don’t forget that you can also sell information as a business model. If you like collecting coupons — you could create a subscription service to notify people of the best supersaver deals each week. If you like baking, you could start selling brownies and pies or you could create a membership website for recipes for homemade baked goods that are for people with food allergies that are wheat/gluten free. Now the greater your production demands eventually you’ll need access to a commercial kitchen—but some economic development agencies across the country are creating food incubators for this very reason. If you enjoy making jewelry, why not sell your products via an online store, rather selling through the typical route of women’s conferences, craft fairs or boutiques.  All these pastimes can be turned into lucrative businesses.

Freelancing is a great way to transition your hobby into a full-time business.  I recently conducted an interview on #Smallbizchat with Pete Savage, the co-author of The Wealthy Freelancer. He’s got great insight into starting slow and building strong. Here are six additional steps that you should take if you want to start a full-time business. 

Be Honest With Yourself. Do you have the energy and stamina to crank out your hobby in volume enough to make it a viable business? Make sure you don’t ruin something that brings you joy. People pursue hobbies to blow off steam.  If you add a lot of pressure—you could blow your stack. Do your research to make sure there’s a paying customer before you bet the farm on your hobby. Successful businesses require dedicated work and responsibility. It’s easy to take the fun out of your hobby if you do not plan well.

Use Low Cost Business Resources. Once you decide that starting a business is for you, there are many books that you can read to develop your plan including my new book Become Your Own Boss in 12 Months. This book gives a comprehensive look at starting a business. It takes you month-by-month through a planning system to help you transition from having a job to starting a business. You should also make an appointment with your local Small Business Development Center and sign up for a business planning course or SCORE chapter which can provide online and face-to-face counseling.

Check Out Your Local Library. You can get plenty of market research data help from the business librarian at your local branch. Also, find out information on legal entities, sales taxes, business insurance and small business accounting systems.  There is also opportunity to learn about any business licenses or regulations that you will need to comply with to start your business.

Start While You Are Still Working a Job. There are two reasons why this is a good idea.

  1. You need to save a significant amount of money before you leave your job to become an entrepreneur—so it’s best to keep the paychecks rolling in as long as possible.
  2. Your job is one of the best sources for a customer base, particularly if your hobby has nothing to do with your day job.

Update Your Contacts And Skills. Start networking externally. Reach out to all your contacts and make sure you have your contact database on a flash drive that you keep at home. Learn the latest social networking sites and how to write press releases. Use your down time to do internet research for sourcing vendors and suppliers and to confirm your target market.

Figure Out How to Stand Out.  It is very difficult for small businesses to compete on price. You must clearly identify your niche customer and spend some time developing a signature product or signature services.  Anyone will buy something once.  How will you get them to buy it over and over again from you?

Turning your hobby into a full-time business is a great way to become your own boss. Why not work at something you love – and earn a living from it?  Do your research before you start your business. You’ll need a lot more customers than the 30 people that buy cakes from you every holiday to replace your full-time salary. Make sure there’s viable market for your goods and services, and start saving money at least 12 months before you start your business.

Next Week:  7 Questions Hobbyists Should Consider When Starting a Small Business

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Her first book Become Your Own Boss in 12 Months was released in March 2010.

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Taking Your Small Business to the Next Level w/ Michael Gerber

by on April 22, 2010 in Before You Start, Branding & Marketing, My Recommendations, SmallBizChat, Social Media

Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat. The show takes place every Wed. on Twitter from 8-9pm ET. This is excerpted from my recent interview with @MichaelEGerber Michael E. Gerber is founder/chairman of Michael E. Gerber Companies and E-Myth Worldwide. He has published 13 books including the international best seller The E-Myth Revisited and his latest book The Most Successful Small Business In The World (Wiley, 2010). He has been dubbed World’s #1 Small Business Guru by Inc. Magazine. For more information http://www.inthedreamingroom.com/

Smallbizlady: Michael, many of my readers are looking for viable alternatives to corporate work life. You have counseled tens of thousands of post-corporate entrepreneurs caught in what you call the “Entrepreneurial Seizure,” or what you consider to be the fatal mistake that most small businesses make. Can you tell my readers more about this fatal mistake and how to avoid it?

Michael E. Gerber: Great question. The “entrepreneurial seizure” lies at the heart of most failures in judgment when someone decides to leave his or her job to go out on their own.  The excitement of independence associated with getting rid of the Boss is almost always fueled by a flawed understanding of what being on your own means, and how it successfully can work.  Most small businesses are started by technicians suffering from an entrepreneurial seizure, rather than by true entrepreneurs.  The Technician believes in the fatal assumption that because he or she knows how to do the work…graphic design, technology of all kinds, cooking a great dinner, repairing an automobile, snowboarding…they can turn what they know into a business that frees them from the Boss.  The Graphic Designer creates a Graphic Design business. The Technology Guy creates a technology business.  The Cook creates a restaurant.  The Mechanic creates an Auto Repair business.  The Snow Boarder creates a Snow Boarding business.

But instead of getting free of the Boss, they have become their own boss, and they’re now, with absolutely no understanding about how it happened, working for a lunatic, doing it, doing it, doing it, doing what they know how to do.  Snowboarding, cooking, fixing a car, making a website.  Entrepreneurs make the transition from working for someone else to going out on their own much differently.  Entrepreneurs invent businesses that work without them.  Technicians, as we’ve already said, create businesses that work because of them.  And in the process, the Entrepreneur is liberated from what I call The Tyranny of Routine, and the Technician becomes a slave to it.  In the Entrepreneur’s case, the business works.  In the Technician’s case, the Technician works. And that’s why of the 500,000 new businesses that are started every month in the U.S.A. most will fail. According to a recent study done by the Kauffman Foundation, 81% of all businesses in the US employ no people, other than the owner.  They’re sole proprietorships.  True Entrepreneurs are never sole proprietors.

Smallbizlady: So many people out of work are starting businesses. I call them pink-slip entrepreneurs, what advice do you have for them?

Michael E. Gerber: How you start a business is even more important than what you do after you’ve started it.  The most important advice I can give to your “pink slip entrepreneurs” is to join me in The Dreaming Room, where we address the opportunity to start a new life through the judicious use of a “blank piece of paper and beginner’s mind.”   In short, what’s your Dream, your Vision, your Purpose, and your Mission?

The worst thing that can happen once you launch your new company is that it turns out as badly as the one you used to work for.  And I can guarantee you, it will, unless you begin with a true sense of the meaning underlying your company’s launch, growth and sustenance.  In short, this is The Age of The New Entrepreneur, where meaning is everything, and money is what follows.  Most important for the New Entrepreneur is to know that there is a way to create a company, and to create one without being aware of, and understand, that way, is to create a disaster.  My purpose in life is to teach that way to those ready and willing to learn it, just as I have done over the past 35 years to more than 70,000 small business owners throughout the world, and millions of my readers.

Smallbizlady: There’s been lots of talk in mass media about saving the US economy by making this the year of Start-up America.  What are the ingredients that foster entrepreneurship?

First, an immense desire to create a company that does something important. Second, a true commitment to stay the course, no matter how difficult it will be. Third, a truly religious need to live the independent life and to teach others how to do that as well.  And, finally, unbridled passion for inventing the original something that others need to transform their lives, and to deliver that something in the form of a company that can grow to reach all those some-bodies the business is intended to serve.

Smallbizlady: Much of the model you laid out in The E-Myth Revisited has to do with the importance of systems in building a franchiseable business. What is the shape of the process and the practical steps for business development in your model?

Michael E. Gerber: As I say in The E-Myth books, the system is the solution.  The System I’m talking about is first and finally The Core Operating System of your business.  It comprises three essential functions that must work in a completely integrated way.  These are Lead Generation, Lead Conversion, and Client Fulfillment.  Whether the business is McDonalds or Starbucks, FedEx or Dell Computer, or Manny, Mo & Jack’s, these three systems are critical to the success of that company.

The building these systems is the process we teach at E-Myth.  They are really arranged in a very simple, three-step approach.  Step One: Intentional Dreaming–The Dream, The Vision, The Purpose, and The Mission. Step Two: Intentional Organization–Conceiving, Building and Perfecting the Turnkey Client Fulfillment systems that comprise the operating reality of the company. Step Three: Intentional Growth–Conceiving, Building, and Perfecting the Lead Generation and Lead Conversion operating systems of the company.  Every business under the sun is conceived, built, and perfected in identically the same way, using identically the same processes.  There is no magic in this, there is simply the intentionality of all this, in the form of The Great Result the entrepreneur has set out to produce through the unique company he or she has set out to invent.

Smallbizlady: Do you think that the Internet era has changed the game for small business?

Michael E. Gerber: The internet era has of course changed the game for small business, but not as dramatically as most would profess.  After all is said and done, the internet is simply a medium through which the business of business is transacted, a conduit through which one can communicate and deliver the results one has set out to deliver, again, in the form of the Great Result I spoke of earlier.  As many or more companies fail on the internet as anywhere else.  And many, many more businesses (especially sole proprietors) stumble along without every making an impact on anyone, and most without selling anything to anyone.  In short, if an internet business fails to follow the three step development process I just outlined, it will fail just like any other business will.   So, I must say frankly that I am not a great believer in the internet as the be all and end all of business opportunity that others see it to be.

Maybe I’m simply too old, but I think not.  In short, I think that given my experience of internet entrepreneurs as being very much the same as any other types of entrepreneurs: if they are absent, the entrepreneurial fundamentals that are absolutely essential for any new company to grow, the result will be the same: lack of direction, lack of intention, lack of execution, and diminished results.

Smallbizlady: In your new book you write–very counter-intuitively to most of the received wisdom out there–that the reason most small businesses fail is not that they dream too big, but that they dream too small to create a truly thriving enterprise. What do you mean by dreaming big?

Michael E. Gerber: By “dreaming big” I mean conceptualizing a result greater than anything you have ever experienced.  When I started my first company, now E-Myth Worldwide, I had absolutely no business experience.  All I had was an idea bigger than life itself.  My idea, my Dream, was to transform small business worldwide.  That Dream was the energizer for everything that was to follow.  That dream for me was the realization of a picture I had formed in my mind of the typical small business I walked into every day, where the owner lived for sweat equity, worked 18-hour days, and had no idea that his or her life could be any different than the overwhelming life he experienced, and that all of his or her peers experienced in the day to day hell of doing it, doing it, doing it.  I knew, don’t ask me how, I just knew it didn’t have to be that way.  Then I saw McDonalds and the impression I walked away with was huge.  I suddenly realized exactly how the tragic condition of small business could be turned on its ear.  All I had to do was to McDonaldize every small business by teaching the owner how to think like the founder of McDonalds, Ray Kroc, did.  That led to the invention of my company E-Myth worldwide.  That’s what I mean when I say Dream Big.

Dream about Great Results.  Dream about a world that works, rather than one that doesn’t.  Think of one thing you wish to transform and then go to work ON it, rather than IN it, which quickly became my E-Myth Mantra. The result of that will be something bigger than you ever imagined. Dreaming small is not dreaming at all.  Dreaming small, which is what most small business owners do, is really the act of shrinking yourself to live a life that you can imagine because it fits your perception of what you know and are able to do.  There is no imagination in that.  And a life without imagination is already dead.  In my book, “Awakening the Entrepreneur Within,” I am focused on awakening the soul of my reader to enable him or her to discover the entrepreneur within.  And, once discovered, to put his or her imagination to work to invent a new life beyond anything he or she has ever done before.  Just like I have done.  Just like you have done.  Just like every entrepreneur does.

Smallbizlady: So, in your view, the real startup when approaching the creation of a company is YOU–the entrepreneurial personality in each of us. Tell me more about that and why it’s so vital.

Michael E. Gerber: Yes, the startup is you and nothing but you.  The startup isn’t the business.  The business is nothing more or less than a product of your imagination.  Your imagination is nothing more or less than the energy flowing through the entrepreneur as he or she looks at the world with the question: What’s missing in this picture?  When you begin to experience that energy, the realization that before you experienced it you, the entrepreneur, were actually asleep, you suddenly come to the realization that you’ve been living a life significantly smaller than the one you are entitled to live. When that happens – and it’s happened to you, exactly as it has happened to me – you suddenly come to the realization that you will never go back to living your life that way again.  Then, just as suddenly, you are almost assaulted by a rush of new perceptions, new ideas, new insights, so dramatic, that at times you can’t even deal with them they are so flush with excitement and promise.  But, remember, that’s simply the beginning of the process that participants in my Dreaming Room begin to experience.

As time wears on, the awakened entrepreneur morphs into the new entrepreneur, and the new entrepreneur morphs into the enlightened entrepreneur, and the product of all that is stunning to see.  People like Muhammad Yunis, the founder of the micro lending phenomenon which became Grameen Bank know exactly what I’m talking about. First he wasn’t an entrepreneur, and then he was.  First he was a professor of economics, and then he was transforming the economic reality of the world.  That’s what I mean when I say the Start Up is you.

Smallbizlady: It’s interesting to me that in your view of a truly awakened entrepreneur, they would not ever buy in to a franchise. Does this go against the E-Myth point of view? Don’t franchises bring freedom to those who own them?

Michael E. Gerber: Of course the truly awakened entrepreneur wouldn’t buy a franchise.  Why would she? The franchise is someone else’s Dream.  Not the entrepreneur’s.  The entrepreneur is the one who invents a franchise company, not the one who buys a franchise.  If the entrepreneur were to buy the franchise, he would immediately set about the task of taking it apart and turning it into something else.  And, in the process, he would destroy the franchise.  No, the one who buys a franchise is either the Technician – he buys a system that works and then he works it – or a Manager – he buys a system that works and then manages it.  And that’s the way it ought to be.

Smallbizlady: My readers are very interested in the intersection of business and lifestyle design. What does an “Awakened Entrepreneur” know about getting this balance right?

Michael E. Gerber: An Awakened Entrepreneur isn’t interested in balance.  An Awakening Entrepreneur is passionate about creating.  Creating is, by its very nature, unbalanced.  But, to the Creator, it doesn’t at all feel that way.  It feels like the optimal flow of life.  Creating is a power all its own.  It takes you where it wants to take you, and the creator simply follows where it takes him.  Just like joy.  Joy is not balanced either.  Joy is explosive; it is the intense experience of life’s purpose all happening at once.  So, if you want balance, don’t become Walt Disney.  Don’t become Michael Dell.  Don’t become anyone who seeks the unknown.  Balance is a figment of our known reality.  Balance has never been something that people who are disinterested in control ever pursue.  The only people who crave balance are people who are desperately out of balance.  When you’re living the creative life, you achieve a balance all its own.

Smallbizlady: After 30 years of working with entrepreneurs, do you see a fundamental change in Entrepreneurship today? If so, what is different now and why?

Michael E. Gerber: Actually, no.  I don’t see a fundamental difference between the entrepreneurs of 30 years ago and the entrepreneurs I meet today.  Other than this: today’s entrepreneur is more likely to be interested in meaning rather than money. Not that he’s not interested in money; he obviously is.  But money that comes with the absence of meaning is too big a price to pay for the new entrepreneur I’m engaging today.  Understand, I’m not saying that everyone I meet today has the question of meaning in mind.  But, when I begin the conversation about meaning, more people I meet today are interested in having the conversation than ever before.

Smallbizlady: How do you feel about people being called to their entrepreneurial journey or completely compelled to run their businesses?

Michael E. Gerber: So, there’s something going on today in the world of the entrepreneur.  And that’s why I call it The Age of The New Entrepreneur. By asking the question as I’ve been doing, something interesting is beginning to wake up, not only in the people I’m talking to, but in me as well.  So, Welcome to The Age of The New Entrepreneur.  Let’s kick ass and take names.

Smallbizlady: I understand you have a new venture launching Thursday 4/22/10 called “Origination.” Can you give us a sneak peak as to what exactly Origination is and will become?

Michael E. Gerber: At Origination, we have invented the process essential to awaken the spirit, inspire her to grow, and then to teach her the skills she requires to create a New Venture that can transform the world. At Origination we believe that every individual can create a New Venture born out of his or her own inspiration and imagination to do something uniquely through a company of his or her own invention and passion, and that, by so doing, he or she can transform the world.

The process created to achieve this result by Origination begins in what we have come to call, The Dreaming Room.

If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #Smallbizchat weekly on Twitter for emerging entrepreneurs.  Her first book Become Your Own Boss in 12 Months was released in March 2010.

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How to Transition From Corporate to Small Business Ownership

How to Transition From Corporate to Small Business Ownership

by on April 1, 2010 in Become Your Own Boss Tips, Before You Start, How to Start, Q & A Interview, SmallBizChat, Your Small Business

Mike Michalowicz @TPEntrepreneur Author, Toilet Paper Entrepreneur interviews Melinda Emerson @Smallbizlady Author, Become Your Own Boss in 12 Months. She also has great start-up tips at www.becomeyourownbossbook.com

Q: What makes your book different from all the other start-up business books?

Melinda Emerson: Become Your Own Boss in 12 Months provides a realistic, month-by-month planning guide to start a sustainable and profitable small business. Become Your Own Boss in 12 Months is not a book about writing a business plan; it’s about planning your successful small business. 

Q: Why did you write Become Your Own Boss in 12 Months?

Melinda Emerson: My mission as the SmallBizLady is to End Small Business Failure. I wanted to develop a tool for people who are unhappy with their jobs and look to transition into small business ownership. I also wanted to discourage people from just quitting their jobs without a well-researched plan. Too often I got calls from people seeking my advice about starting a business—after they had already quit their job — which is just too late to begin planning. Since the recession began, small business owners have even less time to hit it big with their entrepreneurial ideas. I developed the Emerson Planning System to help plan a successful small business which is illustrated in my book Become Your Own Boss in 12 Months.

Q: Why does it take 12 months to start a business?

Melinda Emerson: 12 Months is an ideal time-frame to start a business, it’s not meant to be restrictive.  I have been an entrepreneur for more than 11 years.  Based on my experience, I believe the longer you plan, the more research you will do, and the more money you save, the more likely you are to succeed in business

Q: What if you don’t have 12 months?

Melinda Emerson: Sometimes people are forced to start sooner. This is triggered by layoffs, getting fired, buyouts or retirement packages.  I only planned for three months with my first business, but the challenge with that approach is you learn plenty of lessons the hard way, and that can be expensive.  If you live by a budget, have your debt under control, and have a significant amount of savings, you will be able to start your business much sooner.   Depending on your individual situation, it may take more than a year to get your personal finances in order.

Q: How did you become the Smallbizlady?

Melinda Emerson: When I first began using Twitter, my own name was taken, so my friend @cathywebsavvypr and I brainstormed a name for me that would describe what I do.  She came up with @smallbizlady and I have been that ever since.  It was probably the best branding decision I ever made.  How I really became a Smallbizlady was in 1999 when I became an entrepreneur, after my career in television as a news producer.  I started a television production company called Quintessence Multimedia. About five years into my business, I started speaking on panels and doing workshops about small business start-up, web development and marketing techniques.  Then, I got calls from people looking for help to start a business. I began by sending would-be entrepreneurs a one pager with start-up tips. That was expanded into a special report, 44 Things To Do Before Going Into Business, which was the basis for my book, Become Your Own Boss In 12 Months. Over the years, I joined the National Speakers Association and I became a business coach and expert on small business best practices. I thought the best way to help entrepreneurs would be to provide a step-by-step proven method to start a successful small business.  

Q:  Who should start a business? 

Melinda Emerson:  Anyone with a solid, profitable business idea, willing to learn the business of running a business can start a successful small business. 

Q:  Why do small businesses fail so often?

Melinda Emerson: 

No Life Plan—You need to develop a life plan and then build a business around that.  

No Network—People do business with people they like and with people they know.  Who do you know and, more importantly, who knows you?

Lack of Target Market—You have limited time and limited resources.  Choose a niche so you can focus your marketing efforts.

Undercapitalized—If you do not save enough money to run your household for at least a year and fund the business, you may not be able to hang on until the business can generate any real revenue.

Lack of Fiscal Discipline—Do you run your business with a budget?  Do you just rob the cash register when you need some cash? Do you make business decisions based on up-to-date financial information?

Q: How do you transition from a job to starting a business?

Melinda Emerson: Inside Become Your Own Boss in 12 Months, I write about the Emerson Planning System which is a six step system to transition from having a job to starting a business.  It includes developing a life plan, a financial plan, validating the business concept, developing a marketing plan, the business plan and then finally starting the business.

Q:  What is a Life Plan and why and do I need one to start a business?

Melinda Emerson:  You need a Life Plan before you ever write a business plan, because you need to make sure that the business you start is the right business for you.

Q: You write a lot about personal finances and business planning. Why is that so important to starting a business?

Melinda Emerson: Your ability to save will be the key to whether you are financially able to become an entrepreneur.

Q: What are the 7 Essential Principles of Small Business Success?

Melinda Emerson: Throughout the past seven years, I have interviewed hundreds of entrepreneurs and business executives. After listening to what they said about running their businesses and observing how they did business, I realized that there were seven things they all had in common. They include having an entrepreneurial mindset, utilizing strict fiscal discipline, and having a kitchen cabinet of advisors. They make use of a well-defined brand identity; have a niche market customer, excellent customer service, and a firm understanding every day of their cash position by carefully managing their banking relationship. Using these principles can help any business run at its best.  It’s the gold standard all businesses need to strive for from the very beginning.

Q: Who can benefit from this book?

Melinda Emerson: This book is for anyone looking to create a plan to fire their boss and start a small business.  It will also help people who are within a few years of launching a new enterprise. I have also heard from seasoned business owners who tell me that this book could serve as a professional development course or a great roadmap to reinventing a struggling business. 

 If you found this interview helpful, join us on Wednesdays 8-9pm ET follow @SmallBizChat on Twitter. 

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

Melinda F. Emerson, also known as Twitter’s SmallBizLady is a seasoned entrepreneur, professional speaker, and small business coach whose areas of expertise include small business start-up, business development and social media. She hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  She is the founder and CEO of Quintessence Multimedia, an award-winning strategic communications firm. She has created productions for such companies as Johnson & Johnson, Verizon, Enterprise Rent-A-Car and Comcast. Her book Become Your Own Boss in 12 months; A Month-by-Month Guide to a Business That Works!” was released in March 2010 by Adams Media.

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Can You Afford to Become An Entrepreneur?

by on March 29, 2010 in Become Your Own Boss Tips, Before You Start, Cash Flow & Finance, How to Start, Mompreneurs, My Recommendations, Pink Slip Entrepreneurs, Solopreneurs, Women in Business, Your Small Business

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.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE?  You may, as long as you include this complete blurb with it:

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.

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Your GPS To Start a Small Business

by on March 15, 2010 in Become Your Own Boss Tips, Before You Start, Women in Business

Most people dream about owning a small business. You may have had a “notion” for years that someday you would be CEO of a company, successful beyond your wildest dreams. Turning that dream into reality is an evolutionary process, involving not only having a solid business idea, but also understanding the “business of running a business.” Then you must ask yourself:  Do I have the guts and skills I need to make my dream a business reality?

You will need to get your arms around tasks like accounting, legal issues, operations requirements, branding and financial management skills, banking relationships and processes, and needed human capital.

On top of that, do you have the courage, persistence, skills, work ethic and focus needed to succeed? Can you do all the jobs entrepreneurs must do? These jobs include chief salesperson, secretary, payroll clerk, IT technician, HR manager, collections agent and once you get a sale – you must service the customer, too.

Don’t put your dreams at risk by not doing enough research and thoughtful planning. I have developed an approach that will help you plan your escape from corporate America. It’s called the Emerson Planning System or E.P.S. I have written about how to use this system in my new book, Become Your Own Boss in 12 Months.

It is a six step system.

I. Life Plan – A life plan is a way to identify your motivation, skills, and personal goals and how you figure out what you really want out of life. You must develop a plan for your life and build a business around that business. Examine how you live now and then how you want to live. What do you love? What makes you laugh? And what do you need to learn?

II. Financial Plan – You must be able to support your household for up to two years before you can afford to cut off your paycheck. You also need funds to operate your business for the first year. Use a strict budget. Too many small companies operate at a net loss and do not realize it until it’s too late. There are many money-draining traps that can snare small business owners. If you are not thinking about your enterprise making money every day, then instead of a business, all you really have is an expensive hobby.

III. Validate Your Business Concept — You have already considered your personal goals, motivations, and whether or not you can afford to become an entrepreneur. Now you need to examine the basic business concept and what skills you have and need to run this type of business.  It’s time the start writing down how you will get things done.

IV. Marketing Plan — Who’s going to buy from you and why? This is the stage where you do your in depth market research, competitive analysis and target market analysis. It’s also very important to develop a signature that will set your business apart.

V. Business Plan—You must write a business plan.  You would never take a trip without planning how much money it was going to cost for travel, what you were going to do during your trip and where you were going to stay.  You need to give your new business the same level of attention.  It’s also important to have realistic financial projections that reflect three years of operations.  Be sure that you understand how much money is in every sale for you.

VI. Start Your Business –It is best to start your business while you are still working. Yes–You will be tired, but it’s best to keep those paychecks rolling in for as long as you can.

The Emerson Planning System starts with getting your personal house in order so that you can start your business that nourishes your soul and minimizes the financial hardship for yourself and your family.

Business success is rarely a straight line to the top. It is not enough to have a plan “A”, you must be flexible, meaning you need a plan “B” and even a plan “C” to side-step obstacles in your business. Problems are inevitable. Anything can happen—from needing alternative suppliers, having to change your product mix, adjusting your prices to the competition or having to create a new value proposition if the old one fails. “Solution” thinking is the only remedy. When you are a start up business, there are two things that can take your business down on any given day: lack of planning and lack of experience.

Don’t let this happen to your business. Plan for success!

Tell me how long you planned before starting your business.

Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Expert and Social Media Coach 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’s first book, Become Your Own Boss in 12 months; A Month-By-Month Guide to a Business That Works was released in March 2010 by Adams Media.

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What is Coming up in March on #Smallbizchat on Twitter?

What is Coming up in March on #Smallbizchat on Twitter?

by on February 26, 2010 in Grow Your Business, My Recommendations, SmallBizChat, Social Media, Your Small Business

#SmallBizChat is a weekly conversation on Twitter where emerging small business owners can get answers to their questions. If you have a Twitter account join us every Wednesday from 8-9pm Eastern Time.

If you don’t have a Twitter account, not to worry. a Q&A interview with my #Smallbizchat guest is posted on this blog every Thursday morning.   Subscribe to this blog to have it sent directly to your inbox.

If you’re new to Twitter,  here’s how to participate in #SmallBizChat: http://bit.ly/S797e.

The transcript from every chat is available through the #Smallbizchat community.  Just hit the silver “transcripts” button under the video in the right hand column of this blog to sign in.  Remember, once you develop a login you have access to all the transcripts.

Who is on #SmallBizChat in March?

March 3 @ErikVonk President, BOTH How to be in business for yourself, but not by yourself

March 10 @Bizsavvymom Malika Duke on Social Media Selling Strategies

March 17 @Colleendebaise Small Business Editor, Wall Street Journal Starting a Small Business in this Economy.

March 24  @Skydiver HARO founder Peter Shankman On How to Launch a Product Online.

March 31 Special guest host Mike Michalowicz @TPEntrepreneur interviews Melinda Emerson @Smallbizlady on How to Go From Corporate to Small Business Ownership

March 31 On SmallBizRadio we have Editor, SmallBizTrends.com - Anita Campbell on The Future of Small Business in America.  Join us on Wed at 1pm ET on #BlogTalkRadio

Leave a comment and let me know what topics YOU would like to see covered on #SmallBizChat.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

For more tips on how start or grow your small business subscribe to Melinda Emerson’s blog www.succeedasyourownboss.com.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  #Smallbizchat is the trusted resource on Twitter to discuss everything entrepreneurs need to know about launching and running a profitable small business. Her first book Become Your Own Boss in 12 Months is out in March 2010.

Comments { 1 }

How is Your Entrepreneurial Literacy?

by on February 22, 2010 in Become Your Own Boss Tips, Before You Start, How to Start, My Recommendations, Your Small Business

This is National Entrepreneurship Week Feb 20-27, 2010. This year‘s theme is Entrepreneurial Literacy Empowers Everyone. This is a theme that I truly embrace.

Whether you are still working in corporate America, running a nonprofit, or leading the charge in your own small business - being able to evaluate things from a business perspective will always enable you to be more successful.

So What is Entrepreneurial Literacy?

The organizers of this week-long celebration in honor of Entrepreneurship in America define it as having some basic knowledge of how a business is created and managed.

I have a slightly different definition.  When you are entrepreneurial literate, you are a student of small business.  You do not just rest on your idea and marketing efforts. You constantly work to refine your business model. You are someone who makes sure your passion has a profit center.

Entrepreneurial Literacy is important because too many people who want to start small businesses lack critical understanding about financial matters including budgeting, taxes, balancing a checkbook, managing credit cards or lines of credit, and developing sales projections.

Here’s a fact: if you do not manage your household with a budget you are far less likely to manage your business with budget. The best business owners make business decisions based on up-to-date financial information that is tracked against a budget.

Your journey to become an entrepreneur starts from real experiences that test your knowledge and skills and motivations.

Pursuing entrepreneurial literacy is about the research you do as you prepare to start your business.  The more you learn and grow, the better business leader you will be. Real entrepreneurial skills come from your work and industry experience, and your willingness to continue learning.

Entrepreneurial Literacy is a real necessity if you have plans to Become Your Own Boss.   These are the skills that empower everyone to succeed in business and fuel the American economy with 60-80% of the net new jobs.

Here are 15 Questions for All Would-Be Entrepreneurs

  1. Do you have the career skills and experiences to become a successful entrepreneur?
  2. What personality traits are more likely to lead to success as an entrepreneur?
  3. What taxes do entrepreneurs pay?
  4. What items are part of a firm’s operating costs?
  5. How can an entrepreneur learn about what his/her customers want?
  6. How can computer skills help with business operations?
  7. How do small business owners deal with risk?
  8. How does personal financial literacy relate to business financial literacy?
  9. What factors determine where to locate a business?
  10. Why is branding important?
  11. How does competition affect entrepreneurship?
  12. What percent of American firms have no employees working for them?   Why is this important?
  13. What are some sources of funding to start a business?
  14. What should you do if business drops off?
  15. What should an entrepreneur consider when hiring employees for the business?

National Entrepreneurship Week is sponsored by The Consortium for Entrepreneurship Education which believes that ”Entrepreneurs are not born….rather they ‘become’ through the experiences of their lives.” (Albert Shapero – OSU) For more information http://www.nationaleweek.org/

Are there any other questions that need to go on this list? Please leave a comment.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

Melinda Emerson “Smallbizlady” is a seasoned entrepreneur, professional speaker, and small business coach. Her areas of expertise include small business start-up, business development and social media marketing.  Melinda hosts #Smallbizchat, a weekly talk show on Twitter.  Melinda’s first book Become Your Own Boss in 12 months; A Month-by-Month Guide to Start a Business that Works is due out in March 2010 by Adams Media.

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Go From Employee to Entrepreneur

by on February 4, 2010 in How to Start, SmallBizChat

Every week as SmallBizLady, I conduct interviews with experts on my Twitter talk show #SmallBizChat.  The show takes place every Wed on Twitter from 8-9pm ET.  This is excerpted from my recent interview with Kim Beasley is the owner of two small businesses, and the author of Your Passionate Business, @passionatebiz or @KimBeasley on Twitter. Kim knew at an early age that she wanted to run her own business and, after earning two degrees and working in Corporate American for almost 15 years, Kim decided it was time for her to start her own business, one is Your Passionate Business which helps others start their own business. The second is Pro Membership Services, specializing in developing business or membership websites using WordPress or Drupal. For more information: http://kimbeasley.com/about/

Smallbizlady: What are some important things that a startup business owner need to keep in mind when starting their business?

Kim Beasley: Be open to change, which means that you should be flexible when developing your business.

  • Don’t be afraid to ask questions to those who are experts or leaders in your chosen industry.
  • Use social media to grow your network of business associates and clients.
  • Develop a solid financial plan that you continuously follow.
  • Always have a marketing/advertising plan in place to help grow your business.

Smallbizlady: How much time should be invested in researching a chosen business industry?

Kim Beasley: However much time is needed for you to become comfortable with your choice for an industry. Don’t be too hasty when determining which industry will be your niche. Make sure that you are not only comfortable with your choice but also ready to do what it takes to be successful in your industry.

Smallbizlady: What is your philosophy about starting a business?

Kim Beasley: Your skill + your passion = your passionate business. When starting a business, it is important that you center it on a skill you are passionate. Understanding that your passion for your business is what will help keep it going.

Smallbizlady: How do people know if their passion is profitable?

Kim Beasley: Research, research, research! Starting with research to see if your passion can become a viable business is the first step in determining if it can be profitable. If you find that it is not, see if you can combine it with another skill you are passionate about to see if the combination can be profitable. For example, writing can be combined with research or cooking with writing a cookbook and so forth.

Smallbizlady: What are the top mistakes unemployed people make when starting a business?

Kim Beasley: Not doing their due diligence regarding research, not setting up a firm financial foundation and not having a business mentor. It is very important that at least these three things are in place in order to create a solid start to your business.

Smallbizlady: What are some of the marketing avenues that are good for startup business owners?

Kim Beasley:

  • Sharing information about your business via social media websites like Twitter, Facebook or LinkedIn.
  • Trading links with others to build a solid “backlinks” process and placement.
  • Applying good SEO (Search Engine Optimization) techniques to your website such as research what keywords will help drive traffic to your website.
  • Research websites such as Craigslist.org to see if sharing information about your products or services will be beneficial.

Smallbizlady: What advice would you give to other startup business owners?

Kim Beasley:

  • Stay focused on the important matters.
  • Don’t let issues stop you from reaching your goals.
  • Constantly improve processes.
  • Build a virtual team that is strong, understands your business, and meets your needs.
  • Outsource those tasks that you can delegate for someone to do.

Smallbizlady: How important is it to have a strategy plan in place?

Kim Beasley: A business without a plan is planning to fail. A strategy plan is important because it gives you a guideline for where you have been, where you are and where you want to go. Business owners should always have a living strategy plan that will guide them as they manage their business.

Smallbizlady: How do you know where to locate your office (in-home or office building)?

Kim Beasley: It is important that you determine your location immediately when developing your business. If you find that you will have customers visiting your office on a regular basis then it might be better to have an office that is away from your home. But if most of your work can be down from your home then save yourself the overhead cost of having an external office and just setup an office in your home. Make sure that your home office is a dedicated space that is not shared. This is important for tax purposes.

Smallbizlady: Is it important to have a business mentor?

Kim Beasley: Yes it is important to have a business member because they can help guide you around the “hiccups” that business owners can experience when in the “startup phrase”. When determine who will be your business mentor, make sure that you hire someone who is knowledgeable about your industry. Don’t be afraid to ask them for references so that you can check to see how they have helped others to become successful.

Smallbizlady: What type of people do you need to have on your business support team?

Kim Beasley: The type of people you have on your business support team can vary. Just make sure that as soon as you can, hire a Virtual Assistant (a VA can help mange your business), graphic design (for branding), web design (online presence), or bookkeeper/accountant (manage finances). If you feel comfortable outsourcing these services, do so because it can help free up your time so that you can spend more time developing your business.

Melinda Emerson, known to many as “SmallBizLady,” is a Veteran Entrepreneur, Small Business Coach and Social Media Strategist who hosts #SmallBizChat weekly on Twitter for emerging entrepreneurs.  Her first book Become Your Own Boss in 12 Months is out in March 2010.

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The Entrepreneur’s Job Description PART II

The Entrepreneur’s Job Description PART II

by on January 25, 2010 in Become Your Own Boss Tips, Before You Start, Branding & Marketing, Cash Flow & Finance, Grow Your Business, How to Start, Your Small Business

Just as you would write a job description when hiring an employee, you need to understand what is fully involved in your new job as an entrepreneur and business owner. Everyone at some time or another has dreamed of becoming their own boss, but I’m here to tell you there’s a lot of work involved in running a successful small business. This post is the second of a two part series on what it takes to be an entrepreneur; click here to view Part I of this article.

This blog post is excerpted from my new book Become Your Own Boss in 12 Months; A Month-By-Month Guide to a Business That Works which will be released in March 2010 by Adams Media.  Become Your Own Boss in 12 Months walks you step-by-step through the Emerson Planning System, which will reduce your learning curve as you start your business.

Starting a business is a huge commitment of time, money, and personal energy.  Here’s a list of five more jobs you must hold as a small business owner.

Chief Operations Officer– Once you have your vision for your business, then you must run it.  Issues such as office space, banking, insurance, inventory management, budgeting and financial management are all things that must be handled in order to run a small business effectively.  You must also make sure there are processes in place for hiring, sales and customer service.

Chief Project Manager— You must know who is going to really get the work done once a sale is made to a customer.  Who’s going to communicate with the client, attend all meetings and make sure the project or delivery stays aligned with the timeline? Will you need to hire employees or freelancers to get the work done?

Web/Social Media Manager— In addition to having a website that is updated regularly, you also need to make sure that you are maintaining a presence on social media sites where your prospective customers are spending time. Three top social networking sites are LinkedIn, Twitter and Facebook.  If you decide to launch a blog to keep your website updated and promote your expertise, you will also need to write regular blog posts. Using social media consistently is the best thing you can do to build your small business brand online.

Bill Collector— One you make a sale, you must have a process in place to collect your money.  In the current economic environment many businesses and corporations are paying their bills late.  Small businesses are always on the bottom of the list, so you must be aggressive about getting paid.  On day 31, you should be on the phone and emailing about the status of your payment.  This is one of the least fun things to do as a business owner, but you must be paid for your products and services.     

Secretary— In addition to writing your own letters, you will do your own mail merges, labels and take your mail to the post office or over night mail drop off.  You will probably answer your own phone as well.  It will be important to screen your calls.  Never hesitate to tell a caller you are on deadline and need to call them back. Be sure to use a message pad so that you can actually remember to return the call.

This information will help you think through having your own business – before you get too far down the road pursuing your entrepreneurial endeavor.

Click here to view Part I of this article.

What else do you think needs to go into the small business owner’s job description?  Please leave a comment.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Expert and Social Media Coach 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’s first book, Become Your Own Boss in 12 months; A Month-By-Month Guide to a Business That Works will be released by Adams Media in March 2010.

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The Entrepreneur’s Job Description PART I

by on January 11, 2010 in Become Your Own Boss Tips, Before You Start, How to Start, Mompreneurs, My Recommendations, Pink Slip Entrepreneurs, Solopreneurs, Your Small Business

It will take every bit of enthusiasm and energy you have to grow your business into a viable enterprise and a powerful brand.   If you think you work hard now with a job working in corporate America, you are in for a rude awakening once you start your small business, particularly if you are used to having a large support staff.  This is the first of a Two Part series of blog posts on what it takes to be an entrepreneur.

cover_becomeboss_11-16-09This blog post is excerpted from my forthcoming book Become Your Own Boss in 12 Months! A Month By Month Guide To A Business That Works! The book will be released in March 2010 by Adams Media.  Become Your Own Boss in 12 Months! is organized by month to lead you step by step through the process of how to transition from a job to small business ownership. In other words, it’s a 12 month planning guide to fire your boss and start your small business.

What Does It Take To Be an Entrepreneur?

1. Chief Visionary Officer You must visualize what you want your small business to become over the long haul. Stephen Covey’s most famous concept is “Begin with the End In Mind!”  This is true in business and in life.  This is the step that gets people in trouble all too often.  Don’t get excited about making one initial sale.  Take the time to plan out your business model and write out a business plan. Think about what you want your business to be ultimately in terms of number of employees, number of locations, and amount of revenue etc. this will dictate everything you do as you start and grow your business.

2. Chief Sales Officer Nobody should be able to sell your business better than you. You need to be a selling machine.  Networking feeds the sales of your business.  People do business with people they like and know.  If you are known more internally at your current job than externally, spend the time to build your network before your start your business.  If you are really not that great at networking, there are two options: get a partner with a great rolodex who loves to network or take some sales training courses to develop a structured system to get it done.

3. Marketing Manager Your marketing efforts are the life’s blood of your business.  You must market strategically. You have limited time and limited resources. The narrower your niche market, the easier it is to focus on where to engage your customers. When you are just starting a business you should do marketing activities weekly.  Social media marketing activities must be done at least three times a week.NameTag_CVO

4. AR/AP Manager (Accounts Receivable /Accounts Payable) One of the most important things you need to do to have a successful small business is to stay on top of who you need to pay, and who owes you money.  You should develop a set policy for when you cut checks to vendors and payroll such as every two weeks.  When you can, try to negotiate credit terms with all of your vendors. Push for Net 45 if you can.

5. HR Manager All part time, full time and contract employees will be hired by you.  That means you will need to develop job descriptions for each position and conduct interviews for all positions needed. If you work with a temp agency you will still need to provide a job description.  No employees should be hired until you can afford their salary, taxes and benefits for at least six months. A year is even better.

What other jobs do you think a small business owner needs to do?  Please leave a comment.

WANT TO USE THIS ARTICLE IN YOUR EZINE, E-NEWSLETTER OR WEB SITE? You may, as long as you include this complete blurb with it:

Melinda Emerson “SmallBizLady” is a Veteran Entrepreneur, Small Business Expert and Social Media Coach who hosts #smallbizchat on Twitter.  #Smallbizchat is the trusted Twitter resource to discuss everything entrepreneurs need to know about launching and running a profitable small business.  Melinda’s first book, Become Your Own Boss in 12 months; A Month-By-Month Guide To a Business Than Works! is scheduled to be released by Adams Media in March 2010.

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