Saturday, January 31, 2009

What? In This Economy???

Today, BusinessWeek was out there with this same topic, but to tell you the truth, we're back to the same place I continue to address. It's easy to read these kinds of tips, but unless you have a mentor holding your hand through the steps, chances are you're going to "cave" in the pressure, or rush some important steps. I have to admit I got a little uncomfortable "flutter" reading through their points. I can only imagine how some of you might feel.

So, to the last point in my list:

You just got laid off and you're thinking about starting your own business...
  1. You don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
  3. You may not have a clear business idea.
  4. How much will it cost?
  5. What? In this economy????
One should not start a business because they got laid off from their job, but perhaps because the lay-off has made them realize that they truly might have it within themselves to realize their dreams.

If you've gone through the self-exploration outlined in the previous steps above, you're now going to have some idea of what you need to pull this off. Here you are, in this economy with it's challenges and you want to do something different. I believe that the US is the best place to start a new business. For better or worse, the lack of stringent regulation for the average small business owner makes more possible. It gives us a hand-up to try that new thing. I know I'm making a generalization here on the regulation but seriously, how many of you spoken to people in other countries who want to "hang a shingle out" and just start doing something. We've got it made it the shade in comparison with many countries.

This kind of laissez-faire attitude can go in the other direction. Intuit tells us that all you need is a copy of Quickbooks and we're on our way. For many of my 15 years of consulting I've done "forensic bookkeeping" to uncover and fix years of mistakes of the small business owner. The one's who just started up and kept going, asking non-professional friends to help out with crucial financial organization of their books. In the end, it cost them crucial 'bucks" to get it all straightened out.

If you folks have questions about where you need help and where you might be able to go it alone, please email me at melissabartonconsulting@gmail.com or post here to this page with a comment.

Friday, January 30, 2009

How Much Do I Need?

You just got laid off and you're thinking about starting your own business...
  1. You don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
  3. You may not have a clear business idea.
  4. How much will it cost?
Let's all just have a good, nervous laugh here...
I was actually putting this post off today because I had a lot going on. If I remembered what I was supposed to write, I'd have put it off anyway! (But I did not watch CNN all day...)

So, let's get to it. I'm going to cover both bases in this post, service and product-based businesses because the first one is pretty easy. I will start though with a quote that I'm afraid I cannot correctly attribute, but it goes like this: "When you're a consultant it's like you're 'renting your brain'."

What this person was trying to say is that you have a limited amount of hours in your day a limited amount of days in your year to bill. The big "B" Billable Hours. That's fine. You can start there. You can think about these things:
  • How many hours do I want to work?
  • How many clients do I want to serve?
  • What is the standard rate in my community for what I do?
  • Can I do any of this or all of this from a home office?(sub-topic to be covered later)
  • Does this all tally up to the amount of money that I need to bring in or do I need to re-hash the numbers?
  • What will be my goals for all of the above on a monthly or quarterly basis for my first year and can I live with that?
Okay, the next set of issues to think about is for a product-based business:
  • Am I creating this product or is someone else?
  • Do I have the numbers on how much production will cost?
  • Do I have the numbers on how much inventory I will need (if any)?
  • Do I know what my overhead will be on a monthly basis for the first 6 months?
  • Do I need to hire other folks right out of the gate?
As you already know, the product-based business is going to need some up-front money. You really need to think "worst-case scenario" here and assume little to no income for 6 months to be safe.
Remember again that you can choose to not pay yourself to work in a store that you own, but you must pay yourself something to produce a product or your business plan will never work in the future.

When you get someone to help you with a business plan, this is really going to be the "meat". And, this "meat" changes all the time. Leasing rates change, credit possibilities change :::clearing throat::: And lastly, your competition and what the market will bear will change. Make sure your plan is up to date!

A PR specialist asked me yesterday what would I expect from a PR firm as a new business owner, hiring a firm for the first time. I said that I would want a great article about my opening business in the local business journal and some ideas about what kind of event to hold and who I should invite (and how to get them there) would be a start.

I thought I'd share that with you as a thought about marketing. Now, one last thought:

Sometimes we spend an awful lot of time doing the things that are easy and comfortable for ourselves, even when we're starting something new. I'd like to challenge you (and me) to work on that a bit and try a new "something" every day to get us closer to where we want to be.

Wednesday, January 28, 2009

Class is at Recess!!!

...or "it's a snow day!" "first day of Summer vacation!"
I hereby give you permission to dream.
Shut up all the doomsday people in your life.
Take a break from what some people are calling "the reality".
Start making your reality.

No class today. I hereby declare this a holiday from seriousness.
Hey, if you can't play, you can't dream and what am I always saying??
Yes, Class.
Go dream.

What's my Business Idea?, Part II

You just got laid off and you're thinking about starting your own business...
  1. You don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
  3. You may not have a clear business idea.
Everything written yesterday about doing what you love still stands, but today I'll focus on a product-based business:
  • What events do you go to where products are sold (e.g. fairs, conventions)?
  • What products related to past jobs do you see a need for, done better?
  • Have you "mined" your current connections for people who are making/doing things that interest you?
  • Are you an inventor, crafts person or promoter or visionary (really!)?
  • What gets your heart pounding when you talk about it?
I love that last one. So overlooked. I, myself thought for years that I had no passion for "doing something." To those who know me, that would be pretty funny. I think that perhaps I looked at other people and saw them already in business or professionals realizing their dreams, and thought that because I wasn't at that place yet, I had no passion! It's the seed, people!

If you jump really quickly into the feasibility question, you can lose some of that creative energy that you'll need to use in brainstorming ideas and possibilities. Let your mind go. Just start writing down lots of notes about what "stuff" the world wants or needs from your perspective. Write down the people you know who have "cool stuff" that really interests you and why. And write down how you see yourself in the process of creating a project.

Go dream!

Tuesday, January 27, 2009

What's My Business Idea?


You just got laid off and you're thinking about starting your own business...
  1. You don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
  3. You may not have a clear business idea.
We all think about possible businesses according to what we're naturally interested in. I'm not going to talk you out of that. That's a good way to go for one big reason: If you don't love what you do, you won't do it well.
I could tell you so many stories of people going to franchise conventions or googling trending sites to see what's hot right now. I'm sure that must work for some people, but chances are it's not going to work for you. What will work is if you look at all the possibilities of what is connected to all the things you love to do.
I'll pick one out of my hat: You love Pilates and are an instructor. You see a trend in healthcare. Start a business catering to healthcare professionals at your local hospital and clinics at lunchtime!
Okay, another one: You're a PR professional (and probably have so many contacts you don't even need to read this) and you decide to help other small businesses get their first press release out to the business journals, etc. You find a list of new businesses that have started up in your town/city in the past 6 months.

Both of the examples given above are things that you can do with little to no capital (will be covered more in depth tomorrow) and can grow in different directions. Either going too broad, or too narrow in your idea will be problematic. An example of too broad may be, "I want to teach Fitness." Too narrow may be "I want to teach fitness to woman aged 20-40 who live in my neighborhood." I'm not saying that either of these will not eventually end up being your reality, but if you want to start that business plan, you're going to need something that you can research the feasibility of.
Today, I just want you to think about these things:
  • What am I good at?
  • What do I love to do?
  • What do other people compliment me on?
  • When I get up in the morning, what would be the thing that I might most like to be doing?
On this last one, you can think more broadly, like are you a morning or night person, or I like to go to the computer first, or I hate being on the phone, etc.

These are the questions I give my clients. What it would mean to work with a "mentor" like me is that I can guide you through these steps quickly and perhaps hear and see things in your answers that you don't perceive yourself. Even if I only spend an hour a week on the phone with you, it can help clearly define what it is perhaps that you're really wanting to do and "cut out" to do.
Tomorrow I'll talk about this again from a product-based business.
Start dreaming!

Monday, January 26, 2009

Business Plan for Service-Based Company


You just got laid off and you're thinking about starting your own business...
  1. But, you don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
Yesterday we covered the above quandary with a product-based model. Today let's talk about a service-based model.

We should still think in terms of the business plan and if people need your service(s). All that research is very important. It can be a little less straightforward when it comes to the fee structure. You may employ one, any or all of these fee structures over time or with different clients. What works in one situation does not always work in all.

One of the first things a client will ask you is "How much is this going to cost?" This of course is a very tricky question because most of the time, you will have no idea what "this" actually is until you go in and get your hands a little dirty. I would always recommend a free evaluation lasting an hour on-site. It's really only when you see a situation for yourself that you can make a clear "estimate" .
If you are offering services that do not relate to a particular situation, like an hour of phone consultation or office consultation this would not apply to you. If you are about to repair something like a computer system for an entire office, seeing the situation may not be crucial, but it may change the way you choose to bill because of the organization or (lack of) that you see on-site.
Here are some options for fee-based services:
  • Hourly (with a mininum)
  • Daily (with or without expenses)
  • Value-based (based on what is produced by your service)
  • Retainer and monthly fee
  • Subscription (a range of time put in, say at least 20 hours monthly at a flat rate paid in advance.)
I'll speak to this last one a bit because it's a little more unusual but can work in a difficult economy or with a nervous client. What you're saying is:
"I will work at least X hours monthly and probably more by being on call for you. These are my hours and you (or your staff) may call me during those hours for immediate assistance all month long."

You may wonder how that could work for you?! Well, if you know the client and have worked a little with them, this may be a sort of maintenance contract. Because the money is paid up front, monthly you have certain income. Because they are not watching the clock all the time, worried, they get a sense that you're really there for them.

What you need to do to make this work is to have a flexible schedule and fit them in so that they are not taking away from your other clients, but are actually filling time that you might otherwise not be working. Of course the hours and fees would still need to be negotiated, but having at least one client on this kind of plan may create some security for you and keep you easily engaged with their process.

Contracts like this can also be a stepping stone to bringing on other folks into your company. If you do the initial work, having others do the upkeep may be a way to increase your income.

Someone once said to me "Being a consultant is like renting your brain." What she was eluding to is the 24 hour day and how to make more of it. You can be sure I'll talk more about this in the future as well.
Good day, folks!

Sunday, January 25, 2009

How Feasible is My Business Idea?

This is the first in a series of scenarios described to help you find where you are and how you might benefit from a little professional mentoring.

You just got laid off and you're thinking about starting your own business...
  1. But, you don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
  3. You may not have a clear business idea.
  4. How much will it cost?
  5. What? In this economy????
The first words that come to mind here for most people is Business Plan.
Let's take a step back and do a quick evaluation. Business plans can be very intimidating to the uninitiated and even the seasoned entrepreneur. It's true that this is one of the big elements of a business plan. Before starting that process, let's cover some basic questions to get your head in the right place.
Before I start this though, I'm going to tell you that there are many different formulas for many different kinds of businesses. The market place we're in is changing so quickly with the advent of the internet. These questions are just a starting point to head you in the right direction.

Let's assume you have a product, not service (we'll cover that later)
  • What can my product bring on the retail market?
  • Can I produce my product for one quarter of that price (excluding overhead)?
  • Will I or someone else make this product?
  • If I am to make this product, am I clear about the cost of my time to make it?
  • If someone else is to make this product, do you have a manufacturer in mind and know what their minimum orders are?
In the second point here, I'm covering something that I run through quickly when I look at any product. It's a fast calculation. This calculation doesn't include overhead because those are the elements that are ever changing in our marketplace right now: advertising, rent, etc.

The elements that are something that you can quantify now are materials and labor. We can assume a 100% markup of a retail product. So, that means you're going to charge the retailer half. If half of that again is the production of that product, does that mean the other half of that (one quarter of the final price) is my profit? No.

The other half of what you are payed for your product is your overhead: Everything that is not directly related to the production of your product.

This is where a lot of folks go astray: They think that if they are making this product themselves, they are saving on production. NO! You must pay yourself to make this product. If you don't, you will never be able to afford to pay anyone else to make it and therefore your business model is flawed.

The one place you can afford to push yourself here is in perhaps time spent marketing. In the beginning, when you are just finding your way, you can expect to spend way more time doing this than ever. It's okay to "over-spend" this time. You just can't over-spend your production time.
If you are over-spending on your production time, perhaps you didn't spend enough time on R&D (research and development). Take the time then and figure out how you can make it faster, better. That is time well spent. VERY well spent.

Next, we'll step up to the same question from a services perspective!

Friday, January 23, 2009

Where Are You Now? #1


This is the first in a series of scenarios described to help you find where you are and how you might benefit from a little professional mentoring.

You just got laid off and you're thinking about starting your own business...
  1. But, you don't know if working for yourself is something that fits your personality
  2. You're not sure how feasible your business idea is.
  3. You may not have a clear business idea.
  4. How much will it cost?
  5. What? In this economy????
I'm going to take these issues one at a time and shed some light on them.
#1 is really about temperament, isn't it? Everyone's personality needs a little objective observation from someone like myself, but I'll give you some guidelines to think about:
  • Do you feel most comfortable with an office to go to and a regular check?
  • Do you feel most comfortable working in a team member or a leader?
  • Are you curious?
  • Do you do well in interviews?
  • Do you know someone well who works for themselves?
  • Do you know what you want your day to look like/feel like?
You may not know how to answer some, or even all of these questions right now. Not one of them is the sign of an entrepreneur unto themselves, but each one signals an aspect of personality that comes into play.
Working for yourself if you have it in you can be a great adventure. Learn to separate your fears from your actual nature and what makes you tick.

Keep reading as I move through the different phases or deciding whether or not to strike out on your own!

Blog vs. Web Page

As a small business person myself, I came to this fork in the road as I grow my business again. I've done the website thing in the past, but one thing that strikes me in this climate of instant everything is that a blog seems much more alive to me. It's actually the case for me that when I look at a website now, I'm thinking, 'Gee, I wonder the last time this was updated?'
So, I've decided to just not go there. I'm making the commitment to you and myself to stay out there and give you a place to see just what is going on. Just what news I'm coming across that I can pass along and what my finger feels as it points in the wind.
Many of us are on Twitter and Facebook, but it's about finding those resources that really work for you and where YOU are right now. That's where you'll come back to, to bookmark.

Please comment to your heart's content! I want to hear from you and know what kind of guidance would be useful.

I can do mentoring via the phone for those long distance and for those of you who are in the Portland, OR area, I'm here for you in person.

Thanks for joining me,

Best,
Melissa