Before Launching, Organize Personal Finances
Aspiring entrepreneurs preparing to start businesses will find that savings, credit access, and credit scores matter more than market research and investor presentations
By Monica Mehta - Courtesy of Business Week
What happens when your paychecks stop and your business isn’t bringing in steady cash flow or locking in meaningful investment? You live on personal savings. To give your venture the best shot, prepare for that reality before you quit your day job. You can get started with this checklist.
1. First determine how much you will need to cover personal expenses while launching your startup. Mint.com has a good monthly budget calculator. Budget for 18 to 24 months without a salary, to be safe. That length could vary, depending on how quickly you earn a profit or get a round of financing.
It took Sally Jones and Jill Friedman 18 months to raise $425,000 from friends, family, and angel investors for their first venture, Giddy, a manufacturer of kids’ snacks in San Francisco. They each invested $10,000 and dipped into personal savings to cover living expenses before getting that first round last November. “However long you think it will be before you can start drawing a salary, double [the amount of time], and then add some more,” says Jones.
2. Be sure to include your business partners in the conversation. Discuss not only the amount of capital they are planning to invest in the startup, but also how long they can go without drawing a salary. Their financial well being is as relevant as your own.
3. To make sure you can last until cash starts coming in, get lean. Start by making a list of expenses for the past three months; most credit cards offer detailed payment activity that can be downloaded to Excel or QuickBooks. Scrutinize expenses one by one, identifying those you can do without. Jones renegotiated her rent, cut back on restaurant dinners and beauty treatments, and canceled her gym membership. She also deferred her student loans.
4. Know that student loans can be deferred for up to two years by filing for a temporary economic-hardship dispensation. You must not be making any money to qualify; start-up life certainly fits that description. To get deferment forms, reach out to your loan servicer. To find out which one you’re using, visit the National Student Loan Data System. Budget six months to research your options and get the ball rolling.
5. Take on part-time consulting gigs. Employers are increasingly relying on consultants to fill gaps without incurring fixed overhead costs. Search sites such as oDesk and Elance for opportunities. Also make your availability known to previous employers and co-workers.
6. Make big purchases now, while you can. “The lending landscape in recent years has become incredibly tight,” says Santa Fe (N.M.)-based personal finance expert Manisha Thakor. “In the absence of steady income, your ability to attain a home mortgage or car loan will not only deteriorate, but potentially stop altogether.”
7. Consider increasing your credit limit on existing cards and applying for new ones. Your reliance on credit will increase dramatically in your company’s early days. Young businesses get about three-quarters of their funds from banks via loans, credit cards, and lines of credit, according to the Small Business Administration’s Office of Advocacy. Seek adjustments while issuers still think you are a worthy risk.
8. Strengthen your credit score while you are still employed. “Your credit score is like a hot dog,” says Thakor. “No one entirely knows what goes into it.” While the exact formula remains a mystery, four moves taken at least six months in advance of quitting your job can help boost it.
First, pay bills on time. Even being one or two days late can reduce your score and it can take months to bounce back; Thakor suggests you set up as many online automatic bill payments as you can. Next, make sure your ratio of revolving usage to available credit remains below 30 percent. The best way to lower utilization is to increase availability of credit. That’s why I suggested above that you increase the amount of credit you have access to. The trick is to refrain from using it now.
In addition, keep your oldest credit cards intact; the length of your credit history plays an important role in the way your overall score is calculated. Finally, clean up any errors on your credit report by pulling a free copy from annualcreditreport.com. A study released in May 2011 by the Policy and Economic Research Council found potential errors in nearly 20 percent of reports examined.
9. Once you launch your business, keep spending on track in the early days by setting up a weekly cash burn analysis, to track budgeted vs. actual costs for major expenses. By catching unexpected increases quickly, you can make counterbalancing cuts to preserve your capital.
By Monica Mehta - Courtesy of Business Week
What happens when your paychecks stop and your business isn’t bringing in steady cash flow or locking in meaningful investment? You live on personal savings. To give your venture the best shot, prepare for that reality before you quit your day job. You can get started with this checklist.
1. First determine how much you will need to cover personal expenses while launching your startup. Mint.com has a good monthly budget calculator. Budget for 18 to 24 months without a salary, to be safe. That length could vary, depending on how quickly you earn a profit or get a round of financing.
It took Sally Jones and Jill Friedman 18 months to raise $425,000 from friends, family, and angel investors for their first venture, Giddy, a manufacturer of kids’ snacks in San Francisco. They each invested $10,000 and dipped into personal savings to cover living expenses before getting that first round last November. “However long you think it will be before you can start drawing a salary, double [the amount of time], and then add some more,” says Jones.
2. Be sure to include your business partners in the conversation. Discuss not only the amount of capital they are planning to invest in the startup, but also how long they can go without drawing a salary. Their financial well being is as relevant as your own.
3. To make sure you can last until cash starts coming in, get lean. Start by making a list of expenses for the past three months; most credit cards offer detailed payment activity that can be downloaded to Excel or QuickBooks. Scrutinize expenses one by one, identifying those you can do without. Jones renegotiated her rent, cut back on restaurant dinners and beauty treatments, and canceled her gym membership. She also deferred her student loans.
4. Know that student loans can be deferred for up to two years by filing for a temporary economic-hardship dispensation. You must not be making any money to qualify; start-up life certainly fits that description. To get deferment forms, reach out to your loan servicer. To find out which one you’re using, visit the National Student Loan Data System. Budget six months to research your options and get the ball rolling.
5. Take on part-time consulting gigs. Employers are increasingly relying on consultants to fill gaps without incurring fixed overhead costs. Search sites such as oDesk and Elance for opportunities. Also make your availability known to previous employers and co-workers.
6. Make big purchases now, while you can. “The lending landscape in recent years has become incredibly tight,” says Santa Fe (N.M.)-based personal finance expert Manisha Thakor. “In the absence of steady income, your ability to attain a home mortgage or car loan will not only deteriorate, but potentially stop altogether.”
7. Consider increasing your credit limit on existing cards and applying for new ones. Your reliance on credit will increase dramatically in your company’s early days. Young businesses get about three-quarters of their funds from banks via loans, credit cards, and lines of credit, according to the Small Business Administration’s Office of Advocacy. Seek adjustments while issuers still think you are a worthy risk.
8. Strengthen your credit score while you are still employed. “Your credit score is like a hot dog,” says Thakor. “No one entirely knows what goes into it.” While the exact formula remains a mystery, four moves taken at least six months in advance of quitting your job can help boost it.
First, pay bills on time. Even being one or two days late can reduce your score and it can take months to bounce back; Thakor suggests you set up as many online automatic bill payments as you can. Next, make sure your ratio of revolving usage to available credit remains below 30 percent. The best way to lower utilization is to increase availability of credit. That’s why I suggested above that you increase the amount of credit you have access to. The trick is to refrain from using it now.
In addition, keep your oldest credit cards intact; the length of your credit history plays an important role in the way your overall score is calculated. Finally, clean up any errors on your credit report by pulling a free copy from annualcreditreport.com. A study released in May 2011 by the Policy and Economic Research Council found potential errors in nearly 20 percent of reports examined.
9. Once you launch your business, keep spending on track in the early days by setting up a weekly cash burn analysis, to track budgeted vs. actual costs for major expenses. By catching unexpected increases quickly, you can make counterbalancing cuts to preserve your capital.
One Less Hassle for Small Business Owners?...added 3-7-11
By Peter Barnes - Courtesy of Foxbusiness.com
The House of Representatives last week took the first step in repealing a major looming paperwork hassle for small business.
President Obama's health care reform law requires small businesses, starting in 2012, to report to the IRS all payments of more than $600 on 1099 forms. The provision is intended to catch tax cheats.
But critics say it will create a big burden for struggling small firms and cost more to comply with than it would raise in tax revenue.
“It's a reporting requirement. I call it a snitch act. It's basically assuming the people you do business with are cheating”, said Rep. Dan Lungren (R-CA). “So therefore, the government requires paperwork on your side because of something they believe may or may not be occurring with respect to somebody on the other side of a business transaction.”
The Senate is expected to pass the House measure and the President has said he will sign it.
“The President thinks it's bad. Democrats think it's bad. Republicans think it's bad. Even the Senate thinks it's bad,” said Rep. Charles Boustany (R-LA). “It's taken long enough to move on this. Let's do it. Let's get it done.”
The Senate is expected to pass the change within weeks.
The House of Representatives last week took the first step in repealing a major looming paperwork hassle for small business.
President Obama's health care reform law requires small businesses, starting in 2012, to report to the IRS all payments of more than $600 on 1099 forms. The provision is intended to catch tax cheats.
But critics say it will create a big burden for struggling small firms and cost more to comply with than it would raise in tax revenue.
“It's a reporting requirement. I call it a snitch act. It's basically assuming the people you do business with are cheating”, said Rep. Dan Lungren (R-CA). “So therefore, the government requires paperwork on your side because of something they believe may or may not be occurring with respect to somebody on the other side of a business transaction.”
The Senate is expected to pass the House measure and the President has said he will sign it.
“The President thinks it's bad. Democrats think it's bad. Republicans think it's bad. Even the Senate thinks it's bad,” said Rep. Charles Boustany (R-LA). “It's taken long enough to move on this. Let's do it. Let's get it done.”
The Senate is expected to pass the change within weeks.
Obama Wants Panel to Select Federal Property to Sell Off...added 3-2-11
Courtesy of Foxnews.com
President Obama plans to propose a new commission Wednesday tasked with extracting billions of dollars in savings by figuring out what to do with the federal government's bloated real estate inventory.
The government is holding onto thousands of excess and underused properties, and despite recurring commitments to shed them it has struggled to break through the red tape and make it happen.
According to a senior administration official, the president will propose a board of private- and public-sector leaders to identify which civilian buildings to sell or consolidate and put a set of recommendations to Congress for an up-or-down vote.
The official said the approach should help the government break through the bureaucracy and special interests which typically hold up the process -- efforts to sell excess federal property are often caught up by a requirement that Washington first offer it to other agencies or local governments.
The official said the recommendations should return $15 billion in savings over three years.
The move by Obama comes a day after the Government Accountability Office released a staggering report detailing billions of dollars in waste across hundreds of duplicative and overlapping programs. Republicans seized on the report as evidence that more must be cut from the federal budget.
The senior administration official, citing Obama's State of the Union address pledge to streamline government, said proposals in the president's 2012 budget plan targeting duplicative or ineffective programs would save $33 billion in one year.
The commitment to shedding the real estate fat is not a new one. Obama over the summer signed a memorandum ordering department heads to "identify and eliminate" unneeded properties, with the goal of saving at least $3 billion by fiscal 2012. Former President George W. Bush made a similar efficiency pledge in 2004.
While the administration claims it's making serious headway, a recent inventory from the Federal Real Property Council showed that the federal government picked up thousands of new buildings in 2009.
President Obama plans to propose a new commission Wednesday tasked with extracting billions of dollars in savings by figuring out what to do with the federal government's bloated real estate inventory.
The government is holding onto thousands of excess and underused properties, and despite recurring commitments to shed them it has struggled to break through the red tape and make it happen.
According to a senior administration official, the president will propose a board of private- and public-sector leaders to identify which civilian buildings to sell or consolidate and put a set of recommendations to Congress for an up-or-down vote.
The official said the approach should help the government break through the bureaucracy and special interests which typically hold up the process -- efforts to sell excess federal property are often caught up by a requirement that Washington first offer it to other agencies or local governments.
The official said the recommendations should return $15 billion in savings over three years.
The move by Obama comes a day after the Government Accountability Office released a staggering report detailing billions of dollars in waste across hundreds of duplicative and overlapping programs. Republicans seized on the report as evidence that more must be cut from the federal budget.
The senior administration official, citing Obama's State of the Union address pledge to streamline government, said proposals in the president's 2012 budget plan targeting duplicative or ineffective programs would save $33 billion in one year.
The commitment to shedding the real estate fat is not a new one. Obama over the summer signed a memorandum ordering department heads to "identify and eliminate" unneeded properties, with the goal of saving at least $3 billion by fiscal 2012. Former President George W. Bush made a similar efficiency pledge in 2004.
While the administration claims it's making serious headway, a recent inventory from the Federal Real Property Council showed that the federal government picked up thousands of new buildings in 2009.
How Small-Business Owners Can Prevent a Cyber Attack...added 2-24-11
By Cindy Vanegas - Courtsey of FoxBusiness.com
A cyber attack, whether it's loss of customer data, corrupted hardware, or loss of access to online files and software programs, can cripple a business' operations.
Most often we hear of corporate giants becoming victims of cyber attacks. But small businesses are just as susceptible and often underprepared to handle such attacks. A study by Internet security software company AVG Technologies, found that 52% of small business owners polled don't have an IT security policy.
So what can a small business owner do to prevent a cyber attack? We asked leading online security experts from around the country and here's what they had to say:
Invest in Your Technology
When it comes to protecting your business, it's better to play offense.
Robert Gorby, global head of Small Business Marketing at AVG Technologies advised:
•Spend time acknowledging what type of protection you need. Ask yourself, are you just using workstations or do you have remote employees? Are you using file servers and e-mail servers? Make sure the technology protection you are using matches the network your business is running. Often, businesses protect their laptops and PCs, but their file servers or e-mail servers don't have protection.
•Consider how Internet active the business is. Do you have online customer data? Do you enable online transactions? If so, consider higher-end protection like Internet security as opposed to simple anti-virus.
•Protect remote workers. If you have a lot of remote workers who dial in, consider having firewalls on laptops and PCs.
•If you are hiring an outside IT security company, look at business testimonials. Sometimes when business owners speak to consultants, they don't understand the technicalities being explained, so they should ask for references, credentials, awards and certifications.
Create a Company Policy
Not all attacks occur from outside the building, it can just as easily be a disgruntled employee.
Tim Hogan, Elite Services consultant at Alper Services, recommended:
•Create a risk assessment team that will determine who needs access to what within the company. That will help you figure out where logins and extra security are required.
•Put controls in place for physical assets. Are laptops locked up every night or can they just be popped out of the docking stations? Do your employees know not to leave a laptop in the backseat of a car? Do you have a policy for what can go on an easily misplaced thumb drive? Are the places where your information is stored easily transportable?
•Test your security measures. Most people don't understand or test their systems. Testing these systems will show you where vulnerabilities or holes exist. Set up a regular schedule for threat assessments.
Train Your Staff
People tend to be more careful and secure on their home computers than they are at work, make that change.
Aimee Larsen Kirkpatrick, director of communications and outreach at the National Cyber Security Alliance, advised:
•Make security part of the workplace culture. Often, business owners will bring in someone to make a presentation at lunch and then everyone goes back to work forgetting everything they just heard. By making security a 365-day practice; by requiring daily file back-ups, employees understand they have a stake in keeping the company safe.
•Teach employees to identify threats like phishing, spear-phishing and social engineering. Good e-mail practices include knowing when not to click on links and taking time to verify with the sender.
•Invest in multi-factor authentication and teach employees to make strong passwords. Have a policy with social media so that data is not being compromised.
A cyber attack, whether it's loss of customer data, corrupted hardware, or loss of access to online files and software programs, can cripple a business' operations.
Most often we hear of corporate giants becoming victims of cyber attacks. But small businesses are just as susceptible and often underprepared to handle such attacks. A study by Internet security software company AVG Technologies, found that 52% of small business owners polled don't have an IT security policy.
So what can a small business owner do to prevent a cyber attack? We asked leading online security experts from around the country and here's what they had to say:
Invest in Your Technology
When it comes to protecting your business, it's better to play offense.
Robert Gorby, global head of Small Business Marketing at AVG Technologies advised:
•Spend time acknowledging what type of protection you need. Ask yourself, are you just using workstations or do you have remote employees? Are you using file servers and e-mail servers? Make sure the technology protection you are using matches the network your business is running. Often, businesses protect their laptops and PCs, but their file servers or e-mail servers don't have protection.
•Consider how Internet active the business is. Do you have online customer data? Do you enable online transactions? If so, consider higher-end protection like Internet security as opposed to simple anti-virus.
•Protect remote workers. If you have a lot of remote workers who dial in, consider having firewalls on laptops and PCs.
•If you are hiring an outside IT security company, look at business testimonials. Sometimes when business owners speak to consultants, they don't understand the technicalities being explained, so they should ask for references, credentials, awards and certifications.
Create a Company Policy
Not all attacks occur from outside the building, it can just as easily be a disgruntled employee.
Tim Hogan, Elite Services consultant at Alper Services, recommended:
•Create a risk assessment team that will determine who needs access to what within the company. That will help you figure out where logins and extra security are required.
•Put controls in place for physical assets. Are laptops locked up every night or can they just be popped out of the docking stations? Do your employees know not to leave a laptop in the backseat of a car? Do you have a policy for what can go on an easily misplaced thumb drive? Are the places where your information is stored easily transportable?
•Test your security measures. Most people don't understand or test their systems. Testing these systems will show you where vulnerabilities or holes exist. Set up a regular schedule for threat assessments.
Train Your Staff
People tend to be more careful and secure on their home computers than they are at work, make that change.
Aimee Larsen Kirkpatrick, director of communications and outreach at the National Cyber Security Alliance, advised:
•Make security part of the workplace culture. Often, business owners will bring in someone to make a presentation at lunch and then everyone goes back to work forgetting everything they just heard. By making security a 365-day practice; by requiring daily file back-ups, employees understand they have a stake in keeping the company safe.
•Teach employees to identify threats like phishing, spear-phishing and social engineering. Good e-mail practices include knowing when not to click on links and taking time to verify with the sender.
•Invest in multi-factor authentication and teach employees to make strong passwords. Have a policy with social media so that data is not being compromised.
The Taxman Cometh in 2011 for Online Entrepreneurs...added 2-16-11
Written by Carol Tice - Courtsey of Entreprenur.com
Since the dawn of the Internet, small retailers have lived in a magical, tax-free bubble. First off, they didn't collect sales tax -- an advantage that is likely to be gone shortly, with the inevitable approval of the Streamlined Sales and Use Tax Agreement currently before Congress. Some individual states aren't waiting and are already pressing for sales-tax collection on online sales.
But even more, small e-tailers didn't pay income tax. Ecommerce platforms such as PayPal were not obligated to send the IRS reports on its users' income. It was, as they say at the casinos, a cash business. If you neglected to mention on your tax return your income from selling ebooks or garage-sale merchandise you put on eBay, the IRS was none the wiser. You were under the radar.
For anyone who makes even a modest amount selling online, that income-tax holiday ends this year. Unlike the new rule demanding a 1099 form for every vendor you pay at least $600, there's no outlook that income-tax reporting for ecommerce sales will be repealed. It's here to stay.
Here's what you need to know:
Starting this year, PayPal, Amazon Payments, and other similar electronic-payment platforms are obligated will begin reporting to the IRS any account that earned more than $20,000 selling more than 200 individual items. Banks and debit-card providers will also be sending forms recording income that flowed into merchant accounts.
Why is this happening? Our government needs money to help dig us out of debt, and taxing previously hidden revenue is one of the IRS's top priorities. Of the $290 billion in unpaid taxes the IRS estimates our nation is owed each year, 40 percent is attributed to underreported taxes that should have been paid by small businesses and the self-employed. The agency is out to fix a lot of that problem by starting to capture income tax from ecommerce sales.
Translation: Anyone with even a serious part-time ecommerce business they're running on the side is going to be getting a 1099 next year about this time. If you are self-employed and haven't been paying income tax on this revenue, you need to learn about self-employment tax. That's the type of tax you'll owe on your online income.
You may be able to pay annually your first year, but after that you'll have to estimate and pay tax on ecommerce revenue quarterly, based on your sales this year.
Take a look at your tax rate from last year and the amount you made selling online. Do the math, and you've got a guesstimate of what you will owe. Plan accordingly, whether it's raising your prices, finding cheaper vendors, cutting other expenses, or finding ways to sell more to make up for what you'll lose in taxes.
While e-tailers may be steamed at this new 1099 requirement -- which was shoehorned into the healthcare reform bill -- traditional retailers are no doubt breathing a huge sigh of relief. A very unlevel playing field will take a big step toward getting level again when PayPal starts sending 1099s.
Since the dawn of the Internet, small retailers have lived in a magical, tax-free bubble. First off, they didn't collect sales tax -- an advantage that is likely to be gone shortly, with the inevitable approval of the Streamlined Sales and Use Tax Agreement currently before Congress. Some individual states aren't waiting and are already pressing for sales-tax collection on online sales.
But even more, small e-tailers didn't pay income tax. Ecommerce platforms such as PayPal were not obligated to send the IRS reports on its users' income. It was, as they say at the casinos, a cash business. If you neglected to mention on your tax return your income from selling ebooks or garage-sale merchandise you put on eBay, the IRS was none the wiser. You were under the radar.
For anyone who makes even a modest amount selling online, that income-tax holiday ends this year. Unlike the new rule demanding a 1099 form for every vendor you pay at least $600, there's no outlook that income-tax reporting for ecommerce sales will be repealed. It's here to stay.
Here's what you need to know:
Starting this year, PayPal, Amazon Payments, and other similar electronic-payment platforms are obligated will begin reporting to the IRS any account that earned more than $20,000 selling more than 200 individual items. Banks and debit-card providers will also be sending forms recording income that flowed into merchant accounts.
Why is this happening? Our government needs money to help dig us out of debt, and taxing previously hidden revenue is one of the IRS's top priorities. Of the $290 billion in unpaid taxes the IRS estimates our nation is owed each year, 40 percent is attributed to underreported taxes that should have been paid by small businesses and the self-employed. The agency is out to fix a lot of that problem by starting to capture income tax from ecommerce sales.
Translation: Anyone with even a serious part-time ecommerce business they're running on the side is going to be getting a 1099 next year about this time. If you are self-employed and haven't been paying income tax on this revenue, you need to learn about self-employment tax. That's the type of tax you'll owe on your online income.
You may be able to pay annually your first year, but after that you'll have to estimate and pay tax on ecommerce revenue quarterly, based on your sales this year.
Take a look at your tax rate from last year and the amount you made selling online. Do the math, and you've got a guesstimate of what you will owe. Plan accordingly, whether it's raising your prices, finding cheaper vendors, cutting other expenses, or finding ways to sell more to make up for what you'll lose in taxes.
While e-tailers may be steamed at this new 1099 requirement -- which was shoehorned into the healthcare reform bill -- traditional retailers are no doubt breathing a huge sigh of relief. A very unlevel playing field will take a big step toward getting level again when PayPal starts sending 1099s.
Small Business Borrowing Continues to Grow...added 2-3-11
Courtsey of FoxBusiness.com
Borrowing by small businesses jumped for a fifth straight month in December, data released by PayNet Inc yesterday showed, a fresh sign that the U.S. economic recovery is gaining ground.
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 20 percent in December from the same month a year earlier, PayNet said.
That is the fastest monthly gain since March 2006, with the index registering the highest level of borrowing since July 2008. Separate data also released on Tuesday showed a decline in small business loan delinquencies.
"They are borrowing more and they are finding it easier to pay their bills," William Phelan, PayNet's president and founder, said in an interview. "The recovery is growing and remains on a solid footing."
The surge in borrowing by small businesses, seen as harbinger for the broader economy because they account for as much as 80 percent of new hiring, comes amid other signs the economy is headed for renewed expansion.
Factory activity in the U.S. Midwest hit a 22-1/2-year high in January as orders surged and the employment picture brightened, a report Monday showed. Another report on Monday showed consumer spending is on the rise.
Still, persistent high U.S. unemployment -- which registered 9.4 percent last month -- and a sluggish housing market continue to weigh on the economy.
One large manufacturer that provided data to PayNet in December said that businesses were buying equipment to replace worn-out machines, rather than to expand output -- a sign that the jump in borrowing may not necessary translate to new jobs, Phelan said.
"I don't think we are ready to declare victory quite yet," Phelan said, noting that the borrowing index, which fell by more than half at the nadir of the recession, has yet to return to its 2005 level.
Still, fewer companies are falling behind on their existing loan payments, a fact that may in itself boost borrowing, since higher repayment rates can free up capital that lenders might have otherwise set aside against the possibility of default.
Accounts in moderate delinquency, or those behind by 30 days or more, fell in December to 2.45 percent from 2.56 percent in November, PayNet said.
That is about the same level of delinquency as before the recession began, Phelan said.
The Thomson Reuters/PayNet small business lending index is correlated to developments in the overall economy, with changes in the index preceding changes in the overall U.S. economy by two to five months.
PayNet collects real-time loan information, such as originations and delinquencies, from more than 200 leading U.S. capital equipment lenders.
Borrowing by small businesses jumped for a fifth straight month in December, data released by PayNet Inc yesterday showed, a fresh sign that the U.S. economic recovery is gaining ground.
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to U.S. small businesses, rose 20 percent in December from the same month a year earlier, PayNet said.
That is the fastest monthly gain since March 2006, with the index registering the highest level of borrowing since July 2008. Separate data also released on Tuesday showed a decline in small business loan delinquencies.
"They are borrowing more and they are finding it easier to pay their bills," William Phelan, PayNet's president and founder, said in an interview. "The recovery is growing and remains on a solid footing."
The surge in borrowing by small businesses, seen as harbinger for the broader economy because they account for as much as 80 percent of new hiring, comes amid other signs the economy is headed for renewed expansion.
Factory activity in the U.S. Midwest hit a 22-1/2-year high in January as orders surged and the employment picture brightened, a report Monday showed. Another report on Monday showed consumer spending is on the rise.
Still, persistent high U.S. unemployment -- which registered 9.4 percent last month -- and a sluggish housing market continue to weigh on the economy.
One large manufacturer that provided data to PayNet in December said that businesses were buying equipment to replace worn-out machines, rather than to expand output -- a sign that the jump in borrowing may not necessary translate to new jobs, Phelan said.
"I don't think we are ready to declare victory quite yet," Phelan said, noting that the borrowing index, which fell by more than half at the nadir of the recession, has yet to return to its 2005 level.
Still, fewer companies are falling behind on their existing loan payments, a fact that may in itself boost borrowing, since higher repayment rates can free up capital that lenders might have otherwise set aside against the possibility of default.
Accounts in moderate delinquency, or those behind by 30 days or more, fell in December to 2.45 percent from 2.56 percent in November, PayNet said.
That is about the same level of delinquency as before the recession began, Phelan said.
The Thomson Reuters/PayNet small business lending index is correlated to developments in the overall economy, with changes in the index preceding changes in the overall U.S. economy by two to five months.
PayNet collects real-time loan information, such as originations and delinquencies, from more than 200 leading U.S. capital equipment lenders.
Before You Quit Your Day Job ... added 1-31-11
Written by Susan Schreter - Courtsey of FoxSmallBusinesscenter.com
Too many eager entrepreneurs leave their salaried jobs too soon. That’s right; they abandon their day jobs with only a vague notion of what they want to accomplish as new business owners. Sure, they know the many lifestyle advantages of why they want to start up, but not what they want to start up.
When business owners start companies without a clear operating path to revenue generation, they are at high risk for business failure. By the time they figure out their business plan and do all the administrative duties associated with business set up, they run out of personal savings. This beat-the-clock challenge can overwhelm just about anyone.
One way to minimize startup risks is to do as many time-consuming administrative duties and research projects as possible before cutting off the salaried paycheck. Here are five pre-start up considerations.
No. 1: Select business names that don’t violate existing trademarks. I wince each time I hear start-up entrepreneurs talk about the delays associated with selecting conflict-free business names and domain names and then working with designers to create logos, web sites and marketing materials. Good business and product name selection should involve a search for trademark conflicts. Entrepreneurs can limit their exposure by visiting the U.S. Trademark Electronic Search System (“TESS”). All searches are free. (www.uspto.gov).
No. 2: Get your financial house in order. Before leaving your day job, work to set aside a little extra savings. Also pre-start up is the right time to correct errors on credit reports and improve personal credit scores. Business owners with good personal credit get better deals on small business loans, equipment leases, credit card processing services for e-commerce operations, and more.
No 3: Organize your company structure. Will your startup be set up as a sole proprietorship, a limited liability company, a partnership, an S-corporation or a C-corporation? This is a fundamental question that, among other considerations, will determine the taxes you will have to pay on business profits and personal income. It takes time to understand your options plus put in place effective board members and advisors who can help advance your business interests.
No 4: Research health insurance. Before you quit your job, re-visit your employer's benefits literature. Under federal COBRA regulations, if you work for a company with more than 20 employees you may be able to continue coverage for 18 months provided you pay the entire cost of coverage. Is this a better deal than buying an independent policy? Do your homework now to find out.
No 5: Consider tactical employment. Would you rather learn about costly business problems on someone else's dime or would you rather experience the pain all by yourself? One way to avoid start-up mistakes is to find what I call "tactical employment." These are temporary, part-time or full-time jobs to improve tactical expertise plus generate some extra income. If, for example, your dream is to one day start a craft brewery, work in another beer house first to learn the fine points of manufacturing, pricing, inventory management and product distribution.
Are there any risks to moonlighting? Yes, entrepreneurs who intend to compete with their current employers or develop potentially patentable technologies should understand their legal risks and obligations. Moonlighting entrepreneurs should always work at their business on their own time and completely off employer premises to avoid legal conflicts.
Too many eager entrepreneurs leave their salaried jobs too soon. That’s right; they abandon their day jobs with only a vague notion of what they want to accomplish as new business owners. Sure, they know the many lifestyle advantages of why they want to start up, but not what they want to start up.
When business owners start companies without a clear operating path to revenue generation, they are at high risk for business failure. By the time they figure out their business plan and do all the administrative duties associated with business set up, they run out of personal savings. This beat-the-clock challenge can overwhelm just about anyone.
One way to minimize startup risks is to do as many time-consuming administrative duties and research projects as possible before cutting off the salaried paycheck. Here are five pre-start up considerations.
No. 1: Select business names that don’t violate existing trademarks. I wince each time I hear start-up entrepreneurs talk about the delays associated with selecting conflict-free business names and domain names and then working with designers to create logos, web sites and marketing materials. Good business and product name selection should involve a search for trademark conflicts. Entrepreneurs can limit their exposure by visiting the U.S. Trademark Electronic Search System (“TESS”). All searches are free. (www.uspto.gov).
No. 2: Get your financial house in order. Before leaving your day job, work to set aside a little extra savings. Also pre-start up is the right time to correct errors on credit reports and improve personal credit scores. Business owners with good personal credit get better deals on small business loans, equipment leases, credit card processing services for e-commerce operations, and more.
No 3: Organize your company structure. Will your startup be set up as a sole proprietorship, a limited liability company, a partnership, an S-corporation or a C-corporation? This is a fundamental question that, among other considerations, will determine the taxes you will have to pay on business profits and personal income. It takes time to understand your options plus put in place effective board members and advisors who can help advance your business interests.
No 4: Research health insurance. Before you quit your job, re-visit your employer's benefits literature. Under federal COBRA regulations, if you work for a company with more than 20 employees you may be able to continue coverage for 18 months provided you pay the entire cost of coverage. Is this a better deal than buying an independent policy? Do your homework now to find out.
No 5: Consider tactical employment. Would you rather learn about costly business problems on someone else's dime or would you rather experience the pain all by yourself? One way to avoid start-up mistakes is to find what I call "tactical employment." These are temporary, part-time or full-time jobs to improve tactical expertise plus generate some extra income. If, for example, your dream is to one day start a craft brewery, work in another beer house first to learn the fine points of manufacturing, pricing, inventory management and product distribution.
Are there any risks to moonlighting? Yes, entrepreneurs who intend to compete with their current employers or develop potentially patentable technologies should understand their legal risks and obligations. Moonlighting entrepreneurs should always work at their business on their own time and completely off employer premises to avoid legal conflicts.
How to Swim, Not Sink, in First Year of Business...added 1-24-11
Written by Susan Schreter - Courtsey of FoxSmallBusinesscenter.com
Is your New Year’s resolution to start the business you’ve always wanted? Do you have a million-dollar idea, but you’re unsure of what to do first, second and third? Would you like to leave the cubicle world behind and earn a living on your own entrepreneurial drive?
As an entrepreneurship educator and venture investor, I spend a lot of time studying why promising start-up companies succeed or fail during their first years of operations. A key factor that affects start-up viability is how fast entrepreneurs adapt to their new job description as a business owner.
Many entrepreneurs say they started their companies for the opportunity to pursue their heart’s desire. New bakery owners like to bake. Software technologists like to write code. Contractors like to build. Filmmakers like to make films. But successful entrepreneurship is not defined just by how well you bake or write code, but how well you manage your overall business. You can direct a brilliant film, but if you don’t make money at it, you may not get a second chance to make another film. Besides your specific passion, other skills are required to succeed.
New business owners who assume that entrepreneurship is all about the freedom to do “whatever I want, whenever I want,” are also at high risk of business failure. Being the boss of a prosperous business involves focus and careful decision-making. In contrast, too much managerial spontaneity and freewheeling fun costs more than a young company can typically handle.
Here are three tips to help you make the mental shift from salaried employment to money making self-employment.
No. 1: Pay attention to cash. Businesses close when they run out of cash. It’s that simple. As the boss of your start-up enterprise your top priority is to make sure your company always has enough cash to operate. This means that you have to embrace numbers and money issues; take full ownership of financial projections and understand what kinds of business decisions can drain cash faster than others. You don’t need an MBA to manage cash well, just a desire to do it. Check out some accounting books or take an accounting class to boost your money management skills.
No. 2: Plan to achieve. It’s not enough to hope to succeed; you have to plan to succeed. Hoping for customers, won’t get them to your Web site. Hoping to raise money from investors won’t get you in front of top check writers. Hoping the check is really in the mail is not the best way to collect past due invoices. Successful start-up entrepreneurs set specific goals and then lay out practical day-by-day strategies to secure their first paying customers and profits.
No. 3: Get help. Just because you are the boss of your new enterprise doesn’t mean you will always have all the right answers. Most start-up entrepreneurs are first-time entrepreneurs who come across a lot of problems that they never encountered before in their salaried careers. It’s only natural that beginner’s mistakes will be made, sometimes costly ones. When you face business unexpected problems in product development, product packaging, sales, marketing, customer service, or finance, don’t guess the answer. Find someone who has already “been there and done that” and ask for help. Remember, every mistake you make now comes out of your pocket.
Here’s one last tip. It’s not enough to just get by in business; your managerial objective is to get ahead in business by using your head.
Is your New Year’s resolution to start the business you’ve always wanted? Do you have a million-dollar idea, but you’re unsure of what to do first, second and third? Would you like to leave the cubicle world behind and earn a living on your own entrepreneurial drive?
As an entrepreneurship educator and venture investor, I spend a lot of time studying why promising start-up companies succeed or fail during their first years of operations. A key factor that affects start-up viability is how fast entrepreneurs adapt to their new job description as a business owner.
Many entrepreneurs say they started their companies for the opportunity to pursue their heart’s desire. New bakery owners like to bake. Software technologists like to write code. Contractors like to build. Filmmakers like to make films. But successful entrepreneurship is not defined just by how well you bake or write code, but how well you manage your overall business. You can direct a brilliant film, but if you don’t make money at it, you may not get a second chance to make another film. Besides your specific passion, other skills are required to succeed.
New business owners who assume that entrepreneurship is all about the freedom to do “whatever I want, whenever I want,” are also at high risk of business failure. Being the boss of a prosperous business involves focus and careful decision-making. In contrast, too much managerial spontaneity and freewheeling fun costs more than a young company can typically handle.
Here are three tips to help you make the mental shift from salaried employment to money making self-employment.
No. 1: Pay attention to cash. Businesses close when they run out of cash. It’s that simple. As the boss of your start-up enterprise your top priority is to make sure your company always has enough cash to operate. This means that you have to embrace numbers and money issues; take full ownership of financial projections and understand what kinds of business decisions can drain cash faster than others. You don’t need an MBA to manage cash well, just a desire to do it. Check out some accounting books or take an accounting class to boost your money management skills.
No. 2: Plan to achieve. It’s not enough to hope to succeed; you have to plan to succeed. Hoping for customers, won’t get them to your Web site. Hoping to raise money from investors won’t get you in front of top check writers. Hoping the check is really in the mail is not the best way to collect past due invoices. Successful start-up entrepreneurs set specific goals and then lay out practical day-by-day strategies to secure their first paying customers and profits.
No. 3: Get help. Just because you are the boss of your new enterprise doesn’t mean you will always have all the right answers. Most start-up entrepreneurs are first-time entrepreneurs who come across a lot of problems that they never encountered before in their salaried careers. It’s only natural that beginner’s mistakes will be made, sometimes costly ones. When you face business unexpected problems in product development, product packaging, sales, marketing, customer service, or finance, don’t guess the answer. Find someone who has already “been there and done that” and ask for help. Remember, every mistake you make now comes out of your pocket.
Here’s one last tip. It’s not enough to just get by in business; your managerial objective is to get ahead in business by using your head.
How to Start a Cause-Marketing Campaign... added 1-21-11
By Kim T. Gordon - Coursey of Entrepreneur.com
Serving charitable causes in your community is not only good for your spirit, it can also become a deciding factor when customers choose where to spend their dollars. With consumers demanding higher levels of social responsibility from businesses, it's never been more important to focus your corporate giving into a cause-marketing campaign that motivates your target customer base. And when you create an ongoing strategy for giving, everyone wins -- the charitable cause you support, your customers and, ultimately, your business.
But the first step is to find the right cause-marketing strategy. Here are four ways you can share your corporate altruism with your customers.
1. Designate a product and donate a portion of its sales to charity. Also known as passive customer participation, helping a nonprofit this way is possibly the easiest and fastest way to jump into cause-marketing. It's essential to choose an organization your target audience will value and want to support. It can be a national nonprofit -- such as one that funds cancer research or cleans up the environment -- or a local charity.
It can be particularly advantageous to choose a local nonprofit to benefit from your cause-marketing efforts. Customers in your community are likely to feel more emotionally connected to a charity closer to home, which can result in higher sales.
2. Create and sell a symbolic item. This strategy asks the customer to take an active role in the giving process, and requires a more aggressive public relations and advertising campaign. It involves creating and marketing an item that allows customers to physically demonstrate their support for a designated cause. This can be an item they wear or carry, such as a tote bag, T-shirt or bracelet emblazoned with a supportive and inspiring message.
3. Sponsor a special event. If you're looking for a high profile way to support a cause, then creating a fundraising event could be the best strategy. Traditional events include everything from 10K runs and bike-a-thons to banquets. Keep in mind, the more creative you are with these events, the better your results are likely to be. For example, I recently co-produced and hosted an American Idol-style fashion show featuring local celebrity male "models" who created their own outfits and competed to earn audience votes. The sold-out luncheon attracted 300 attendees who voted for their favorite men and donated a significant amount of money. All proceeds benefitted a local homeless shelter for women and children, and my firm was spotlighted as an organizer.
4. Provide grassroots help. One tried-and-true strategy for lower-profile corporate giving is to donate staff time to make a difference in your community at the grassroots level. It's smart to align your giving with your company's primary business. This will not only aid the nonprofit you choose, but also help your customers remember what your company stands for. For example, each store in the Whole Foods Market chain donates food to area food banks and shelters and holds community giving days during which 5 percent of net sales are donated to a local nonprofit.
Finally, your cause-marketing campaign will require a dedicated public-relations effort to get the word out. This might include online and traditional media relations and the addition of a section on your website that highlights your corporate giving with links for tweeting and "liking” on Facebook.
When you let your customers know your business is caring and socially responsible, you serve your community and your company at the same time.
Serving charitable causes in your community is not only good for your spirit, it can also become a deciding factor when customers choose where to spend their dollars. With consumers demanding higher levels of social responsibility from businesses, it's never been more important to focus your corporate giving into a cause-marketing campaign that motivates your target customer base. And when you create an ongoing strategy for giving, everyone wins -- the charitable cause you support, your customers and, ultimately, your business.
But the first step is to find the right cause-marketing strategy. Here are four ways you can share your corporate altruism with your customers.
1. Designate a product and donate a portion of its sales to charity. Also known as passive customer participation, helping a nonprofit this way is possibly the easiest and fastest way to jump into cause-marketing. It's essential to choose an organization your target audience will value and want to support. It can be a national nonprofit -- such as one that funds cancer research or cleans up the environment -- or a local charity.
It can be particularly advantageous to choose a local nonprofit to benefit from your cause-marketing efforts. Customers in your community are likely to feel more emotionally connected to a charity closer to home, which can result in higher sales.
2. Create and sell a symbolic item. This strategy asks the customer to take an active role in the giving process, and requires a more aggressive public relations and advertising campaign. It involves creating and marketing an item that allows customers to physically demonstrate their support for a designated cause. This can be an item they wear or carry, such as a tote bag, T-shirt or bracelet emblazoned with a supportive and inspiring message.
3. Sponsor a special event. If you're looking for a high profile way to support a cause, then creating a fundraising event could be the best strategy. Traditional events include everything from 10K runs and bike-a-thons to banquets. Keep in mind, the more creative you are with these events, the better your results are likely to be. For example, I recently co-produced and hosted an American Idol-style fashion show featuring local celebrity male "models" who created their own outfits and competed to earn audience votes. The sold-out luncheon attracted 300 attendees who voted for their favorite men and donated a significant amount of money. All proceeds benefitted a local homeless shelter for women and children, and my firm was spotlighted as an organizer.
4. Provide grassroots help. One tried-and-true strategy for lower-profile corporate giving is to donate staff time to make a difference in your community at the grassroots level. It's smart to align your giving with your company's primary business. This will not only aid the nonprofit you choose, but also help your customers remember what your company stands for. For example, each store in the Whole Foods Market chain donates food to area food banks and shelters and holds community giving days during which 5 percent of net sales are donated to a local nonprofit.
Finally, your cause-marketing campaign will require a dedicated public-relations effort to get the word out. This might include online and traditional media relations and the addition of a section on your website that highlights your corporate giving with links for tweeting and "liking” on Facebook.
When you let your customers know your business is caring and socially responsible, you serve your community and your company at the same time.
Small Business Owners Not Optimistic Just Yet... added 1-19-11
By Kate Rogers-Courtsey of FoxSmallBusinessCenter
Despite recent headlines showing signs the economy is recovering, small business owners aren’t seeing a half-full glass just yet, according to a monthly reading of entrepreneurs across the country.
The National Federation of Independent Business’ monthly reading on small business optimism dropped by 0.6 points in December to 92.6, with business owners citing weak sales as their biggest issue. This index is the 36th month of readings in the recession level.
William C. Dunkelberg, chief economist at the NFIB, said the situation for small business owners is not good, but could certainly be worse.
“The hope for a pick up in the small business sector did not materialize, but new weaknesses did not appear either,” Dunkelberg said in a release. “More owners expect their real sales volumes to rise in the coming months, increasing the odds that more hiring and inventory investments will take place. Overall, owners remain stubbornly cautious and uncertain about the future course of the economy and their business prospects.”
Job creation remained around the “0” line, with the average employment change per firm at a negative 0.07 employees. However, 13% reported unfilled job openings, and over the next three months 10% plan on increasing employment while 9% plan to reduce it. These numbers are up one point and down three points, respectively. This creates a seasonally adjusted net of 6 % of small business owners planning to create new jobs—up 2% from last month and the best reading in 27 months.
Reported capital outlays hit close to the lowest percentage ever, at 47% of all firms. According to the NFIB, this suggests owners are still in “maintenance mode” and are not willing to take a chance on new capital investments, or may not feel there is a need for them at the time. The percent of owners planning capital outlays in the future, however, did increase by one point to 21%.
The study also found that:
- A net 9% expect business conditions to improve over the next six months, which is down seven points from November’s index.
-The net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past three months dropped by one point to a net negative 16%.
- Consumer spending appears to have rising at 4% in the fourth quarter, but small businesses do not appear to have benefited from the gains.
- 8% of all owners (seasonally adjusted) expect higher real sales to continue to rise, an 11-point gain since September.
-The percentage of businesses raising average selling was 14% and 20% reported reductions, both of which are unchanged.
- Plans to raise prices hit a 26-month high at a seasonally-adjusted reading of 15%.
- Reports of positive earnings trends fell four points in December to a net-negative of 34 percent.
- 91 % reported their credit needs were all met or that they were not interested in borrowing.
Despite recent headlines showing signs the economy is recovering, small business owners aren’t seeing a half-full glass just yet, according to a monthly reading of entrepreneurs across the country.
The National Federation of Independent Business’ monthly reading on small business optimism dropped by 0.6 points in December to 92.6, with business owners citing weak sales as their biggest issue. This index is the 36th month of readings in the recession level.
William C. Dunkelberg, chief economist at the NFIB, said the situation for small business owners is not good, but could certainly be worse.
“The hope for a pick up in the small business sector did not materialize, but new weaknesses did not appear either,” Dunkelberg said in a release. “More owners expect their real sales volumes to rise in the coming months, increasing the odds that more hiring and inventory investments will take place. Overall, owners remain stubbornly cautious and uncertain about the future course of the economy and their business prospects.”
Job creation remained around the “0” line, with the average employment change per firm at a negative 0.07 employees. However, 13% reported unfilled job openings, and over the next three months 10% plan on increasing employment while 9% plan to reduce it. These numbers are up one point and down three points, respectively. This creates a seasonally adjusted net of 6 % of small business owners planning to create new jobs—up 2% from last month and the best reading in 27 months.
Reported capital outlays hit close to the lowest percentage ever, at 47% of all firms. According to the NFIB, this suggests owners are still in “maintenance mode” and are not willing to take a chance on new capital investments, or may not feel there is a need for them at the time. The percent of owners planning capital outlays in the future, however, did increase by one point to 21%.
The study also found that:
- A net 9% expect business conditions to improve over the next six months, which is down seven points from November’s index.
-The net percent of all owners (seasonally adjusted) reporting higher nominal sales over the past three months dropped by one point to a net negative 16%.
- Consumer spending appears to have rising at 4% in the fourth quarter, but small businesses do not appear to have benefited from the gains.
- 8% of all owners (seasonally adjusted) expect higher real sales to continue to rise, an 11-point gain since September.
-The percentage of businesses raising average selling was 14% and 20% reported reductions, both of which are unchanged.
- Plans to raise prices hit a 26-month high at a seasonally-adjusted reading of 15%.
- Reports of positive earnings trends fell four points in December to a net-negative of 34 percent.
- 91 % reported their credit needs were all met or that they were not interested in borrowing.
Lending a Hand, and a Few Dollars, to Fellow Americans...added 1-17-11
By Kate Rogers - Courtsey of FoxBusiness
When 29-year-old John Good wanted to expand the small business he owns with his wife, Bubbles Galore Carwash, he turned to their mortgage lender. For a $16,000 loan, Good was met with endless amounts of paperwork and sky-high interest rates.
“We are the epitome of a small business,” he said. “We didn’t have the type of clout behind us that other employers would have. It seemed very arduous to go through the lending process for the amount of money we were requesting.”
Discouraged, Good began investigating alternative lending sources, and stumbled upon the Lending Club, a peer-to-peer lending service that eliminates banks as part of the process. Good’s idea for expansion was to add a self-service dog washing area into the car wash model, which he found the Lending Club actively supported. The banks he had originally approached didn’t seem to understand why this plan was a good fit for Bubbles Galore, which is based in Davison, Mich.
Within a few days of applying, the Lending Club granted Good a three-year loan for $16,000, with an interest rate between 10% and 12%. Good has 174 peers funding his expansion project.
“The regular Joe gets it,” he said. “The people [at Lending Club] who ended up funding our loan in the end really appeared to get it. The lenders, the mold you have to fit in for a bank, they can’t seem to see outside of their own tunnel vision. The bankers didn’t get it; they snubbed their noses at the idea.”
Lending Club CEO Renaud LaPlanche said he got the idea to start the lending service after looking at his own credit card statement, nearly four years ago. The interest rate was close to 18%, which was a good investment opportunity to the banks collecting on it, but a poor deal for even a creditworthy consumer like himself.
“I started thinking of allowing investors to lend directly to consumers,” he said.
And lend they do. The club just passed the $200 million mark in loan origination, and is doing $15 million in new origination each month. Retail investors open an account online and build a loan portfolio that has a fixed income investment, anywhere from $100 to $12 million. The average portfolio returns close to 9.5%.
“It’s a predictable investment in that you can’t make 15 or 20%, but it’s not moving in the same direction as the stock market,” LaPlanche said. “With us, everything happens all at once, and it shortens the path between the source of capital and use of capital. We create efficiency between investors and borrowers.”
The creditors can choose which loans they want to back online, and can invest whatever amount they’d like, LaPlanche said. Although 90% of applicants are denied by the club because he wants to ensure his investors’ protection.
“We don’t accept subprime loans, and we need to lend in a stringent way,” he said. “We need to make sure the risk is low enough for individual investors.”
Craig Jones, a 54-year-old venture capitalist from Los Altos Hills, Calif., decided to invest in the club nearly a year ago after being drawn to the idea of offering lower-interest rates to borrowers. From his venture capitalist background, he felt U.S. banks were too quick to apply rules across the board, instead of considering borrowers individually.
“It appealed to me that these were fellow Americans, trying to rid themselves of extremely-high interest rates, credit card debt or launching a new small business,” Jones said. “These loans are small, and on the risk side it would make for a highly-diversified portfolio.”
Jones invested $1 million of his own capital and has received a bit more than 10% in returns over the year. The user experience is easy, automated and customized, and the risk and return are somewhere between investing in a savings account and the stock market, he said.
“Credit still remains very tight and expensive,” he said. “It’s darn hard to find $25,000 from a bank for a small business.”
When 29-year-old John Good wanted to expand the small business he owns with his wife, Bubbles Galore Carwash, he turned to their mortgage lender. For a $16,000 loan, Good was met with endless amounts of paperwork and sky-high interest rates.
“We are the epitome of a small business,” he said. “We didn’t have the type of clout behind us that other employers would have. It seemed very arduous to go through the lending process for the amount of money we were requesting.”
Discouraged, Good began investigating alternative lending sources, and stumbled upon the Lending Club, a peer-to-peer lending service that eliminates banks as part of the process. Good’s idea for expansion was to add a self-service dog washing area into the car wash model, which he found the Lending Club actively supported. The banks he had originally approached didn’t seem to understand why this plan was a good fit for Bubbles Galore, which is based in Davison, Mich.
Within a few days of applying, the Lending Club granted Good a three-year loan for $16,000, with an interest rate between 10% and 12%. Good has 174 peers funding his expansion project.
“The regular Joe gets it,” he said. “The people [at Lending Club] who ended up funding our loan in the end really appeared to get it. The lenders, the mold you have to fit in for a bank, they can’t seem to see outside of their own tunnel vision. The bankers didn’t get it; they snubbed their noses at the idea.”
Lending Club CEO Renaud LaPlanche said he got the idea to start the lending service after looking at his own credit card statement, nearly four years ago. The interest rate was close to 18%, which was a good investment opportunity to the banks collecting on it, but a poor deal for even a creditworthy consumer like himself.
“I started thinking of allowing investors to lend directly to consumers,” he said.
And lend they do. The club just passed the $200 million mark in loan origination, and is doing $15 million in new origination each month. Retail investors open an account online and build a loan portfolio that has a fixed income investment, anywhere from $100 to $12 million. The average portfolio returns close to 9.5%.
“It’s a predictable investment in that you can’t make 15 or 20%, but it’s not moving in the same direction as the stock market,” LaPlanche said. “With us, everything happens all at once, and it shortens the path between the source of capital and use of capital. We create efficiency between investors and borrowers.”
The creditors can choose which loans they want to back online, and can invest whatever amount they’d like, LaPlanche said. Although 90% of applicants are denied by the club because he wants to ensure his investors’ protection.
“We don’t accept subprime loans, and we need to lend in a stringent way,” he said. “We need to make sure the risk is low enough for individual investors.”
Craig Jones, a 54-year-old venture capitalist from Los Altos Hills, Calif., decided to invest in the club nearly a year ago after being drawn to the idea of offering lower-interest rates to borrowers. From his venture capitalist background, he felt U.S. banks were too quick to apply rules across the board, instead of considering borrowers individually.
“It appealed to me that these were fellow Americans, trying to rid themselves of extremely-high interest rates, credit card debt or launching a new small business,” Jones said. “These loans are small, and on the risk side it would make for a highly-diversified portfolio.”
Jones invested $1 million of his own capital and has received a bit more than 10% in returns over the year. The user experience is easy, automated and customized, and the risk and return are somewhere between investing in a savings account and the stock market, he said.
“Credit still remains very tight and expensive,” he said. “It’s darn hard to find $25,000 from a bank for a small business.”
Regulators see small business lending improving...added 1-13-11
By Dave Clarke - courtsey of Reuters
Small-business lending will likely improve this year, but the degree of growth depends on the overall economic recovery, top U.S. bank regulators said on Thursday.
The Obama administration and federal regulators have both struggled to find ways to get banks to lend more to small businesses, which is viewed as key to getting the stubbornly high unemployment to begin dropping.
Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp Chairman Sheila Bair said on Thursday they expect the situation to improve in 2011, but added there is a limit to how much the government can do.
"The more we can do to get the economy going again, the more we're going to help small businesses and banks' lending to small businesses," Bair said at a forum on small-business lending hosted by the FDIC.
There are already signs hiring is picking up, including at small businesses, but unemployment remain high. In December, the unemployment rate dropped to 9.4 percent from 9.8 percent.
The ADP National Employment Report released earlier this month showed businesses added 297,000 jobs in December and the smallest companies -- with fewer than 50 workers -- accounted for more than a third of this increase. Economists view the report somewhat skeptically, however, because it has a spotty track record.
Bernanke believes the economy will grow 3 percent to 4 percent this year, which will not be enough to put much of a dent in jobless numbers.
As part of efforts to get the economy going, regulators face the dilemma of pushing banks to lend more, while also urging them to be careful about the amount of risk on their books following the financial crisis of 2007-2009.
Banks and lawmakers complain the right balance is not being struck. They contend lending is being restricted because regulators are sending a mixed message, with agency heads in Washington saying they want more lending while examiners in the field crack the whip on loans they view as not meeting a high enough standard.
"Instead of focusing on patterns and practices that suggest poor underwriting or lax risk management, some examiners are micro-managing the daily activities at our community banks," House Financial Services Chairman Spencer Bachus said at the forum.
Bernanke and Bair have instructed their examiners to be more flexible with lenders, particularly in cases where the bank knows the small business and the business has a good track record of repaying its loans.
They also pushed back on this complaint, arguing banks sometimes use the regulators as an excuse when they do not want to make a loan.
Bernanke said banks need to do more work and consider a variety of factors when determining who should get a loan.
He argued banks are relying too much on the collateral a borrower brings to the table. Many small businesses use their homes or commercial properties for this purpose and with real estate values low they are having a harder time getting a loan.
"Collateral is essentially a way to make a loan without doing much work," Bernanke added.
Small-business lending will likely improve this year, but the degree of growth depends on the overall economic recovery, top U.S. bank regulators said on Thursday.
The Obama administration and federal regulators have both struggled to find ways to get banks to lend more to small businesses, which is viewed as key to getting the stubbornly high unemployment to begin dropping.
Federal Reserve Chairman Ben Bernanke and Federal Deposit Insurance Corp Chairman Sheila Bair said on Thursday they expect the situation to improve in 2011, but added there is a limit to how much the government can do.
"The more we can do to get the economy going again, the more we're going to help small businesses and banks' lending to small businesses," Bair said at a forum on small-business lending hosted by the FDIC.
There are already signs hiring is picking up, including at small businesses, but unemployment remain high. In December, the unemployment rate dropped to 9.4 percent from 9.8 percent.
The ADP National Employment Report released earlier this month showed businesses added 297,000 jobs in December and the smallest companies -- with fewer than 50 workers -- accounted for more than a third of this increase. Economists view the report somewhat skeptically, however, because it has a spotty track record.
Bernanke believes the economy will grow 3 percent to 4 percent this year, which will not be enough to put much of a dent in jobless numbers.
As part of efforts to get the economy going, regulators face the dilemma of pushing banks to lend more, while also urging them to be careful about the amount of risk on their books following the financial crisis of 2007-2009.
Banks and lawmakers complain the right balance is not being struck. They contend lending is being restricted because regulators are sending a mixed message, with agency heads in Washington saying they want more lending while examiners in the field crack the whip on loans they view as not meeting a high enough standard.
"Instead of focusing on patterns and practices that suggest poor underwriting or lax risk management, some examiners are micro-managing the daily activities at our community banks," House Financial Services Chairman Spencer Bachus said at the forum.
Bernanke and Bair have instructed their examiners to be more flexible with lenders, particularly in cases where the bank knows the small business and the business has a good track record of repaying its loans.
They also pushed back on this complaint, arguing banks sometimes use the regulators as an excuse when they do not want to make a loan.
Bernanke said banks need to do more work and consider a variety of factors when determining who should get a loan.
He argued banks are relying too much on the collateral a borrower brings to the table. Many small businesses use their homes or commercial properties for this purpose and with real estate values low they are having a harder time getting a loan.
"Collateral is essentially a way to make a loan without doing much work," Bernanke added.
New Year's Resolutions for Entrepreneurs
Want to raise your game in 2011? Here's advice to get started now...added 1-7-11
Forget dieting. To help fatten your bottom line in 2011, the experts at Entrepreneur.com suggest the following new year's resolutions for business owners.Business Planning
Harness the power of planning your time well, taking care to allocate your schedule according to priorities. Wait when it's appropriate, hurry when it's appropriate, and apply patience, vision and common sense. -- Tim Berry, Business Plans
Social Media
Do whatever it takes to get out of your comfort zone and into your "power place" to grow your business. Embrace change and new technologies, including social sites. Choose what works best for reaching your target market, and run with it. Most important: Have fun. -- Starr Hall, Social Media
Sales
In 2011, show up to the meetings that you would have passed on previously. Never underestimate the power of face-to-face meetings for building stronger relationships and connections with your prospects and customers. Activity creates opportunity. -- Barry Farber, Make the Sale
E-Commerce
Develop and implement systems that will free up time that you can spend on other pursuits. What really matters most is making a measurable amount of progress in a reasonable amount of time and spending time with loved ones. Do the only things about which you’re passionate and work with only your ideal clients. -- Lena West, Ask Entrepreneur
Technology
Take the security of your business seriously. Change all your passwords. Close down old unused accounts for emails, business software and social networks. And set up a password for your mobile phone. -- Jonathan Blum, Office Technology
Managing
Resolve to invest heavily in the people and technology necessary to meet client demands and seize market opportunity. -- Paul Spiegelman, Corporate Culture
Online Marketing
Understand your customers’ experience with your business. It's essential for businesses to look at what they do from their customers' point of view and then smooth out any rough edges. Customers have so many options. You can't afford a single reason for one to choose a competitor’s business over yours. -- Gail Goodman, E-Mail Marketing
Communications
The new year will see an acceleration of the reinvention of media. With so many ways to reach so many different types of consumers, reaching out to a variety of outlets through diverse media is critical. Craft customized content and send it via multiple platforms engage customers wherever they may be. -- Rachel Meranus, Public Relations
Productivity
It's critical to get absorbed in your business niche to achieve mastery. But, most importantly, laugh, love and live more fully. -- Scott Halford, Brainy Business
Starting Young
Forget the mantra of “work hard, get good grades and go to school to get a job." For too long, young people have been force-fed this nonsense from their parents and mentors. It's stifling their income generating potential. Gen Y needs to become the most entrepreneurial generation in history. -- Scott Gerber, Never Get a "Real" Job
Video Marketing
Create at least one professionally-produced video for the homepage of your website and social media sites. It should show y why your business is the best choice among the competition and include a compelling incentive to make an immediate purchase and share the video with others. -- John Arnold, Marketing Tools & Technologies
Selling a Business
Prepare yourself psychologically. Make sure you’re emotionally committed and ready for the sale, or you may turn buyers off to your business. -- Domenic Rinaldi, Buying & Selling a Business
Buying a Business
Making a concrete plan to pursue your entrepreneurial dreams, and take at least one action every day that will help you achieve your goal. Set a realistic timeline for when you will reach the major milestones on your path to entrepreneurial success. -- Mike Handelsman, Buying & Selling a Business
Real Estate
Question the experts in your field and find out who the real experts are. Hint: If they’re in Washington or on television, they might not be experts. -- Greg Rand, Real Estate Realities
Growing
Turn your small mom-and-pop business into a bigger opportunity this year by launching the projects you never got around to in 2010. -- Lisa Druxman,Mompreneur
Prioritizing
Ask yourself, “What can I stop doing?” Begin to put stronger accountability practices into place to create a better business foundation. -- Nina Kaufman, Making It Legal
Mobile Marketing
Make mobile marketing a high priority. Capture mobile shoppers by updating your website to load quickly in a variety of browsers and making them Facebook and Twitter interactive. Offer competitive pricing and tap into the soaring popularity of coupons by texting them to your customers' mobile phones. -- Kim T. Gordon, Marketing
Courtsey of Kara Ohngren - entrepreneur.com
Harness the power of planning your time well, taking care to allocate your schedule according to priorities. Wait when it's appropriate, hurry when it's appropriate, and apply patience, vision and common sense. -- Tim Berry, Business Plans
Social Media
Do whatever it takes to get out of your comfort zone and into your "power place" to grow your business. Embrace change and new technologies, including social sites. Choose what works best for reaching your target market, and run with it. Most important: Have fun. -- Starr Hall, Social Media
Sales
In 2011, show up to the meetings that you would have passed on previously. Never underestimate the power of face-to-face meetings for building stronger relationships and connections with your prospects and customers. Activity creates opportunity. -- Barry Farber, Make the Sale
E-Commerce
Develop and implement systems that will free up time that you can spend on other pursuits. What really matters most is making a measurable amount of progress in a reasonable amount of time and spending time with loved ones. Do the only things about which you’re passionate and work with only your ideal clients. -- Lena West, Ask Entrepreneur
Technology
Take the security of your business seriously. Change all your passwords. Close down old unused accounts for emails, business software and social networks. And set up a password for your mobile phone. -- Jonathan Blum, Office Technology
Managing
Resolve to invest heavily in the people and technology necessary to meet client demands and seize market opportunity. -- Paul Spiegelman, Corporate Culture
Online Marketing
Understand your customers’ experience with your business. It's essential for businesses to look at what they do from their customers' point of view and then smooth out any rough edges. Customers have so many options. You can't afford a single reason for one to choose a competitor’s business over yours. -- Gail Goodman, E-Mail Marketing
Communications
The new year will see an acceleration of the reinvention of media. With so many ways to reach so many different types of consumers, reaching out to a variety of outlets through diverse media is critical. Craft customized content and send it via multiple platforms engage customers wherever they may be. -- Rachel Meranus, Public Relations
Productivity
It's critical to get absorbed in your business niche to achieve mastery. But, most importantly, laugh, love and live more fully. -- Scott Halford, Brainy Business
Starting Young
Forget the mantra of “work hard, get good grades and go to school to get a job." For too long, young people have been force-fed this nonsense from their parents and mentors. It's stifling their income generating potential. Gen Y needs to become the most entrepreneurial generation in history. -- Scott Gerber, Never Get a "Real" Job
Video Marketing
Create at least one professionally-produced video for the homepage of your website and social media sites. It should show y why your business is the best choice among the competition and include a compelling incentive to make an immediate purchase and share the video with others. -- John Arnold, Marketing Tools & Technologies
Selling a Business
Prepare yourself psychologically. Make sure you’re emotionally committed and ready for the sale, or you may turn buyers off to your business. -- Domenic Rinaldi, Buying & Selling a Business
Buying a Business
Making a concrete plan to pursue your entrepreneurial dreams, and take at least one action every day that will help you achieve your goal. Set a realistic timeline for when you will reach the major milestones on your path to entrepreneurial success. -- Mike Handelsman, Buying & Selling a Business
Real Estate
Question the experts in your field and find out who the real experts are. Hint: If they’re in Washington or on television, they might not be experts. -- Greg Rand, Real Estate Realities
Growing
Turn your small mom-and-pop business into a bigger opportunity this year by launching the projects you never got around to in 2010. -- Lisa Druxman,Mompreneur
Prioritizing
Ask yourself, “What can I stop doing?” Begin to put stronger accountability practices into place to create a better business foundation. -- Nina Kaufman, Making It Legal
Mobile Marketing
Make mobile marketing a high priority. Capture mobile shoppers by updating your website to load quickly in a variety of browsers and making them Facebook and Twitter interactive. Offer competitive pricing and tap into the soaring popularity of coupons by texting them to your customers' mobile phones. -- Kim T. Gordon, Marketing
Courtsey of Kara Ohngren - entrepreneur.com
Getting Goliath to Hire David ...added 12-3-2011
By Jamie Monberg Courtesy of Fox Business
Whether you run a design firm, a PR agency, or a landscaping business, if you’re a “small business,” there are barriers--perceived and real--to landing the big-name clients that will take you to the next level.
So why do big companies hire small firms?
Typically, because they are perceived to be cheaper, hungrier and more willing to run the engine past redline to please clients.
Paying the requisite dues to get into the country club is still a fact of life for many small firms, but under-bidding and over-delivering are not sustainable practices, especially for small firms.
In a world where reputation rules, how do you avoid the inevitable Catch-22 of needing the big- name experience to get the big-name experience?
First, you need to go after work that you want to do, and work that you can do well. But even if you’re ready for the big date, you need to get the invitation. Fundamentally, landing big clients is about trust. You don’t have to be big, or published in the journals, or have offices in Manhattan.
You have to be the best version of yourself, and you have to be persistent; here at Hornall Anderson, we have both succeed and failed in going after big name work.
Here are 10 tips for small businesses to landing those whales :
1. This actually is a first date: Be polite. Be on time. Be interesting. Listen more than you talk. You have to be someone the client wants to be on the phone with every day for weeks on end. One advantage small firms have is being more accessible and personal. Overcome the expectation of flakiness that your bigger siblings have set with your clients.
2. You are a global company: You’re all about early mornings/late nights; you present well over the phone; you don’t mind travel. No matter where your office is, show them that distance and time are not gating factors to entering into a relationship with you. Our recent work with the Empire State Building had us Seattleites on East Coast time for several months, but it also taught us to be very proficient with Web conferencing and other sharing tools.
3. No one wins every time: For every marquee job, there are two to three beautifully executed, thoughtful, presentations in the recycling bin. Going to bat costs time and money: When you lose, be graceful, but be ruthless about getting feedback on why you struck out.
4. All visibility is not created equal: Market your capabilities and your brand aggressively, but in a way that is directly relevant to the kind of work you want to get. Quality over quantity when showing your past work, and always talk about why it’s relevant, not why it’s good.
5. Be agile: Your size lets you move quickly, engage in rapid prototyping, make impulsive decisions… these can be good things. You are not hamstrung by preconceived notions of process, and if you can, within reason, say 'yes' where the other guys reflexively say 'no,' you might make your client look like a hero for hiring you.
6. Be careful about speculative work: Spec work can get you hired, but it can also get you burned. The big guys get hired for their ideas, not just their executions. Have the discipline to sell your ideas--and your approach to the project--without high-fidelity executions: If you’re waiting until first round design to get hired, you probably won’t.
7. Don’t over-listen: Responding to every line item in an RFP makes you the teacher’s pet, but if you can show that you thought about the fundamental problem they’re trying to solve, and not just the deliverable, they might actually read your whole proposal.
8. Do "big-client work" for your small clients: You’re only as good as your last job, so look for opportunities to invest in the little guys to get the big guys’ attention. And put your money where your mouth is--over delivering for an existing client or doing something pro bono is almost always a better investment than spec work. We have found that our personal lab projects are often more compelling to clients than past work--it shows how we think.
9. Focus on the business result: Have an almost unhealthy attachment to metrics. You’re not on a retainer, so show the client that you’re not hunting awards: their bottom line is your bottom line. You should be constantly trying to streamline your own processes as well, and those metrics make a statement to clients that you will be grading yourself long before they will.
10. Overcome the accountability barrier: They have to believe in you. Remember, the people hiring you are accountable to other people for your work. They feel safer with the name they know, not because the work will necessarily be better, but because by hiring “the best,” they are defraying some of that accountability. Small firms simply have to work harder to earn that trust, which comes from clear expectation setting, not just saying yes.
Ultimately, size isn’t about how many people you have on the clock. Great ideas, thoughtfully presented, will win big work. Play to your strengths: you are cheaper, you will work harder, and you are hungrier than they are.
Whether you run a design firm, a PR agency, or a landscaping business, if you’re a “small business,” there are barriers--perceived and real--to landing the big-name clients that will take you to the next level.
So why do big companies hire small firms?
Typically, because they are perceived to be cheaper, hungrier and more willing to run the engine past redline to please clients.
Paying the requisite dues to get into the country club is still a fact of life for many small firms, but under-bidding and over-delivering are not sustainable practices, especially for small firms.
In a world where reputation rules, how do you avoid the inevitable Catch-22 of needing the big- name experience to get the big-name experience?
First, you need to go after work that you want to do, and work that you can do well. But even if you’re ready for the big date, you need to get the invitation. Fundamentally, landing big clients is about trust. You don’t have to be big, or published in the journals, or have offices in Manhattan.
You have to be the best version of yourself, and you have to be persistent; here at Hornall Anderson, we have both succeed and failed in going after big name work.
Here are 10 tips for small businesses to landing those whales :
1. This actually is a first date: Be polite. Be on time. Be interesting. Listen more than you talk. You have to be someone the client wants to be on the phone with every day for weeks on end. One advantage small firms have is being more accessible and personal. Overcome the expectation of flakiness that your bigger siblings have set with your clients.
2. You are a global company: You’re all about early mornings/late nights; you present well over the phone; you don’t mind travel. No matter where your office is, show them that distance and time are not gating factors to entering into a relationship with you. Our recent work with the Empire State Building had us Seattleites on East Coast time for several months, but it also taught us to be very proficient with Web conferencing and other sharing tools.
3. No one wins every time: For every marquee job, there are two to three beautifully executed, thoughtful, presentations in the recycling bin. Going to bat costs time and money: When you lose, be graceful, but be ruthless about getting feedback on why you struck out.
4. All visibility is not created equal: Market your capabilities and your brand aggressively, but in a way that is directly relevant to the kind of work you want to get. Quality over quantity when showing your past work, and always talk about why it’s relevant, not why it’s good.
5. Be agile: Your size lets you move quickly, engage in rapid prototyping, make impulsive decisions… these can be good things. You are not hamstrung by preconceived notions of process, and if you can, within reason, say 'yes' where the other guys reflexively say 'no,' you might make your client look like a hero for hiring you.
6. Be careful about speculative work: Spec work can get you hired, but it can also get you burned. The big guys get hired for their ideas, not just their executions. Have the discipline to sell your ideas--and your approach to the project--without high-fidelity executions: If you’re waiting until first round design to get hired, you probably won’t.
7. Don’t over-listen: Responding to every line item in an RFP makes you the teacher’s pet, but if you can show that you thought about the fundamental problem they’re trying to solve, and not just the deliverable, they might actually read your whole proposal.
8. Do "big-client work" for your small clients: You’re only as good as your last job, so look for opportunities to invest in the little guys to get the big guys’ attention. And put your money where your mouth is--over delivering for an existing client or doing something pro bono is almost always a better investment than spec work. We have found that our personal lab projects are often more compelling to clients than past work--it shows how we think.
9. Focus on the business result: Have an almost unhealthy attachment to metrics. You’re not on a retainer, so show the client that you’re not hunting awards: their bottom line is your bottom line. You should be constantly trying to streamline your own processes as well, and those metrics make a statement to clients that you will be grading yourself long before they will.
10. Overcome the accountability barrier: They have to believe in you. Remember, the people hiring you are accountable to other people for your work. They feel safer with the name they know, not because the work will necessarily be better, but because by hiring “the best,” they are defraying some of that accountability. Small firms simply have to work harder to earn that trust, which comes from clear expectation setting, not just saying yes.
Ultimately, size isn’t about how many people you have on the clock. Great ideas, thoughtfully presented, will win big work. Play to your strengths: you are cheaper, you will work harder, and you are hungrier than they are.
Connected
By Donna Fuscaldo Courtesy of Fox Business
It’s no secret starting a business is a hard, daunting journey made up of determination and hard work. Playing a starring role in some cases, and a supporting role in others, is technology. Love it or hate, in order for small businesses to be successful these days, being technological savvy is a requirement for owners.
Take YouSendIt, the Campbell, Calif., digital document company that lets users send large documents securely over the Internet.
Launched in 2004 as a 100%-free service with zero paying customers, YouSendIt now has more than 274,000 paid customers. Early on, the company relied on an advertising model to make money. But when it switched to a subscriber-based business, it meant an overhaul in technology.
“We wanted to build a subscription based on the model of Fedex,” said Ranjith Kumaran, founder and chief technology officer of YouSendIt. “When we launched the subscription service we had the first subscriber in four minutes and it took off from there.”
When that happened, YouSendIt had to build out its IT operation to create a customer-service operation, which meant more data centers and advanced technology.
Switching from an ad-based model to a subscription business brought more than just technological challenges. The company lost some employees who had signed up to be part of a fast growing ad-based business, according to Kumaran. “It’s very hard to shift to a subscription model but I learned to do it quickly,” he said, noting that he was very clear with employees as to what the company was doing.
YouSendIt faces tough competition, but Kumaran isn’t worried. The best thing for any company is the brand,” he said. "We tried to instill in the company in the early days that we need to know what we do, and do that one thing better than anyone else.” Kumaran said the company's secret sauce are its employees who love to come to work every day.
“My DNA is not to worry about competition. I can’t control what they do I can control what we do,” said Kumaran. As for the company’s future, he said it is projecting 100% growth over the next several years and that in a year or so the company could be ready to launch an IPO.
Technology can also play a crucial role in generating business and attracting customers, such is the case for Stephanie Serie, founder of Serie Sweets.
A stay-at-home mom to three kids under five, the former Donna Karen public relations executive recently launched her own clothing business in which she brings designer fashion to people home’s to sell, similar to how Avon sells its cosmetics. Dubbed a “boutique in a box,” Series Sweets is based largely on word of mouth and online buzz.
Without technology, Serie would have a tough time building her business, but thanks to social networks like Facebook she is able to generate substantial awareness about her company.
"Facebook has been amazing for me,” said Serie. “I have over 250 friends [on Facebook] that I was able to reach out to just by putting a status update.” Within just one night, she got more than 1,000 hits to her new Web site thanks to Facebook. “It’s insane; I could never get that if I didn’t have Facebook.”
While social networks are a powerful marketing tool to generate interest in your company, it’s their experience on your site that is going to make them loyal customers.
Serie knew that visitors to her Web site and Facebook page didn’t want to be bombarded with self-serving marketing spiel, so she designed both as informational and helpful.
She posts tips on how to dress and updates her Web site with the latest fashions trends in addition to showcasing the products she sells. Since the company is so new, she hasn’t engaged in Twitter yet, but that’s next on her list. Serie is also dabbling with sending out blast e-mails every couple of weeks when her inventory is updated of she has fashion tips for a particular season.
“To be successful technology is a major part of everything,” said Serie. Without it I might as well have a horse and buggy to bring my boutique to your house.”
It’s no secret starting a business is a hard, daunting journey made up of determination and hard work. Playing a starring role in some cases, and a supporting role in others, is technology. Love it or hate, in order for small businesses to be successful these days, being technological savvy is a requirement for owners.
Take YouSendIt, the Campbell, Calif., digital document company that lets users send large documents securely over the Internet.
Launched in 2004 as a 100%-free service with zero paying customers, YouSendIt now has more than 274,000 paid customers. Early on, the company relied on an advertising model to make money. But when it switched to a subscriber-based business, it meant an overhaul in technology.
“We wanted to build a subscription based on the model of Fedex,” said Ranjith Kumaran, founder and chief technology officer of YouSendIt. “When we launched the subscription service we had the first subscriber in four minutes and it took off from there.”
When that happened, YouSendIt had to build out its IT operation to create a customer-service operation, which meant more data centers and advanced technology.
Switching from an ad-based model to a subscription business brought more than just technological challenges. The company lost some employees who had signed up to be part of a fast growing ad-based business, according to Kumaran. “It’s very hard to shift to a subscription model but I learned to do it quickly,” he said, noting that he was very clear with employees as to what the company was doing.
YouSendIt faces tough competition, but Kumaran isn’t worried. The best thing for any company is the brand,” he said. "We tried to instill in the company in the early days that we need to know what we do, and do that one thing better than anyone else.” Kumaran said the company's secret sauce are its employees who love to come to work every day.
“My DNA is not to worry about competition. I can’t control what they do I can control what we do,” said Kumaran. As for the company’s future, he said it is projecting 100% growth over the next several years and that in a year or so the company could be ready to launch an IPO.
Technology can also play a crucial role in generating business and attracting customers, such is the case for Stephanie Serie, founder of Serie Sweets.
A stay-at-home mom to three kids under five, the former Donna Karen public relations executive recently launched her own clothing business in which she brings designer fashion to people home’s to sell, similar to how Avon sells its cosmetics. Dubbed a “boutique in a box,” Series Sweets is based largely on word of mouth and online buzz.
Without technology, Serie would have a tough time building her business, but thanks to social networks like Facebook she is able to generate substantial awareness about her company.
"Facebook has been amazing for me,” said Serie. “I have over 250 friends [on Facebook] that I was able to reach out to just by putting a status update.” Within just one night, she got more than 1,000 hits to her new Web site thanks to Facebook. “It’s insane; I could never get that if I didn’t have Facebook.”
While social networks are a powerful marketing tool to generate interest in your company, it’s their experience on your site that is going to make them loyal customers.
Serie knew that visitors to her Web site and Facebook page didn’t want to be bombarded with self-serving marketing spiel, so she designed both as informational and helpful.
She posts tips on how to dress and updates her Web site with the latest fashions trends in addition to showcasing the products she sells. Since the company is so new, she hasn’t engaged in Twitter yet, but that’s next on her list. Serie is also dabbling with sending out blast e-mails every couple of weeks when her inventory is updated of she has fashion tips for a particular season.
“To be successful technology is a major part of everything,” said Serie. Without it I might as well have a horse and buggy to bring my boutique to your house.”
Tips for (Really) Working From Home ...added 11-16-10
Courtesy of Fox Business
When one decides to work from home, he or she most likely will set up a home office – if there is space, of course. When space is tight, a kitchen table may double as a desk.
But how do you make your home “office” comfortable enough to want to spend quality, productive time in it as a professional but not so much that you feel more like napping than working? And what can be done to reduce the distractions that may come with working from home?
Home office and organization experts have a bevy of tips on how to be a productive professional at home, including having a separate space for work and play, picking a properly sized and styled desk and chair, and hooking up to technology sufficient for your needs.
The first thing you need is a proper space to call your “office” – whether it be a small corner of your “big city” apartment somehow cordoned off or a separate room in your suburban home.
“Hopefully, it’s not the kitchen table or the den or something like that that has to do double duty or worse yet, at the end of the day, you have to clean off the kitchen table or make the space … or conform to some other need,” explained Jeff Zbar, founder of ChiefHomeOffice.com and expert on small and home offices. “The ability to work from a home office does not end at 5 o’clock.”
One more important element to creating a successful home office is to minimize distractions – that includes kids, pets and television.
“If you don’t set boundaries of when you need to work, you may not be able to work until late in the evening,” said Lisa Kanarek, a home-office expert and author and founder of WorkingNaked.com.
Kanarek said home workers need to make clear to friends and family that when you are working, that means no interruptions. And save the personal tasks until lunchtime or after work, she added.
“Throwing in a load of laundry before you get to your home office is fine,” she said. “But when one personal task leads to another, you’ll have a day filled with personal tasks and no work.”
One of the biggest mistakes people make when setting up their home office, Zbar said, is setting up shop too close to the “nerve center” of the home. People need to have a vision of what they are trying to accomplish and how their office can help them achieve it. And never forget to plan for expansion.
“If you think small, you’ll be small,” Zbar concluded. “If you treat your home office like an office in the home and you don’t plan for the growth and you don’t plan for the space … if you treat it like you’re a pariah in the workplace, like this office isn’t where it should be, then you will be treated that way by others. You will build that mental stigma.”
When one decides to work from home, he or she most likely will set up a home office – if there is space, of course. When space is tight, a kitchen table may double as a desk.
But how do you make your home “office” comfortable enough to want to spend quality, productive time in it as a professional but not so much that you feel more like napping than working? And what can be done to reduce the distractions that may come with working from home?
Home office and organization experts have a bevy of tips on how to be a productive professional at home, including having a separate space for work and play, picking a properly sized and styled desk and chair, and hooking up to technology sufficient for your needs.
The first thing you need is a proper space to call your “office” – whether it be a small corner of your “big city” apartment somehow cordoned off or a separate room in your suburban home.
“Hopefully, it’s not the kitchen table or the den or something like that that has to do double duty or worse yet, at the end of the day, you have to clean off the kitchen table or make the space … or conform to some other need,” explained Jeff Zbar, founder of ChiefHomeOffice.com and expert on small and home offices. “The ability to work from a home office does not end at 5 o’clock.”
One more important element to creating a successful home office is to minimize distractions – that includes kids, pets and television.
“If you don’t set boundaries of when you need to work, you may not be able to work until late in the evening,” said Lisa Kanarek, a home-office expert and author and founder of WorkingNaked.com.
Kanarek said home workers need to make clear to friends and family that when you are working, that means no interruptions. And save the personal tasks until lunchtime or after work, she added.
“Throwing in a load of laundry before you get to your home office is fine,” she said. “But when one personal task leads to another, you’ll have a day filled with personal tasks and no work.”
One of the biggest mistakes people make when setting up their home office, Zbar said, is setting up shop too close to the “nerve center” of the home. People need to have a vision of what they are trying to accomplish and how their office can help them achieve it. And never forget to plan for expansion.
“If you think small, you’ll be small,” Zbar concluded. “If you treat your home office like an office in the home and you don’t plan for the growth and you don’t plan for the space … if you treat it like you’re a pariah in the workplace, like this office isn’t where it should be, then you will be treated that way by others. You will build that mental stigma.”
Who Cares What You Wear To Work? Maybe You Should ...added 10-29-10
By Liza Porteus Viana Courtesy of Fox Business
We all know the image many people picture when they hear someone works from home: a person who rolls out of bed in the morning, grabs their coffee, then strolls into their home office in their pajamas – shower or not – and starts their work day.According to Uncle Sam home-based businesses make up roughly half of all U.S. businesses. That means a lot of folks have the opportunity to go straight from the bed to the work desk. But many work-at-home experts argue that taking a shower and getting “dressed” in the morning can greatly help get into the “work zone” and increase one’s productivity. Even some of those who are balancing taking care of kids at home while running their own business advocate this going-to-work process.
“Even if you’re not getting dressed up – certainly you don’t have to wear a suit – you can have comfortable clothes on,” said Kirsten E. Ross, a leadership and human resource coach and founder of FocusFoward.com “It’s more about having a routine. …Taking a shower and doing the morning things you do … going out to work does kickstart you … from sleep mode to total productivity.”
Ross, who’s book, “From People Problems to Productivity” is due out in a few months and who has been a work-at-home mom since 1998, added that getting showered and dressed is “just something that mentally separates you and gets you into the work zone.”
Many at-home workers agree that there’s something about that morning routine that helps them get mentally prepared to work.
Melanie Van Every, for example, who has worked from home on and off for about 20 years, says she has more energy when getting down to business after taking a shower and getting dressed.
“I do find that even at work, if I am in a sweatshirt and jeans, I am lazy at work,” she said. “If I spruce it up a notch – jeans, a nice top, makeup and jewelry, I am much more efficient at what I do because I feel better about myself.”
Particularly if you have to do any sort of web conferencing or video chats – just a few technologies that enable millions of Americans to earn a living from home these days - appearances matter when working from home. But for some who don’t have to meet clients in the home office, nor do they have face-to-face meetings via the computer or some other technology, they opt to literally go from bed to office and say it doesn’t hinder their productivity or efficiency.
For example, one male professional who works Fridays from home, instead of his corporate New York City office, said it’s a running joke with his wife as to whether he’s going to shower that day or just wait until Monday. He doesn’t feel his productivity is affected – even though his wife may feel her olfactory senses are.
But, overall, for most people, donning something a step up from your boxers or nightgown – whatever your sleeping attire – helps them get a leg up on their work day.
Getting dressed for your day helps “separate the home life from the work life even though it’s happening in the same space,” Ross said. But “certainly, one of the benefits [of working from home] is you don’t have to wear a suit, you don’t have to wear anything that has to be dry cleaned.
We all know the image many people picture when they hear someone works from home: a person who rolls out of bed in the morning, grabs their coffee, then strolls into their home office in their pajamas – shower or not – and starts their work day.According to Uncle Sam home-based businesses make up roughly half of all U.S. businesses. That means a lot of folks have the opportunity to go straight from the bed to the work desk. But many work-at-home experts argue that taking a shower and getting “dressed” in the morning can greatly help get into the “work zone” and increase one’s productivity. Even some of those who are balancing taking care of kids at home while running their own business advocate this going-to-work process.
“Even if you’re not getting dressed up – certainly you don’t have to wear a suit – you can have comfortable clothes on,” said Kirsten E. Ross, a leadership and human resource coach and founder of FocusFoward.com “It’s more about having a routine. …Taking a shower and doing the morning things you do … going out to work does kickstart you … from sleep mode to total productivity.”
Ross, who’s book, “From People Problems to Productivity” is due out in a few months and who has been a work-at-home mom since 1998, added that getting showered and dressed is “just something that mentally separates you and gets you into the work zone.”
Many at-home workers agree that there’s something about that morning routine that helps them get mentally prepared to work.
Melanie Van Every, for example, who has worked from home on and off for about 20 years, says she has more energy when getting down to business after taking a shower and getting dressed.
“I do find that even at work, if I am in a sweatshirt and jeans, I am lazy at work,” she said. “If I spruce it up a notch – jeans, a nice top, makeup and jewelry, I am much more efficient at what I do because I feel better about myself.”
Particularly if you have to do any sort of web conferencing or video chats – just a few technologies that enable millions of Americans to earn a living from home these days - appearances matter when working from home. But for some who don’t have to meet clients in the home office, nor do they have face-to-face meetings via the computer or some other technology, they opt to literally go from bed to office and say it doesn’t hinder their productivity or efficiency.
For example, one male professional who works Fridays from home, instead of his corporate New York City office, said it’s a running joke with his wife as to whether he’s going to shower that day or just wait until Monday. He doesn’t feel his productivity is affected – even though his wife may feel her olfactory senses are.
But, overall, for most people, donning something a step up from your boxers or nightgown – whatever your sleeping attire – helps them get a leg up on their work day.
Getting dressed for your day helps “separate the home life from the work life even though it’s happening in the same space,” Ross said. But “certainly, one of the benefits [of working from home] is you don’t have to wear a suit, you don’t have to wear anything that has to be dry cleaned.
3 Successful Strategies to Find a Business Mentor ...added 10-18-10
Business Mentoring
By Teri Evans Courtesy of Fox Business
earching for a business mentor to help guide your small company is often a daunting task. Of course, one of the most well-known resources to start with is the Service Corp of Retired Executives (SCORE), which offers free mentoring services, whether you prefer an online or face-to-face connection. But many entrepreneurs say that identifying the perfect fit is not as simple as it seems.
For a decidedly different approach to finding the right match, consider these three successful, yet oft-overlooked, strategies.
1. Find a common passion. Keep your eyes open to possible mentors when you meet fellow entrepreneurs with whom you share a common interest -- one that has nothing to do with business.
A passion for cars led entrepreneur Ali Allage to his mentor, thanks to an introduction by a mutual friend at a local auto-racing school in 1999.
"We had the same tastes in cars," said Allage, now 30, and the founder of Boost Labs, a Web marketing firm based in Gaithersburg, Md. "I then started to talk to him about other subjects, including business."
The conversations led to monthly mentoring lunches. At times when it was too difficult to make a regularly-scheduled meeting, their shared hobby served as a liaison.
"I would always let him know when I was going to a track event, and ask if he was going to be there," Allage said. "There was an underlying trust between him and I. If we didn't have that common interest I don't think it would have worked out."
In return for the many years of guidance, Allage ultimately offered his mentor an undisclosed amount of equity in his company and brought him in as a partner in 2009.
Allage's Advice: After bonding over a similar interest, casually segue into business topics. Once you agree on a mentor-mentee arrangement, be respectful of your mentor's time. Always arrive with a genuine purpose in mind and ask specific questions.
2. Make a public request. Consider reaching out to your online networks. A personal blog, for example, is a great place to cast your net, according to Joshua Steimle, founder of Draper, Utah-based MWI, a 15-employee search-engine marketing firm.
At the beginning of the year, when Steimle needed a mentor for guidance on business issues, he turned to the readers of his blogwith a specific request. "I really wanted someone to be honest with me, and not beat around the bush," said Steimle, 35.
Within days, a successful entrepreneur -- who was much older and more experienced -- responded; they continue to exchange e-mails on a monthly basis.
Steimle's Advice: Define the kind of mentor you're looking for and outline the types of decisions you'd like help with in your business. "If you describe it generically, either nobody will respond or everyone will," Steimle said, "then you're put in the position of rejecting people, and that's never good."
3. Pick up the phone. In a hi-tech world where everyone is inundated with e-mail, a simple phone call can be surprisingly effective when reaching out for guidance.
Take entrepreneur Joel Bomgar, for example. In 2006, Bomgar was wrestling with branding issues at his company, which develops software for IT help desks.
He read countless business books, including every book that branding expert Al Ries had ever written.
"We just needed a breakthrough," said Bomgar, founder and CEO of his Jackson, Miss.-based namesake company, Bomgar.
Bomgar was so impressed by the strategies detailed in Al Ries' books, he decided to reach out directly for more guidance.
"I found his Web site and just called the number," said the 30-year-old entrepreneur, whose company now has 150 employees and annual revenue of $28 million. "He actually picked up the phone, so I asked him if he had a few minutes to talk about company branding. He ended up speaking with me for a half-hour."
Four years later, he continues to exchange e-mails with Reis and has since hired him several times to consult for Bomgar.
Bomgar's Advice: Identify a handful of successful entrepreneurs or experts who have successfully resolved the issue you're facing, and ask for help. "Don't hesitate to pick up the phone," Bomgar said. "Assume everyone is accessible until they prove otherwise. As long as it's not directly competitive, people will tell you just about anything."
earching for a business mentor to help guide your small company is often a daunting task. Of course, one of the most well-known resources to start with is the Service Corp of Retired Executives (SCORE), which offers free mentoring services, whether you prefer an online or face-to-face connection. But many entrepreneurs say that identifying the perfect fit is not as simple as it seems.
For a decidedly different approach to finding the right match, consider these three successful, yet oft-overlooked, strategies.
1. Find a common passion. Keep your eyes open to possible mentors when you meet fellow entrepreneurs with whom you share a common interest -- one that has nothing to do with business.
A passion for cars led entrepreneur Ali Allage to his mentor, thanks to an introduction by a mutual friend at a local auto-racing school in 1999.
"We had the same tastes in cars," said Allage, now 30, and the founder of Boost Labs, a Web marketing firm based in Gaithersburg, Md. "I then started to talk to him about other subjects, including business."
The conversations led to monthly mentoring lunches. At times when it was too difficult to make a regularly-scheduled meeting, their shared hobby served as a liaison.
"I would always let him know when I was going to a track event, and ask if he was going to be there," Allage said. "There was an underlying trust between him and I. If we didn't have that common interest I don't think it would have worked out."
In return for the many years of guidance, Allage ultimately offered his mentor an undisclosed amount of equity in his company and brought him in as a partner in 2009.
Allage's Advice: After bonding over a similar interest, casually segue into business topics. Once you agree on a mentor-mentee arrangement, be respectful of your mentor's time. Always arrive with a genuine purpose in mind and ask specific questions.
2. Make a public request. Consider reaching out to your online networks. A personal blog, for example, is a great place to cast your net, according to Joshua Steimle, founder of Draper, Utah-based MWI, a 15-employee search-engine marketing firm.
At the beginning of the year, when Steimle needed a mentor for guidance on business issues, he turned to the readers of his blogwith a specific request. "I really wanted someone to be honest with me, and not beat around the bush," said Steimle, 35.
Within days, a successful entrepreneur -- who was much older and more experienced -- responded; they continue to exchange e-mails on a monthly basis.
Steimle's Advice: Define the kind of mentor you're looking for and outline the types of decisions you'd like help with in your business. "If you describe it generically, either nobody will respond or everyone will," Steimle said, "then you're put in the position of rejecting people, and that's never good."
3. Pick up the phone. In a hi-tech world where everyone is inundated with e-mail, a simple phone call can be surprisingly effective when reaching out for guidance.
Take entrepreneur Joel Bomgar, for example. In 2006, Bomgar was wrestling with branding issues at his company, which develops software for IT help desks.
He read countless business books, including every book that branding expert Al Ries had ever written.
"We just needed a breakthrough," said Bomgar, founder and CEO of his Jackson, Miss.-based namesake company, Bomgar.
Bomgar was so impressed by the strategies detailed in Al Ries' books, he decided to reach out directly for more guidance.
"I found his Web site and just called the number," said the 30-year-old entrepreneur, whose company now has 150 employees and annual revenue of $28 million. "He actually picked up the phone, so I asked him if he had a few minutes to talk about company branding. He ended up speaking with me for a half-hour."
Four years later, he continues to exchange e-mails with Reis and has since hired him several times to consult for Bomgar.
Bomgar's Advice: Identify a handful of successful entrepreneurs or experts who have successfully resolved the issue you're facing, and ask for help. "Don't hesitate to pick up the phone," Bomgar said. "Assume everyone is accessible until they prove otherwise. As long as it's not directly competitive, people will tell you just about anything."
Supreme Court's Docket Puts Business in the Spotlight ...added 10-04-10
United States Supreme Court
A look at five pending cases that have the potential to change the way you do business.
By Eric Marcowitz courtesy of Inc Magazine
The Supreme Court, minus Justice John Paul Stevensand with the addition of Elena Kagan, opens its doors today. As always, this year's cases will cover a range of legal theory. A number of the disputes this year involve business law. Here's a look at a few upcoming cases on the court's docket that could potentially affect the practices of thousands of small and midsize businesses around the country.
Kasten v. Saint-Gobain Performance Plastics Corp.
The issue: The Fair Labor Standards Act protects employees from employer retaliation after a complaint is made. In this case, the employee complained verbally, but not in writing. Are his oral complaints protected by the statute?
Kevin Kasten was employed by Saint-GobainPerformance Plastics in Wisconsin until late 2006 when he was terminated on the claim that he had violated the company's policy for punching the clock. Kasten asserts that he told his supervisors on four separate occasions that the location of the time clock was illegal because it "prevented employees from being paid for time spent donning and doffing their required protective gear," according to the brief. After seven out of 10 judges in the U.S. Court of Appeals for the Seventh Circuit denied his bid a rehearing in October, the Supreme Court agreed to hear Kasten's case.
Since Kasten never officially filed his complaints about the clock with a judicial or administrative body, the court must determine whether Kasten's complaints were protected by the Fair Labor Standards Act, and second, and whether unwritten verbal complaints are protected activity.
Staub v. Proctor Hospital
The issue: Under what circumstances can an employer be held liable for discriminatory actions made by managers who are not direct supervisors.
Vincent Staub, an army reservist and angiography technologist, sued his employer, the Proctor Hospital of Peoria, Illinois, after he was terminated from his position for what his employer called insubordination, shirking, and attitude problems. However, Staub claims that starting in the year 2000 his managers began to schedule him on weekend shifts, which he could not work. As an army reservist, he had to participate in drill exercises every weekend. Staub claims he complained to his superiors, but that he was scheduled on weekend shifts anyway and that his managers called his reservist duties "bullshit." According to Staub's brief, managers "would post a notice on the bulletin board stating that volunteers were needed to cover the drill weekends, portraying Staub as irresponsible."
Staub's lawyers are set to explore the legal implications of something called "the cat's paw theory," which is a "way of proving discrimination when the decision maker herself is admittedly unbiased" but influenced by biased managers, according to the brief.
Matrixx Initiatives v. Siracusano
The issue: If the number of adverse incidents in a drug study prove to be statistically insignificant, does the company still have to disclose the information? If the company does not disclose the information, are they violating federal securities laws?
Executives at Matrixx Initiatives, an Arizona-based drug company, received fewer than 100 reports from doctors around the country that the company's popular nose inhaler, Zicam, caused adverse reactions, including the loss of smell. Side effects are already required to be mentioned on TV commercials and any print or radio advertising, so the real question for the nine justices will be how much is too much information, especially when it comes to pharmaceuticals litigation. A district court threw out the securities lawsuit, but the Ninth Circuit reversed that decision.
Thompson v. North American Stainless
The issue: Does an employer violate anti-retaliation provisions of the Fair Labor Standards Act if he or she fires the spouse of an employee that made a formal complaint against the employer?
Eric Thompson worked as a metallurgical engineer for North American Stainless, the owner and operator of a stainless steel manufacturing facility in Carroll County,Kentucky until 2003, when he was fired shortly after his wife, who also worked for North American Stainless, filed a charge with the U.S. Equal Employment Opportunity Commission (EEOC) in September 2002 alleging gender discrimination. Thompson alleges that he was terminated in retaliation for his then-fiancée's EEOC charge, while North American Stainless contends that performance-based reasons supported the plaintiff's termination.
J. McIntyre Machinery v. Nicastro
The issue: Can a consumer sue in a state court a manufacturer that is based in another country over a product that the company distributes in the U.S.?
On October 11, 2001, Robert Nicastro, an employee of Curcio Scrap Metal in New Jersey, was operating a McIntyre recycling machine used to cut metal. Nicastro's right hand got caught in the machine's blades, which severed four of his fingers. J. McIntyre Machinery is a company incorporated in the United Kingdom but its equipment is sold through an exclusive American distributor, McIntyre Machinery America, Ltd. (McIntyre America), to Curcio Scrap Metal.
The initial complaint alleged that the machine was defective, but the court granted J. McIntyre's motion to dismiss the action, because the manufacturer was out of the court's jurisdiction.
By Eric Marcowitz courtesy of Inc Magazine
The Supreme Court, minus Justice John Paul Stevensand with the addition of Elena Kagan, opens its doors today. As always, this year's cases will cover a range of legal theory. A number of the disputes this year involve business law. Here's a look at a few upcoming cases on the court's docket that could potentially affect the practices of thousands of small and midsize businesses around the country.
Kasten v. Saint-Gobain Performance Plastics Corp.
The issue: The Fair Labor Standards Act protects employees from employer retaliation after a complaint is made. In this case, the employee complained verbally, but not in writing. Are his oral complaints protected by the statute?
Kevin Kasten was employed by Saint-GobainPerformance Plastics in Wisconsin until late 2006 when he was terminated on the claim that he had violated the company's policy for punching the clock. Kasten asserts that he told his supervisors on four separate occasions that the location of the time clock was illegal because it "prevented employees from being paid for time spent donning and doffing their required protective gear," according to the brief. After seven out of 10 judges in the U.S. Court of Appeals for the Seventh Circuit denied his bid a rehearing in October, the Supreme Court agreed to hear Kasten's case.
Since Kasten never officially filed his complaints about the clock with a judicial or administrative body, the court must determine whether Kasten's complaints were protected by the Fair Labor Standards Act, and second, and whether unwritten verbal complaints are protected activity.
Staub v. Proctor Hospital
The issue: Under what circumstances can an employer be held liable for discriminatory actions made by managers who are not direct supervisors.
Vincent Staub, an army reservist and angiography technologist, sued his employer, the Proctor Hospital of Peoria, Illinois, after he was terminated from his position for what his employer called insubordination, shirking, and attitude problems. However, Staub claims that starting in the year 2000 his managers began to schedule him on weekend shifts, which he could not work. As an army reservist, he had to participate in drill exercises every weekend. Staub claims he complained to his superiors, but that he was scheduled on weekend shifts anyway and that his managers called his reservist duties "bullshit." According to Staub's brief, managers "would post a notice on the bulletin board stating that volunteers were needed to cover the drill weekends, portraying Staub as irresponsible."
Staub's lawyers are set to explore the legal implications of something called "the cat's paw theory," which is a "way of proving discrimination when the decision maker herself is admittedly unbiased" but influenced by biased managers, according to the brief.
Matrixx Initiatives v. Siracusano
The issue: If the number of adverse incidents in a drug study prove to be statistically insignificant, does the company still have to disclose the information? If the company does not disclose the information, are they violating federal securities laws?
Executives at Matrixx Initiatives, an Arizona-based drug company, received fewer than 100 reports from doctors around the country that the company's popular nose inhaler, Zicam, caused adverse reactions, including the loss of smell. Side effects are already required to be mentioned on TV commercials and any print or radio advertising, so the real question for the nine justices will be how much is too much information, especially when it comes to pharmaceuticals litigation. A district court threw out the securities lawsuit, but the Ninth Circuit reversed that decision.
Thompson v. North American Stainless
The issue: Does an employer violate anti-retaliation provisions of the Fair Labor Standards Act if he or she fires the spouse of an employee that made a formal complaint against the employer?
Eric Thompson worked as a metallurgical engineer for North American Stainless, the owner and operator of a stainless steel manufacturing facility in Carroll County,Kentucky until 2003, when he was fired shortly after his wife, who also worked for North American Stainless, filed a charge with the U.S. Equal Employment Opportunity Commission (EEOC) in September 2002 alleging gender discrimination. Thompson alleges that he was terminated in retaliation for his then-fiancée's EEOC charge, while North American Stainless contends that performance-based reasons supported the plaintiff's termination.
J. McIntyre Machinery v. Nicastro
The issue: Can a consumer sue in a state court a manufacturer that is based in another country over a product that the company distributes in the U.S.?
On October 11, 2001, Robert Nicastro, an employee of Curcio Scrap Metal in New Jersey, was operating a McIntyre recycling machine used to cut metal. Nicastro's right hand got caught in the machine's blades, which severed four of his fingers. J. McIntyre Machinery is a company incorporated in the United Kingdom but its equipment is sold through an exclusive American distributor, McIntyre Machinery America, Ltd. (McIntyre America), to Curcio Scrap Metal.
The initial complaint alleged that the machine was defective, but the court granted J. McIntyre's motion to dismiss the action, because the manufacturer was out of the court's jurisdiction.
Home, Work, Kids and Finding Balance ...added 9-30-10
By Liza Porteus Viana Courtesy of Fox Business
Those rules include: keeping the home life out of the home office, and vice versa; making sure kids - those who are old enough, at least - respect mom or dad’s work schedule; and having realistic expectations about just how much you can get done in a day. But many agree that you have to put your family and its schedule first when working from home.
“You have to have a family first mentality at all times when being a mom entrepreneur. Otherwise distractions from your children will drive you crazy, make you lose your focus on your business and make you angry at your children,” explained Traci Bisson, founder of The Mom Entrepreneur and mother of two children – ages six and 10 – whom she has raised while working from home.
Many experts agree that having a physical door to separate the office from the rest of the home – or, at least, some sort of barrier – is vital, particularly for younger children who get along just fine, if not better, without mom or dad in their sights.
“As that five-month-old becomes a year or older – often out of sight out of mind. If they don’t see you, they don’t need you,” said Jeff Zbar, founder of CheifHomeOfficer.com
If the kids need to see you to stay calm, other arrangements can be made. Zbar has been working from home since 1989. When his children were young – they are now 18, 16, and 12 – he would put the playpen on the other side of his see-through glass office door. This eliminated any “separation anxiety.”
But where you decide to set up your home office depends on each individual and their home needs. For Bisson, her office is in her living room, which is directly off the playroom area.
“My kids like having me in the same room and I have worked hard to have them understand what my work entails and what hours I will dedicate to working and to playing,” she said. “They have also been instructed not to interrupt me while I am on the phone unless it is an emergency.”
Sometimes, bringing kids into the office may be to your benefit WorkingNaked.com founder Lisa Kanarek, who has been working from home for 20 years while raising her two sons, now 13 and 15, said older kids can help mail out products, update mailing lists, and help with other tasks. It’s also important to keep younger kids busy so you can be productive – whether that be with books, movies, going to summer camp, and even setting up a little mini-office for them to play grown-up in.
“Give him or her a smaller version of a telephone, stapler, tape dispenser, ruler, and safety scissors. Add plenty of paper and markers,” Kanarek said. But when it comes to the TV, she warned: “Try to avoid turning the TV into an electronic babysitter.”
If possible, try to work with clients who are OK with having conference calls rescheduled, calls and e-mails returned only at certain times, or getting status updates via phone while you are on the road to daycare, little league, or other kids’ activity.
Desk hours can be planned around school drop off, dentist appointments and other family must-dos. Bisson, Kanarek and others agree that phone calls with clients should be scheduled while kids are at school, day care or napping. Play dates are also good times to be productive.
Heather Allard, founder of TheMogulMom.com and mother of three who has started three at-home businesses since 2001, said it’s also helpful to set regular office hours each day. She advises to treat those hours as “sacred,” barring family emergencies – since you often may have a small window of time to spend in your home office. And make sure friends and family know to steer clear of you while you’re working, as well.
“During your office hours, let [personal] phone calls go to voice mail, close your e-mail client and for heaven’s sake, stop Twittering and Facebooking,” Allard said. “You need every minute of your office hours and you have no time to waste on distractions and disruptions. “
Those rules include: keeping the home life out of the home office, and vice versa; making sure kids - those who are old enough, at least - respect mom or dad’s work schedule; and having realistic expectations about just how much you can get done in a day. But many agree that you have to put your family and its schedule first when working from home.
“You have to have a family first mentality at all times when being a mom entrepreneur. Otherwise distractions from your children will drive you crazy, make you lose your focus on your business and make you angry at your children,” explained Traci Bisson, founder of The Mom Entrepreneur and mother of two children – ages six and 10 – whom she has raised while working from home.
Many experts agree that having a physical door to separate the office from the rest of the home – or, at least, some sort of barrier – is vital, particularly for younger children who get along just fine, if not better, without mom or dad in their sights.
“As that five-month-old becomes a year or older – often out of sight out of mind. If they don’t see you, they don’t need you,” said Jeff Zbar, founder of CheifHomeOfficer.com
If the kids need to see you to stay calm, other arrangements can be made. Zbar has been working from home since 1989. When his children were young – they are now 18, 16, and 12 – he would put the playpen on the other side of his see-through glass office door. This eliminated any “separation anxiety.”
But where you decide to set up your home office depends on each individual and their home needs. For Bisson, her office is in her living room, which is directly off the playroom area.
“My kids like having me in the same room and I have worked hard to have them understand what my work entails and what hours I will dedicate to working and to playing,” she said. “They have also been instructed not to interrupt me while I am on the phone unless it is an emergency.”
Sometimes, bringing kids into the office may be to your benefit WorkingNaked.com founder Lisa Kanarek, who has been working from home for 20 years while raising her two sons, now 13 and 15, said older kids can help mail out products, update mailing lists, and help with other tasks. It’s also important to keep younger kids busy so you can be productive – whether that be with books, movies, going to summer camp, and even setting up a little mini-office for them to play grown-up in.
“Give him or her a smaller version of a telephone, stapler, tape dispenser, ruler, and safety scissors. Add plenty of paper and markers,” Kanarek said. But when it comes to the TV, she warned: “Try to avoid turning the TV into an electronic babysitter.”
If possible, try to work with clients who are OK with having conference calls rescheduled, calls and e-mails returned only at certain times, or getting status updates via phone while you are on the road to daycare, little league, or other kids’ activity.
Desk hours can be planned around school drop off, dentist appointments and other family must-dos. Bisson, Kanarek and others agree that phone calls with clients should be scheduled while kids are at school, day care or napping. Play dates are also good times to be productive.
Heather Allard, founder of TheMogulMom.com and mother of three who has started three at-home businesses since 2001, said it’s also helpful to set regular office hours each day. She advises to treat those hours as “sacred,” barring family emergencies – since you often may have a small window of time to spend in your home office. And make sure friends and family know to steer clear of you while you’re working, as well.
“During your office hours, let [personal] phone calls go to voice mail, close your e-mail client and for heaven’s sake, stop Twittering and Facebooking,” Allard said. “You need every minute of your office hours and you have no time to waste on distractions and disruptions. “
The Fraud Fight That Never Ends ...added 9-23-10
By Gwen Moran Entrepreneur Magazine
How to keep your customers' financial data safe in an increasingly unsafe environment
Since late 2009, law enforcement officials have been seeing an increase in attacks by fraudsters attempting to target the transaction data of small to midsize companies, stealing everything from business account numbers to customers' credit card information. John Bonora, vice president and compliance officer at Fairfield County Bank in Ridgefield, Conn., works with his customers to employ better safety precautions. In addition to concerns about financial losses, Bonora says, companies should be concerned about potential liability for breaches of customer's data.
"At a minimum, you need to know the basics about your state's laws and what the security expectations are," he says. "What a lot of states are doing now is building laws about safeguarding customer information and including the business' civil liability right in the law."
To keep your company safe, follow the guidelines below, but most important review your financial data at least two or three times each week to look for suspicious activity. Fraudsters move quickly, Bonora says, and the faster you can spot potential fraud, the better chance you have to mitigate the damage.
Do
Designate one terminal for financial transactions. Keep it offline when not in use and do not use it for e-mail correspondence, which is a popular tool of scammers attempting to plant information-stealing malware on your terminal. Secure your terminal by passwords when it's not in use.
Turn to your bank for assistance. Many banks have compliance teams that can help you develop a system of transaction security to safeguard your business.
Don't
Rely only on virus protection programs. They simply can't keep up with new viruses and malware, Bonora says. However, your programs should be kept as up-to-date as possible for the protections they do offer.
Ignore the importance of employing PCI Data Security Standardss, a series of universal financial best practices that will help you keep your transaction data safe. A good overview is available at pcisecuritystandards.org.
How to keep your customers' financial data safe in an increasingly unsafe environment
Since late 2009, law enforcement officials have been seeing an increase in attacks by fraudsters attempting to target the transaction data of small to midsize companies, stealing everything from business account numbers to customers' credit card information. John Bonora, vice president and compliance officer at Fairfield County Bank in Ridgefield, Conn., works with his customers to employ better safety precautions. In addition to concerns about financial losses, Bonora says, companies should be concerned about potential liability for breaches of customer's data.
"At a minimum, you need to know the basics about your state's laws and what the security expectations are," he says. "What a lot of states are doing now is building laws about safeguarding customer information and including the business' civil liability right in the law."
To keep your company safe, follow the guidelines below, but most important review your financial data at least two or three times each week to look for suspicious activity. Fraudsters move quickly, Bonora says, and the faster you can spot potential fraud, the better chance you have to mitigate the damage.
Do
Designate one terminal for financial transactions. Keep it offline when not in use and do not use it for e-mail correspondence, which is a popular tool of scammers attempting to plant information-stealing malware on your terminal. Secure your terminal by passwords when it's not in use.
Turn to your bank for assistance. Many banks have compliance teams that can help you develop a system of transaction security to safeguard your business.
Don't
Rely only on virus protection programs. They simply can't keep up with new viruses and malware, Bonora says. However, your programs should be kept as up-to-date as possible for the protections they do offer.
Ignore the importance of employing PCI Data Security Standardss, a series of universal financial best practices that will help you keep your transaction data safe. A good overview is available at pcisecuritystandards.org.
Part 7- Building a Positive Business Image ...added 9-16-10
This is the final edition to this series of articles...
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
Part 7- Building a Positive Business Image
The majority of home business owners do not have the advantage of elaborate offices or elegant storefronts to wow prospects and impress customers. Instead, they must rely on imagination, creativity, and attention to the smallest detail when creating and maintaining a professional business image.
Yes, there are disadvantages in operating a business from home in terms of projecting a positive and professional business image, but these disadvantages can be easily overcome and often turned into competitive advantages. In most instances, your start-up costs will be lower than those of a similar business that operates from a commercial office or storefront. Therefore, you can spend more to project your image. This means putting more money into brochures, promotional materials, public relations, customer service, and descriptive advertising campaigns. Since you do not commute, you have extra time and money to prospect, build strong relationships with customers, and develop business and marketing plans. Your overhead will most likely be a fraction of what competitors are paying to maintain commercial office space or storefronts, so you can devote some of the money you save into more productive activities to attract new clients--advertising, product demonstrations, and trade show marketing. You may also want to set aside some of the money you saved to incorporate or form a limited liability company right from the start.
Logos and Slogans
Logos and slogans can help to brand your business and build consumer awareness of your business, products, or services in a simple and easy-to-remember manner. Good slogans have been used effectively to communicate a message as attention spans are getting shorter. Logos provide visual images that can serve as imprints for businesses. Visual images are powerful tools that people remember. They can also transcend language barriers.
Of course, the key here is consistency. Once you have decided on a logo design and a promotional or descriptive slogan, you must consistently incorporate these into every aspect of your business. Branding requires time. The more often consumers are exposed to your brand, the more they will remember it, giving you brand recognition.
Business logos and promotional slogans play a major role in branding, especially logos because we recognize them as soon as we see them. You see the "swoosh" and you instantly think Nike. You see the golden arches and McDonald's instantly comes to mind. You hear or read "like a good neighbor" and think State Farm Insurance. This is what logos and slogans do: they act as beacons in the swirling fog of competition to attract consumers instantly to brands they know, like, and trust.
Slogans are very straightforward to develop. Simply think about the biggest benefit that people receive from doing business with you. Build a slogan around that benefit. Then, keep editing until you have a few powerful words that perfectly sum up your big benefit and are easy to remember. No, it's not necessarily easy. If it were, advertising agencies wouldn't make millions of dollars coming up with slogans. You also need a slogan that is not being used by another company.
Logos can also be tricky to create unless you have design experience. Fortunately, there are many logo and business image design services that will be more than happy to help you create a professional logo for your business--a logo that makes sense and builds brand awareness. Logo design starts around $50 and can go as high as a few hundred dollars, depending on your needs. Make sure your logo is not being used by another business. You can copyright your slogan and trademark your logo once you are happy with what you have created.
Listed below are a few online logo design services to get you on your way to creating a powerful business image through instant brand identification:
•Logo Design http://www.logodesign.com/
•LogoBee http://www.logobee.com/
•The Logo Company http://thelogocompany.net/
•OnlineLogo.com http://www.onlinelogo.com/
•E-Logo Design http://www.fuelmybrand.com/
Print Identity Package
Your print identity package is composed of the print elements that you use daily in your business--business cards, letter stationery, receipts, envelopes, estimate forms, presentation folders, marketing brochures, catalogs, simple fliers, and account statements. High-quality printing is well worth the extra expense, especially for home business owners. Even though high-quality printing on heavy stock paper may be more expensive than a standard print job, it is still relatively cheap when compared with other overhead expenses, such as office rent, that home business owners do not have to pay. Therefore, you can spend a little extra on items that will project a very positive business image.
The key to a great print identity package is consistency throughout the entire package, just as in your entire marketing program. You want to develop a standard color scheme, logo, slogan, and type of font, and use these consistently so that customers and prospects visually link your business with your identity program. Use colors and a design that are appropriate for your business and your clients. For example, you might use brighter colors and a more youthful design if you are selling children's toys than you would as a legal consultant.
Consult your local telephone directory for printers near you or ask other business owners for recommendations. Remember to obtain three quotes for all your printing needs. Do not decide on price alone. Instead, base your purchasing decision on quality, value, reputation, and turnaround time. You can also visit the PrintUSA website at printusa.com to get free online printing quotes for hundreds of business products, from mouse pads to business cards and everything in between.
Website
Whether you are handling e-commerce or not, your business needs a web presence. In simple terms, you need a website.
The type and complexity of the site will depend on the type of business you are running and your budget. If, for example, you are running a local tutoring service, you may need only a very simple web page that provides your basic information. In this case, you can probably design a workable site yourself with a web design program or through Yahoo or another search engine. However, if you intend to engage in business through your website, the design should be professional. You want it to sell merchandise, to present content that interests and/or informs visitors, and to promote your business and whatever you're selling.
Your online presence is a very important aspect of your overall business and marketing strategy and you should treat it as such. Again, consistency is one of the keys to success. You want your offline business and your online business image to be uniform and appropriate. This is not to say that you or someone you know cannot design and build your website. However, for a more complex site, with a shopping cart or other such functions, you should bring in a professional web designer..
Whatever you decide, take the time to plan carefully how you want the site to look, how you want it to work, and how you expect it to achieve your business and marketing objectives.
Communications
Communications systems and devices can play a major role in projecting a positive and professional business image. You can use communications to project your business as much larger and to reach more prospects, especially when you consider the following simple communications tips that every home entrepreneur can use:
•Install a dedicated business telephone line and promote the number in all marketing activities and business correspondence.
•Purchase and carry a cell phone so that important clients can keep in constant communication with you and vice versa. Poor access is always one of the biggest complaints in any customer service survey.
•Provide customers with a toll-free calling option for inquiries and product orders. This option makes your business appear much larger, especially when the toll-free number is featured in all your advertising.
•Always return telephone messages and e-mails the same day when possible, especially to your best customers and your hottest prospects. Never wait longer than 48 hours.
•If you operate a service business, use an answering service to take after-hours calls. You can also use a voice-mail system, since people are now more comfortable leaving messages. Answering machines, while they serve the purpose, do not project the same business image. However, for a part-time business or a business that is run primarily via e-mails, an answering machine with a business message (not recorded by your kids) will usually be sufficient.
•Record promotional on-hold messages featuring special offers or information on new products or services so you can take advantage of the time that any prospects or customers are placed on hold. Be careful not to overdo it or you will turn customers off.
Powerful Image-Building Business Letters
People receive lots of letters, especially businesspeople and professionals. If you want your business letters to attract attention and achieve your objectives, you must get to the point quickly and have a clear and concise message.
Start by letting your reader know right away what's in it for him or her. What will he or she get by continuing to read your letter? Write in short paragraphs, using subheadings for each new section to ensure that skimmers get the message and stay engaged and interested. Perhaps most important, write from the reader's viewpoint. Anticipate questions, concerns, and objections the reader might have and try to answer them. Here are a few more tips for writing powerful business letters:
•Write a first draft, wait a day, and then review it. Often you will notice points that you want to expand--or delete.
•Include a call to action: e.g., "Give me a call" or "Visit my website" or "Stop by our trade show booth."
•Avoid technical words or explanations. Use basic, easy-to-understand language. Never make your reader work or think too hard to understand your points.
•Edit and proofread for errors at least twice before sending.
•At the bottom of all written communications, include a postscript (P.S.) that restates the main theme of your message and the big benefit for the reader if he or she takes action and responds to your communication.
E-Mails
The world is e-mail crazy, with employees sending e-mails to co-workers 50 feet away and family members sending e-mails from room to room in the same house. While it is not always the best means of communication, since they consist of words alone without intonation or expressions and gestures, e-mail is a strong means of communicating business messages quickly and inexpensively.
Word all e-mails to clients and customers carefully, as if they were business letters, and take the time to proofread for errors and typos. Here are a few other tips for business e-mails:
•Do not send unsolicited e-mails to prospective customers. Make sure you have permission to use their e-mail addresses before sending.
•Use your business name in the From line so that people become familiar with your company and don't see just your name.
•Don't use acronyms, such as LOL (laughing out loud) and other lingo.
•Don't use all caps. It's considered the same as shouting.
•Keep your messages brief, professional, and to the point. Don't ramble.
•If replying to an e-mail question, inquiry, or complaint, address the sender's situation first and respond appropriately. Resist the urge to sell until after you've addressed the issue.
•Don't continue endless threads. Start a new e-mail or, if you are returning an e-mail, delete the older text that is no longer necessary. Change the Subject line to make it appropriate to the current communication.
•If you have a spam filter on, check your spam inbox briefly on occasion to make sure nothing that you need got routed there. Then delete all of the unwanted spam that you receive.
•E-mails are a very common means of communication now. However, there are some matters that merit picking up the phone or meeting in person. Try to judge accordingly, based on the nature and significance of the message to be communicated.
Dress for Success and Uniforms
You may hate them, but stereotypes sell. Resist the urge to stand out or make a statement in terms of how you dress for work. Leave fashion trends to the Hollywood types. Society in general has expectations about the way businesspeople and professionals should dress. We expect doctors to be in white lab coats, mechanics in coveralls, and bankers in business wear. It stands to reason that if you want to make the sale, don't let your choice of business fashion be an obstacle. Dress for success by wearing what the majority of your customers expect you to be wearing. If their expectation is a suit, wear a suit. If it is smart casual, wear smart casual. If it is a uniform, wear a uniform.
Enter Business Competitions
Winning business, product, and customer service awards is a fantastic way to earn credibility, attract new business, and build a great business image and reputation. This is especially important for service providers, who often build their entire sales and marketing campaign around trust, reliability, credibility, and a good reputation. Just about every community, city, and state has some sort of annual business competition classified by type, sector, or industry. Often these business excellence awards and competitions are sponsored and administered by local business groups such as the Chamber of Commerce, the economic committee of local government, or even local newspapers, radio, and television stations. Many industry associations also hold annual best-of business award ceremonies. It is more than worthwhile to take the time to enter your business.
Check with community business groups, your local newspaper, and industry associations for competitions and awards appropriate for your business. Study the details of each and then apply or get nominated for the ones that interest you and that offer the best opportunities to benefit your business. The publicity and free advertising that winning can generate are priceless, and the marketing opportunities associated with being the best are limitless.
Custom Postcards
Another great way to project a positive business image is with custom-designed postcards emblazoned with your company name, logo, and promotional message. Not only do they scream professionalism, but also they are a terrific way to keep in touch with current customers and new prospects. In bulk, custom-printed postcards can be designed and printed for less than 10 cents each, making them less expensive than sending an ordinary run-of-the-mill sales letter. Use the postcards to promote a new product or service or just to let customers know that you are thinking of them.
Resources
Associations
American Home Business Association http://www.homebusinessworks.com/FLAX/default.asp?PageID=1001
965 East 4800, Suite 3C
Salt Lake City, UT 84117
(866) 396-7773
National Association of Professional Organizers http://www.napo.net/default.aspx?AspxAutoDetectCookieSupport=1
15000 Commerce Parkway, Suite C
Mount Laurel, NJ 08054
(856) 380-6828
National Association of Women Business Owners (NAWBO) http://www.nawbo.org/
8405 Greensboro Drive, Suite 800
McLean, VA 22102
(800) 55-NAWBO (556-2926)
Small Office Home Office Business Group (SOHO) http://www.soho.ca/
1680 Lloyd Avenue, Suite 1
North Vancouver, BC V7P 2N6
(604) 929-8250 or (800) 290-SOHO (7646)
Suggested Reading
Allen, David. Ready for Anything: 52 Productivity Principles for Work and Life. New York: Viking Press, 2003.
Carter, David E., and Suzanna MW Stephens. American Corporate Identity 2008. New York: Collins Design (HarperCollins Publishers), 2007.
Kanarek, Lisa. Home Office Life: Marking a Space to Work at Home. Gloucester, MA: Rockport Publishers, 2001.
Allen, David. Getting Things Done: The Art of Stress-Free Productivity. New York: Viking (Penguin Putnam), 2001.
Websites
Apple Computers: Wide range of computers and peripherals. http://www.apple.com/
Best Buy: Wide range of computers, printers, digital cameras, etc. http://www.bestbuy.com/
CNet: Comprehensive website for reviews and vendors of every type of technology. http://www.cnet.com/
Dell Computers: Wide range of computers and peripherals. http://www.dell.com/
DigitalCameraInfo.com: Comparisons, reviews, and data. http://www.digitalcamerainfo.com/
Download Superstore: Business software with shareware downloads. http://www.downloadsuperstore.com/
Ergonomics Online: Ergonomics information, articles, industry links, and resources. http://www.ergonomics.org/
Gateway Computers: Wide range of computers and peripherals. http://www.gateway.com/
Hewlett-Packard: Printers, computers, etc. http://www.hp.com/#Product
Ikea: Retailer of home office furniture. http://www.ikea.com/
Office by Design: Retailer of home office furniture and design services. http://www.officebydesign.net/
Office Depot: Office supplies, furniture, and equipment. http://www.officedepot.com/
OfficeFurniture.com: Retailer of home office furniture. http://www.officefurniture.com/
Office Max: Office supplies, furniture, and equipment. http://www.officemax.com/
PC Magazine: Leading authority on all technical equipment. http://www.pcmag.com/
PopPhoto.com: Buying guide for digital and all other cameras. http://www.popphoto.com/
PowerHomeBiz.com: Home business information portal. http://www.powerhomebiz.com/
Staples: Office supplies, furniture, and equipment. http://www.staples.com/
Steve's Digicams: Detailed revews and comparisons of digital cameras and related devices. http://www.steves-digicams.com/
WorkSpaces: Information, advice, and links on setting up, organizing, and furnishing a home office. http://www.workspaces.com/
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
Part 7- Building a Positive Business Image
The majority of home business owners do not have the advantage of elaborate offices or elegant storefronts to wow prospects and impress customers. Instead, they must rely on imagination, creativity, and attention to the smallest detail when creating and maintaining a professional business image.
Yes, there are disadvantages in operating a business from home in terms of projecting a positive and professional business image, but these disadvantages can be easily overcome and often turned into competitive advantages. In most instances, your start-up costs will be lower than those of a similar business that operates from a commercial office or storefront. Therefore, you can spend more to project your image. This means putting more money into brochures, promotional materials, public relations, customer service, and descriptive advertising campaigns. Since you do not commute, you have extra time and money to prospect, build strong relationships with customers, and develop business and marketing plans. Your overhead will most likely be a fraction of what competitors are paying to maintain commercial office space or storefronts, so you can devote some of the money you save into more productive activities to attract new clients--advertising, product demonstrations, and trade show marketing. You may also want to set aside some of the money you saved to incorporate or form a limited liability company right from the start.
Logos and Slogans
Logos and slogans can help to brand your business and build consumer awareness of your business, products, or services in a simple and easy-to-remember manner. Good slogans have been used effectively to communicate a message as attention spans are getting shorter. Logos provide visual images that can serve as imprints for businesses. Visual images are powerful tools that people remember. They can also transcend language barriers.
Of course, the key here is consistency. Once you have decided on a logo design and a promotional or descriptive slogan, you must consistently incorporate these into every aspect of your business. Branding requires time. The more often consumers are exposed to your brand, the more they will remember it, giving you brand recognition.
Business logos and promotional slogans play a major role in branding, especially logos because we recognize them as soon as we see them. You see the "swoosh" and you instantly think Nike. You see the golden arches and McDonald's instantly comes to mind. You hear or read "like a good neighbor" and think State Farm Insurance. This is what logos and slogans do: they act as beacons in the swirling fog of competition to attract consumers instantly to brands they know, like, and trust.
Slogans are very straightforward to develop. Simply think about the biggest benefit that people receive from doing business with you. Build a slogan around that benefit. Then, keep editing until you have a few powerful words that perfectly sum up your big benefit and are easy to remember. No, it's not necessarily easy. If it were, advertising agencies wouldn't make millions of dollars coming up with slogans. You also need a slogan that is not being used by another company.
Logos can also be tricky to create unless you have design experience. Fortunately, there are many logo and business image design services that will be more than happy to help you create a professional logo for your business--a logo that makes sense and builds brand awareness. Logo design starts around $50 and can go as high as a few hundred dollars, depending on your needs. Make sure your logo is not being used by another business. You can copyright your slogan and trademark your logo once you are happy with what you have created.
Listed below are a few online logo design services to get you on your way to creating a powerful business image through instant brand identification:
•Logo Design http://www.logodesign.com/
•LogoBee http://www.logobee.com/
•The Logo Company http://thelogocompany.net/
•OnlineLogo.com http://www.onlinelogo.com/
•E-Logo Design http://www.fuelmybrand.com/
Print Identity Package
Your print identity package is composed of the print elements that you use daily in your business--business cards, letter stationery, receipts, envelopes, estimate forms, presentation folders, marketing brochures, catalogs, simple fliers, and account statements. High-quality printing is well worth the extra expense, especially for home business owners. Even though high-quality printing on heavy stock paper may be more expensive than a standard print job, it is still relatively cheap when compared with other overhead expenses, such as office rent, that home business owners do not have to pay. Therefore, you can spend a little extra on items that will project a very positive business image.
The key to a great print identity package is consistency throughout the entire package, just as in your entire marketing program. You want to develop a standard color scheme, logo, slogan, and type of font, and use these consistently so that customers and prospects visually link your business with your identity program. Use colors and a design that are appropriate for your business and your clients. For example, you might use brighter colors and a more youthful design if you are selling children's toys than you would as a legal consultant.
Consult your local telephone directory for printers near you or ask other business owners for recommendations. Remember to obtain three quotes for all your printing needs. Do not decide on price alone. Instead, base your purchasing decision on quality, value, reputation, and turnaround time. You can also visit the PrintUSA website at printusa.com to get free online printing quotes for hundreds of business products, from mouse pads to business cards and everything in between.
Website
Whether you are handling e-commerce or not, your business needs a web presence. In simple terms, you need a website.
The type and complexity of the site will depend on the type of business you are running and your budget. If, for example, you are running a local tutoring service, you may need only a very simple web page that provides your basic information. In this case, you can probably design a workable site yourself with a web design program or through Yahoo or another search engine. However, if you intend to engage in business through your website, the design should be professional. You want it to sell merchandise, to present content that interests and/or informs visitors, and to promote your business and whatever you're selling.
Your online presence is a very important aspect of your overall business and marketing strategy and you should treat it as such. Again, consistency is one of the keys to success. You want your offline business and your online business image to be uniform and appropriate. This is not to say that you or someone you know cannot design and build your website. However, for a more complex site, with a shopping cart or other such functions, you should bring in a professional web designer..
Whatever you decide, take the time to plan carefully how you want the site to look, how you want it to work, and how you expect it to achieve your business and marketing objectives.
Communications
Communications systems and devices can play a major role in projecting a positive and professional business image. You can use communications to project your business as much larger and to reach more prospects, especially when you consider the following simple communications tips that every home entrepreneur can use:
•Install a dedicated business telephone line and promote the number in all marketing activities and business correspondence.
•Purchase and carry a cell phone so that important clients can keep in constant communication with you and vice versa. Poor access is always one of the biggest complaints in any customer service survey.
•Provide customers with a toll-free calling option for inquiries and product orders. This option makes your business appear much larger, especially when the toll-free number is featured in all your advertising.
•Always return telephone messages and e-mails the same day when possible, especially to your best customers and your hottest prospects. Never wait longer than 48 hours.
•If you operate a service business, use an answering service to take after-hours calls. You can also use a voice-mail system, since people are now more comfortable leaving messages. Answering machines, while they serve the purpose, do not project the same business image. However, for a part-time business or a business that is run primarily via e-mails, an answering machine with a business message (not recorded by your kids) will usually be sufficient.
•Record promotional on-hold messages featuring special offers or information on new products or services so you can take advantage of the time that any prospects or customers are placed on hold. Be careful not to overdo it or you will turn customers off.
Powerful Image-Building Business Letters
People receive lots of letters, especially businesspeople and professionals. If you want your business letters to attract attention and achieve your objectives, you must get to the point quickly and have a clear and concise message.
Start by letting your reader know right away what's in it for him or her. What will he or she get by continuing to read your letter? Write in short paragraphs, using subheadings for each new section to ensure that skimmers get the message and stay engaged and interested. Perhaps most important, write from the reader's viewpoint. Anticipate questions, concerns, and objections the reader might have and try to answer them. Here are a few more tips for writing powerful business letters:
•Write a first draft, wait a day, and then review it. Often you will notice points that you want to expand--or delete.
•Include a call to action: e.g., "Give me a call" or "Visit my website" or "Stop by our trade show booth."
•Avoid technical words or explanations. Use basic, easy-to-understand language. Never make your reader work or think too hard to understand your points.
•Edit and proofread for errors at least twice before sending.
•At the bottom of all written communications, include a postscript (P.S.) that restates the main theme of your message and the big benefit for the reader if he or she takes action and responds to your communication.
E-Mails
The world is e-mail crazy, with employees sending e-mails to co-workers 50 feet away and family members sending e-mails from room to room in the same house. While it is not always the best means of communication, since they consist of words alone without intonation or expressions and gestures, e-mail is a strong means of communicating business messages quickly and inexpensively.
Word all e-mails to clients and customers carefully, as if they were business letters, and take the time to proofread for errors and typos. Here are a few other tips for business e-mails:
•Do not send unsolicited e-mails to prospective customers. Make sure you have permission to use their e-mail addresses before sending.
•Use your business name in the From line so that people become familiar with your company and don't see just your name.
•Don't use acronyms, such as LOL (laughing out loud) and other lingo.
•Don't use all caps. It's considered the same as shouting.
•Keep your messages brief, professional, and to the point. Don't ramble.
•If replying to an e-mail question, inquiry, or complaint, address the sender's situation first and respond appropriately. Resist the urge to sell until after you've addressed the issue.
•Don't continue endless threads. Start a new e-mail or, if you are returning an e-mail, delete the older text that is no longer necessary. Change the Subject line to make it appropriate to the current communication.
•If you have a spam filter on, check your spam inbox briefly on occasion to make sure nothing that you need got routed there. Then delete all of the unwanted spam that you receive.
•E-mails are a very common means of communication now. However, there are some matters that merit picking up the phone or meeting in person. Try to judge accordingly, based on the nature and significance of the message to be communicated.
Dress for Success and Uniforms
You may hate them, but stereotypes sell. Resist the urge to stand out or make a statement in terms of how you dress for work. Leave fashion trends to the Hollywood types. Society in general has expectations about the way businesspeople and professionals should dress. We expect doctors to be in white lab coats, mechanics in coveralls, and bankers in business wear. It stands to reason that if you want to make the sale, don't let your choice of business fashion be an obstacle. Dress for success by wearing what the majority of your customers expect you to be wearing. If their expectation is a suit, wear a suit. If it is smart casual, wear smart casual. If it is a uniform, wear a uniform.
Enter Business Competitions
Winning business, product, and customer service awards is a fantastic way to earn credibility, attract new business, and build a great business image and reputation. This is especially important for service providers, who often build their entire sales and marketing campaign around trust, reliability, credibility, and a good reputation. Just about every community, city, and state has some sort of annual business competition classified by type, sector, or industry. Often these business excellence awards and competitions are sponsored and administered by local business groups such as the Chamber of Commerce, the economic committee of local government, or even local newspapers, radio, and television stations. Many industry associations also hold annual best-of business award ceremonies. It is more than worthwhile to take the time to enter your business.
Check with community business groups, your local newspaper, and industry associations for competitions and awards appropriate for your business. Study the details of each and then apply or get nominated for the ones that interest you and that offer the best opportunities to benefit your business. The publicity and free advertising that winning can generate are priceless, and the marketing opportunities associated with being the best are limitless.
Custom Postcards
Another great way to project a positive business image is with custom-designed postcards emblazoned with your company name, logo, and promotional message. Not only do they scream professionalism, but also they are a terrific way to keep in touch with current customers and new prospects. In bulk, custom-printed postcards can be designed and printed for less than 10 cents each, making them less expensive than sending an ordinary run-of-the-mill sales letter. Use the postcards to promote a new product or service or just to let customers know that you are thinking of them.
Resources
Associations
American Home Business Association http://www.homebusinessworks.com/FLAX/default.asp?PageID=1001
965 East 4800, Suite 3C
Salt Lake City, UT 84117
(866) 396-7773
National Association of Professional Organizers http://www.napo.net/default.aspx?AspxAutoDetectCookieSupport=1
15000 Commerce Parkway, Suite C
Mount Laurel, NJ 08054
(856) 380-6828
National Association of Women Business Owners (NAWBO) http://www.nawbo.org/
8405 Greensboro Drive, Suite 800
McLean, VA 22102
(800) 55-NAWBO (556-2926)
Small Office Home Office Business Group (SOHO) http://www.soho.ca/
1680 Lloyd Avenue, Suite 1
North Vancouver, BC V7P 2N6
(604) 929-8250 or (800) 290-SOHO (7646)
Suggested Reading
Allen, David. Ready for Anything: 52 Productivity Principles for Work and Life. New York: Viking Press, 2003.
Carter, David E., and Suzanna MW Stephens. American Corporate Identity 2008. New York: Collins Design (HarperCollins Publishers), 2007.
Kanarek, Lisa. Home Office Life: Marking a Space to Work at Home. Gloucester, MA: Rockport Publishers, 2001.
Allen, David. Getting Things Done: The Art of Stress-Free Productivity. New York: Viking (Penguin Putnam), 2001.
Websites
Apple Computers: Wide range of computers and peripherals. http://www.apple.com/
Best Buy: Wide range of computers, printers, digital cameras, etc. http://www.bestbuy.com/
CNet: Comprehensive website for reviews and vendors of every type of technology. http://www.cnet.com/
Dell Computers: Wide range of computers and peripherals. http://www.dell.com/
DigitalCameraInfo.com: Comparisons, reviews, and data. http://www.digitalcamerainfo.com/
Download Superstore: Business software with shareware downloads. http://www.downloadsuperstore.com/
Ergonomics Online: Ergonomics information, articles, industry links, and resources. http://www.ergonomics.org/
Gateway Computers: Wide range of computers and peripherals. http://www.gateway.com/
Hewlett-Packard: Printers, computers, etc. http://www.hp.com/#Product
Ikea: Retailer of home office furniture. http://www.ikea.com/
Office by Design: Retailer of home office furniture and design services. http://www.officebydesign.net/
Office Depot: Office supplies, furniture, and equipment. http://www.officedepot.com/
OfficeFurniture.com: Retailer of home office furniture. http://www.officefurniture.com/
Office Max: Office supplies, furniture, and equipment. http://www.officemax.com/
PC Magazine: Leading authority on all technical equipment. http://www.pcmag.com/
PopPhoto.com: Buying guide for digital and all other cameras. http://www.popphoto.com/
PowerHomeBiz.com: Home business information portal. http://www.powerhomebiz.com/
Staples: Office supplies, furniture, and equipment. http://www.staples.com/
Steve's Digicams: Detailed revews and comparisons of digital cameras and related devices. http://www.steves-digicams.com/
WorkSpaces: Information, advice, and links on setting up, organizing, and furnishing a home office. http://www.workspaces.com/
Part 6- Home Office Furniture, Equipment and Supplies ...added 9-9-10
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
Here is a handy checklist to help you determine the furniture, equipment, and supplies you will need. This checklist is very comprehensive; chances are you will not need everything featured on it. If your budget is a concern, you can prioritize the items and purchase just what you need most to get the business generating revenues and profits right away and then purchase the other items as you earn.
Office Furniture and Equipment
•Desk
•Comfortable chair
•Filing cabinets
•Work/computer table(s)
•Overhead and work lighting
•Client seating
•Fireproof safe
•Desktop and pocket calculatorso Bookcases
•Postage meter
•Wall whiteboard and markers
•Storage boxes
•Label maker
•Photocopier
•Radio
•Paper shredder
•Air conditioner
•Wastebasket
•Insulated windows
•Recycling bin
•Desktop fan
•Space heater
•Outside courier delivery box
•Home alarm system
•Fire extinguisher
•Telephone Yellow Pages
•Smoke director
•Telephone White Pages
•Rechargeable flashlight
•Office decorations
•Business and industry Directory
•Reference books and product catalogs Computer Hardware and Accessories
•Desktop computer, keyboard, mouse, and monitor
•Surge protector
•UPS
•Printer
•Scanner
•Notebook or laptop computer
•Modem
•Wireless router
•PowerPoint projector
•Palm organizer
•Digital camera
•USB flash drive
•Computer and equipment manuals
Computer Software Specific Program or Brand
•Word processing program _________________________
•Accounting software _________________________
•Contact management software _________________________
•Database management software _________________________
•Website building software _________________________
•Website maintenance software _________________________
•E-commerce software _________________________
•Payment processing software _________________________
•Inventory management software _________________________
•Delivery tracking software _________________________
•Desktop publishing software _________________________
•Multimedia software _________________________
•Antivirus software _________________________
•CD storage case _________________________
•Fireproof lock box (disks) _________________________
•Industry-specific software programs _________________________
Home Office Communications
•Dedicated telephone line o Internet connection
•Dedicated fax line o Toll-free line/number
•Cordless telephone
•Fax machine
•Answering machine/service
•Cordless headset
•Speakerphone
•Cell phone (possibly with internet features)
•Pager
•Tape recorder
•Telephone (possibly multi-line) with business features and functions
Home Office General Supplies
•Business cards (paper)
•Business cards (CDs)
•Envelopes
•Promotional items (e.g., pens)
•Mailing labels
•Letterhead
•Postage stamps
•CD
•DVD
•Index cards
•Printer cartridges
•In box
•Out box
•Pens
•Pencils/Erasers
•Accordion files
•File folders
•File labels and tabs
•Markers
•Hanging files
•Pencil holder
•Pencil sharpener
•Printer paper
•Note pads
•Fax paper
•Paper clips
•Hole puncher
•Stapler/staples/Staple remover
•Paper cutter
•Packing tape
•Tape
•Rubber bands
•Glue
•Ring binders
•Scissors
•Cleaning supplies
Here is a handy checklist to help you determine the furniture, equipment, and supplies you will need. This checklist is very comprehensive; chances are you will not need everything featured on it. If your budget is a concern, you can prioritize the items and purchase just what you need most to get the business generating revenues and profits right away and then purchase the other items as you earn.
Office Furniture and Equipment
•Desk
•Comfortable chair
•Filing cabinets
•Work/computer table(s)
•Overhead and work lighting
•Client seating
•Fireproof safe
•Desktop and pocket calculatorso Bookcases
•Postage meter
•Wall whiteboard and markers
•Storage boxes
•Label maker
•Photocopier
•Radio
•Paper shredder
•Air conditioner
•Wastebasket
•Insulated windows
•Recycling bin
•Desktop fan
•Space heater
•Outside courier delivery box
•Home alarm system
•Fire extinguisher
•Telephone Yellow Pages
•Smoke director
•Telephone White Pages
•Rechargeable flashlight
•Office decorations
•Business and industry Directory
•Reference books and product catalogs Computer Hardware and Accessories
•Desktop computer, keyboard, mouse, and monitor
•Surge protector
•UPS
•Printer
•Scanner
•Notebook or laptop computer
•Modem
•Wireless router
•PowerPoint projector
•Palm organizer
•Digital camera
•USB flash drive
•Computer and equipment manuals
Computer Software Specific Program or Brand
•Word processing program _________________________
•Accounting software _________________________
•Contact management software _________________________
•Database management software _________________________
•Website building software _________________________
•Website maintenance software _________________________
•E-commerce software _________________________
•Payment processing software _________________________
•Inventory management software _________________________
•Delivery tracking software _________________________
•Desktop publishing software _________________________
•Multimedia software _________________________
•Antivirus software _________________________
•CD storage case _________________________
•Fireproof lock box (disks) _________________________
•Industry-specific software programs _________________________
Home Office Communications
•Dedicated telephone line o Internet connection
•Dedicated fax line o Toll-free line/number
•Cordless telephone
•Fax machine
•Answering machine/service
•Cordless headset
•Speakerphone
•Cell phone (possibly with internet features)
•Pager
•Tape recorder
•Telephone (possibly multi-line) with business features and functions
Home Office General Supplies
•Business cards (paper)
•Business cards (CDs)
•Envelopes
•Promotional items (e.g., pens)
•Mailing labels
•Letterhead
•Postage stamps
•CD
•DVD
•Index cards
•Printer cartridges
•In box
•Out box
•Pens
•Pencils/Erasers
•Accordion files
•File folders
•File labels and tabs
•Markers
•Hanging files
•Pencil holder
•Pencil sharpener
•Printer paper
•Note pads
•Fax paper
•Paper clips
•Hole puncher
•Stapler/staples/Staple remover
•Paper cutter
•Packing tape
•Tape
•Rubber bands
•Glue
•Ring binders
•Scissors
•Cleaning supplies
Part 5- Home Business Security and Safety ...added 8-31-10
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
Protecting your family from criminal intrusion and creating a safe working environment should be high on your list of priorities. Unfortunately for home business owners, the most common crime in the United States and Canada is home burglary. The potential loss is even greater for business owners with expensive computer equipment, cash, and specialized tools commonly on-site, making residences a tempting target, because experienced burglars know which homes contain businesses.
As a rule of thumb, criminals look for items that are small, valuable, and easy to sell, such as notebook computers and digital cameras. Even worse, with the increase in identity theft and e-fraud, your clients could also become crime victims if their financial and confidential information is stolen from your business. For these reasons, all home business owners have to go out of their way to secure their homes and businesses for the protection of their families, businesses, clients, and neighbors.
Building Alliances with Neighbors
One of the simplest and least expensive ways to begin securing your home, family, and business is to forge close relationships with your neighbors, so that you all can help each other by watching out for suspicious activities. Knock on a few doors and introduce yourself to your neighbors and suggest setting up a simple neighborhood watch, if there is none already in place. Establish a system so that when residents are away their neighbors will pick up their mail and park in their vacant driveways so that the home seems occupied. Property crimes can be greatly reduced when neighbors report suspicious activities to the local police. And most police departments have information available about how to set up neighborhood watch programs; some even have neighborhood watch programs in place already.
It also helps to keep shrubs and trees trimmed back from your exterior entrances and window areas, to make your home more visible from the street and from your neighbors' homes so they can keep an eye on your property and you can watch their properties.
Home Security Alarms
The next logical step in protecting your family and business is to purchase and install a good quality, monitored home alarm system complete with glass-break detectors, interior motion detectors, and window and door contact point detectors. Home security alarms provide three major deterrents to theft. The small alarm company sign that can be displayed around the outside of the home informs thieves that the home is protected. There are also window and door stickers to reinforce this message, which is another deterrent. Last, the alarm that blasts an ear-piercing screech after a contact point has been disrupted or a motion detector triggered is definitely a deterrent.
You can also buy home surveillance systems that are hooked up to a digital video recorder and installed for less than $500.
Most home alarm companies offer free, comprehensive written quotations. Be sure to get three, so you can compare features, benefits, and costs of having the alarm system installed and the monthly monitoring fee. There are also monitored alarm systems available that detect smoke and carbon monoxide, as well as break-ins. Two major players in the home security industry are ADT Security Services (http://www.adt.com/) and Brinks Home Security (http://www.broadviewsecurity-home.com/).
Both companies offer numerous home alarm systems and monitoring options that can be tailored to individual needs and financial
budgets.
Securing Doors and Windows
In over 70 percent of home thefts, entrance was gained through a door or window using no more than a simple screwdriver or pry bar. Conse-quently, you want to beef up locks, consider installing heavy-duty entrance doors, and take a few other simple measures that will make your home less of a target for theft and more secure for your family and business.
Entrance Doors
If your home or apartment does not currently have steel or solid wood entrance doors, you should consider upgrading to heavy-duty steel doors. It is a wise investment that not only can help keep your home secure, but also can be a business tax deduction if the improvements are made in conjunction with starting your home business. Deadbolts can be installed to prevent entrance by means of twisting or prying on locks and jambs. These heavy-duty locks are not very expensive, easy to install, and available at your local hardware store.
Patio Doors
Sliding glass doors, commonly known as patio doors, are another easy entrance point for thieves, mainly because of inferior and defective locks. The doors are also easily lifted from their tracks. However, if you spend just a few dollars on an anti-lift device, such as a pin that extends through both the sliding and fixed portion of the door track at the bottom, can make it impossible an outsider to slide the door open or lift it from the track. Locking pins are cheap, quick to install with basic hand tools, and available at any hardware store.
Windows
Windows also make easy entrance points for brazen thieves; windows are often left open for ventilation in warmer weather, making a thief's job that much easier. Ground-floor windows, of course, are more susceptible to break-ins; upper-floor windows become attractive targets if they can be accessed from stairs, a tree, a fence, or an extension ladder left lying beside the house. Most windows have basic latches instead of keyed locks, but the addition of simple blocks and pin locks can prevent an outsider from prying windows up, out, or over. They are easy to install, cheap, and available at your local hardware store. You can also install security bars on the windows. But be cautious here: the design of some window bars can prevent people inside the home from escaping through the window in case of emergency.
Security Lighting
Indoor and outdoor lighting also plays a major role in home security, especially when darkness makes your home more vulnerable to burglars. You should purchase and install good-quality exterior lighting with motion detectors to keep the outside of your home illuminated at night as needed. Motion-sensitive lights will serve a dual purpose. First, when thieves approach your home, a sudden light may surprise them into fleeing. Second, a motion-sensitive light makes it safer for you to enter your home. Exterior motion-detector lights are very inexpensive, approximately $50 each, and can be installed in a few minutes by novices with nothing more than basic hand tools.
Interior lighting is also important, as it indicates activity inside your home. If it's dark, especially for extended periods of time, burglars are likely to assume that nobody is home. To confuse burglars, you can purchase inexpensive light timers and connect them to key interior lighting visible through front and back windows. When interior lights come on and turn off at various times, it appears that someone is home, which is the number-one deterrent to thieves.
Going High Tech
The latest in high-tech home integration packages, with HD CCTV (high-definition closed-circuit TV), can provide clear photos of who is outside your front door or on your property--and even send you photographs via e-mail. If you prefer to watch your home over your cell phone, the Motorola Q Phone is one cell phone that gives you that possibility. Full-integration technology can now allow you to see visitors at your front door either on your computer or even, if you are away from your desk, on your laptop or notebook. The latest devices also allow you to regulate lighting from afar via your computer, so if you are away for a few days, you can still turn the lights on from time to time and get alerts if anyone is on your property, so you can call the local police if necessary. Ask security companies in your area about home integration technology.
Home Office Safes
Purchasing and installing a safe is another way a home business owner can protect his or her valuables and important personal and business documents. There are various styles of home office safes available at many price points: flush wall-mounted safes, portable lockbox safes, floor-mounted safes, and safes that are disguised as pieces of office furniture and equipment. Ideally, you want a safe with a long burn rating and one that can be securely anchored to the floor or in a wall to prevent thieves from stealing the safe to get its contents. In addition to cash, safes can be used to store key client files on disk, business documents such as incorporation papers, backup CDs of customer data, insurance policies, personal and family documents, and copies of important documents, such as your will or your drivers' license.
You should do a little research to determine which safe will best meet your specific needs. You can learn more about home business safes, features, and costs by visiting these websites:
•Liberty Safe & Security Products http://www.libertysafe.com/
•Sentry Group http://www.sentrysafe.com/
•Gardall Safe Corporation http://www.gardall.com/
•Hidden Safes http://www.hiddensafes.com/
•American Security Products http://www.amsecusa.com/home/
Fire Safety
Like property and personal security, fire safety is another high-priority issue for home business owners. While having sufficient fire insurance is certainly a must, it is not the sole answer to all fire safety concerns. The following are a few tips to help protect your family and your business:
•Carry sufficient fire insurance.
•Install hardwired smoke detectors with a battery backup system on each floor and in the home office.
•Install emergency battery-powered lighting in hallways and stair corridors.
•Purchase fire extinguishers and keep them in key areas of the home, such as the kitchen, your home office, and the upstairs hall closet.
•Install carbon monoxide detectors.
•Install second-story fire safety ladders or ropes.
•Purchase fireproof lock boxes for important business and personal documents.
•Develop an emergency fire plan and make sure that all family members know it well. It should include an exit strategy for each room of the house, contingency exit points in case of fire blocks, and a central meeting place outside, at a safe distance.
To find out more about fire safety, visit the U.S. Fire Administration website, at usfa.fema.gov. On the site you will find fire safety tips for your home and business.
Home Office Safety
In addition to security and fire concerns, you also want to ensure that your home office is a safe working environment for you, your family, and visitors. Believe it or not, the vast majority of preventable accidents and injuries happen at home, not on the highways, so take extra precautions to make sure that you develop and maintain a safe working environment. Here are a few great tips to help you:
•Keep emergency numbers for the police, ambulance, and fire department in a visible place by the telephone.
•All electrical outlets should be the grounded, three-pronged type. It's easy and inexpensive to switch from ungrounded outlets to grounded outlets, which are readily available at hardware stores everywhere.
•Use surge protectors to protect expensive computer equipment against voltage spikes in your electricity service. You can also get an uninterruptible/universal power supply (UPS), so you're prepared in the event of a power outage. This will keep your computer running so that you can close down all important files rather than losing them.
•Do not store toxic materials, such as paints and cleaners, in your home office.
•Secure top-heavy or unstable furniture and equipment such as file cabinets firmly to the floor or walls.
•Avoid loose wiring. Make sure all wiring, cables, and extension cords are secured to the walls or floor.
•Keep a flashlight in an easily accessible location in case of power outages.
Protecting your family from criminal intrusion and creating a safe working environment should be high on your list of priorities. Unfortunately for home business owners, the most common crime in the United States and Canada is home burglary. The potential loss is even greater for business owners with expensive computer equipment, cash, and specialized tools commonly on-site, making residences a tempting target, because experienced burglars know which homes contain businesses.
As a rule of thumb, criminals look for items that are small, valuable, and easy to sell, such as notebook computers and digital cameras. Even worse, with the increase in identity theft and e-fraud, your clients could also become crime victims if their financial and confidential information is stolen from your business. For these reasons, all home business owners have to go out of their way to secure their homes and businesses for the protection of their families, businesses, clients, and neighbors.
Building Alliances with Neighbors
One of the simplest and least expensive ways to begin securing your home, family, and business is to forge close relationships with your neighbors, so that you all can help each other by watching out for suspicious activities. Knock on a few doors and introduce yourself to your neighbors and suggest setting up a simple neighborhood watch, if there is none already in place. Establish a system so that when residents are away their neighbors will pick up their mail and park in their vacant driveways so that the home seems occupied. Property crimes can be greatly reduced when neighbors report suspicious activities to the local police. And most police departments have information available about how to set up neighborhood watch programs; some even have neighborhood watch programs in place already.
It also helps to keep shrubs and trees trimmed back from your exterior entrances and window areas, to make your home more visible from the street and from your neighbors' homes so they can keep an eye on your property and you can watch their properties.
Home Security Alarms
The next logical step in protecting your family and business is to purchase and install a good quality, monitored home alarm system complete with glass-break detectors, interior motion detectors, and window and door contact point detectors. Home security alarms provide three major deterrents to theft. The small alarm company sign that can be displayed around the outside of the home informs thieves that the home is protected. There are also window and door stickers to reinforce this message, which is another deterrent. Last, the alarm that blasts an ear-piercing screech after a contact point has been disrupted or a motion detector triggered is definitely a deterrent.
You can also buy home surveillance systems that are hooked up to a digital video recorder and installed for less than $500.
Most home alarm companies offer free, comprehensive written quotations. Be sure to get three, so you can compare features, benefits, and costs of having the alarm system installed and the monthly monitoring fee. There are also monitored alarm systems available that detect smoke and carbon monoxide, as well as break-ins. Two major players in the home security industry are ADT Security Services (http://www.adt.com/) and Brinks Home Security (http://www.broadviewsecurity-home.com/).
Both companies offer numerous home alarm systems and monitoring options that can be tailored to individual needs and financial
budgets.
Securing Doors and Windows
In over 70 percent of home thefts, entrance was gained through a door or window using no more than a simple screwdriver or pry bar. Conse-quently, you want to beef up locks, consider installing heavy-duty entrance doors, and take a few other simple measures that will make your home less of a target for theft and more secure for your family and business.
Entrance Doors
If your home or apartment does not currently have steel or solid wood entrance doors, you should consider upgrading to heavy-duty steel doors. It is a wise investment that not only can help keep your home secure, but also can be a business tax deduction if the improvements are made in conjunction with starting your home business. Deadbolts can be installed to prevent entrance by means of twisting or prying on locks and jambs. These heavy-duty locks are not very expensive, easy to install, and available at your local hardware store.
Patio Doors
Sliding glass doors, commonly known as patio doors, are another easy entrance point for thieves, mainly because of inferior and defective locks. The doors are also easily lifted from their tracks. However, if you spend just a few dollars on an anti-lift device, such as a pin that extends through both the sliding and fixed portion of the door track at the bottom, can make it impossible an outsider to slide the door open or lift it from the track. Locking pins are cheap, quick to install with basic hand tools, and available at any hardware store.
Windows
Windows also make easy entrance points for brazen thieves; windows are often left open for ventilation in warmer weather, making a thief's job that much easier. Ground-floor windows, of course, are more susceptible to break-ins; upper-floor windows become attractive targets if they can be accessed from stairs, a tree, a fence, or an extension ladder left lying beside the house. Most windows have basic latches instead of keyed locks, but the addition of simple blocks and pin locks can prevent an outsider from prying windows up, out, or over. They are easy to install, cheap, and available at your local hardware store. You can also install security bars on the windows. But be cautious here: the design of some window bars can prevent people inside the home from escaping through the window in case of emergency.
Security Lighting
Indoor and outdoor lighting also plays a major role in home security, especially when darkness makes your home more vulnerable to burglars. You should purchase and install good-quality exterior lighting with motion detectors to keep the outside of your home illuminated at night as needed. Motion-sensitive lights will serve a dual purpose. First, when thieves approach your home, a sudden light may surprise them into fleeing. Second, a motion-sensitive light makes it safer for you to enter your home. Exterior motion-detector lights are very inexpensive, approximately $50 each, and can be installed in a few minutes by novices with nothing more than basic hand tools.
Interior lighting is also important, as it indicates activity inside your home. If it's dark, especially for extended periods of time, burglars are likely to assume that nobody is home. To confuse burglars, you can purchase inexpensive light timers and connect them to key interior lighting visible through front and back windows. When interior lights come on and turn off at various times, it appears that someone is home, which is the number-one deterrent to thieves.
Going High Tech
The latest in high-tech home integration packages, with HD CCTV (high-definition closed-circuit TV), can provide clear photos of who is outside your front door or on your property--and even send you photographs via e-mail. If you prefer to watch your home over your cell phone, the Motorola Q Phone is one cell phone that gives you that possibility. Full-integration technology can now allow you to see visitors at your front door either on your computer or even, if you are away from your desk, on your laptop or notebook. The latest devices also allow you to regulate lighting from afar via your computer, so if you are away for a few days, you can still turn the lights on from time to time and get alerts if anyone is on your property, so you can call the local police if necessary. Ask security companies in your area about home integration technology.
Home Office Safes
Purchasing and installing a safe is another way a home business owner can protect his or her valuables and important personal and business documents. There are various styles of home office safes available at many price points: flush wall-mounted safes, portable lockbox safes, floor-mounted safes, and safes that are disguised as pieces of office furniture and equipment. Ideally, you want a safe with a long burn rating and one that can be securely anchored to the floor or in a wall to prevent thieves from stealing the safe to get its contents. In addition to cash, safes can be used to store key client files on disk, business documents such as incorporation papers, backup CDs of customer data, insurance policies, personal and family documents, and copies of important documents, such as your will or your drivers' license.
You should do a little research to determine which safe will best meet your specific needs. You can learn more about home business safes, features, and costs by visiting these websites:
•Liberty Safe & Security Products http://www.libertysafe.com/
•Sentry Group http://www.sentrysafe.com/
•Gardall Safe Corporation http://www.gardall.com/
•Hidden Safes http://www.hiddensafes.com/
•American Security Products http://www.amsecusa.com/home/
Fire Safety
Like property and personal security, fire safety is another high-priority issue for home business owners. While having sufficient fire insurance is certainly a must, it is not the sole answer to all fire safety concerns. The following are a few tips to help protect your family and your business:
•Carry sufficient fire insurance.
•Install hardwired smoke detectors with a battery backup system on each floor and in the home office.
•Install emergency battery-powered lighting in hallways and stair corridors.
•Purchase fire extinguishers and keep them in key areas of the home, such as the kitchen, your home office, and the upstairs hall closet.
•Install carbon monoxide detectors.
•Install second-story fire safety ladders or ropes.
•Purchase fireproof lock boxes for important business and personal documents.
•Develop an emergency fire plan and make sure that all family members know it well. It should include an exit strategy for each room of the house, contingency exit points in case of fire blocks, and a central meeting place outside, at a safe distance.
To find out more about fire safety, visit the U.S. Fire Administration website, at usfa.fema.gov. On the site you will find fire safety tips for your home and business.
Home Office Safety
In addition to security and fire concerns, you also want to ensure that your home office is a safe working environment for you, your family, and visitors. Believe it or not, the vast majority of preventable accidents and injuries happen at home, not on the highways, so take extra precautions to make sure that you develop and maintain a safe working environment. Here are a few great tips to help you:
•Keep emergency numbers for the police, ambulance, and fire department in a visible place by the telephone.
•All electrical outlets should be the grounded, three-pronged type. It's easy and inexpensive to switch from ungrounded outlets to grounded outlets, which are readily available at hardware stores everywhere.
•Use surge protectors to protect expensive computer equipment against voltage spikes in your electricity service. You can also get an uninterruptible/universal power supply (UPS), so you're prepared in the event of a power outage. This will keep your computer running so that you can close down all important files rather than losing them.
•Do not store toxic materials, such as paints and cleaners, in your home office.
•Secure top-heavy or unstable furniture and equipment such as file cabinets firmly to the floor or walls.
•Avoid loose wiring. Make sure all wiring, cables, and extension cords are secured to the walls or floor.
•Keep a flashlight in an easily accessible location in case of power outages.
Part 4 - Equipping Your Workspace ...added 8-23-10
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
Equipping your home workspace with the furniture, equipment, technology, communications, and supplies that you will need to operate your business requires considering three main factors--business needs, personal comfort, and budget.
The need for office equipment, furniture, technology, and communications varies with the type of business planned. But every business will need at least a few items from each of the five main home workspace categories: furniture, equipment, technology, communications, and supplies. Each of these categories is discussed in greater detail later in the chapter.
The second issue will be comfort, which is of particular concern for home business operators who will be putting in long hours at their desks in front of a computer or on the telephone. You cannot cut corners on comfort. In order to be productive over the long term, you have to be comfortable. In recent years, many new physical ailments, such as carpal tunnel syndrome, have been linked to long hours spent doing repetitive tasks, such as typing at a keyboard.
Therefore, you need to focus on the long-term physical effects of improper furniture and lighting. Ergonomics, the study of the correct positioning of your body while at rest or work, can play a major role in ensuring comfort and maintaining good physical health over the long term. When setting up and equipping your home workspace, you will want to ensure that it is ergonomically correct. To help you plan, you can purchase a book on ergonomics or visit Ergonomics Online, ergonomics.org, which provides in-depth information, links, and resources related to ergonomics.
The third main factor when equipping your home workspace is your budget. Here are five ways a financially challenged entrepreneur can substantially reduce the cost of home office furniture, equipment, computers, and communication products or minimize the amount of money needed upfront:
1. Barter.
You can barter and trade for office furniture and equipment. For instance, if you operate a painting service, ask local office suppliers if they would be interested in trading office furniture for a paint job. You can also join a local barter club and trade whatever products or services you sell with members who sell office furniture and equipment. BarterNews is an online magazine dedicated to the world of business barter clubs, organizations, and industry information. There are many barter clubs on the web. To locate a bartering exchange group, check out Bartermax, or the International Reciprocal Trade Association. Or simply network with other local business owners and see what you can do for each other.
2. Borrow. Create a list of all needed office furniture, equipment, and supplies that you need and then distribute copies to friends and family members. You will be amazed at how many of the things that you need to start and run your business are stored away in basements, garages, and attics, just waiting to be borrowed. Most of your friends and family members won't mind if you borrow these items. In fact, many will probably be happy just to get rid of them and free up some space for more clutter.
3. Buy seconds or floor models. Call around to your local office outfitters and inquire about factory seconds and the floor models they have available. Often you can save as much as 25 percent of the retail price by purchasing seconds with slight blemishes or floor models with nothing wrong other than a few fingerprints and smudges.
4. Purchase secondhand. Buy used office equipment and furniture and save as much as 75 percent or even more off the retail price. Good places to begin your search for used office equipment include auctions, business closeouts, newspaper classifieds, garage sales, and retailers that sell secondhand office furniture, equipment, and computers. Also look for businesses that are moving or closing; if you find what you want, you can get great discounts.
5. Lease. Take the no-money-down route and lease new office furniture, equipment, and computers. You will have to pay for these items monthly, but you will not be spending capital to buy them, capital that can be used for marketing. Lease payments can be written off taxes and you will have the use of new equipment with full warranties. The downside of leasing is that you cannot count things you lease as assets. You can also rent furniture and equipment. Definitely rent specialized equipment for select jobs as you need it, so that you do not have to spend as much as to purchase it. Be careful when leasing and renting that you do not end up paying more for an item than if you bought it and financed it.
Getting the Office Furniture and Equipment You Need
Every business has different needs for office furniture and equipment. If clients will be visiting your home office, your furniture and equipment will need to reflect this use, both in appearance and function. If you do not have clients visiting your home office, you will have a little more leeway in your equipment and furniture choices. It won't really matter if the colors are mismatched, if you purchased your desk secondhand at your neighbor's garage sale, or even if you choose to build a few of the items yourself. All that really matters is that your furniture and equipment do what you need them to do and are reliable and comfortable. So what are the basics that every home workspace needs, regardless of business type?
Desk or Work Station
Depending on the percentage of time you will spend at a desk not working with a computer, you will decide whether you want a traditional desk with a computer on it or a computer table with some desk space. Often, a used desk can serve the purpose. The same holds true with secondhand computer tables, which are often good, low-cost alternatives to new. Either way, the reason you should look for specific computer furniture is because it is designed to be at the right height for computer chairs plus strong and roomy enough to hold computer equipment. Computers have gotten lighter and most chairs are adjustable, making alternatives to computer furniture more feasible than in previous years.
If you need drawers to hold plenty of things at your disposal, but out of site, then by all means find a desk with drawers. If you are comfortable with rolling a couple of filing cabinets under your computer table, than perhaps drawers are unnecessary. Consider that rearranging your workspace is more difficult with older, heavier traditional desks, especially with large drawers that tend to accumulate plenty of junk. Yet some people just don't feel like they are working if they aren't sitting at a big desk. Wooden desks often appear more impressive to clients, which may score points for your business.
When buying a desk, check that the drawers have adequate space for your needs and open and close smoothly. Metal suspension rollers last longer than plastic or other alternatives. The wood and the construction will indicate the quality of the desk. Look underneath and see if the quality of the materials is consistent throughout and not just on the surface. For example, if staples underneath are holding drawers together, it is not a sign of quality. Heavier woods are used in the better desks and the construction is more solid. Also, if a wooden desk has rounded corners, it's more likely a higher-end model. Most office furniture suppliers today sell wooden desks with a laminate finish, which can help the wood resist scratches and dents.
Measure your office space before shopping for furniture, so you will know exactly what will fit. Then, when shopping, measure the height of desks, tables, and standing furniture so you know how much room they allow underneath for filing cabinets or any other type of storage.
Computer desks are created to position the computer at a comfortable height, assuming that the monitor is on a stand. For this reason, desktop computers are preferred for computer desks, since laptops or notebooks can cause back pain if the user is constantly leaning toward the screen. Some people like movable keyboard trays; others don't care. Again, your preference is what matters. Also, keep in mind that unless you are doing computer programming or similar work exclusively, there will be a need for space to do tasks away from the computer. Many people focus all their attention on the position of the computer and tend to forget that there will be a need for reference books, papers, and a desk lamp. Make sure you leave adequate room for whatever you anticipate needing on the desk--including some open space.
Lastly, take computer wiring into consideration before you make your purchase. Modern desks and computer tables are typically designed for computer wiring. Older desks, however, are not. You will want to position the desk in such a way as to minimize the length of the wires between the desk and the wall. Don't cut into any older desk that has potential value. It's easier to hide wiring in some manner, such as taping it to the bottom of the desk.
Desk Alternatives
If your home office is part of another room, you might opt for creating desk space out of an armoire, a piece of furniture with doors that hide drawers or other storage space. Created specifically for home office use, many armoires allow you to have a workspace with shelves, storage, and even a sliding computer keyboard tray in one unit with doors that can be closed when company comes over. Built as work centers, armoires are often equipped with file drawers, adjustable shelves, and nooks and crannies for storing supplies. You also want to look for accommodations for computer wiring, which are included in the newest models.
Counter-tops or other such flat areas are not usually roomy or sturdy enough to be considered as workstations. Some home offices have counters built around part or all of the perimeter, extending far enough to hold a computer and/or a printer, but needing extra reinforcement to support technological equipment. Cutouts in the back can accommodate wiring and drawers can be built. If you have such counters or workstations extending from a wall, measure carefully for both depth and height from the floor. Sit comfortably and see at what height you would like to be working with your feet on the floor.
Comfortable Chair
If you can splurge on only one piece of office furniture, a comfortable and ergonomically correct chair should be that luxury item, especially if your business keeps you in front of the computer or on the telephone for long periods. I endured many uncomfortable chairs until I decided a few years ago to splurge on a comfortable and high-quality chair for my office. All I can say is that I should have done it 10 years earlier. Sitting in an uncomfortable chair all day is like running a marathon in sneakers that are two sizes too small; both will leave you in physical agony.
Key things to check are distance from the seat to floor (or adjustable heights), adjustable armrests, and adjustable seating positions. Try chairs out to find one that feels comfortable. You will likely buy a computer chair on wheels, so you can roll it over to a filing cabinet if necessary.
Filing Cabinets
There are plenty of choices when buying filing cabinets, most of which are inexpensive, particularly secondhand. The portable two-drawer cabinets for hanging files are very popular, since you can slide one under a computer table or tuck one in a corner and move it when necessary. In fact, some people roll them into their closets when not using them, as they also fit under hanging clothes.
Three- and four-drawer tower files can obviously accommodate more and usually come with options, such as drawers designed to accommodate CD/DVDs. Lateral filing cabinets will work only if you have enough wall space. The disadvantage is that they are heavier to move and require bending to access the files. An advantage is that if they are a good height you can set fax machine and/or printer on top.
If money is tight, you do not have to invest in a file cabinet for client files immediately. Instead, for about five dollars you can purchase an accordion-style file storage box that can hold up to about 100 documents. That is enough file storage space to get you going, especially if you purchase one for business records and a second for client files. Obviously, as your business grows, you will want to invest in quality cabinets with locking mechanisms.
Bookshelves
Bookshelves are also indispensable for the home workspace. In addition to the obvious use of holding books, they can also be used for office supplies, in and out boxes, mail, a radio or CD player, CDs, DVDs, and just about anything else that you need to be easily accessible. There are numerous office supply websites as well as office supply stores in any major shopping area. Ikea is one place to check for shelving if you don't mind assembling the shelves yourself.
Lighting
As the years roll on, things may get just a little more out of focus. Natural lighting from windows and skylights is terrific, but you will also need quality electrical lighting, which can make a huge difference in reducing eyestrain and increasing productivity. In addition to bright overhead lighting, also invest a few dollars in a good desk or a clamp-on work lamp that can be positioned to illuminate specific tasks.
Office Furniture and Equipment Costs
Office Furniture and Equipment Costs Worksheet, will help you calculate the costs of obtaining furniture and equipment for your workspace. Once again, ignore items that are not relevant to your business and add items that are specific to it.
Office Furniture and Equipment Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Desk ______ $_________ $_________
•Office chair ______ $_________ $_________
•Client seating ______ $_________ $_________
•File cabinets ______ $_________ $_________
•Bookcases ______ $_________ $_________
•Worktable(s) ______ $_________ $_________
•Work lighting ______ $_________ $_________
•Fireproof safe ______ $_________ $_________
•Storage boxes ______ $_________ $_________
•Photocopier ______ $_________ $_________
•Postage meter ______ $_________ $_________
•Radio or CD Player ______ $_________ $_________
•Paper shredder ______ $_________ $_________
•Recycling bin ______ $_________ $_________
•Labeling machine ______ $_________ $_________
•Wastebasket ______ $_________ $_________
•Other _________________ ______ $_________ $_________
•Other _________________ ______ $_________ $_________
•Total $_________
Getting the Technology You Need
There is basic technology that every business needs: a computer, a monitor, an operating system, software, a modem, a printer, and a digital camera.
Computer
Assuming you know how to use a computer (if not, sign up for computer training at your local community college), the main considerations will be processing speed and data storage capabilities.
Whether you are planning to buy a desktop computer or intend to use one you already have, you should look for the following:
•At least 1 gigabyte (GB) of RAM
•At least 200, if not 250 or more, gigabytes (GB) of hard drive (the more the better)
•At least 2.3 or 2.8 gigahertz (GHz) processing speed
•At least four USB (universal serial bus) connections for peripherals, typically including a printer and perhaps a scanner
•A DVD drive/burner
•A CD burner
•Windows XP operating system (Vista has thus far not been as "amazing" as billed, which means you can get XP for less money and interface with the many other people who are also not yet taking a chance with Vista.)
•An internal modem
•A 3D graphics card, which will allow you to use the latest software programs
•5.1 Surround Sound (not essential for your purposes, but always a plus for quality sound, such as background music while you're working)
•A firewall and anti-virus software (The firewall should be part of your purchasing deal; for anti virus programs, consider PC- cillin, Norton 2008, or another leading anti-virus program.)
The main part of your computer, the processor (aka central processing unit, CPU), is the component that runs the programs. A CPU typically costs between $400 and $1,000 and is usually packaged (or bundled) with a keyboard, a monitor, speakers, and a mouse, providing a discount against buying them all separately.
Monitors
For years the typical home computer monitor has been the familiar bulky kind with the big back, resembling a television. It has that look because it uses a cathode-ray tube (CRT) like the televisions we've watched for years, with numerous tiny phosphor dots inside the glass tube, each forming a line, with all the lines together creating an image.
The latest trend in monitors is the flat-panel LCD (liquid crystal display) monitor, which uses plasma and light-emitting diodes. While LCD monitors are more technical to explain, they offer a sleeker look than their CRT counterparts. The flat-panel monitors take up less room and are lighter, often weighing less than 20 pounds, far less than CRT monitors, generally weighing 35 to 45 pounds. Here are some basic differences to make shopping for a monitor less confusing:
•LCD monitors cost a little more than CRTs.
•LCD monitors typically have sharper pictures than CRTs, although not sharper colors.
•LCD monitors don't have that occasional flicker that you may sometimes experience on a CRT monitor.
To see an LCD monitor clearly, you need to be in front of it; otherwise, the image on screen can look distorted. A CRT monitor, however, can be seen clearly from various angles.
LCD monitors are more energy-efficient than CRT monitors.
Monitors range anywhere from $170 to $2,000, depending primarily on size and clarity. Most people purchase good-quality monitors in the $300 to $700 range. Again, look for a deal or work a deal with the CPU.
Keyboard and Mouse
Studies have shown that ergonomics should play a major role in your decision about what keyboard and mouse to purchase for your computer. The reason is that hand, wrist, arm, and shoulder positions are affected by your mouse and keyboard. Each has to be in balance to reduce the potential for injury. You may also want to consider purchasing a wireless keyboard-and-mouse set because it frees space on your desk and eliminates those pesky wires that seem to get wrapped around everything. Plan to spend about $50 to $70 on a keyboard, $20 to $60 on a mouse, or $70 to $130 on both. These are very often worked into the cost of the package--CPU, monitor, keyboard, and mouse--since it is worthwhile to the seller to get you to buy a slightly better monitor by practically throwing in the keyboard and mouse. Look at package deals, but don't be afraid to ask that one item be changed if you prefer another.
Modem
Most computers now come with a standard 56K modem, which is needed to connect to the internet. You can also opt for a more expensive modem, giving you the ability to connect to high-speed cable internet, which allows you to download files up to 20 times faster than with a dial-up internet connection, which is now becoming a thing of the past.
Wireless Modems
You can opt to go the wireless route with a wireless router. These routers are rather small and include an antenna. They can be set up in any location in the house, so that you can use your computer in any room. It's almost like having your own personal radio station signal tower, only much, much smaller. From this "hot spot," the wireless connections will go in all directions. Therefore, you may want to select a location that is not only central for your current computer, but also good for a laptop, should you decide to work in other parts of the home. You can also use the router for the computers of family members, although beyond that, I would not opt for networking between a business computer and one being used for computer games. Depending on the speed and distance you need, you can buy a wireless router for anywhere from $25 to $250.
Laptops and Notebooks
If you like working in different places around your office ... or around the house ... or in the backyard, there are many laptop and notebook computers available. Many weigh less than four pounds and are powerful enough to handle the same functions as a desktop, if not more.
The biggest disadvantages of laptop and notebook computers are the smaller screen and keyboard. While this may take getting used to while on the road, in your home office you can use a docking station, which magically turns your laptop into a desktop. No, this has nothing to do with the Starship Enterprise. A docking station is actually a platform into which you can install your portable computer so that you can use a full-size monitor, a full-size keyboard, your printer, and other peripheral devices.
When you are shopping for a laptop, the same rules apply as for a desktop. The feel of the keys, the size of the screen, and the feel of the trackball, TrackPoint™, or touchpad will all be a matter of comfort. How does it look or feel to you? Last, remember: the smaller the components, the higher the prices, so you can expect to pay a little more for a notebook. Popular laptops and notebooks are available from Dell, Hewlett-Packard, Compaq, Toshiba, IBM, Sony, Gateway, Fujitsu, Acer, eMachines, and, of course, Apple. You can walk away with a good quality model for around $800.
Printers
There are two types of printers, laser and inkjet. Which one you need will depend on the type of business you are running and your primary need for a printer.
Laser printers are fast, some printing as much as 30 pages per minute. These are strong workhorse printers for someone who has a higher volume of material and needs printed words more than high-quality graphics and photos. Laser printers typically cost between $200 and $700, but cartridges, although not inexpensive, cost less than those for inkjet printers.
Inkjet printers are slower than their laser counterparts, but they can produce a higher level of color than color laser models and are priced lower. The cost of ink, however, will make them higher in the long run. These are printers for businesses that need a higher level of graphic and photographic materials and do not have as high a volume of printed matter. You'll find inkjets for $300 to $500.
Yes, some business owners have both to meet their various needs.
Once you have zeroed in on your printer needs, try a few models in stores and ask friends and neighbors which printers they have bought. It's easy to compare prices online and salespeople will tell you all the positives. However, since printers can be very frustrating when they stop working properly, you'll wan to get some good reviews and recommendations from people you know and trust.
Popular printer models manufacturers are Canon, Epson, Oki Data, Brother, Lexmark, and Hewlett-Packard.
Computer Data Storage
You'll want to stock up on CDs for your computer to store your data and back up all important material. It can't be stressed often enough that you need to back up your files frequently so that you do not suddenly lose valuable customer, vendor, and personal data if your computer crashes or you have a power outage. You can also use a USB flash drive, which is a small, lightweight, removable, and rewritable device used to save computer data, much like disks were used in the past, only sturdier, since disks could get bent or accidentally erased more easily.
Digital Camera
Digital cameras are indispensable to home business owners. You can take pictures of products, clients, completed jobs, or your trip to Florida, and then transfer them easily to your website, e-mails, or desktop publishing programs. You can easily create brochures, presentations, catalogs, and fliers using your own photographs. Good-quality digital cameras cost in the range of $200 to $500. Nikon, Canon, Sony, Panasonic, and Olympus USA are among the leading companies making digital cameras.
High-Tech Shopping Tips
When shopping for your high-tech business equipment, it's advantageous to buy from well-known reputable companies that have been in business for some time and will likely still be there should you need them if you have problems with your business equipment. Here are some other general high-tech shopping tips:
•Look for good deals. Don't be afraid to walk away if you are not getting what you need.
•Don't buy into the wealth of features offered on top models, whether it's computers or digital cameras. Look for the functions that you need.
•Don't jump at the latest innovations. You can often buy the previously "hottest" items for a better price when the latest models come out. Unless the newest model has a feature you absolutely need, go with last year's model.
•Shop for a good warranty.
•Make sure you get all paperwork that comes with any technical equipment and keep it in a safe place.
•Buy from companies and businesses that provide excellent tech support.
Computer Hardware, Accessories and Software Costs
The following Computer Hardware, Accessories, and Software Costs Worksheet (Figure 7.3) can help you calculate the costs of equipping your new home workspace with common technology. Ignore items that are not relevant to your business and add items that are specific to your business, as required.
Computer Hardware, Accessories, and Software Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Desk ______ $_________ $_________
•Desktop computer ______ $_________ $_________
•Desktop monitor ______ $_________ $_________
•Keyboard and mouse ______ $_________ $_________
•Modem ______ $_________ $_________
•Notebook or laptop computer ______ $_________ $_________
•Printer ______ $_________ $_________
•PowerPoint projector ______ $_________ $_________
•Palm organizer ______ $_________ $_________
•Scanner ______ $_________ $_________
•Digital camera ______ $_________ $_________
•Surge protection ______ $_________ $_________
•UPS (uninterpretable/universal power supply) ______ $_______ $ ______
•Word processing program ______ $_________ $_________
•Accounting software ______ $_________ $_________
•Contact management software______ $_________ $_________
•Database management software ______ $_________ $_________
•Website building software ______ $_________ $_________
•Website maintenance software ______ $_________ $_________
•E-commerce software ______ $_________ $_________
•Payment processing software ______ $_________ $_________
•Inventory management software ______ $_________ $_________
•Desktop publishing software ______ $_________ $_________
•Multimedia software ______ $_________ $_________
•Antivirus software ______ $_________ $_________
•Other ________________ ______ $_________ $_________
•Other ________________ ______ $_________ $_________
•Total $_________
Getting the Communication Devices You Need
The proliferation of high-tech communication devices in recent years makes it very easy to spend a whole lot of money in a very short time. But, once again, if you can get by with just the basic communication devices at first, you can always upgrade to new and better communication devices when your business is generating profits. For basic communication, you will need all or some of the following.
Telephone
If you are going to have a workspace, you'll want to install a separate telephone line or multi-line system, depending on the volume of calls you anticipate. Ideally this phone will have business features and functions such as conferencing, redial, speakerphone, call waiting, caller ID, and so on. Get what you need if it's not included. The payments can be added to your telephone bill.
Fax Machine
Although fax transmissions have greatly declined in popularity in the last few years as e-mail use has increased, many businesses will still need a fax machine. Most contracts and agreements that must be signed are legal when faxed if both parties agree and it is so stipulated in the contract. If you do not want to purchase a separate fax machine, you can get fax software for your computer.
Cell Phone
It seems that everyone has a cell phone now. They're convenient for anyone who wants to stay in touch and necessary for anyone who needs to do business while away from home.
Shop around for a good rate. Although the newer models have more features, you will primarily need only the basics for communication purposes. You may, however, consider purchasing a cell phone with internet features, as it is very convenient to be able to check e-mail when you are away from your computer. In fact, cell phones have become so popular and the services and features so varied that many home business owners are also using simple and inexpensive cell phones as their main phone. It's always advisable to have a landline, however, since cell phones drop calls and cell phone batteries tend to need recharging when you need your phone the most. Therefore, have both.
Telephone Headset
A telephone headset will be a definite need if your business keeps you working at a computer all day or if you use a phone in your car. It enables you to use your phone and leaves your hands free to work on the computer or, when you are out of the office and on your cell phone, to drive your car, walk down the street, or work in your garden. Headsets, both wired and wireless, are available for both desktop phones and cellular phones. Count on spending $30 to $90 for either type.
Internet Connection
You will need an internet connection. A good internet service provider is a must for anyone in business today. Most internet service providers (ISPs) charge about $20 to $30 per month for broadband, meaning cable or DSL hookup, and give you unlimited web and e-mail access. Dial-up access will cost less, but tie up a phone line, so it can end up costing you more--as well as being too slow for business purposes. Therefore, you need to sign up for cable or DSL.
Communications Costs
The Communications Costs Worksheet (Figure 7.4) will help you calculate the costs of equipping your home workspace with common communication devices. Ignore items that are not relevant to your business and add items that are specific to your business.
Figure 7-4. Communications Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Specialty wiring and networking ______ $_________ $_________
•Telephone with business functions ______ $_________ $_________
•Install dedicated telephone line ______ $_________ $_________
•Install dedicated fax line ______ $_________ $_________
•Toll-free line/number ______ $_________ $_________
•Internet connection ______ $_________ $_________
•Cordless telephone ______ $_________ $_________
•Cell phone (perhaps with internet features) ______ $_________ $_________
•Headset ______ $_________ $_________
•Answering machine or service ______ $_________ $_________
•Fax machine (or fax software) ______ $_________ $_________
•Pager ______ $_________ $_________
•Other ____________________ ______ $_________ $_________
•Other ____________________ ______ $_________ $_________
•Total $_________
Home Office Library
All successful entrepreneurs share a common trait--they never stop searching for ways to become better businesspeople through education. And because time is always in high demand but short supply, the best way to educate themselves and find information that will make them better businesspeople is by purchasing and reading books, reports, magazines, directories, and journals. In fact, most successful businesspeople take pride in their business libraries.
For these reasons, you should start purchasing business-related publications so that you can build your own valuable business library. Even with the internet as a powerful research and educational tool, books are handy: you can take them on the plane or read them in bed. They help you check facts quickly, without having to log onto the Net and conduct searches for the information. The internet is an invaluable business tool, but the combination of a well-stocked and varied business library and key websites gives businesspeople access to all the information they need.
You will also want to subscribe to journals that are aimed at your specific business or industry. When you come across ideas in print that will work for your business, cut the article out and place it in an idea folder for later use. Prime topics that you should include in your business library include:
•Small business accounting, bookkeeping, and taxation
•Sales and marketing
•Business and marketing planning
•Administration and management
•Internet, website building, and e-commerce
•Advertising and public relations
•Personal and business goal setting
•Customer service
•Industry, product, service, and manufacturers' directories and source books
•Time management and organization
A good source for used books is AbeBooks which boasts in excess of 45 million used books for sale in every imaginable category. Amazon is also a good source for new and used books. PubList.com is an online directory listing in excess of 150,000 domestic and international print and electronic publications, including magazines, journals, e-journals, and newsletters. Also check with your local library about book sales; most sell titles for a fraction of what they cost new.
Equipping your home workspace with the furniture, equipment, technology, communications, and supplies that you will need to operate your business requires considering three main factors--business needs, personal comfort, and budget.
The need for office equipment, furniture, technology, and communications varies with the type of business planned. But every business will need at least a few items from each of the five main home workspace categories: furniture, equipment, technology, communications, and supplies. Each of these categories is discussed in greater detail later in the chapter.
The second issue will be comfort, which is of particular concern for home business operators who will be putting in long hours at their desks in front of a computer or on the telephone. You cannot cut corners on comfort. In order to be productive over the long term, you have to be comfortable. In recent years, many new physical ailments, such as carpal tunnel syndrome, have been linked to long hours spent doing repetitive tasks, such as typing at a keyboard.
Therefore, you need to focus on the long-term physical effects of improper furniture and lighting. Ergonomics, the study of the correct positioning of your body while at rest or work, can play a major role in ensuring comfort and maintaining good physical health over the long term. When setting up and equipping your home workspace, you will want to ensure that it is ergonomically correct. To help you plan, you can purchase a book on ergonomics or visit Ergonomics Online, ergonomics.org, which provides in-depth information, links, and resources related to ergonomics.
The third main factor when equipping your home workspace is your budget. Here are five ways a financially challenged entrepreneur can substantially reduce the cost of home office furniture, equipment, computers, and communication products or minimize the amount of money needed upfront:
1. Barter.
You can barter and trade for office furniture and equipment. For instance, if you operate a painting service, ask local office suppliers if they would be interested in trading office furniture for a paint job. You can also join a local barter club and trade whatever products or services you sell with members who sell office furniture and equipment. BarterNews is an online magazine dedicated to the world of business barter clubs, organizations, and industry information. There are many barter clubs on the web. To locate a bartering exchange group, check out Bartermax, or the International Reciprocal Trade Association. Or simply network with other local business owners and see what you can do for each other.
2. Borrow. Create a list of all needed office furniture, equipment, and supplies that you need and then distribute copies to friends and family members. You will be amazed at how many of the things that you need to start and run your business are stored away in basements, garages, and attics, just waiting to be borrowed. Most of your friends and family members won't mind if you borrow these items. In fact, many will probably be happy just to get rid of them and free up some space for more clutter.
3. Buy seconds or floor models. Call around to your local office outfitters and inquire about factory seconds and the floor models they have available. Often you can save as much as 25 percent of the retail price by purchasing seconds with slight blemishes or floor models with nothing wrong other than a few fingerprints and smudges.
4. Purchase secondhand. Buy used office equipment and furniture and save as much as 75 percent or even more off the retail price. Good places to begin your search for used office equipment include auctions, business closeouts, newspaper classifieds, garage sales, and retailers that sell secondhand office furniture, equipment, and computers. Also look for businesses that are moving or closing; if you find what you want, you can get great discounts.
5. Lease. Take the no-money-down route and lease new office furniture, equipment, and computers. You will have to pay for these items monthly, but you will not be spending capital to buy them, capital that can be used for marketing. Lease payments can be written off taxes and you will have the use of new equipment with full warranties. The downside of leasing is that you cannot count things you lease as assets. You can also rent furniture and equipment. Definitely rent specialized equipment for select jobs as you need it, so that you do not have to spend as much as to purchase it. Be careful when leasing and renting that you do not end up paying more for an item than if you bought it and financed it.
Getting the Office Furniture and Equipment You Need
Every business has different needs for office furniture and equipment. If clients will be visiting your home office, your furniture and equipment will need to reflect this use, both in appearance and function. If you do not have clients visiting your home office, you will have a little more leeway in your equipment and furniture choices. It won't really matter if the colors are mismatched, if you purchased your desk secondhand at your neighbor's garage sale, or even if you choose to build a few of the items yourself. All that really matters is that your furniture and equipment do what you need them to do and are reliable and comfortable. So what are the basics that every home workspace needs, regardless of business type?
Desk or Work Station
Depending on the percentage of time you will spend at a desk not working with a computer, you will decide whether you want a traditional desk with a computer on it or a computer table with some desk space. Often, a used desk can serve the purpose. The same holds true with secondhand computer tables, which are often good, low-cost alternatives to new. Either way, the reason you should look for specific computer furniture is because it is designed to be at the right height for computer chairs plus strong and roomy enough to hold computer equipment. Computers have gotten lighter and most chairs are adjustable, making alternatives to computer furniture more feasible than in previous years.
If you need drawers to hold plenty of things at your disposal, but out of site, then by all means find a desk with drawers. If you are comfortable with rolling a couple of filing cabinets under your computer table, than perhaps drawers are unnecessary. Consider that rearranging your workspace is more difficult with older, heavier traditional desks, especially with large drawers that tend to accumulate plenty of junk. Yet some people just don't feel like they are working if they aren't sitting at a big desk. Wooden desks often appear more impressive to clients, which may score points for your business.
When buying a desk, check that the drawers have adequate space for your needs and open and close smoothly. Metal suspension rollers last longer than plastic or other alternatives. The wood and the construction will indicate the quality of the desk. Look underneath and see if the quality of the materials is consistent throughout and not just on the surface. For example, if staples underneath are holding drawers together, it is not a sign of quality. Heavier woods are used in the better desks and the construction is more solid. Also, if a wooden desk has rounded corners, it's more likely a higher-end model. Most office furniture suppliers today sell wooden desks with a laminate finish, which can help the wood resist scratches and dents.
Measure your office space before shopping for furniture, so you will know exactly what will fit. Then, when shopping, measure the height of desks, tables, and standing furniture so you know how much room they allow underneath for filing cabinets or any other type of storage.
Computer desks are created to position the computer at a comfortable height, assuming that the monitor is on a stand. For this reason, desktop computers are preferred for computer desks, since laptops or notebooks can cause back pain if the user is constantly leaning toward the screen. Some people like movable keyboard trays; others don't care. Again, your preference is what matters. Also, keep in mind that unless you are doing computer programming or similar work exclusively, there will be a need for space to do tasks away from the computer. Many people focus all their attention on the position of the computer and tend to forget that there will be a need for reference books, papers, and a desk lamp. Make sure you leave adequate room for whatever you anticipate needing on the desk--including some open space.
Lastly, take computer wiring into consideration before you make your purchase. Modern desks and computer tables are typically designed for computer wiring. Older desks, however, are not. You will want to position the desk in such a way as to minimize the length of the wires between the desk and the wall. Don't cut into any older desk that has potential value. It's easier to hide wiring in some manner, such as taping it to the bottom of the desk.
Desk Alternatives
If your home office is part of another room, you might opt for creating desk space out of an armoire, a piece of furniture with doors that hide drawers or other storage space. Created specifically for home office use, many armoires allow you to have a workspace with shelves, storage, and even a sliding computer keyboard tray in one unit with doors that can be closed when company comes over. Built as work centers, armoires are often equipped with file drawers, adjustable shelves, and nooks and crannies for storing supplies. You also want to look for accommodations for computer wiring, which are included in the newest models.
Counter-tops or other such flat areas are not usually roomy or sturdy enough to be considered as workstations. Some home offices have counters built around part or all of the perimeter, extending far enough to hold a computer and/or a printer, but needing extra reinforcement to support technological equipment. Cutouts in the back can accommodate wiring and drawers can be built. If you have such counters or workstations extending from a wall, measure carefully for both depth and height from the floor. Sit comfortably and see at what height you would like to be working with your feet on the floor.
Comfortable Chair
If you can splurge on only one piece of office furniture, a comfortable and ergonomically correct chair should be that luxury item, especially if your business keeps you in front of the computer or on the telephone for long periods. I endured many uncomfortable chairs until I decided a few years ago to splurge on a comfortable and high-quality chair for my office. All I can say is that I should have done it 10 years earlier. Sitting in an uncomfortable chair all day is like running a marathon in sneakers that are two sizes too small; both will leave you in physical agony.
Key things to check are distance from the seat to floor (or adjustable heights), adjustable armrests, and adjustable seating positions. Try chairs out to find one that feels comfortable. You will likely buy a computer chair on wheels, so you can roll it over to a filing cabinet if necessary.
Filing Cabinets
There are plenty of choices when buying filing cabinets, most of which are inexpensive, particularly secondhand. The portable two-drawer cabinets for hanging files are very popular, since you can slide one under a computer table or tuck one in a corner and move it when necessary. In fact, some people roll them into their closets when not using them, as they also fit under hanging clothes.
Three- and four-drawer tower files can obviously accommodate more and usually come with options, such as drawers designed to accommodate CD/DVDs. Lateral filing cabinets will work only if you have enough wall space. The disadvantage is that they are heavier to move and require bending to access the files. An advantage is that if they are a good height you can set fax machine and/or printer on top.
If money is tight, you do not have to invest in a file cabinet for client files immediately. Instead, for about five dollars you can purchase an accordion-style file storage box that can hold up to about 100 documents. That is enough file storage space to get you going, especially if you purchase one for business records and a second for client files. Obviously, as your business grows, you will want to invest in quality cabinets with locking mechanisms.
Bookshelves
Bookshelves are also indispensable for the home workspace. In addition to the obvious use of holding books, they can also be used for office supplies, in and out boxes, mail, a radio or CD player, CDs, DVDs, and just about anything else that you need to be easily accessible. There are numerous office supply websites as well as office supply stores in any major shopping area. Ikea is one place to check for shelving if you don't mind assembling the shelves yourself.
Lighting
As the years roll on, things may get just a little more out of focus. Natural lighting from windows and skylights is terrific, but you will also need quality electrical lighting, which can make a huge difference in reducing eyestrain and increasing productivity. In addition to bright overhead lighting, also invest a few dollars in a good desk or a clamp-on work lamp that can be positioned to illuminate specific tasks.
Office Furniture and Equipment Costs
Office Furniture and Equipment Costs Worksheet, will help you calculate the costs of obtaining furniture and equipment for your workspace. Once again, ignore items that are not relevant to your business and add items that are specific to it.
Office Furniture and Equipment Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Desk ______ $_________ $_________
•Office chair ______ $_________ $_________
•Client seating ______ $_________ $_________
•File cabinets ______ $_________ $_________
•Bookcases ______ $_________ $_________
•Worktable(s) ______ $_________ $_________
•Work lighting ______ $_________ $_________
•Fireproof safe ______ $_________ $_________
•Storage boxes ______ $_________ $_________
•Photocopier ______ $_________ $_________
•Postage meter ______ $_________ $_________
•Radio or CD Player ______ $_________ $_________
•Paper shredder ______ $_________ $_________
•Recycling bin ______ $_________ $_________
•Labeling machine ______ $_________ $_________
•Wastebasket ______ $_________ $_________
•Other _________________ ______ $_________ $_________
•Other _________________ ______ $_________ $_________
•Total $_________
Getting the Technology You Need
There is basic technology that every business needs: a computer, a monitor, an operating system, software, a modem, a printer, and a digital camera.
Computer
Assuming you know how to use a computer (if not, sign up for computer training at your local community college), the main considerations will be processing speed and data storage capabilities.
Whether you are planning to buy a desktop computer or intend to use one you already have, you should look for the following:
•At least 1 gigabyte (GB) of RAM
•At least 200, if not 250 or more, gigabytes (GB) of hard drive (the more the better)
•At least 2.3 or 2.8 gigahertz (GHz) processing speed
•At least four USB (universal serial bus) connections for peripherals, typically including a printer and perhaps a scanner
•A DVD drive/burner
•A CD burner
•Windows XP operating system (Vista has thus far not been as "amazing" as billed, which means you can get XP for less money and interface with the many other people who are also not yet taking a chance with Vista.)
•An internal modem
•A 3D graphics card, which will allow you to use the latest software programs
•5.1 Surround Sound (not essential for your purposes, but always a plus for quality sound, such as background music while you're working)
•A firewall and anti-virus software (The firewall should be part of your purchasing deal; for anti virus programs, consider PC- cillin, Norton 2008, or another leading anti-virus program.)
The main part of your computer, the processor (aka central processing unit, CPU), is the component that runs the programs. A CPU typically costs between $400 and $1,000 and is usually packaged (or bundled) with a keyboard, a monitor, speakers, and a mouse, providing a discount against buying them all separately.
Monitors
For years the typical home computer monitor has been the familiar bulky kind with the big back, resembling a television. It has that look because it uses a cathode-ray tube (CRT) like the televisions we've watched for years, with numerous tiny phosphor dots inside the glass tube, each forming a line, with all the lines together creating an image.
The latest trend in monitors is the flat-panel LCD (liquid crystal display) monitor, which uses plasma and light-emitting diodes. While LCD monitors are more technical to explain, they offer a sleeker look than their CRT counterparts. The flat-panel monitors take up less room and are lighter, often weighing less than 20 pounds, far less than CRT monitors, generally weighing 35 to 45 pounds. Here are some basic differences to make shopping for a monitor less confusing:
•LCD monitors cost a little more than CRTs.
•LCD monitors typically have sharper pictures than CRTs, although not sharper colors.
•LCD monitors don't have that occasional flicker that you may sometimes experience on a CRT monitor.
To see an LCD monitor clearly, you need to be in front of it; otherwise, the image on screen can look distorted. A CRT monitor, however, can be seen clearly from various angles.
LCD monitors are more energy-efficient than CRT monitors.
Monitors range anywhere from $170 to $2,000, depending primarily on size and clarity. Most people purchase good-quality monitors in the $300 to $700 range. Again, look for a deal or work a deal with the CPU.
Keyboard and Mouse
Studies have shown that ergonomics should play a major role in your decision about what keyboard and mouse to purchase for your computer. The reason is that hand, wrist, arm, and shoulder positions are affected by your mouse and keyboard. Each has to be in balance to reduce the potential for injury. You may also want to consider purchasing a wireless keyboard-and-mouse set because it frees space on your desk and eliminates those pesky wires that seem to get wrapped around everything. Plan to spend about $50 to $70 on a keyboard, $20 to $60 on a mouse, or $70 to $130 on both. These are very often worked into the cost of the package--CPU, monitor, keyboard, and mouse--since it is worthwhile to the seller to get you to buy a slightly better monitor by practically throwing in the keyboard and mouse. Look at package deals, but don't be afraid to ask that one item be changed if you prefer another.
Modem
Most computers now come with a standard 56K modem, which is needed to connect to the internet. You can also opt for a more expensive modem, giving you the ability to connect to high-speed cable internet, which allows you to download files up to 20 times faster than with a dial-up internet connection, which is now becoming a thing of the past.
Wireless Modems
You can opt to go the wireless route with a wireless router. These routers are rather small and include an antenna. They can be set up in any location in the house, so that you can use your computer in any room. It's almost like having your own personal radio station signal tower, only much, much smaller. From this "hot spot," the wireless connections will go in all directions. Therefore, you may want to select a location that is not only central for your current computer, but also good for a laptop, should you decide to work in other parts of the home. You can also use the router for the computers of family members, although beyond that, I would not opt for networking between a business computer and one being used for computer games. Depending on the speed and distance you need, you can buy a wireless router for anywhere from $25 to $250.
Laptops and Notebooks
If you like working in different places around your office ... or around the house ... or in the backyard, there are many laptop and notebook computers available. Many weigh less than four pounds and are powerful enough to handle the same functions as a desktop, if not more.
The biggest disadvantages of laptop and notebook computers are the smaller screen and keyboard. While this may take getting used to while on the road, in your home office you can use a docking station, which magically turns your laptop into a desktop. No, this has nothing to do with the Starship Enterprise. A docking station is actually a platform into which you can install your portable computer so that you can use a full-size monitor, a full-size keyboard, your printer, and other peripheral devices.
When you are shopping for a laptop, the same rules apply as for a desktop. The feel of the keys, the size of the screen, and the feel of the trackball, TrackPoint™, or touchpad will all be a matter of comfort. How does it look or feel to you? Last, remember: the smaller the components, the higher the prices, so you can expect to pay a little more for a notebook. Popular laptops and notebooks are available from Dell, Hewlett-Packard, Compaq, Toshiba, IBM, Sony, Gateway, Fujitsu, Acer, eMachines, and, of course, Apple. You can walk away with a good quality model for around $800.
Printers
There are two types of printers, laser and inkjet. Which one you need will depend on the type of business you are running and your primary need for a printer.
Laser printers are fast, some printing as much as 30 pages per minute. These are strong workhorse printers for someone who has a higher volume of material and needs printed words more than high-quality graphics and photos. Laser printers typically cost between $200 and $700, but cartridges, although not inexpensive, cost less than those for inkjet printers.
Inkjet printers are slower than their laser counterparts, but they can produce a higher level of color than color laser models and are priced lower. The cost of ink, however, will make them higher in the long run. These are printers for businesses that need a higher level of graphic and photographic materials and do not have as high a volume of printed matter. You'll find inkjets for $300 to $500.
Yes, some business owners have both to meet their various needs.
Once you have zeroed in on your printer needs, try a few models in stores and ask friends and neighbors which printers they have bought. It's easy to compare prices online and salespeople will tell you all the positives. However, since printers can be very frustrating when they stop working properly, you'll wan to get some good reviews and recommendations from people you know and trust.
Popular printer models manufacturers are Canon, Epson, Oki Data, Brother, Lexmark, and Hewlett-Packard.
Computer Data Storage
You'll want to stock up on CDs for your computer to store your data and back up all important material. It can't be stressed often enough that you need to back up your files frequently so that you do not suddenly lose valuable customer, vendor, and personal data if your computer crashes or you have a power outage. You can also use a USB flash drive, which is a small, lightweight, removable, and rewritable device used to save computer data, much like disks were used in the past, only sturdier, since disks could get bent or accidentally erased more easily.
Digital Camera
Digital cameras are indispensable to home business owners. You can take pictures of products, clients, completed jobs, or your trip to Florida, and then transfer them easily to your website, e-mails, or desktop publishing programs. You can easily create brochures, presentations, catalogs, and fliers using your own photographs. Good-quality digital cameras cost in the range of $200 to $500. Nikon, Canon, Sony, Panasonic, and Olympus USA are among the leading companies making digital cameras.
High-Tech Shopping Tips
When shopping for your high-tech business equipment, it's advantageous to buy from well-known reputable companies that have been in business for some time and will likely still be there should you need them if you have problems with your business equipment. Here are some other general high-tech shopping tips:
•Look for good deals. Don't be afraid to walk away if you are not getting what you need.
•Don't buy into the wealth of features offered on top models, whether it's computers or digital cameras. Look for the functions that you need.
•Don't jump at the latest innovations. You can often buy the previously "hottest" items for a better price when the latest models come out. Unless the newest model has a feature you absolutely need, go with last year's model.
•Shop for a good warranty.
•Make sure you get all paperwork that comes with any technical equipment and keep it in a safe place.
•Buy from companies and businesses that provide excellent tech support.
Computer Hardware, Accessories and Software Costs
The following Computer Hardware, Accessories, and Software Costs Worksheet (Figure 7.3) can help you calculate the costs of equipping your new home workspace with common technology. Ignore items that are not relevant to your business and add items that are specific to your business, as required.
Computer Hardware, Accessories, and Software Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Desk ______ $_________ $_________
•Desktop computer ______ $_________ $_________
•Desktop monitor ______ $_________ $_________
•Keyboard and mouse ______ $_________ $_________
•Modem ______ $_________ $_________
•Notebook or laptop computer ______ $_________ $_________
•Printer ______ $_________ $_________
•PowerPoint projector ______ $_________ $_________
•Palm organizer ______ $_________ $_________
•Scanner ______ $_________ $_________
•Digital camera ______ $_________ $_________
•Surge protection ______ $_________ $_________
•UPS (uninterpretable/universal power supply) ______ $_______ $ ______
•Word processing program ______ $_________ $_________
•Accounting software ______ $_________ $_________
•Contact management software______ $_________ $_________
•Database management software ______ $_________ $_________
•Website building software ______ $_________ $_________
•Website maintenance software ______ $_________ $_________
•E-commerce software ______ $_________ $_________
•Payment processing software ______ $_________ $_________
•Inventory management software ______ $_________ $_________
•Desktop publishing software ______ $_________ $_________
•Multimedia software ______ $_________ $_________
•Antivirus software ______ $_________ $_________
•Other ________________ ______ $_________ $_________
•Other ________________ ______ $_________ $_________
•Total $_________
Getting the Communication Devices You Need
The proliferation of high-tech communication devices in recent years makes it very easy to spend a whole lot of money in a very short time. But, once again, if you can get by with just the basic communication devices at first, you can always upgrade to new and better communication devices when your business is generating profits. For basic communication, you will need all or some of the following.
Telephone
If you are going to have a workspace, you'll want to install a separate telephone line or multi-line system, depending on the volume of calls you anticipate. Ideally this phone will have business features and functions such as conferencing, redial, speakerphone, call waiting, caller ID, and so on. Get what you need if it's not included. The payments can be added to your telephone bill.
Fax Machine
Although fax transmissions have greatly declined in popularity in the last few years as e-mail use has increased, many businesses will still need a fax machine. Most contracts and agreements that must be signed are legal when faxed if both parties agree and it is so stipulated in the contract. If you do not want to purchase a separate fax machine, you can get fax software for your computer.
Cell Phone
It seems that everyone has a cell phone now. They're convenient for anyone who wants to stay in touch and necessary for anyone who needs to do business while away from home.
Shop around for a good rate. Although the newer models have more features, you will primarily need only the basics for communication purposes. You may, however, consider purchasing a cell phone with internet features, as it is very convenient to be able to check e-mail when you are away from your computer. In fact, cell phones have become so popular and the services and features so varied that many home business owners are also using simple and inexpensive cell phones as their main phone. It's always advisable to have a landline, however, since cell phones drop calls and cell phone batteries tend to need recharging when you need your phone the most. Therefore, have both.
Telephone Headset
A telephone headset will be a definite need if your business keeps you working at a computer all day or if you use a phone in your car. It enables you to use your phone and leaves your hands free to work on the computer or, when you are out of the office and on your cell phone, to drive your car, walk down the street, or work in your garden. Headsets, both wired and wireless, are available for both desktop phones and cellular phones. Count on spending $30 to $90 for either type.
Internet Connection
You will need an internet connection. A good internet service provider is a must for anyone in business today. Most internet service providers (ISPs) charge about $20 to $30 per month for broadband, meaning cable or DSL hookup, and give you unlimited web and e-mail access. Dial-up access will cost less, but tie up a phone line, so it can end up costing you more--as well as being too slow for business purposes. Therefore, you need to sign up for cable or DSL.
Communications Costs
The Communications Costs Worksheet (Figure 7.4) will help you calculate the costs of equipping your home workspace with common communication devices. Ignore items that are not relevant to your business and add items that are specific to your business.
Figure 7-4. Communications Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Specialty wiring and networking ______ $_________ $_________
•Telephone with business functions ______ $_________ $_________
•Install dedicated telephone line ______ $_________ $_________
•Install dedicated fax line ______ $_________ $_________
•Toll-free line/number ______ $_________ $_________
•Internet connection ______ $_________ $_________
•Cordless telephone ______ $_________ $_________
•Cell phone (perhaps with internet features) ______ $_________ $_________
•Headset ______ $_________ $_________
•Answering machine or service ______ $_________ $_________
•Fax machine (or fax software) ______ $_________ $_________
•Pager ______ $_________ $_________
•Other ____________________ ______ $_________ $_________
•Other ____________________ ______ $_________ $_________
•Total $_________
Home Office Library
All successful entrepreneurs share a common trait--they never stop searching for ways to become better businesspeople through education. And because time is always in high demand but short supply, the best way to educate themselves and find information that will make them better businesspeople is by purchasing and reading books, reports, magazines, directories, and journals. In fact, most successful businesspeople take pride in their business libraries.
For these reasons, you should start purchasing business-related publications so that you can build your own valuable business library. Even with the internet as a powerful research and educational tool, books are handy: you can take them on the plane or read them in bed. They help you check facts quickly, without having to log onto the Net and conduct searches for the information. The internet is an invaluable business tool, but the combination of a well-stocked and varied business library and key websites gives businesspeople access to all the information they need.
You will also want to subscribe to journals that are aimed at your specific business or industry. When you come across ideas in print that will work for your business, cut the article out and place it in an idea folder for later use. Prime topics that you should include in your business library include:
•Small business accounting, bookkeeping, and taxation
•Sales and marketing
•Business and marketing planning
•Administration and management
•Internet, website building, and e-commerce
•Advertising and public relations
•Personal and business goal setting
•Customer service
•Industry, product, service, and manufacturers' directories and source books
•Time management and organization
A good source for used books is AbeBooks which boasts in excess of 45 million used books for sale in every imaginable category. Amazon is also a good source for new and used books. PubList.com is an online directory listing in excess of 150,000 domestic and international print and electronic publications, including magazines, journals, e-journals, and newsletters. Also check with your local library about book sales; most sell titles for a fraction of what they cost new.
Part 3-Renovating Your Workspace ...added 8-13-10
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
If you can use the space that you have selected with only minimal renovations, you are wise to do so. Sometimes, however, you will have to renovate your workspace or other areas of your home to accommodate your new business. This is especially true for professionals setting up practices at home and for people engaged in manufacturing or assembling products at home.
Renovating your workspace can be challenging for a number of reasons. There is the noise and disruption that result. Also, if the renovations are extensive, you'll have to deal with the mess. In addition, there's the time factor. Once you have decided to start a home business, you want to get moving as quickly as possible so that you can begin to recoup some of the money you'll be spending. Finally, there's the cost. Renovating is not cheap, especially when you consider that skilled tradespeople charge upward of $50 per hour plus the costs of materials. If you can get by with the workspace that you have without renovations, you should do so. However, if you must renovate your home to accommodate your new business, the information in this section should help.
Do It Yourself or Hire a Contractor?
Once you have action and design plans and know exactly what you need, the next step is to decide if you can do the work or if an experienced contractor is necessary. Certainly, if the job is uncomplicated and if you have the time, tools, and talents necessary to do the work, by all means do it. It can save you a substantial amount of money on labor costs. If the job is small, but outside your comfort zone, you may be able to hire a local handyperson. If you do so, expect to pay about $40+ per hour plus the cost of materials. If however, your new workspace is a major renovation that includes upgraded mechanicals, removing walls, installing new doors, and so forth, you will be well advised to hire a professional contractor.
If you decide to hire a contractor, the following are a few tips:
•Explain the type of business that you will be starting and show the contractor your plans, equipment lists, and other information relevant to the renovation. Doing so will help the contractor understand what you want and he or she may offer some cost-saving suggestions.
•Obtain three quotes, basing your decision not only on price, but also on value, quality, and reputation.
•Call each contractor's references to make sure past clients were satisfied with the jobs. If possible, try to get a look at a home office that the contractor has built or substantially renovated.
•Before selecting a contractor check with your local chapter of the Better Business Bureau to make sure the contractor has no unresolved complaints outstanding. I say "unresolved" because complaints that have been resolved are generally not a sign of trouble, but unresolved complaints usually are.
•Get a contract in writing, signed by both parties. Make sure that it specifies the scope of work and all details.
•Obtain proof of liability insurance and workers' compensation insurance from the contractor before the job begins.
•Arrange for favorable payment terms in four installments: 25 percent deposit, 25 percent progress installment, 25 percent on substantial completion, and the balance 30 days after full competition of the renovation.
•Inspect materials delivered to the job site before they are used, to make sure they are what is specified in the scope of work and contract.
•Know which party is responsible for securing building permits and if the costs of these permits are included in the estimate. This is very important. If you renovate without a permit and the required inspections from your local municipality, if any structural, electrical, or other mechanical problems arise with the work that has been done, your insurance company may not compensate you if the work was completed illegally.
•Make sure that all warranty information is included in the written agreement. The workmanship portion of the warranty should be a minimum of five years from the date of completion.
•Don't be totally focused on cost. Remember: this is a job that you want to tackle only once. You may save $500 now by not installing an outside door into your workspace, but if you decide to install one later, the cost can easily be as much as five times what it would have cost when the crew and tools were there for the renovation.
•Make sure that your contract specifies a completion date. Some renovation projects have taken far longer than expected. A "finish" date for the job is essential.
Renovation Costs
Whether you plan on doing the required renovations yourself or hiring a contractor, it is wise to have a general idea of the costs associated with the renovation before getting started or asking for quotes and bids on the job. Following is a basic Renovation Costs Worksheet (Figure 7.1) that you can use to estimate the costs of renovating your workspace. Add or delete items according to your specific needs. To arrive at the cost per unit or total cost of some items or services, you will need to make a few calls and visit your local home improvement store to check product prices.
Figure 7-1. Renovation Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Building and inspection permits _____ $_________ $_________
•General construction _____ $_________ $_________
•Finish carpentry _____ $_________ $_________
•Plumbing and heating _____ $_________ $_________
•New or upgraded electrical _____ $_________ $_________
•Security alarms _____ $_________ $_________
•Fire alarms and extinguishers ____ $_________ $_________
•New or upgraded communications Capabilities_____ $_________ $_________
•Windows _____ $_________ $_________
•Window coverings _____ $_________ $_________
•Doors and locksets _____ $_________ $_________
•Paint _____ $_________ $_________
•Wall covering _____ $_________ $_________
•Flooring _____ $_________ $_________
•Build-ins _____ $_________ $_________
•Decorations _____ $_________ $_________
•Other ____________________ _____ $_________ $_________
•Other ____________________ _____ $_________ $_________
•Total $_________
If you can use the space that you have selected with only minimal renovations, you are wise to do so. Sometimes, however, you will have to renovate your workspace or other areas of your home to accommodate your new business. This is especially true for professionals setting up practices at home and for people engaged in manufacturing or assembling products at home.
Renovating your workspace can be challenging for a number of reasons. There is the noise and disruption that result. Also, if the renovations are extensive, you'll have to deal with the mess. In addition, there's the time factor. Once you have decided to start a home business, you want to get moving as quickly as possible so that you can begin to recoup some of the money you'll be spending. Finally, there's the cost. Renovating is not cheap, especially when you consider that skilled tradespeople charge upward of $50 per hour plus the costs of materials. If you can get by with the workspace that you have without renovations, you should do so. However, if you must renovate your home to accommodate your new business, the information in this section should help.
Do It Yourself or Hire a Contractor?
Once you have action and design plans and know exactly what you need, the next step is to decide if you can do the work or if an experienced contractor is necessary. Certainly, if the job is uncomplicated and if you have the time, tools, and talents necessary to do the work, by all means do it. It can save you a substantial amount of money on labor costs. If the job is small, but outside your comfort zone, you may be able to hire a local handyperson. If you do so, expect to pay about $40+ per hour plus the cost of materials. If however, your new workspace is a major renovation that includes upgraded mechanicals, removing walls, installing new doors, and so forth, you will be well advised to hire a professional contractor.
If you decide to hire a contractor, the following are a few tips:
•Explain the type of business that you will be starting and show the contractor your plans, equipment lists, and other information relevant to the renovation. Doing so will help the contractor understand what you want and he or she may offer some cost-saving suggestions.
•Obtain three quotes, basing your decision not only on price, but also on value, quality, and reputation.
•Call each contractor's references to make sure past clients were satisfied with the jobs. If possible, try to get a look at a home office that the contractor has built or substantially renovated.
•Before selecting a contractor check with your local chapter of the Better Business Bureau to make sure the contractor has no unresolved complaints outstanding. I say "unresolved" because complaints that have been resolved are generally not a sign of trouble, but unresolved complaints usually are.
•Get a contract in writing, signed by both parties. Make sure that it specifies the scope of work and all details.
•Obtain proof of liability insurance and workers' compensation insurance from the contractor before the job begins.
•Arrange for favorable payment terms in four installments: 25 percent deposit, 25 percent progress installment, 25 percent on substantial completion, and the balance 30 days after full competition of the renovation.
•Inspect materials delivered to the job site before they are used, to make sure they are what is specified in the scope of work and contract.
•Know which party is responsible for securing building permits and if the costs of these permits are included in the estimate. This is very important. If you renovate without a permit and the required inspections from your local municipality, if any structural, electrical, or other mechanical problems arise with the work that has been done, your insurance company may not compensate you if the work was completed illegally.
•Make sure that all warranty information is included in the written agreement. The workmanship portion of the warranty should be a minimum of five years from the date of completion.
•Don't be totally focused on cost. Remember: this is a job that you want to tackle only once. You may save $500 now by not installing an outside door into your workspace, but if you decide to install one later, the cost can easily be as much as five times what it would have cost when the crew and tools were there for the renovation.
•Make sure that your contract specifies a completion date. Some renovation projects have taken far longer than expected. A "finish" date for the job is essential.
Renovation Costs
Whether you plan on doing the required renovations yourself or hiring a contractor, it is wise to have a general idea of the costs associated with the renovation before getting started or asking for quotes and bids on the job. Following is a basic Renovation Costs Worksheet (Figure 7.1) that you can use to estimate the costs of renovating your workspace. Add or delete items according to your specific needs. To arrive at the cost per unit or total cost of some items or services, you will need to make a few calls and visit your local home improvement store to check product prices.
Figure 7-1. Renovation Costs Worksheet
Quantity $ Unit Cost $ Total Cost
•Building and inspection permits _____ $_________ $_________
•General construction _____ $_________ $_________
•Finish carpentry _____ $_________ $_________
•Plumbing and heating _____ $_________ $_________
•New or upgraded electrical _____ $_________ $_________
•Security alarms _____ $_________ $_________
•Fire alarms and extinguishers ____ $_________ $_________
•New or upgraded communications Capabilities_____ $_________ $_________
•Windows _____ $_________ $_________
•Window coverings _____ $_________ $_________
•Doors and locksets _____ $_________ $_________
•Paint _____ $_________ $_________
•Wall covering _____ $_________ $_________
•Flooring _____ $_________ $_________
•Build-ins _____ $_________ $_________
•Decorations _____ $_________ $_________
•Other ____________________ _____ $_________ $_________
•Other ____________________ _____ $_________ $_________
•Total $_________
Part 2-Planning Your Workspace ...added 8-2-10
You will greatly maximize your chances of putting together the most productive, functional, and visually appealing workspace
at the lowest possible cost if you take the time necessary to plan your workspace well in advance of actually setting it up.
Planning your workspace enables you to take into account all of your needs and avoiding costly mistakes.
First, determine if there are any renovations that must be done. It's always easier to get these completed in advance of
setting up shop. After renovations or if no renovations are needed, completely clean the space and all surfaces--walls,
ceiling, and floor--and do any painting.
The next step is to take measurements of the room and make a scale drawing on a large piece of paper, noting on your floor
plan windows, doors, electrical outlets, telephone jacks, cable outlets, and lights. Once you have an accurate, scaled floor
plan, you can move on to purchasing equipment and furniture that fit your space and suit your needs. After you have
purchased all or most of what you need, install the furniture and equipment according to your plan.
This may seem like a time-consuming way of setting up your workspace, but you want to do the job only once, do it within
your budget, and get exactly what you need to start your business right. The extra time spent planning your workspace now
will ultimately save you time and money down the road, as it won't be necessary to interrupt business to redo your
workspace or lose productivity because the space does not suit your business needs.
Hiring a Designer
Most home workspaces are basic enough so that they can be planned without hiring a professional. However, if you intend
to spend a substantial amount of money to create a workspace in your home or you have hired an architect to build an
extension to your home, you might want to consider hiring an interior designer with home office experience. A key point to
remember is that the ultimate goal of the designer is to create the perfect workspace to suit your specific business needs
while saving you at least enough to pay his or her fee. That's right: in the end you will most likely find that a professional
designer can save you enough money through his or her experience, contacts, and trade discounts to cover the fee,
especially on contracts in excess of $25,000. Additionally, the finished product will probably be far superior to what you can
plan and design yourself--unless, of course, you're a contractor or a designer.
To find an interior designer with experience in home workspace design and planning, consult your local Yellow Pages
directory, ask friends and associates if they know one, or visit the website of the International Interior Design Association, at
iida.org. Typically, a designer might be helpful for businesses that will be receiving visits from clients, businesses that will be
employing several workers, or businesses that require specialized professional facilities, such as a dentist's office with a
waiting room, an X-ray room, etc. Otherwise, you can very likely design your workspace yourself.
Creating an Environmentally-Friendly Workspace
You will also want to be sensitive to the environment. Integrate your home business recycling with your household recycling
for convenience. Find out how you can use recycled products in your business. Also, let your customers know that you
support recycling and environmentally conscious business practices. In fact, include this information in all of your advertising
and business communications, because you will certainly not alienate customers in an increasingly environmentally
conscious society. In fact, you will very likely attract a few new customers simply because we all know that taking care of our
planet is not only right, but necessary for this and future generations. Heidi Schimpl, Community Programs Coordinator at
the North Shore Recycling Program in North Vancouver, British Columbia, advises these simple and inexpensive practices
in your home office to save money and contribute to a healthier environment:
•Place paper recycling bins in convenient locations such as beside your desk, areas where you pack and unpack shipments,
and near file cabinets. The more convenient you make recycling, the more you will recycle.
•Hang on to paper that has been printed only on one side and use the other side for printing draft documents and other
materials that are for your eyes only, as well as for use in your fax machine. You can also cut paper that has only been printed
on one side and staple the pieces together for use as note and memo pads.
•Purchase and use unbleached office paper with a high-recycled content; if available, 100-percent post-consumer waste is
the best.
•Purchase and use ink and toner cartridge refill kits to cut down on waste and save money on cartridge costs. If your printer
and toner cartridges are non-refillable, contact the manufacturer about recycling them; most cartridge manufacturers have
programs for recycling.
•Edit documents on screen rather than printing draft copies.
•Reduce fax-related paper waste by using a computer fax-modem or scanning and e-mailing documents.
•Turn off lights when not in use and purchase energy-efficient office equipment with power-saving sleep options rather than
power-wasting screensavers. Look for Energy Star office equipment.
•Use energy-efficient light bulbs and reusable items, such as rechargeable batteries and mechanical pencils and pens.
•Purchase office supplies in bulk to cut down on packaging waste. Purchase only what you need, regardless of what's on
sale.
•Use environmentally friendly packaging materials rather than polystyrene foam peanuts and minimize your use of packing
materials.
•Use large windows and skylights to provide light and heating, rather than lights and heating, whenever possible.
•Install insulated windows to keep heat in and cold out, to reduce energy consumption.
•Use workstations and office furnishing built from sustainable, earth-friendly materials.
Additional helpful information and tips about recycling practices and your home business, as well as environmental
information, can be found on the North Shore Recycling Program's website, at nsrp.bc.ca. Green Sites Online, at
greensites.com, also offers recycling information, resources, and links.
at the lowest possible cost if you take the time necessary to plan your workspace well in advance of actually setting it up.
Planning your workspace enables you to take into account all of your needs and avoiding costly mistakes.
First, determine if there are any renovations that must be done. It's always easier to get these completed in advance of
setting up shop. After renovations or if no renovations are needed, completely clean the space and all surfaces--walls,
ceiling, and floor--and do any painting.
The next step is to take measurements of the room and make a scale drawing on a large piece of paper, noting on your floor
plan windows, doors, electrical outlets, telephone jacks, cable outlets, and lights. Once you have an accurate, scaled floor
plan, you can move on to purchasing equipment and furniture that fit your space and suit your needs. After you have
purchased all or most of what you need, install the furniture and equipment according to your plan.
This may seem like a time-consuming way of setting up your workspace, but you want to do the job only once, do it within
your budget, and get exactly what you need to start your business right. The extra time spent planning your workspace now
will ultimately save you time and money down the road, as it won't be necessary to interrupt business to redo your
workspace or lose productivity because the space does not suit your business needs.
Hiring a Designer
Most home workspaces are basic enough so that they can be planned without hiring a professional. However, if you intend
to spend a substantial amount of money to create a workspace in your home or you have hired an architect to build an
extension to your home, you might want to consider hiring an interior designer with home office experience. A key point to
remember is that the ultimate goal of the designer is to create the perfect workspace to suit your specific business needs
while saving you at least enough to pay his or her fee. That's right: in the end you will most likely find that a professional
designer can save you enough money through his or her experience, contacts, and trade discounts to cover the fee,
especially on contracts in excess of $25,000. Additionally, the finished product will probably be far superior to what you can
plan and design yourself--unless, of course, you're a contractor or a designer.
To find an interior designer with experience in home workspace design and planning, consult your local Yellow Pages
directory, ask friends and associates if they know one, or visit the website of the International Interior Design Association, at
iida.org. Typically, a designer might be helpful for businesses that will be receiving visits from clients, businesses that will be
employing several workers, or businesses that require specialized professional facilities, such as a dentist's office with a
waiting room, an X-ray room, etc. Otherwise, you can very likely design your workspace yourself.
Creating an Environmentally-Friendly Workspace
You will also want to be sensitive to the environment. Integrate your home business recycling with your household recycling
for convenience. Find out how you can use recycled products in your business. Also, let your customers know that you
support recycling and environmentally conscious business practices. In fact, include this information in all of your advertising
and business communications, because you will certainly not alienate customers in an increasingly environmentally
conscious society. In fact, you will very likely attract a few new customers simply because we all know that taking care of our
planet is not only right, but necessary for this and future generations. Heidi Schimpl, Community Programs Coordinator at
the North Shore Recycling Program in North Vancouver, British Columbia, advises these simple and inexpensive practices
in your home office to save money and contribute to a healthier environment:
•Place paper recycling bins in convenient locations such as beside your desk, areas where you pack and unpack shipments,
and near file cabinets. The more convenient you make recycling, the more you will recycle.
•Hang on to paper that has been printed only on one side and use the other side for printing draft documents and other
materials that are for your eyes only, as well as for use in your fax machine. You can also cut paper that has only been printed
on one side and staple the pieces together for use as note and memo pads.
•Purchase and use unbleached office paper with a high-recycled content; if available, 100-percent post-consumer waste is
the best.
•Purchase and use ink and toner cartridge refill kits to cut down on waste and save money on cartridge costs. If your printer
and toner cartridges are non-refillable, contact the manufacturer about recycling them; most cartridge manufacturers have
programs for recycling.
•Edit documents on screen rather than printing draft copies.
•Reduce fax-related paper waste by using a computer fax-modem or scanning and e-mailing documents.
•Turn off lights when not in use and purchase energy-efficient office equipment with power-saving sleep options rather than
power-wasting screensavers. Look for Energy Star office equipment.
•Use energy-efficient light bulbs and reusable items, such as rechargeable batteries and mechanical pencils and pens.
•Purchase office supplies in bulk to cut down on packaging waste. Purchase only what you need, regardless of what's on
sale.
•Use environmentally friendly packaging materials rather than polystyrene foam peanuts and minimize your use of packing
materials.
•Use large windows and skylights to provide light and heating, rather than lights and heating, whenever possible.
•Install insulated windows to keep heat in and cold out, to reduce energy consumption.
•Use workstations and office furnishing built from sustainable, earth-friendly materials.
Additional helpful information and tips about recycling practices and your home business, as well as environmental
information, can be found on the North Shore Recycling Program's website, at nsrp.bc.ca. Green Sites Online, at
greensites.com, also offers recycling information, resources, and links.
Part 1-Establishing Your Home Workspace ...added 7-30-10
Determine your needs and create a space that's right for you
We will do something a bit different for the next few weeks. We found this excerpt so informative and relevant that we have decided to run the whole thing as a series. This is the first in what should be 8 posts on this subject.
This is an excerpt from Entrepreneur Magazine's Ultimate Homebased Business Handbook by James Stephenson and Rich Mintzer available from Entrepreneur Press.
Every business that is operated or managed from home will require some sort of workspace, but not all will require an office in the traditional sense. If you operate a freelance photography business, for example, your main workspace in the home may be your darkroom. If you operate an automotive paint shop, then chances are your workspace will be the garage or a freestanding shop out back. If you operate a dental practice from home, then your workspace will probably be a portion of your home used for a waiting room, a treatment room, and an office. In other words, workspace requirements will vary depending on the business you choose to operate.
While helping you determine your needs so that you can create the right home workspace for your business, this chapter is broken into sections to help you establish your home workspace step by step:
Selecting your workspace based on your needs
Planning your workspace
Renovating your workspace
Equipping your workspace
Making your workspace secure and safe
Providing your workspace with furniture, equipment, and supplies
Building a positive image for your new business
Working full or part time in the home requires much thought to create a working environment that is suitable for your business and in balance with the needs of your family.
Establishing Your Home Workspace
Selecting Your Workspace
The type of business that you will be operating from home is key to determining the type, size, and location of the workspace you need. You must also carefully consider day-to-day living as well as special occasions, seasonal activities, and guests.
If you have a family and will be operating a business primarily from within your home, you will want to incorporate as many of the following ideas as possible to help achieve the best business–family balance:
-If available, choose a separate room as dedicated workspace. Then you can close the door to keep business in and family, friends, and pets out.
-Pick a room or other space where you can minimize distractions, far away from kitchen, laundry room, and PlayStation noises.
-Select a workspace that is large enough to operate your business. Working out of two or three separate areas of the home is far less productive than working from one area, although you can certainly use another part of the house, such as your basement or garage, for storage, if necessary.
-If clients will be coming to your home, the ideal is a workspace with a separate outside door or very close to an outside door.
-If you will be operating a business that creates noise or generates byproducts (dust, mess, fumes), consider the garage or an outside structure for your workspace.
Your Workspace Options
Your workspace options range from a corner of the home to a separate outside structure. This will depend on the size of your home and available rooms, the type of business you are running, and any other residents. Obviously, someone who is living alone has different options than someone whose home reminds visitors of the movie Cheaper by the Dozen.
Spare Corner
Though by far the least expensive way to set up a home workspace, using a spare corner of the house can have some disadvantages. If you are not alone, you will have to deal with a lack of privacy and noise. However, if all your budget allows is a secondhand desk in the corner of your living room to serve as the head office location for your new business, then go for it! Many successful business people have started with far less. Lillian Vernon started her massive catalog empire from her kitchen table.
Dining Room
Believe it or not, the dining room is the most popular room of the house to convert into a home business workspace, mainly because it is cheap and quick to do and because the dining room is an area that is often used only on occasion. Unfortunately, most dining rooms do not have doors that close, so that room may not be very appropriate for client visits. Again, this will depend on any other residents and the type of home business you are running. For example, a part-time seasonal homebased business doing income tax returns can work very well from the dining room table, where all paperwork can be spread out after dinner while the kids are doing homework.
Kitchen
Desks in kitchens are not that uncommon now. If you need a place to pay the bills, make phone calls, handle paperwork, and run a part-time business, this scenario can work out fine. You can use a foldout desk, with a filing cabinet below and a hutch above. The lighting is probably appropriate and the atmosphere is usually cheery, so if you live alone or any other residents are away at work or in school, doing business from your kitchen can be fine.
In one loft apartment, the homeowner simply extended the kitchen counter several feet and added onto the cabinets with shelving made of the same wood. Sliding wooden doors were then installed on the counter top to hide the computer; in fact, a visitor would not know if behind the closed doors was a computer station or a breadbox. In fact, the only hint of an office in the kitchen was the computer chair, which could easily be wheeled out of sight.
However, if you require full-time office space, any portion of the kitchen will likely afford too many distractions. In most households, the kitchen is a busy room. In addition, the ever-present temptation to snack may make the kitchen a bad choice.
Extra Bedroom
A spare bedroom is the second-most popular choice for almost any type of homebased business that has no or few client visitors. Here, you can create the full office experience or use as much or as little space as you need. In addition, since this is a dedicated workspace, you can decorate as you choose and take care of all functional needs, such as installing an extra phone jack, stronger, insulated windows to keep out the cold of winter, and so forth.
Converted Garage
The garage can be a great place for a business, especially if it is attached to the home, has a separate entrance, requires few alterations, and is large enough to meet your needs. The downside is the large amount of money that is required to make the transformation from a typical garage to a fully functioning home workspace complete with electricity, heat, water, sewer, and communications. Recently, an associate converted his double attached garage to home business use, leaving one side for storage, shipping, and receiving, basically unchanged, while renovating the other into a very elaborate office that would rival any in a high-rise, high-rent downtown office district. The other downside to using your garage is that you may need to park your car outside, which may be inconvenient if you are living where it snows a lot.
Basement
Basements provide yet another good, and increasingly popular, option for home business space, if they have been altered for your climate and have good access, improved lighting, and adequate headroom. Many people have built offices into finished basements, often taking up only a portion of the area, leaving other sections for storage or family use. One concern with basement workspaces is moisture, especially at certain times of the year. So, if you are considering this option, think carefully about the conditions, especially if you plan to store inventory, paper, or documents that can be easily ruined or computer equipment that can be affected by heat, cold, or dampness.
Attic Space
Attics can also work, providing they have been altered to suit the climate and have good access. The downside is that there is almost no chance of having a separate outside entrance for client visits. Also, if the attic space is the third floor, walking up and down two flights of steps with documents, mail, products, and job files can be very tiring. In addition, most attics are shaped oddly, with low or slanted roofs that can reduce use of much of the space. Attics are also usually subject to great changes in temperature, as well as unwanted visitors (bats, squirrels, mice, bugs, etc.), and many are not equipped with electrical outlets and phone jacks or even solid flooring to support your technical equipment.
New Addition
The much more costly option for workspace is to build an addition onto your home. On average, you can count on spending $30,000 to $50,000 just on the addition, before you spend one dime on business equipment, inventory, marketing, or any other aspect of setting up and getting your business rolling. You will also have to comply with building codes, zoning regulations, and other rules associated with adding square footage to your home.
The positive aspect is that you can design this addition exactly as you wish. Also, if you decide to sell your house, the extra space can be used as a family room or for some other reason, making your home that much more valuable when you put it on the market. Typically, such additions are more common for high-income professionals who need a large and well designed separate area, such as doctors, dentists, or physical therapists.
Outside Structures
Outbuildings on your property, such as tool sheds, enclosed cabanas, and freestanding workshops, are another option, if the structure is suitable and large enough to meet your needs. The downside to outbuildings is that most do not have water or sewer connections and only basic electrical services, lacking proper heat and light. By the time you renovate and upgrade the mechanicals, you will be talking about a substantial amount of money that might be better spent renovating another space that does not require as many alterations, such as the attic or basement. Outbuildings are generally in the backyard, so you would have to address issues of client parking and access as well as access for deliveries and pickups. However, if you plan on operating a manufacturing or repair business, a renovated or new outbuilding on your property may be your only logical or legal option.
Other Workspace Issues
The type of home business you will be starting also greatly influences your needs in terms of where in the house the workspace is established and, in many cases, even if you can operate your business legally from home. Here are a few additional workspace issues to consider prior to starting up.
1. Will you have clients visiting your home office? If so:
Do you have the space to accommodate visits?
Do you have suitable parking for clients and good access?
Will you be able to separate your workspace from your living space in order to provide visiting clients with privacy?
Is the appearance of your home suitable for client visits? Broken porch boards, peeling paint, and worn carpets can send potential clients the wrong signals about your business.
Can you provide clients easy and private access to washroom facilities in your home?
2. Will you have employees working from your home? If so:
Can employees or outside contractors legally work from your home?
Do you have the space required for employees to work?
Can you provide employees working from your home with enough privacy to do their work and offer your family enough privacy from your employees?
Can you provide employees separate and easy access to your home workspace and can you provide them with suitable parking?
Can you provide employees with the basic necessities, such as washroom facilities, space for breaks and lunch, and closet space for coats?
3. Will you be manufacturing or assembling products at home? If so:
Do local zoning regulations allow homebased manufacturing businesses?
Will you have to upgrade or install new mechanical services such as heating, cooling, electrical, and plumbing to accommodate your business?
Will you need to install ventilation systems? If so, will the exhaust pollute? Will the noise bother your neighbors?
Do you have adequate access for parking, shipping, receiving, and storage?
Will you have to upgrade your home to meet fire safety standards because of your business or the product you manufacture?
4. Do you need storage space? If so:
Do you have enough room in your home to store inventory, equipment, business records, and client files?
Is your storage space accessed easily and safely?
Is your storage space suitable for the things you need to store? Consider dampness, heat, critters, and cold.
Is your storage space secure so that valuable business equipment, inventory, and records are not at risk of being stolen?
If you do not have suitable storage space, is there a suitable self-storage facility close by with easy access? If so, how much does it cost?
5. Do you have the communications connectivity you require?
Are there phone jacks for landlines? Does your cell phone work clearly from your chosen location?
Can you connect your wireless routers from your workspace? There's nothing worse than realizing your wireless router, wireless phone, and wireless computer do not work reliably.
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