Preneuraholics Start Your Own Small Business Now!

Whoo hoo! The federal government is opening up funds to Preneuraholics once again! $200 billion will be made available for SBA backed loans in early 2009.

To qualify for an SBA (Small Business Association) guaranteed loan you MUST have a formal business plan. What do I mean by formal? I mean the traditional business plan that follows the SBA preferred format.  Look here for more info on that.

I have spoken with several lenders and SBA reps that have expressed dismay and shock at the fact that so many entrepreneurs approach them for loans to start a small business and they are not prepared with a business plan. My own experience has been that when I went to my local banks armed with a complete business plan (that I wrote myself) I was welcomed with open arms. Ok, maybe it wasn’t exactly a love fest. The initial reactions were more along the lines of “Sure. Whatever,” until they started reading the first page. They were immediately captivated and after just a few minutes I was told that they were forwarding it on for SBA approval!

Keep in mind, I’m talking about a very simple, short, consise but complete, business plan that I wrote myself. My first attempt at my first business plan turned out to be a great success. I will admit that it took me two years to get up the courage to even attempt to write the business plan. I was terrified, but determined. It took me only 3 weeks (and very little sleep) to complete. And no, I did not use software or templates of any kind. Loan officers do not take kindly to templates and they really do not like to read through long, boring, overly detailed business plans. Learn the techniques I used that took my simple little business plan over the top here.

If you are in need of funding for your small business start up, be among the first in line for the newly available SBA funds by being prepared with your completed business plan.

If you have ever thought of starting your own Internet business this is the best time to get started! Today. Right now.
Why? An Internet business is by far the fastest, easiest way to start your own small business. Even if this isn’t your dream business, it’s a great way to get started while you wait for the economic crisis to ease up.

As you may have noticed I love to promote Site Sell. I researched long and hard before partnering up with this company and I can tell you that I only hear great things. They are an upstanding, trustworthy company with a quality product. They offer the easiest to use web site builder/host at a very reasonable price.

ONCE A YEAR SPECIAL ENDS JANUARY 5!

They are currently offering a once a year special promotion that ends on January 5th. Don’t put this off folks. The timing is perfect. Start the new year with a new business.

The economy has taken a nose dive just as you are hoping to start your own business. You might be discovering that this just is the wrong time to start a business. If your business idea requires a loan for funding, you will find that it is that much more difficult to get a loan. Have you decided to put your dream business on hold for now? Maybe you should consider an Internet business while the economy recovers.

Starting an Internet business can be much less costly than starting a brick and mortar retail business or a service business.  Or you can even start your dream business on a smaller scale by working strictly from a website.

I spend a lot of time promoting a web site builder/host called Site Sell because they are a great company. They offer unmatched customer service and a quality product. And while I hate to sound like an annoying tv commercial, this is actually the best time to jump in and get started because they are currently running a holiday special, Buy 1 Get 1 Free. Click here to see how quickly and easily you can start building your own custom website and start an Internet business.

Read more about how to actually make money from your website simply promoting others’ products or services through affiliates. While my original intent with my website business was to provide fellow preneuraholics (serial entrepreneurs) specific how-to direction for starting their own small business with my own ebooks, I immediately discovered that I was actually bringing in the highest income from the affiliates I was promoting. And most surprising to me was the fact that the highest paying affiliate was Site Sell. 

So, while you are waiting for the economy to recover and still itching to start your own small business, I would highly recommend starting your own Internet business. Even if you’re not entirely sure what kind of Internet business to start, just pick a topic that is near and dear to you, put the website out there and add affiliates. Yes, it really is that simple when you use Site Sell because they walk you through every step of the way. Try it!

Funding is usually the the biggest hurdle to being able to start your own small business. Since so many people are intrested in locating “free” money I will discuss a couple of the most sought after forms of free money.

Angel funding is money that is usually gifted or given to you for your small business startup. Before you get all excited at the prospect of finally finding a money source, let’s discuss where Angels come from. Angels are usually people you already know. Maybe they are mentors, current or former. They could be advisers. They could be friends or family that know you and trust you and love you and what to see you succeed. Maybe they have heard your pitch or seen your business plan and are really on board with your ideas. They might be in a position to be able to give you a few thousand dollars to get you started. That is Angel funding.

You likely won’t find an Angel association or group handing out cash to strangers, so don’t waste your time searching for such groups.

I’ve already discussed grants in a few posts. Look here for those discussions.  Unfortunately, you won’t find free money through grants either. Sorry folks. That’s the hard cold reality. Grants for start ups is a myth and many an entrepreneur has wasted countless hours in search of a grant for their new business.

Next post I will discuss venture capitalist money as another funding source. Yes, there are groups of venture capitalists looking to fund businesses. But as with most things, there is good news and there is bad news associated with that type of funding. Come back soon to read more about that. In the meantime look at the other posts for more funding ideas. Click here.

If you are interested in making money with an internet site then you must use affiliates!

Affiliate sales are the easiest way to earn money from a website. Not sure what affiliate sales are? Look at a post in this blog where I recommend SiteSell.com. This is an example of an affiliate. I recommend the product on my site and when anyone buys the product I receive a commission.

But keep in mind, that I recommend this particular product because I truly believe this is a great product and a superb company. You will notice that I actually offer very few products from affiliates. That is because I am very choosy about what I recommend. But that is a key component to successful affiliate sales. The more you believe in the product, the easier it is to recommend and generate the commissions naturally.

I also believe that generating an income from a website can be achieved faster and easier by using the affiliates that offer the most generous commissions. So far I can tell you that hands down, my biggest money generator is SiteSell.com. My first big commission sale was from Site Sell and it continues to be my best.

But in order to be able to earn money from a web site business, you first must create the website. Without hesitation I can tell you that SiteSell.com is the best way to create a web site fast and easy. They handle all of the technical stuff as you write your pages. They are there every step of the way to help you as much as you need. They also handle the hosting. The best part is that they are super affordable. I can also attest to the fact that I have heard only great things about this company. That is why I chose them as an affiliate and I cannot tell you how happy I am that I did! Learn more about how to earn the highest commissions here.

Now, to take affiliate sales to the next level I am recommending the product you see below. Rosalind Garner is extremely successful at what she does, generating income from affiliate sales of course. So grab yourself a copy so you too can start to earn money from your website.

Read the amazing true story of how one woman, with no previous business experience, earned $436,797+ in 2002 and now earns MUCH MORE than that … just by selling other people’s stuff online! In her down-to-earth, sincere and often humorous style, Rosalind Gardner guides you through the entire process of building an affiliate marketing business on the ‘Net.Frequently revised and updated to reflect industry changes, the Super Affiliate Handbook now consists of 236 pages and 124 screenshots that will show you step-by-step how to become a Super Affiliate. You’ll learn how to pick the best affiliate programs, negotiate a commission raise and save time, money and effort on everything from affiliate software to web hosting.To learn exactly how she does it, Click Here.

So just how long and how detailed is a business plan supposed to be? This question has started many heated discussions because people seem to be very divided when it comes to this topic.

My own personal experiences with loan officers and SBA representatives taught me that short and concise is best. This has always been my advice to others when trying to determine which way to go. And even though I didn’t seem to have too many other entrepreneurs (or preneuraholics as I like to call us) that agreed with me, I knew from my meetings with lenders that they much prefer short and concise. And now I finally feel vindicated in my beliefs. I was listening to the director of the entrepreneur program of the University of Southern California , Tom O’Malia and he touts the same advice: CONCISE and SHORT

He also agrees with me when I say that the Executive Summary is THE SINGLE MOST IMPORTANT PAGE of the formal business plan. That is the first page that the reader will read. They have to be engrossed enough to want to continue to read with great interest. Not just skim through the rest of the plan as a courtesy, but to truly want to be so interested that they feel compelled to continue reading.

That was the strategy I took with my first, and of course subesquent, business plans. While the Executive Summary is the last section that you write (because it summarizes the rest of the plan), it is the first section that is read. It is important to keep it short (as with the remainder of the business plan), but thoroughly exciting so that you capture the reader’s attention right from the first paragraph. The Executive Summary should be no longer than 2 pages.

The entire business plan can be completed in as few as 20 pages.

Since this just a blog and space is limited, I cannot teach you here how to write your own business plan. But I have written the book, “You Can Write Your Own Successful Business Plan” where I take you step-by-step and tell you exactly how to do this. Look here to order your copy (hard copy or eBook).

Writing your business plan need not be the stumbling block that stands between you and your dream. It can be done. And you can do it yourself. My book is specially written for the absolute beginner with no experience with a business plan. It shows you what makes up a formal business plan (the SBA preferred format), how to write the business plan, and gives you an example of a simple plan that you can follow along and see exactly how it was created. The ebook version is only $9.99. Check it out.

As you’ve heard me say many, many times. There are no free rides. There are no grants for for-profit startups.

I read in a WAHM forum about a mom that normally was extremely careful about scams and very aware and always on the lookout. However, she let her guard down just one time when she found a resource grants online that really looked legit. They asked for $1.50 to gain access to their info. She read and reread their agreement before she clicked and paid the $1.50. She didn’t see anything that sent up any red flags so she figured she was safe. Afterall, if it was bogus she was only out the $1.50.

She didn’t see anything useful so she left the sight. After a while (I couldn’t tell how long) she discovered a charge to her bank account for $49.50 from this company! She called them several times to complain to no avail. They swore up and down that they clearly stated on their site that if she didn’t cancel within 7 days, they would automatically charge her $49.50. She fought and fought but never got her money back.

Folks, please stop grasping at straws. Forget about grants. Government grants just are not available for the regular Joe/Jane that is trying to start a new small biz. You need to look elsewhere for funding.

Where? Well to be honest funding is still mostly gotten from loans or personal savings or home equity or even credit cards. There are some other obscure sources that are legitimate, but still not so easy to obtain. For example, there is Prosper.com where pretty much anyone qualifies for loans up to I believe $25,000. This place is a throwback to times when communities banded together to help each other. This place matches lenders with borrowers. The lenders are people with a little extra cash that they are willing to loan at variable interest rates. The borrower doens’t necessarily need to have good credit, however, good credit does help in finding the lenders with the lower interest rates. Loans are available to borrowers with not so great credit, but of course at higher rates.

What’s the catch? Well, technically there really is no catch. But the problem is that if you are looking for a loan of say $25,000, the borrower may need to combine a bunch of different loans. The reason for that is that lenders are more apt to give loans in very small amounts ($50 or so). But it is an option to pursue if you cannot qualify for a bank loan.

The cold hard truth is that we all need to rely on ourselves and our own ingenuity and be willing to work and save, save, save. Since SBA backed loans require your own infusion of cash (20-30% of your startup funding needs), plus collateral, plus experience in the industry you are going into, it is also a good idea to get some experience in your industry of choice while saving up your portion of the cash.

If you already have experience, you are that much more ahead of the game.

Bottom line…..get grants out of your head and get real.

I offer much more detail about where to find funding in my One Stop Business Startup Kit. 

Free money?? Uh, no. Sorry. If you plan to fund your business with grants your business will very likely never get off the ground. Ever since that infomercial started playing on late night tv several years ago, so many people have fallen under the mistaken impression that government grants are out there for the taking. The truth of the matter is that while there are indeed grants out there, those grants are not meant for small business startups. They are not for for-profit businesses.

Government grants (federal or state) for example are meant to create jobs (not just for yourself or your few employees), but for major players. Sometimes grants are targetted for manufacturers or environmental concerns or scientific studies. Usually grants are meant to targic a very specific niche/need in a specific community.

Applying for a grant can be extremely tedious and can take months. The criteria is very limited and restrictive. But the bottom line is, grants are not for new small business startups. Ok, you might see a very small grant or contest here and there, but the prize is usually very small. Maybe $1500 or so. Not enough to make a difference for most funding needs. And even then the competition will be fierce.

Additionally, even for those tiny “grants” (contests) you will likely be required to provide ongoing monthly reporting on your business activities. It can be a real hassle for that little bit of money.

A typical small business startup will likely require at the very least around $10,000. More likely between $50,000 and $100,000 and higher. The exception to that would be very small home based businesses or online businesses.

I know I’m bursting a lot of hopeful bubbles out there, but I hate to see folks spinning their wheels and wasting time chasing down non existent grants. It’s best to get real and start looking for funding realistically.

More on those other options to come.

I just realized this is the last day of June and I haven’t posted this month at all! Why not? Truth be told, I’m techno challenged. I upgraded to a better computer and haven’t been able to transfer my files. That means I haven’t been able to keep up with my website SmallBusinessStartup.BIZ .

I was just notified that Google Adsense Referrals are being discontinued, so I need to remove those and replace with something. Geeze, just when I learned to add those ads to my pages, they go and throw a monkey wrench at me.

I also plan a major change to the main site which will take a lot of time and effort. But my end goal is to be albe to provide much more info on the main site for FREE!

So, stay tuned and watch for the new and improved pages soon!

In the meantime, look around. There is a ton of great info on this blog (if I may say so myself). 

If you are hoping to someday start your own small business, you’ve come to the right place. Scroll down and you’ll find tips and information on how to get started. If you want to start an internet based biz you’ll find information on where to go to get your website built.

If you are a stay at home mom you will find info for WAHM’s (work at home moms).

If you are wondering if a franchise is the way to go, you’ll find a post about franchises. I owned my own franchise (a children’s retail shop) so I can give you plenty of insider info!

You’ll see that my posts tend to be long. Well that’s because I intend to give you plenty of truly useful info here! So, keep reading….there’s plenty to get you started on that business idea of yours.

Let’s get back to Ann who is starting her first small business. If you recall from the April 5, 2008 post titled Actual New Business Step by Step, Ann had developed a new product and needed to set up her company to be able to sell her product. Her intention was to sell initially from a web site to keep start up costs as low as possible. Eventually she wants to expand by making her product available at wholesale to retailers.

First things first. Ann had long since decided on the product name and I advised her that she also needed a business name. Two separate names. The business name is needed to be able to register the business with your local and/or state government. In order to register the business, a legal structure for the business must be chosen. More about that will follow. However, I also advised Ann that as soon as she chose her product and business names, she needed to purchase a domain name for her website. I always steer folks to www.GoDaddy.com for their unbeatable low prices and outstanding customer service. (When deciding on names for your business it is always a good idea to check on the availability of the domain name during your brainstorming. Domain names go fast and often you need to change gears when it comes to choosing a name.)

Back to the business structure….What exactly is a business structure (also known as business entity)?

A business structure is the legal structure under which you are operating your business. You must choose a business entity for taxation purposes. The simplest form is  Sole Proprietorship, then Partnership. In days gone by these were the most often chosen types. However, with today’s litigation crazed mentality, many new businesses choose an LLC (Limited Liability Company) because of the relative ease of formation and the many tax and liability advantages. For others an S Corp (hybrid of the C Corporation) makes the most sense.

This is where I remind you to pay a visit to an accountant and an attorney. The initial consultation visits are usually free so take advantage of that offer. You can gleen quite a lot of information from those free visits! An accountant can recommend which business entity offers the best tax benefits and an attorney can advise as to which entity offers the best liability protection.

I learned an extrememly valuable and little known piece of information from my free consultation with an attorney regarding the popular LLC. Many new businesses are needlessly forming LLC’s under the erroneous assumption that their personal assets are then fully protected from potential law suits. This is WRONG. I go into full detail in the One Stop Business Startup Kit .

Ann chose to do business as a Sole Proprietor. She intends to start small and see where this new business leads before making things any more complicated than needed. As a sole proprietor she can file her business taxes with her personal taxes. Simple and clear cut.

With her business structure chosen she was able to then register her new business with the county offices. Registering a business in usually very simple, quick and inexpensive. It took Ann all of 15 minutes to fill out a one page form and $5.00. This county requires that the new business name request be announced through the local newspaper’s legal notices. A quick 10 minute visit to local newspaper office with a form provided by the county and payment for the legal ad and she was done. The business registration arrived by mail 3 weeks later. How simple is that?

Stay tuned for the next post for the next step in starting a new small business.