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Advice & More July 2012

Starting a Business of Your Own: It Can Happen

By Teresa Ambord

If your motivation for starting a business is to not have a boss, forget it. Obviously you can’t succeed if you are not pleasing your customers. So while you own the company, as long as you want someone to pay you for what you do or sell, the customer is your boss.

Whether you’ve always dreamed of being your own boss, or you just got tired of waiting for the job market to heat up again, why wait any longer to start your own business? 

Gender is not a factor in business success, but just so you know, about 70 percent of new businesses opened in America are started by women. The truth is, man or woman, it doesn’t take a rocket scientist to succeed, but before you hang out a shingle, consider what personal attributes it does take.

You need to:

  • Be a self-starter.
  • Be comfortable working mostly alone for long periods of time.
  • Be highly motivated and hard to discourage.
  • Be able to work well without supervision. A mentor yes, but not a supervisor.

If you’re a baby boomer or older, you probably already understand the meaning of hard work. Self-employment can add flexibility and satisfaction to your work life, and let you feel more in control of your destiny. However, if your motivation for starting a business is to not have a boss, forget it. Obviously you can’t succeed if you are not pleasing your customers. So while you own the company, as long as you want someone to pay you for what you do or sell, the customer is your boss.

 

Mind the Economy

Since the economic downturn I’ve seen so many businesses spring up, only to close their doors soon. I could see it coming from day one, because in a weak economy when people are cutting expenses, these fledgling businesses offered “wants,” not “needs.” Selling wants is okay if you can offer quality at a better price. That allows people to continue their habits while saving money.

Example: when the economy first slowed down, a lot of people who were in the habit of stopping daily for a $5 latte had to cut way back. McDonald’s seized an opportunity, and entered the specialty coffee market with a good alternatives for a fraction of the cost. Unless you can offer a “want” with reasonably comparable quality and a lower price, it’s better to target true needs.

Here are a few businesses which can have low cost of entry and are going concerns these days.

Vending machines. You can buy or lease vending machines and form a route. By some estimates, Americans spend 40 billion dollars a year in vending machines. Better still, this business is somewhat recession-proof… but, you have to have a good location. Do you know someone with a business who would like to have a vending machine or two on the premises? A business with a lot of foot-traffic, which does not sell the same product is a good choice. For example, most gyms sell bottled water, but maybe they would like to have a vending machine which offers vitamin water or Gatorade.

Depending on where you live, you may need a business license, a sales tax permit, a seller’s permit, or all of the above. Startup costs may be only a few thousand dollars.

You’ll also need to service the machines, collect money, and arrange for repairs and maintenance on the machines.

Note: there are scams related to vending machines, so be sure you are dealing with legitimate vending machine companies before you get in with both feet.

Specialty bakery, such as cupcakes. Cupcakes have become hugely popular in the last couple of years. This is somewhat of a luxury, but the public’s desire for sweets isn’t going anywhere. However, in a down economy people tend to be more picky. If they are going to spend, the product had better be darn good.

Also, look around. Cupcakes seem to be the dessert of choice in many areas, including as a replacement or a supplement to a traditional wedding cake.

Industry experts say a cupcake bakery, as opposed to a general bakery, is a better idea because you can focus on one item. Your desire for variety can inspire you to come up with new flavor combinations, colors, and decorations.

If you sell to the public you may need to do your baking in a commercial kitchen depending on the state you live in. Here’s an idea: if there is a large church in your area, they might be willing to rent their commercial kitchen to you, during hours when they are not using the space. That’s added revenue to them and might be a godsend to you.

Contact your local authorities to find out what you need to do to be legal.

Bookkeeping/payroll. Every business has books to keep, and most have at least a small payroll. If you have bookkeeping and/or payroll skills, you could be a lifesaver to a small company, or to many small companies. Many business owners are great at what they do, but terrible at keeping books. They can’t afford – and don’t need – a full-time bookkeeper, and even if they could, they don’t have the office space for such a person. But they can afford to have you stop in once a week or twice a month, pick up the receipts and/or timecards, take the work to your office and whip it into shape.

I did this myself after I left full-time accounting and before becoming a full-time writer/editor. It was a simple matter of being reliable, organized, and occasionally being available to answer questions for the business owner.

If you already have a good computer, the cost of entry may be no more than a business license, the purchase of a good accounting software program, and possibly the cost to print some business cards. If you work from home, you may need a home occupation permit, and you may be restricted from having clients visit your home. Just be sure you are up on current laws regarding payroll in your state.

 

Resources to Help Small Businesses Get on Their Feet

The National Federation of Independent Businesses is an advocate for businesspeople, loaded with help of various kinds. Find them by logging onto: http://www.nfib.com, then click on “resources” and “start a business.” They take you through the challenges new businesses face and answer questions about financing, about franchises, legal structure… just about anything you can ask.

SCORE.org is another website that provides a wealth of resources, including free webinars to help you past the hurdles of starting and operating a business. Many successful businesspeople volunteer their knowledge and services to SCORE as a way to give back to the public and give the new guy – you – a hand up

 

Teresa Ambord is a former accountant and Enrolled Agent with the IRS. Now she writes full time from her home, mostly for business, and about family when the inspiration strikes.

Meet Teresa