For those of us who grew up with parents who worked for businesses rather than owned them, the world of business can be quite a mystery. Even more so if we’ve dared to try to start one of our own. There is the factor of what type of business to start – a product or service business. There are the issues of doing a good market analysis, licensing the business, understanding the codes of law governing businesses, and determining just what type of business structure to choose – especially if the business will have employees. For example, should we start a sole proprietorship or a corporate business? It’s a lot to work on, and it’s not an overnight process to the road of success. But, the most crucial challenge to whether a business succeeds or fails lies deep within the realm of emotional versus financial intelligence.

Many start-up businesses fail within the first year of existence. This is especially so with businesses started from home, or exist without the traditional bricks and mortar structure we are so accustomed to. And, far too often the reason many start-up businesses fail has to do with the emotional challenge the new business owner faces. The challenge of seeing him or her self now as a business owner, rather than a paid worker for someone else’s business. It means dressing differently, thinking differently, and talking differently. It means believing that you are already successfully established even if you have a long ways to go on the business’s balance sheet. To put simply, if the business owner doesn’t have a firm belief and commitment in the business and his or her role as the owner, then others simply won’t be convinced that this business is the place to get what they need.

Then, there is the crucial issue of having the financial intelligence to keep the business going in the direction the new owner desires. To put it simply, if the new business is only taking money to operate and not making money, it won’t be long before the doors of opportunity become closed. No matter how much motivational self-talk and emotional pump-me-up the new business owner does, it is the results shown on the bottom line that determines the future of the new business. And, if the bottom line is steady generating a negative, the business will eventually lose. Far too many new business owner simply don’t understand this simple fact and it’s incredible impact upon the future of his or her business. And, far too many system based business endeavors, such as network marketing, fail to properly focus the majority of their teaching on this.

To keep the vision, motivation, commitment and, ultimately, the business alive, a start-up business owner must simply know the ins and outs of basic business accounting. The more he or she comprehends the principles of good financial management, the greater the chance of achieving the desired goals for the business. It is, ultimately, the financial bottom line the determines whether a business owner maintains the belief and dreams associated to his or her business. The financial bottom line determines just how much commitment to marketing and advertising the principal staff of the business will willing give. It’s very encourage able to develop a love for numbers, especially when working with the basic additions, subtractions, multiplications, and divisions of the financial budget. Here’s a recommended source to spur this number love: http://www.jtsef.com/financial.htm .

Many schools of thought teach that marketing and advertising is the key to success in any business. To their credit, there is a certain truth to this, because the market is a numbers game. The greater the numbers of people that know about the owner’s business, it’s products or services, the greater the chances of getting the sale. Understanding the numbers allows us to measure where we are and where we want to go. But, regardless how successful the new business owner is with marketing and advertising his or her business, no amount of business exposure alone can guarantee the success of the business. There are big businesses that are testimonies to this fact with their sudden bankruptcies at the time they seem to be at their greatest.

Ultimately, the deciding factor on whether a business succeeds or fails lies in the level of knowledge and expertise that the principle players of a business have with the business balance sheet. This level of knowledge also determines just how much belief the business owner has in his or her business, and how willing he or she is to make the necessary efforts and adjustments that steadily drive a business up to the road of success. And, once reaching this point where the customers and clients are knocking at the door and the money is rolling in, it is the degree of financial intelligence that will ultimately determine whether the business stays in business or not. And, no amount of motivational self-talk or marketing is likely to change this simple reality.

What this means for those who are just starting a business or are struggling to keep a business idea alive, is that it is imperative to develop a deep appreciation – if not love – for numbers and how these numbers play out on the business balance sheet. If the business is progressing in a positive way financially, the rest of the aspects to running a business will fill itself in over time. Isn’t it a lot easier to learn the ends and outs of operating a successful business venture and maintaining the commitment and motivation to the business vision when the business is steadily in a financial growth? Something to seriously think about. Especially, if owning a business is an appealing idea, but is equally as much a mystery to the aspiring entrepreneur. The key to success ultimately is determined by the plusses and negatives found in the business’s balance sheet. And, a focus on this will dispel many of the mysteries and emotional challenges to owning a business.

Joseph T Farkasdi is the President of JtseF, Inc. and is a member of the Financial Freedom Society. He is an entrepreneur who is committed to helping others achieve the financial lifestyle they desire. For more information, visit http://www.jtsef.com/financial.htm .

TheDesireForMoney@jtsef.com

Article Source: http://www.jtsef.com/articlesfromthepresident.htm

Don’t let these stop you from having a business plan for success!

A recent study of 29,000 business startups noted that 26,000 of them failed. Of those failures, 67% had no written business plan. Think that’s a coincidence?

Here’s the top 10 myths Solo Entrepreneurs often have about business plans-usually, the reasons why they don’t have one. De-bunk the myths, and see how having a business plan for your solo business, can actually be easy and fun–and can jumpstart your success!

1. Myth: I don’t need a business plan–it’s just me!

Starting a business without a plan is like taking a trip in a foreign country without a map. You might have a lot of fun along the way, and meet a lot of friends, but you are likely to end up at a very different place than you originally set out for-and you might have to phone home for funds for your return ticket.

Solo Entrepreneur Reality: Successful Solo Entrepreneurs know that the exercise of creating a business plan, really helps them think through all the critical aspects of running a business, make better business decisions, and get to profitability sooner.

2. Myth: I have to buy business plan software before I can start.

Business plan software comes in many shapes and sizes, and prices. Many are more geared at small and growing businesses with employees.

Solo Entrepreneur Reality: Business plan software can be helpful-but it’s not required. Software is more likely to help if you have a more traditional type business, like a restaurant or a typical consulting business.

3. Myth: I need to hire a consultant to write my business plan.

Consultants are an expensive way to have your business plan written.

Solo Entrepreneur Reality: Your business IS you-and you need to be intimately involved with the creation of your business plan. A better strategy, if you think you need professional help, is to hire a coach or mentor-someone who can guide you in what you need to do, not do it for you.

4. Myth: The business plan templates I’ve seen have all these complex-sounding sections to them-I guess I need all those?

The only time you need to follow a specific outline is if you are looking for funding.

Solo Entrepreneur Reality: Your business plan needs to answer ten basic questions-that’s it! Don’t make things more complicated than necessary.

5. Myth: My business plan needs to be perfect before I can start my business.

If you wait for everything to be perfectly detailed, you may never start.

Solo Entrepreneur Reality: If you have at least a first draft that answers those ten basic questions, you are ready to launch your business! Make your business plan a living, evolving document. In the startup stages, review and update your plan every 2-3 months. As you grow and stabilize, you can slow down the review cycle to every 6-12 months. All business plans should be reviewed and updated at least once a year.

6. Myth: I have to do everything I say I’m going to do in my business plan, or I’m a failure.

Many Solo Entrepreneurs never start because of this myth-which leaves them feeling that the success of their future business suddenly rides on each stroke of the pen or click of the keyboard!

Solo Entrepreneur Reality: Think of your business plan as a roadmap for a trip. Expect to take some detours for road construction. Be flexible enough to take some exciting, unplanned side trips. And don’t be surprised if instead of visiting Mount Rushmore, you decide to go to Yellowstone, if that turns out to meet your vacation goals better!

7. Myth: A good business plan has a nice cover, is at least 40 pages long, must be typed and double-spaced…

Business plans intended for investors, such as a bank or venture capitalist, must meet certain requirements that such investors expect.

Solo Entrepreneur Reality: As a Solo Entrepreneur, your business plan need only satisfy YOU. It might be scribbled on a napkin, on stickie notes on your wall, or consist of a collage of pictures and captions. It might be all in one document or scattered among several mediums. As long as you know it in your head and heart without having to look at it, and and it is easily accessible to you when you have doubts, that’s all that is necessary.

8. Myth: I don’t need a loan-so I don’t need a business plan.

YOU are the investor in your business-and would you invest in the stock of some company without seeing a prospectus?

Solo Entrepreneur Reality: Seeing your plan in black and white (or color, if you prefer!), can give a whole new view on the financial viability of your business. If “doing the numbers” seems overwhelming, remember you don’t need fancy spreadsheets. Just lay out a budget that shows where all the money is coming from (and going), and have an accountant review it for additional perspective.

9. Myth: My business plan is in my head-that’s good enough.

I don’t know about you, but I sometimes can’t remember what I planned yesterday to do tomorrow, if I don’t write it down!

Solo Entrepreneur Reality: There is a real power in writing down your plans. Some schools of thought advocate that the act of writing a plan down triggers our subconscious to start working on how to manifest that plan. And, of course, it’s a lot easier to remember when you have it in front of you. And a lot easier to share and get feedback from your non-mind reading supporters.

10. Myth: Friends and family are the best sources of feedback and advice on my business plan.

If your brother is an accountant and your best friend is a market research expert, then this might be true.

Solo Entrepreneur Reality: As well meaning as our friends and family can often be, they just aren’t the best way to get honest, objective guidance. Instead, seek out folks that have specific knowledge that will help you, are willing to be candid with you, and that have a genuine interest in helping you succeed. A business coach is one resource to consider!

Copyright 2004, Terri Zwierzynski – Accel Innovation, Inc.

Terri Zwierzynski is a self-employed business strategist and marketing consultant to solo entrepreneurs, and a grassroots promoter of the solo entrepreneur lifestyle. She runs Solo-E.com, the resource website for the self-employed which attracts thousands of solo home business owners monthly from over 100 countries on six continents (and was recently named a finalist for “Website of the Year” in the 4th Annual Stevie® Awards for Women in Business). Terri is also the co-author of 136 Ways To Market Your Small or Solo Business.

Find more articles about Business Planning at Solo-E.com, plus get a copy of our new ebook, “25 Surefire Ways to Capture More Clients, Get More Done in Less Time, and Make More Money — in 90 Days or Less.”

Starting Business Secrets will help you to start your own business successfully.

The American Dream is, and always will be, to come up with an idea, start a business and become rich from your own efforts. Based upon this motivation, thousands of businesses fail each year, due primarily to not being familiar with the basics involved in running a business.

This report will enlighten you, and give you a number of suggestions you can use to better guarantee your chances for success. This report is written with the warning that any and every business venture contains certain inherent risks, and any number of alternatives. We do not espouse that any one way is the right way or that our suggestions are the only way. On the contrary, we advise that before investing any money in a business venture, you seek counselling and help from a qualified accountant and/or attorney.

Just about the first thing you should consider before deciding to start or purchase a business is the legal form you’ll be operating under. There are basically four choices: sole proprietorship, partnership, limited partnership, and/or corporation.

Each has a number of advantages and disadvantages. We’ll try to enumerate some of them for you.

As much as anything else, for many people starting a business is a form of ego-gratification, and they form a corporation for some sort of prestige gain – just to say, “I own a corporation.”

With just a little bit of observation, you’ll find that one of the major causes of business failures is due to the founder wasting start-up capital on frills, such as an impressive store- front office, expensive furnishings, and corporate legal costs.

One of the basic traits you must develop it you’re going to be successful in business, is a tight hold on your expenditures. In fact, a good rule of thumb is that anything that does not make money for yo or protect your investment, should not be purchased at this time. Very definitely, this applies to the expense of setting up your own corporation.

Unless you have a partnership and start your business as such, the only real advantage to forming a corporation would appear to be that a corporate structure will semi-protect the property you personally own.

As an example, you own a home and car. You form a corporation to protect these possessions from business losses. Yet, if you can be found guilty of misusing corporate funds, your business creditors can pierce the corporate shield and come after your possessions.

Basically, if you invest everything you have in your business, as most newcomers do, you don’t usually need a corporation because you have nothing to protect. Your household possessions, personal belongings, generally your car, and even a portion of the equity in your home is protected by the homestead provision of the Federal Bankruptcy Act, and cannot be taken away from you.

As a sole proprietor or partner of a business you’ll be paying taxes on your overall earnings, much the same as if you were holding down a salaried or hourly paid job. Whether you do or don’t take out money as a salary will have no bearing on the earnings of your business and tax return.

The often advertised advantage of incorporating, that you can manipulate your salary in order to save on tax dollars, is real because of corporation laws. However, the IRS frowns on this practice. When your business is successful and making a lot of money, definitely check with your accountant on the advantages of incorporating.

As a corporation, you’ll be subject to a number of other drawbacks as well: generally higher state taxes, stricter laws concerning the operation of your business, more elaborate accounting procedures, and legal papers that are required just about every time you make a major move or sign almost any contract. Thus, your legal and accounting fees will be much higher as a corporation than will those required for a sole proprietorship type of business.

As a sole proprietor or partnership, you’ll find many areas require the registration of your business name. The cost however, is minimal, ranging from $5 to $100. About the best way to find out what laws apply in your area, is to call your bank and ask if they need a fictitious name registration card or certificate in order for you to open a business account.

Selecting a name for your business is quite important to you and particularly relative to advertising. Your business name should describe the product or services you offer. Fancy names such as, Linda’s Clipping Service will lose potential “walk-in and passing” customers to the beauty shop across the street that calls itself, Patti’s Beauty Salon or Jane’s Hair Styling Shop.

The advantage of using your full name in the title of your business, such as Johnny Jones’ Meat Lockers, has the advantage of making credit somewhat easier to come by – provided you pay your bills on time – but it also includes the disadvantage of confining your services to a local or at most, a regional area.

Should you buy, lease, or rent a space for your business? think twice before you make any decision along these lines. Most businesses tend to grow quickly or they never get off the ground.

There are a few exceptions, but only a very few, that tend to grow at a modified rate.

So, buying a piece of property and setting up your business on or within that property, obligates you to ownership regardless of what happens to your business.

Leases are almost always very strong contracts written by attorneys to the advantage of the property-owner. When you sign an agreement to pay someone for the use of their space over any length of time, you’re “nailed in” to paying for that space regardless of what happens to your business.

In the beginning, it’s wise to either get the shortest-term lease possible, or arrange to rent with an option to lease at a later date. This does not apply to a retail business, unless your particular business happens to be an untried one.

Definitely, you should open a business bank account. In selecting a bank for your business, scout around and look for one that can, and will help you. Determine what your banking needs will be, and then via telephone, interview the managers of the banks in your area. The important convenient bank to your business location.

A point to remember: the closer you can make the relationship between you and the bank manager, the better your chances are going to be for approval on loans and/or special favors you may need at a later date.

Try to become acquainted with as many of the bank employees as possible. The better you know them, the more courtesies they’ll be extending especially to you in the course of your association.

Just as a doctor is a specialist in his field, and you go to him for medical problems, your banker is a specialist in his field and you should go to him for your money problems. In business, you’ll have to learn that everyone is an expert in his own line of work, and in your associations with other business people, refrain from acting like a “sharpie” and/or pretending that you know exactly how everything works in someone else’s specialty.

You’ll find that very often, different banks specialize in different types of businesses. As an example, you’re sure to find banks that specialize in real estate transactions, export- import businesses, and even manufacturing operations only.

What I’m saying here is that if you’re planning to sella fairly expensive item, your customers will probably need and/or want financing. It will behoove you to select a bank familiar with your type of product that will afford your customers, through you, contract financing.

Some of the questions you should ask of your banker include the following:

Is it necessary to maintain a certain balance in your account before the bank will approve a loan for you? What qualifications must you have in order to obtain a line of credit with the bank?

Does the bank limit the number of loans, or types of loans it will approve for small businesses?

What is the bank’s policy regarding the size of a check you might deposit that requires holding for collection?

And what about checks less than that amount – will they be immediately credited to your account?

In almost all types of businesses, it will be to your benefit to set up with your bank, a method of handling VISA, Master Charge, and regional credit cards. The important thing here is to ultimately set up your account in the bank that will service all of these credit transactions for you – one stop for all your banking needs. In most instances, you’ll find that having the capability to fill orders/make sales via credit card transactions, will increase your volume of sales appreciatively.

Once you’ve made the decision as to which bank is going to handle your account, you’ll need your Social Security Number or your Federal Employer’s Identification Number, your driver’s license, the fictitious name certificate, and if you’re requesting a VISA or Master Charge franchise, you’ll also need a financial statement.

For corporations, you’ll also need a corporate resolution approving of the opening of your business account.

There are different policies exercised in just about every state regarding installation/hook-up charges by the telephone and utility companies. Some require a deposit, and some don’t.

You’ll find that a great number of city business license departments are there solely for the purpose of collecting another tax. Depending on the type of business you’re asking a license for, the building and zoning people may inspect your premises for soundness of structure and safety. Generally, you won’t encounter any difficulties – you simply pay your fee to operate your business in that city, and the clerk types your name onto a city license certificate.

Relative to sales tax permits and licenses, each state’s rules and regulations very widely. The best thing to do is call your state offices and ask for information concerning registry and collection procedures. Many states require an advance deposit or bond, and you’ll find that some wholesalers or manufacturers will not sell to you at wholesale prices until you can show them your sales tax permit or number.

Should your business entail selling your products or services across state lines, in another state, you’re not required to collect taxes except in those where you have offices or stores.

You may find also that your particular business requires the collection of Federal Excise Taxes. For information along these lines, check in with your local office of the Internal Revenue Service.

Some states also require certain businesses to hold state licenses, such as those required in many states for TV Repairmen.

These are known as “occupational permits” and are most often required of barbers, hair stylists, real estate people and a number of other consumer oriented businesses. If you have any doubts, check with your state offices for a list of those occupations that require licensing.

Any business doing business in any type of interstate commerce is subject to federal regulations, usually through the Federal Trade Commission. This means that any business that shops, sells or advertises in more than one state is subject to such regulation, and this includes even the smallest of mail order operations.

Normally, very few business people ever have and contact with the federal regulatory agencies. The only exceptions being when there is a question of your operating your business unethically or illegally.

Any business that sells or distributes food in any manner almost always requires a county health department permit. If your business falls into this category, simply call the county health department and invite them out to your place of business for an inspection. The fees generally range from about $25, depending on the size of your business when they first inspect it for permit approval.

There are also a number of businesses that require inspection by a fire marshall, and fire department approval. Generally, these are those that handle flammable materials or attract large numbers of people, such as a theater. Overall, the local fire department has to be allowed to inspect your premises whenever they desire to do so.

You may also run into a requirement for an air and/or water pollution control permit. These specifically apply to any business that burns anything, discharges anything into the sewers or waterways, or use any gas-producing product, such as a paint sprayer.

Without a doubt, you’ll need to check on local regulations relating to advertising display signs. Each city or township makes its own rules and then enforces those rules according to its own thinking -check before you contract to have a sign made for your business.

The design and placement of your sign is very important to your business – specifically to retail establishments – but let me remind you that your business sign is usually the first thing a potential customer sees and as such, it should catch his eye and leave an impression that lasts. It would be a good idea to ride around your town and take a look at the signs that catch your eye, and try to determine the impression of the business that sign leaves on you. This is a basic learning formula for determining the design, size and placement of your business sign.

Some of the other things to consider before opening for business – If you intend to employ one or more employees, you’ll be required to deduct Federal Income Taxes, and Social Security payments from their checks. This will involve your filing for a Federal Tax Number and necessitates contact with your local IRS Office.

Most states have “unemployment taxes” which will have to be deducted from the paychecks of any employees you hire. And there are a number of states that have income taxes – disability insurance – and any number of other taxes. Again, the best thing to do is check with your local office of the IRS. And above all else, don’t forget to ask for the rules of the minimum wage law, and comply.

When your business grows to the point of needing additional help, don’t be afraid to look for and hire the help you need. when you’re ready to hire someone, simply run an ad in your local paper and/or register your needs with the local office of your state’s employment service. Businesses either grow or die, and those that grow eventually need more people in order to continue growing.

When that time comes, hire the additional people you need, and your business will continue growing. If you don’t, for whatever reason, you’ll find yourself married to your business and your business growth stymied.

Regardless of how small your business is when you begin, never walk in with the thought in mind that it’s something to keep you busy. Anyone with an attitude of that kind is a fool. You begin and make a business successful in order to realize financial freedom. Establish your business. Put it on its feet, and then hire other people to do the work for you. And those businesses that require an operations manager, or someone to run a phase of the business you’re too busy to handle, hire the person needed or the business will surely suffer.

To protect the investment of your business, you need business insurance. If you’ve never had any experience with business insurance, simply look under the heading of “business insurance” in your phone directory. Ask for bids from several different companies or agents…Primarily, you should have a policy that gives you general liability, fire, workmen’s compensation, business interruption, and vehicle coverage. You amy also want coverage against possible losses related to burglary, robbery, Life & Accident, Key Man, and Fidelity Bonds.

As the sole proprietor of a business, you won’t be paid as an employee, so there will be no income tax deducted from whatever you withdraw from the company’s earnings. What you’ll have to do is a gain check with the IRS Office for a Tax Guide For Small Businesses Handbook, and probably end up filing an estimated tax return on a quarterly basis.

The minute you open your doors for business, you’ll have to spend some time engaged in the work of bookkeeping. Exactly how, and using what forms, you keep books, should be on the recommendations of a good tax counselor…The same holds true for your overall business and/or payroll accounting system. Look for an experienced CPA that knows the accounting problems to your particular kind of business, and solicit his advise/counseling.

If your business is going to involve the possible purchase or lease of operating equipment, again seek the help of your tax counselor for the most advantageous method of obtaining the needed equipment.

Basically, arranging for your suppliers to give you materials on credit will depend upon your honesty and personal financial statement. The best way is usually a personal visit to the person with the power to approve or disapprove of credit at the company where you want to set up a credit account. Show him your financial statement, and explain your prospects for success. Then assure him that you’ve always honored all of your obligations, and that if ever there’s a question or problem, you’d like for him to call you at home. And of course, give him your home phone number.

We won’t go into the exigencies of advertising your products, services or business here, but there is something along these lines you should always keep in mind. The best kind of advertising your business can receive is that you don’t really pay for – publicity.

When something unusual happens to you, your business, or your employees – that’s news, so be sure to tell the news media in your area about it.

The most important ingredient of your eventual success will be the soundness of the planning you did before you started your business. Any number of bad things can really throw your business into a tailspin, but it you’ve done your homework well – really set up a detailed business plan before starting – your losses or setbacks will be minimal. Success takes planning, and within this report, you’ve got a basic checklist…The rest is up to you…Good luck, and may your life overflow with success in all that you undertake from this moment forward.