Six-Week Startup

What people say about Six-Week Startup:
A Step-by-Step Program for Starting your Business,

Making Money, and Achieving your Goals
Actual ratings and quotes from online reviews at Amazon,
Barnes & Noble, and Goodreads
(5 out of 5 stars)
I started...and opened in six-weeks!
This is a great book for business beginners (and even those who are on their
second or third time around). It walks you through the well suggested steps
of getting started. If you follow the plan...you should realistically be able to
“start” in 6-weeks.
(5 out of 5 stars)
Oh, this book is just too gooood to be true!
This book serves as a wonderful tool towards starting your own business!
I’ve thought about doing this for years but mainly found myself delaying
getting anything started due to not really knowing where to start or feeling
like I didn’t know enough to run my own business. …I came across this…
book casually and thought “How can you really start a business in only six
weeks!?”...Well, after…seeing how detailed and informative this book is…
boy, did I underestimate its potential impact. “Six-Week Start-Up” walks you
through every step imaginable... has so many steps to make sure you have
everything done right and effectively. If you’re skeptical, don’t be! It’s set up for
week-by-week tasks that are more than attainable and ideal for anyone, even
someone with a busy schedule. I finished most of these tasks setting in my
cubicle at work! I’m in my fifth week already and I couldn’t be more optimis-
tic about my capabilities of running my own business. Even if you only have
just a slight desire to get a business up and running, “Six-Week Start-Up” will
baby you all the way to your Opening Day…
(5 out of 5 stars)
Great DIY!
For people on a budget or not — great book! Very clearly written. Saved me
bunch of $$ and I learned a lot of new things about business!
ii | SIX-WEEK STARTUP
(5 out of 5 stars)
Great Book for Starting Your Own Business!
I’ve been thinking about starting my own business and I have no experience.
This book gives you a lot of nuts and bolts about starting a business which
I’ve found incredibly helpful. She also gives a lot of free resources such as how
to find a trade association, project management websites, websites that offer
free sample contracts, email management, etc.
(5 out of 5 stars)
Helpful, encouraging guide to starting a business
This book was really helpful to me in laying out all the steps needed to start a
small business. I think being able to do it all in 6 weeks is ambitious…(but)
I actually liked that she titled the book this way, because part of her point is
that anyone can do all this, its not hard, and it doesn’t take long to do. She’s
very positive and encouraging. As I worked through all the tasks in starting up
my company, I came back to this book again and again, and found it helpful
(5 out of 5 stars)
Very helpful
This book really does what it promises. I went through each week/chapter
writing down what Rhonda told me to. It all flowed together beautifully, and
I am now almost ready to put my web site live and ready for sales. I also con-
tacted SCORE and the SBA as per her recommendation, and have the added
value of the counsel of hundreds of counselors who can speak specifically into
my situation. I don’t think there is anything else Rhonda could add to make
this book a better choice for the virgin entrepeneur. Four thumbs up-two are
from my SBA counselor!
(5 out of 5 stars) It will take you more than 6 weeks to do; but, this
book is the best startup book I’ve read... it takes the complex process of start-
ing a business, and boils it down to a step-by-step recipe. A must-have for the
aspiring business owner.
(5 out of 5 stars) This book did a great job of walking through what it
takes to start a business. LOTS of helpful information and first-hand wisdom
is passed on here, including many “make sure you don’t forget ____” sections.
Praise for Books from PlanningShop
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wants to be an entrepreneur or just wants to grow their own business.
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create one because it seems intimidating. Rhonda Abrams is on a mission to
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ness plan that will seem like it took weeks to write instead of 24 hours.
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business practice these days and Abrams has done a terrific job of making this
sometimes confusing subject relevant and practical for businesses of all shapes
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and sizes.
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Successful Marketing: Secrets & Strategies
“ Successful Marketing encourages students to think through standard

marketing concepts while applying them directly to their business idea.
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— Meredith Carpenter, Entrepreneurship Instructor, Haywood Community College
iv | SIX-WEEK STARTUP
Successful Business Plan: Secrets & Strategies
“ [Successful Business Plan is] user-friendly and exhaustive…highly recom-

mended. Abrams’ book works because she tirelessly researched the subject.
Most how-to books on entrepreneurship aren’t worth a dime; among the
thousands of small business titles, Abrams’ [is an] exception.
— Forbes Magazine ”
“ There are plenty of decent business-plan guides out there, but Abrams’
was a cut above the others I saw. Successful Business Plan won points with me
because it was thorough and well organized, with handy worksheets and good
quotes. Also, Abrams does a better job than most at explaining the business
plan as a planning tool rather than a formulaic exercise. Well done.
— Inc. Magazine ”
“ We are again using Successful Business Plan in my business honors course
this semester. Must be working, as Penn State was just named (by Kaplan
and Newsweek magazine) as the ‘hottest school in the U.S. for student
entrepreneurs!’
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— Greg Pierce, Penn State University
“ Successful Business Plan enables my Entrepreneurship students at the

University of Vermont to develop really great business plans. The book’s
easy-to-follow, step-by-step format makes preparing a plan logical and
understandable. Over the years...several students have actually launched
their businesses successfully. Our son used the book at St. Michael’s College
in Vermont to develop a plan for airport fitness centers, winning the school’s
annual business plan competition for business majors…with a hefty cash
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Business Plan!
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“ If you’d like something that goes beyond the mere construction of your
plan and is more fun to use, try Successful Business Plan: Secrets and Strategies,
by Rhonda Abrams…this book can take the pain out of the process.
— “ Small Business School,” PBS television show ”
SIX-WEEK STARTUP | v
“ Successful Business Plan is easy to follow and comprehensive. From the first
chapter to the last, it guides you through the business planning process with a
proven systematic approach.
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— Sean S. Murphy, Ernst & Young LLP
“ As a 20 plus year veteran SBDC director, consultant and entrepreneur-

ship instructor, I have assisted thousands of individuals and business owners
through the planning process. Having reviewed tens of thousands of plans
and critiquing hundreds of planning texts, programs and tools, Successful Busi-
ness Plan: Secrets & Strategies remains my hands-down favorite text/workbook/
guide. The content and construction is comprehensive, practical and ‘do-able’
for the serious small business owner/entrepreneur.
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— David Gay, Illinois Small Business Development Center at College of DuPage
“ In my opinion, your book is the definitive guide for successful business

plans. I particularly appreciate and recommend the use of the Flow-Through
Financial worksheets. Each is a great device to illustrate the connection
between the qualitative and quantitative elements of a plan.
— Gene Elliott, Business Consultant, New Mexico ”
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and it’s great! I’ve taught business plan writing in several local SBDCs, as
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Institute. My course is designed and delivered around your book.
— Ransom S. Stafford, Business Consultant, Twin Cities, MN ”
“ One of the best books on business planning. The overall quality of this
book is excellent, but three things make it stand out: First, it contains work-
sheets that walk you through the information gathering process. Fill them out,
and even the financials—always the hardest part of a plan—will fall right into
place. Second, it has a sample plan that reads like a real business plan, written
by a real person for a real business. You can use much of the wording in your
own plan. Third, it has tips from successful managers, leaders, and business
owners, large and small. I was especially fascinated reading the tips from
ex-49’er head coach Bill Walsh. You can’t go wrong following his advice on
planning and organizing!
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— Economic Chamber of Macedonia
vi | SIX-WEEK STARTUP
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for business planning and development. It’s an excellent guide to the details
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text because I used it, per recommendation from my graduate school advisor, for
my MBA project in graduate school 13 years ago!
— Indria Gillespie, Sierra College SBDC ”
“ Your book has been both an inspirational read as well as a comprehensive
guide for starting my business. Being relatively inexperienced with entre-
preneurship, your book has not only given me the ability to create a solid
roadmap for planning, but has also provided an encouraging and easy way
to cope with the enormous amount of information and organization needed.
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are very useful.
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PlanningShop
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NEW! 4th Edition
6-Week
Startup
A step-by-step program for
starting your business,
making money, and
achieving your goals!
Rhonda Abrams
Six-Week Startup:
A step-by-step program for starting your business, making money, and achieving your goals!™
©2018 by Rhonda Abrams. Published by PlanningShop™
All rights reserved. No part of this publication may be reproduced, transmitted, stored in an information
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recording, or otherwise without the prior written permission of the publisher.
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10 9 8 7 6 5 4 3 2 1
SIX-WEEK STARTUP | ix
Who this book is for

This book is a step-by-step guide for getting a successful business up and
running fast. It covers all aspects of launching a business, from licenses to
bookkeeping to marketing to setting up shop. Everything is presented in
a step-by-step format with checklists, worksheets, and top-notch advice
from one of America’s most highly regarded business writers.
This book is for you if:

n You’re currently in the process of starting your own business and want
to get things done as efficiently as possible, yet still do them right.
n You want to make certain you take care of all the details of getting a
business under way, organize the process, and get some good advice.
n You’regoing to start a business soon and need a plan on how to go
about it.
n You have an idea for a business but don’t know where to start.
n You already run a business but would like to improve operations, mar-
keting, or take care of essential aspects of growing a company.
n You’rea student in an entrepreneurship or small business class and
need to launch a complete business in a limited time period.
x | SIX-WEEK STARTUP
About Rhonda Abrams

Rhonda Abrams: Entrepreneur, author, and nationally syndicated
columnist Rhonda Abrams is widely recognized as
a leading expert on entrepreneurship and small busi-
facebook.com/
ness. Rhonda’s column for USA Today, “Successful
RhondaAbramsSmallBusiness
Strategies,” is the most widely distributed column on
small business and entrepreneurship in the United
States, reaching tens of millions of readers each week.
twitter.com/RhondaAbrams
Rhonda’s books have been used by millions of entrepreneurs. Her first
book, Successful Business Plan: Secrets & Strategies, is the best-selling busi-
ness plan guide in America. It was named one of the top 10 business
books for entrepreneurs by both Forbes and Inc. magazines. She is also
the author of more than a dozen other books on entrepreneurship and
has sold more than a million copies of her books. Rhonda’s other books
are perennial best sellers, with three of them having reached the nation-
ally recognized “Top 50 Business Best-Seller” list.
Rhonda not only writes about business—she lives it! As the founder of
three successful companies, Rhonda has accumulated an extraordinary
depth of experience and a real-life understanding of the challenges facing
entrepreneurs. Rhonda first founded a management consulting practice
working with clients ranging from one-person startups to Fortune 500
companies. An early Web pioneer, she founded a website for small
business that she later sold. Today, Rhonda is CEO of the publishing
company PlanningShop, which focuses exclusively on the topics of
business planning, entrepreneurship, and new business development.
PlanningShop is America’s leading academic publisher in the discipline
of entrepreneurship.
A popular public speaker, Rhonda regularly addresses leading industry and
trade associations, business schools, and corporate conventions and events.
Educated at Harvard University and UCLA, Rhonda lives in Palo Alto,
California.
table of contents
Who this book is for. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

About Rhonda Abrams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvi
Week 1 Lay the Foundation…. . . . . . . . . . . . . . 1

#1: Clarify your business concept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
n Identify your personal goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
n Spell out your business values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
n Remind yourself of your source of inspiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
n Describe your business concept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
n Consider starting lean. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
n Identify your strategic position. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
n Decide whether you want partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
n Decide whether you want investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
n Consider potential exit strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
n Discuss the impact of starting a business with your family. . . . . . . . . . . . . . . . . 25
n Make an appointment with an SBDC counselor. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
#2: Create your company identity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

n Choose a name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
n Check out trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
n Secure a domain name. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
n Consider logos, taglines, and colors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
n Meet with a graphic designer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
#3: Get organized. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

n Set up files. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
n Create digital records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
n Set up a contact management system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
n Keep track of your company’s vital statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
n Keep track of expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Week 2 Get the Information You Need . . . . . . . 45

#1: Learn more about your industry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
n Make a list of your research questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
n Contact your industry association(s). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
n Do online research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
xii | SIX-WEEK STARTUP
#2: Research your target market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

n Define your target market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
n Determine if there are enough customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
#3: Check out your competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

n Identify your competitors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
n Analyze your competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
n Compare competitors’ pricing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
#4: Find suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

#5: Consider strategic partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
#6: Broaden or establish your network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
n Attend a community, entrepreneur, or industry organization meeting. . . . . 72
n Build your online connections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Week 3 Cut Through Red Tape. . . . . . . . . . . . . . . 77

#1: Deal with legal and licensing matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
n Choose a legal form and ownership structure for your company. . . . . . . . . . . 81
n Discuss ownership of your company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
n Apply for business licenses, permits, and identification numbers . . . . . . . . . . 92
n Discuss collecting sales tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
n Draw up basic contracts and other legal agreements. . . . . . . . . . . . . . . . . . . . . . 98
n Protect your intellectual property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
#2: Build your team and personnel structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

n Consider your support structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
n Decide whom you need on your team. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
n Figure out how much you can afford. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
n Examine the use of independent contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
n Understand employment laws and consider your personnel policies. . . . . 115
n Appraise your management style. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Week 4 Take Care of Operations . . . . . . . . . . . 129

#1: Find and secure a location. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Option A: Rent space. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
n Decide on the necessary attributes of your location. . . . . . . . . . . . . . . . . . . . . . . 133
n Meet with a real estate agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
n Compare properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138
n Consider whether you need more than one location. . . . . . . . . . . . . . . . . . . . . . 140
SIX-WEEK STARTUP | xiii
Option B: Set up a home office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

n Find the space to work. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141
n Figure out your phone, fax, and Internet connections. . . . . . . . . . . . . . . . . . . . . 142
n Plan how to meet with customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
n Decide whether you need a separate business address. . . . . . . . . . . . . . . . . . . 143
n Understand home-based office tax deductions. . . . . . . . . . . . . . . . . . . . . . . . . . . 144
n Plan ways to separate work life from home life. . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
n Deal with kids and pets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Option C: Set up an “office” in your vehicle. . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

Option D: Search for shared space: Incubator, accelerators,
and coworking spaces. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
#2: Design your work space and production process. . . . . . . . . . . . . . . . . . . . . 152
n Design your layout. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
n Design your production process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
n Order/install utilities and facility improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . 155
n Get furniture and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
n Order inventory and/or raw materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
# 3: Research and purchase computers, software, and other technology. . . . 165

n Develop an approach to buying technology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
n Choose a phone system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
n Choose software. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
n Choose hardware. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
n Get online. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
n Meet your mobile needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
n Find ways to get technical help. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
#4: Consider how you will distribute your products. . . . . . . . . . . . . . . . . . . . . . 189

#5: Design procedures for handling administrative tasks . . . . . . . . . . . . . . . . 192
#6: Deal with insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
Week 5 Deal with Money Issues . . . . . . . . . . . 203

#1: Deal with money matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
n Meet with an accountant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
n Learn the lingo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
n Take stock of your personal financial situation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
n Clean up your credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
n Set up your books. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
n Establish your prices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
xiv | SIX-WEEK STARTUP
n Open a bank account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

n Consider accepting credit cards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
n Prepare simple financial forecasts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
n Learn about taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
# 2: Consider financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234

n Determine whose money you want. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235
n Consider Crowdfunding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
n Develop a business plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
Week 6 Open Your Doors!. . . . . . . . . . . . . . . . . 249

#1: Develop your marketing messages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
n Clarify your company’s message. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252
n Come up with your Elevator Pitch. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254
#2: Set up a simple website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

#3: Begin offline marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
#4: Begin online marketing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275
#5: Start making sales! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292
#6: Hold your grand opening . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
#7: Look toward the future. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315
Worksheets
Goals for starting my business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
My personal goals: The four Cs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
My business values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
My role models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
My bright idea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
My business concept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Basic business description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Discussing partnership terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Business name comparison chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Creating my identity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
My research questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Who are my customers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
My customer profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Size of my market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
My competitors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Competitor’s price comparison chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Potential strategic partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Organizations to join. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
People you’ve given or promised stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SIX-WEEK STARTUP | xv
Stock distribution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Business licenses and permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Vital statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
My support system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Whom do i need on my team?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
How much can i afford?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
My personnel policies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Recruiting employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
My leadership skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Things to consider when renting space. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Location/space comparison chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Mobile office plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Office move-in checklist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Floor plan layout. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Designing my production process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Warranties and service contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Furniture shopping list. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
Equipment shopping list. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Supplier comparison chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166
My phone needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
My software needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
My hardware needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
Comparison chart: Internet hosting companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Distribution agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
Retailer comparison chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
My health insurance questions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Comparison chart: Insurance coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
Taking stock: What are my existing assets?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
My credit cards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Comparison chart: banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220
Sales projections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226
Marketing budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Profit & Loss projection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Cash flow projection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
My tax deadlines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Comparison chart: Investors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
My crowdfunding plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
My elevator pitch. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255
My website checklist. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257
My printing needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
Trade shows and industry events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264
Getting publicity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
Media contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
My social media strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
My email newsletter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287
Marketing vehicles comparison chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
My sales pitch. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297
xvi | SIX-WEEK STARTUP
Introduction
In six weeks you can change your life!
Where will you be six weeks from today?
Six weeks from today, you can have your own business up and running,
and you can be on the road to success.
You’ve had the dream of owning your business for some time; you even
have an idea for your business concept. Now, I’m giving you the blueprint.
I’m going to help you get all the nitty-gritty details of starting a business
out of the way so you can spend your time on things you really want to
do—make your products, provide your service, be creative, make money,
and have fun!
With checklists and very specific advice, this book walks you through the
process of starting your business, step by step. I’ve detailed the critical
components of getting a business—a successful business—under way and
created an easy-to-follow program for dealing with those components.
Starting a business can seem overwhelming—there’s so much to do, so
much to figure out. How do you set prices? What licenses do you need?
How do you choose a location? Where do you find customers? Where do
you get the money?
All these details seem paralyzing.
I know, because I’ve been there. I’ve started and built three successful
companies. I still remember my first weeks in business—deciding on a
business name, getting my first business card designed, figuring out a
way to land my first customer. I was flustered by buying my first com-
puter and choosing the software to go with it.
I want to make it easier—much easier—for you. And I want to not only
deal with all those details, but to make sure you have some fun along the
way—staying motivated and getting energized.
So, in this book, I’ve organized the startup process into a comprehen-
sive program that breaks down the many tasks of launching a business
into six, manageable weeks. During each week, you’ll focus on just a
few major issues; this makes it possible for you to manage the necessary
details without feeling overwhelmed.
SIX-WEEK STARTUP | xvii
Each week consists of:

n Main accomplishments: These cover major issues you’ll have to deal
with when you start your business, such as money, laws and regula-
tions, and operations.
n Checklists: Each accomplishment is broken down into a checklist
of steps for you to mark off as you complete each one. This makes it
easier for you to tackle each major accomplishment.
n Worksheets: To make completing your checklists easier, each week
includes helpful worksheets and planning forms. Use these to guide
you as you go along. Even after you’ve opened your business, you may
want to keep these completed forms to refer to from time to time.
You’ll find worksheet icons in the margins next to text to signal nearby
worksheets related to the topics under discussion.
n Make appointments with: Each week includes a suggestion of which
experts or advisors can help you complete that week’s accomplishments
and checklists.
You can undertake these accomplishments in any order—or break up

checklists into separate weeks!
In addition, throughout this book, you will find:

n Questions to Ask: Lists of suggested issues to deal with when you meet
with key contacts such as investors, attorneys, accountants, and many more.
n Red Tape Alerts: To give you a “heads-up” warning when an issue may
have legal or tax consequences.
n What Would Rhonda Do: Insight and advice based on my real-life
experience.
n Check It Out: To help you find useful information and resources online
quickly.
n Start It Free: Tohelp you find free versions of applications such as
website builders, data storage, and accounting applications, so you can
get your business up and running for as little money as possible.
This book covers everything from taxes to trade shows, accounting to

advertising, customers to computers.
xviii | SIX-WEEK STARTUP
Of course, you might want to—or need to—take more than six weeks to
get your own business under way. That’s okay. Set your own pace. This
book still serves as a plan—a “cookbook”—outlining the steps to launch-
ing your business—whether you take six weeks or six months.
Can I guarantee that in six weeks you’ll be sitting on a beach counting
your money? No. This isn’t some late-night infomercial.
Instead, this is a realistic, do-able guide to getting your own business up
and running.
If not knowing where to start has been holding you back from launching
your business, or you feel overwhelmed by the details, or you’re afraid
you don’t have the money to pay for the advice you need, then this book
is for you.
Where do you want to be six weeks from now?
week 1
üweek 1: lay the foundation
week 2: get the information you need
week 3: cut through red tape
week 4: take care of operations
week 5: deal with money issues
week 6: open your doors!

week 1
Main accomplishments:
#1 Clarify your business vision and concept
#2 Create your company identity
#3 Get organized
Make appointments with:

Graphic designer
SBDC counselor
Lay the
Foundation…
C ongratulations! You’re now officially starting your
new business. During this first week, you’ll jump right in
with some of the fun stuff of starting a business—like choos-
ing a business name and developing a corporate identity. But
most of the week is devoted to establishing a strong founda-
tion for your new company: making sure your business con-
cept is solid, developing a network of advisors and supporters
to help you build and grow your company, and taking care
of the organizational details to make day-to-day business life
more effective and efficient.
In other words, we’re going to make sure you get off to the
right start.
Even if you are starting a one-person business, you’ll find it
beneficial to develop a network of colleagues and associates,
referral sources, and supporters. No one succeeds alone—so
right from Week One, you’ll start building your network.
WORKSHEET goals for starting my business
Specific Goals:
Enter the number or amount you hope to achieve for your business in one year, five years, and ten years.
One Year Five Years Ten Years

Number of Employees
Number of Locations
Annual Sales
Profits or Profit Margin
Number of Products/Services
Awards/Recognition Received
Ownership Allocation
Other:
Priorities:
Rate your priorities for your business.
I’ll get to it Not on the Not applicable
Urgent Important sooner or later radar screen to my business
Add Employees
Add New Lines
Increase Marketing
Add Locations
Expand Online
Increase Salaries
Increase Inventory
Increase Profits
Retire Debts
Increase Reserve
Acquire Other Companies
Other:
_______________________
_______________________
_______________________
_______________________
WEEK ONE | 5
Accomplishment #1:
Clarify your business concept
My Checklist:
Identify your personal goals
Spell out your business values
Remind yourself of your source of inspiration
Describe your business concept
Consider starting lean
Identify your strategic position
Decide whether you want partners
Decide whether you want investors
Consider potential exit strategies
Discuss the impact of starting a business with your family
If you were building a house, before you drew up the blueprints, laid
the foundation, or even bought the land, you’d first have a vision of what
you’d want that house to be: big or small, one story or two, in the city or
in the country. You’d have a “vision” of your future home. The same is
true when building a company: You need a vision of what you hope
Check It Out
For a list of the most
to achieve.
popular sole proprietor
When you imagine your business, what do you hope for? To make a lot businesses in the U.S., go
of money? Use your creativity? Have more flexibility in your life? Do you to the Census Bureau’s
nonemployee statistics:
see yourself working alone or building a company with employees? Do
https://census.gov/
you hope your company grows very large or do you want it to stay small?
econ/nonemployer
As you launch your new company, it’s important to clarify and evaluate
your business concept. What is your long-term vision? What are your
personal goals? What do you see as the business opportunity? From that,
how do you define your business specifics—what it does, whom it serves,
how it differs from the competition?
Some entrepreneurs describe themselves as “visionaries” because they can
conceive of grand schemes or bold new inventions. They envision their
WORKSHEET my personal goals: the four cs
Make copies of this worksheet for yourself and your partners or key employees, if any.
Check the level of importance to you in each area.
Extremely Somewhat Somewhat Not

Important Important Unimportant Important
Creativity
Determining the design or look of products/packaging
Creating new products or services
Devising new business procedures/policies
Identifying new company opportunities
Creating new business materials
Devising new ways of doing “old” things
Other:
Control
Over own work responsibilities
Over own time, work hours, etc.
Over company decisions and directions
Over products/services
Over other employees
Over work environment
Over social/environmental impact of products/services
Over own future and business’ future
Other:
Challenge
Long-term problem solving
Critical problem solving (putting out fires)
Handling many issues at one time
Continually dealing with new issues
Perfecting solutions, products, or services
Organizing diverse projects and keeping the
group goal-focused
Other:
Cash
List approximate dollar ranges for the following. Measure wealth as the value of stocks or of the company.
Wealth desired in 2–5 years ___________________ Income needed currently _____________________
Wealth desired in 6–10 years __________________ Income desired in 1–2 years ___________________
Wealth desired in 10+ years ___________________ Income desired in 2–5 years ___________________
WEEK ONE | 7
companies clobbering the competition, defining new product categories,

perhaps growing to hundreds of millions—if not billions—of dollars.
But a business “vision” doesn’t have to be revolutionary. The important
part is that you identify what you see your business becoming: what it
will do or make, how it will grow and compete, how big it will get.
Over time, your business vision will almost certainly change. As you gain
experience and confidence, you may change the nature of your products
or services, your personal goals may evolve, and the things that seem
most important to you now may be much less so in the next few years.
Nevertheless, clarifying your current business vision and articulating
your specific business concept gives you a stronger start as you begin
building your company. Use the “Goals for Starting My Business” work-
sheet on as a starting place for defining your business goals. See page 4
Identify your personal goals

What are your personal goals in growing your business? Some busi-
nesses fail, and others flounder, because their founders or executives are
uncertain of what they really want to achieve, and they don’t structure
the company and their responsibilities in ways that satisfy their personal
needs and ambitions.
The Four Cs
For most entrepreneurs, their personal goals can be summed up by the
Four Cs: Creativity, Control, Challenge, and Cash. Of course, we each
want all four of these to some degree, but knowing which we most want
or need can help us structure our companies to best achieve our goals.
For instance, my very first clients were the owners of a small sportswear
apparel company. The designer began the business because she was good
at—and loved—designing clothes. Her primary motivation was being able
to act on her creativity. But an apparel company doesn’t run on designs
alone. There is a myriad of purely “business” aspects of the company—sales,
operations, manufacturing, etc. If she hadn’t planned for it, she might have
spent the majority of her time on such issues instead of designing. Fortu-
nately, she had a partner to take over those responsibilities. She gave up some
control—which wasn’t a major concern of hers—to maintain her creativity.
8 | SIX-WEEK STARTUP
Which of the Four Cs motivates you most?

n Creativity.Entrepreneurs want to leave their mark. Their companies
are not only a means of making a living, but a way of creating something
that bears their stamp. Creativity comes in many forms, from design-
ing a new “thing,” to devising a new business process or even a new
way to make sales, handle customers, or reward employees.
If you have a high need for creativity, make certain you remain
involved in the creative process as your company develops. You’ll want
to shape your business so it’s not just an instrument for earning an
income but also a way for maintaining your creative stimulation and
making a larger contribution to society. But don’t overpersonalize your
company, especially if it’s large. Allow room for others, particularly
partners and key personnel, to share in the creative process.
n Control. Most of us start businesses because we want more control
over our own lives. Perhaps we want more control over how our good
ideas are implemented. Perhaps we want, or need, more control of our
work hours or conditions so we can be more involved in family, com-
munity, or even golf! Control is a major motivator for most entrepre-
neurs—usually more important than money. But how much control
you need—especially on a day-to-day basis—directly influences how
large your company can be.
The larger the company, the less control you have over day-to-day
decisions. As you grow your company, you’ll need to structure com-
munication and reporting systems to ensure that you have sufficient
information about and direction over developments to give you per-
sonal satisfaction. If you seek outside funding in the form of investors,
understand the nature of control your funders will have and be certain
you are comfortable with these arrangements.
n Challenge. If you’re starting or expanding a business, it’s clear you like
challenge—at least to some degree. You’re likely to be a problem-solver
and risk-taker, enjoying the task of figuring out solutions to problems
or devising new undertakings. Challenge-hungry entrepreneurs can be
some of the most successful businesspeople, but they can also be their
own worst enemies—flitting from one thing to another, never focusing
long enough to succeed.
WEEK ONE | 9
If you have a high need for challenge in your business life, it’s impor-
tant to develop positive means to meet this need, especially once your
company is established and the initial challenge of starting a company
is met. Otherwise, you may find yourself continually starting new
projects that divert attention from your company’s main goals. As you
plan your company, establish goals that not only provide you with suf-
ficient stimulation, but also advance—rather than distract from—the
growth of your business. (Or take up skydiving on the side!)
n Cash. Every entrepreneur wants to make money. Perhaps it’s just
enough money to provide a decent income; perhaps it’s so much
money you can buy a jet. How much you want or need affects how
you’ll develop your business. Will you need investors? And if so, when?
Will you sacrifice control to grow the business quickly?
Keep in mind there are sometimes trade-offs between personal goals:
Wanting more cash often means having less control; staying at the center
of the creative process may mean you need to have a partner or grow slow-
ly, once again trading off control or cash. Examine your personal goals and
those of key personnel using “The Four Cs” worksheet. See page 6
Spell out your business values

As we build our companies, we have goals not only for what our business Check It Out
will achieve for us, but also for how our business will impact Many businesses foster
others: our employees, customers, the environment, our communities. social responsibility
in their organizations
For many entrepreneurs, the business values they want their company to through volunteer work.
project are part of their inspiration for getting started in the first place. You can find opportuni-
ties for donating your
Incorporating your values into your business will help you build a com- time—and your team’s—
pany that gives you greater satisfaction in the long term and, quite pos- at Volunteer Match
sibly, a more successful company as well. Having a company that ascribes (www.volunteermatch.
to and practices certain positive values can be a competitive advantage in org).
attracting and retaining employees and in developing customer loyalty.
Be cautious, however, that as you build your business around your
values, you do not impose your personal beliefs (especially religious or
political beliefs) on others.
To help clarify the values you’d like to incorporate into your business,
use the “My Business Values” worksheet. See page 10
WORKSHEET my business values
Describe what values are important to you in building your company as they relate to:
Corporate culture and nature of the work environment (management/employee relations

and communication, work hours and flexibility, dress code, office location, decor, etc.):
Business ethics (customer treatment; relations with vendors, distributors, competitors;

advertising, etc.):
Employee treatment (wages and benefits, layoff policies, promotions, empowerment, etc.):
Community and civic involvement:
The environment:
Other:
WORKSHEET my role models
Use this space to list the names of people you admire, whether they’re in business or not.
Name and What traits of theirs How could you incorporate

job or role do you admire? those traits in your business?
Remind yourself of your source

of inspiration
At some point in their business lives, all entrepreneurs are inspired—by
an idea, a person, or an opportunity. That inspiration not only gets you
started; it also keeps you going. You may reach a point down the road
when you ask yourself, “Why did I start all this?” Reread what you’ve
written here when you need to be “re-inspired,” or just to get a reminder
of what your goals were from the beginning.
The worksheets in this section are also the starting point for articulating
your business concept and identifying your niche and customer base.
My role models
Do you want to be another Elon Musk? Do you see yourself as a future
Oprah Winfrey? Or do you look up to your uncle who ran his own store
or your older sister who has been self-employed for 10 years?
Many of us are fortunate enough to know of people in business whom
we admire or would like to emulate. You may know them personally, or
you may have read about their business practices or success.
Thinking about your role models can help you clarify your own busi-
ness vision. If your business hero is Elon Musk, what about him do you
admire? His ability to make a great deal of money? Build a huge busi-
ness? His marketing and strategic capabilities? Or do you admire his
technical knowledge?
Take a moment to think about whom your business role models are, by
See page 11 completing the “My Role Models” worksheet.
My bright idea
What excites you about your business idea? If you have two or three
ideas, what do you like best about each one? Where did the idea come
from? How has it evolved since you started the process of turning the
idea into a business?
By looking at how you initially got the inspiration for your business, you
can take the next step toward determining how you might get others
excited about your business also. That’s the start of taking an idea and
turning it into a plan, which becomes a successful business. You will also
WORKSHEET my bright idea
Use this space to record your initial business idea(s). This will become a starting point for
defining your business concept and why it can be competitive in the marketplace (on page 14). It will
also be useful as you prepare your marketing materials and write your “Elevator Pitch” in Week Six.
What is your business idea?
How did you come up with it?
What excites you about it?

WORKSHEET my business concept
Answering the following questions will help you clarify your concept:
Is yours a retail, service, manufacturing, distribution, or Internet business?
What industry does it belong to?
What products or services do you sell?
What improved features/services or added value do you provide? What makes you unique
or special?
Whom do you see as your potential customers?
What is your overall marketing and sales strategy?
Which companies (or types of companies) do you think of as your competition?
What do you think will make customers buy from you instead of your competitors?
W E E K O N E | 15
find it useful to have a record of what initially inspired you, to which

you can refer from time to time, especially as your business grows. Use
the worksheet “My Bright Idea” to record your initial business idea.
Describe your business concept See page 13
Meeting needs is the basis of all business. You can devise a wonderful
new machine, but if it doesn’t address some real and important need or
desire, people won’t buy it, and your business will fail. Even Thomas
Edison recognized this fact when he said, “Anything that won’t sell, I
don’t want to invent.”
NEW AND IMPROVED

WHAT
WOULD It’s easier to get a piece of an existing market than to create a new one.
RHONDA Although small businesses are the engine of creativity for our economy,
DO? remember that creating a market for a brand-new type of product or service
is difficult, time-consuming, and expensive. The iPod wasn’t the first digital
music player; Google wasn’t the first search engine; Facebook wasn’t the first social media plat-
form. There are lots of advantages to being a follower.
Identify needs
Now that you know what your spark and passion are regarding your
idea, use the worksheet “My Business Concept” to determine how your
product or service will meet new or existing needs in the marketplace. See page 14
A concept’s success often hinges on whether it does something newer or

better than anyone else. Being new or better can take many forms:
n Something new. A new product, service, feature, or technology.
n Something better. This could be an improvement on an existing
product or service—encompassing more features, lower price, greater
reliability, faster speed, increased convenience, or enhanced technology.
n An underserved or new market. This is a market for which there is
greater demand than competitors can currently satisfy, an unserved
location, or a small part of an overall market—a niche market—that
hasn’t yet been dominated by other competitors. Sometimes, markets
WORKSHEET basic business description
Use this worksheet to develop a description for your business.

For example, a finished description might read:
“AAA, Inc., is a spunky, imaginative food products and service company aimed at offering high-quality,
moderately priced, occasionally unusual foods made with only natural ingredients. We view ourselves as
partners with our customers, our employees, our community, and our environment, and we take per-
sonal responsibility in our actions toward each. We aim to become a regionally recognized brand name,
capitalizing on the sustained interest in southwestern and Mexican food. Our goals are moderate
growth, annual profitability, and maintaining our sense of humor.”
Describe the following in one sentence:
Core business concept:
Core business values:
Core business goals:
Core financial goals:
Corporate culture:
Now combine these sentences into one comprehensive statement. You will revisit and rewrite it
several times, but you’ll need a succinct business description for your business plan, investors,
employees, and others, so get something on paper now.
W E E K O N E | 17
become underserved when large companies abandon or neglect smaller

portions of their current customer base.
n New delivery system or distribution channel. For example, the Inter-
net enables companies to reach customers more efficiently, creating
opportunities for businesses to provide products or services less expen-
sively, or with far greater choice, to a wider geographic area.
n Increased integration. This occurs when a product is both manufac-
tured and sold by the same company, or when a company offers more
services or products in one location.
Your concept should be strong in at least one area. If it isn’t, you should
ask yourself how your company will be truly competitive.
Outline specifics
OK, so you have your inspiration, and you’ve seen an opportunity in the
market…now how do those translate into your particular business con-
cept? Exactly what are you going to sell? To whom? How?
The “Basic Business Description” worksheet helps you outline the specif-
ics of your business as you see them at this early point. You’ll be more
successful if you have a clear concept of critical business aspects such as
your target market, competition, industry, and so on. See page 16
Don’t worry if you aren’t entirely certain about the answers to your
“Basic Business Description.” Fill in the answers anyway. You’ll use these
specifics to guide the research you’ll do in Week Two, and you’ll con-
tinue to refine your business concept as you go along.
Consider starting lean

Now that you’ve described your business concept, should you spend a
lot of time and money perfecting your product or service before you try
to get customers? Should you spend months or years doing product or
market research, finalizing your design and eliminating every glitch? Not
if you want to be up and running in six weeks.
Instead, follow the lean startup approach which advocates launching a
product or service as quickly as possible, seeing how real customers use
the product, and then continually revising.
You don’t go to market with a fully developed product or service. Rather,

you create a minimal viable product (MVP), building only to a level that
enables you to go out and get your first customers. You then later make
improvements based on the experience of actual customers. Google’s
product development mantra, for instance, is “Experiment, expedite, iter-
ate.” In other words, the company tries a lot of new things, moves quickly
rather than getting stuck, and refines and improves along the way.
Clearly you don’t want a minimally viable product for a medical device
or automobile. But in some categories, such as online services, mobile
apps, and personal electronics, consumers are willing—even eager—to
pay for version 1.0. Depending on your product, you may want to keep
this concept in mind when developing your prototype. And become an
MVP yourself.
Identify your strategic position

The late Eugene Kleiner, one of the world’s most successful venture
capitalists, once told me that most companies don’t know what business
they’re in. By this he meant that most businesspeople don’t understand
the true basis on which they compete. Yes, they know how to make their
products and invent their technologies, but they don’t really understand
what makes their customers buy from them.
Today, defining a strategic position is as important for the proverbial
“mom and pop” small business as it is for a high-technology company.
It’s not enough to hang out a shingle that says, “I sell shoes,” or “I sell
ecommerce technology.” You must have something that’s unique, that
few others can offer, that makes your customers want to buy from you.
You have to understand how you meaningfully differentiate yourself
from the competition—your strategic position in the marketplace.
Of course, the best strategic position is just to be better than the compe-
tition—the tennis racket you’ve invented enables players to hit harder,
the graphic designs you create are more memorable. But those things are
often a matter of judgment and hard to prove.
So, how do you develop a clear distinction between yourself and the
competition? Your company’s strategic position can be based on:
n Serving a specific niche in the market
n Unique features of your product or service
W E E K O N E | 19
n Exceptional customer service

n Price
n Convenience, or
n Anything that significantly distinguishes you from others who offer
similar services or products.
The more you understand about your own company—and how you dif-
fer from others—the better able you are to compete.
Decide whether you want partners

Hewlett and Packard. Ben and Jerry. Great partnerships often make great
companies. But just as often, bad partnerships destroy good companies.
Nothing affects your day-to-day work life more than the people you
work with. Yes, work can be satisfying when you have challenging tasks,
play with cool technology, or make lots of money. But whether or not
you feel like getting out of bed in the morning can be greatly influenced
by whom you’ll work with that day.
Partners not only affect your mood but your bottom line as well. They
share, or may even control, ownership of your company. Spend time get-
ting to know the business skills, attitudes, and aspirations of any poten-
tial partners—even if you’ve been friends or acquaintances for many
years. Find out whether their goals, work style, and values fit yours.
If you are going to take on a partner, carefully consider why you want or
need one. As you start your business, you may feel uncertain about being
on your own, but that feeling of uncertainty may pass quickly. A partner
will be around for a long, long time. Remember, partners own a piece of
the business. Even if you bring in someone with only a minority interest
as a partner, your future is tied to them.
Make certain your partnership expectations are realistic. Are your part-
ners willing to work as hard as you? Do they bring the same level of tal-
ent or skill (although perhaps in a different area) as you? Do they have
the same long-term view of where they want to be?
You have more leeway, legally, to ask questions of potential partners than
of employees. Of course, make certain your potential partner is honest,
but also examine their personal attitudes, how they handle stress, how
much money they need and how soon, family or other demands on their
time, and any other issues that may affect your working relationship.
WORKSHEET discussing partnership terms
Use this worksheet to determine with your partners the terms of your partnership.
Then meet with a lawyer to draw up a formal partnership agreement.
Ownership Division. Who owns what percent of the business?
Jobs/Responsibilities. What jobs and responsibilities does each partner have?

Can partners work for any other company or do any other work on the side?
Decisions. How will general business decisions be made? What decisions does each
partner have final authority on? Who has the final authority for decisions for the company
as a whole?
Communication. How will you communicate on a regular basis? How will serious disputes
be resolved?
Exit Strategy and Dissolution Agreement. What happens if one partner wants to leave
the business or move? What if one partner wants to sell the company? What happens if a
partner dies or becomes disabled?
Other:
W E E K O N E | 21
The best way to take on a partner is with clear-cut definitions of respon-

sibilities and authority. It’s nice to believe you will make every decision
together, but that’s not realistic. Who, in the end, gets to call the shots?
And be careful about going into business with a friend—often both the
business and the friendship suffer.
QUESTIONS TO ASK
POTENTIAL PARTNERS
Why are you going into business?
What past experiences have prepared you for going into business?
What are your personal goals for this business?
How much money do you need now? How much money will you need over the next 12
months? 24 months? 36 months?
How much money are you able and willing to invest in the company, if any?
What kind of credit rating do you have?
How big a company would you like this to be one day?
What would you like to see as the eventual exit?
How much time do you have to devote to the business?
What other obligations do you have, both business and personal, that will affect your
commitment of time, money, and attention?
How do you see decisions being made? By whom?
What areas of responsibility do you feel capable of taking on?
What areas of responsibility do you want to be in charge of?
How formal/informal do you like to be about such things as work hours, dress code, etc.?
What are your business values and what kind of corporate culture do you want to create?
Is your family supportive of this commitment?
Have you ever been in a partnership before? What happened?
What are your fears in this partnership?
How will you resolve differences?
Are you willing to sign a buy-sell agreement?
If you’re going into business with other people, even a spouse or friend,
formalize your arrangement with a written partnership agreement. Take
the time to work out as many details as you can. Be certain to include
a way to buy each other (or each other’s heirs) out of the business. A
messy “divorce” from a business partner is as difficult as a messy marital
divorce—with potentially greater financial consequences. Drawing up an
agreement now will help avoid difficulties if you later decide to go your
separate ways.
Use the guide “Questions to Ask: Potential Partners” on page 21 to dis-
cuss the nature of your relationship. The worksheet “Discussing Partner-
ship Terms” outlines important issues that can later become part of a
See page 20 formal agreement, drawn up with the help of a lawyer.
Decide whether you want investors

You may have heard that it’s best to start a business using OPM—“Other
People’s Money.” But don’t just rush out looking for investors. Choosing
to get an investor is a big decision.
You are almost always tied to your investors for the life of your business.
Remember, there usually isn’t any easy way out of a relationship with an
investor; in fact, if you have to come to a parting of the ways, your inves-
tors may have more ability to get rid of you than you will have to get rid
Check It Out of them. So proceed carefully!
To start your search for
funding from an angel Don’t forget—investors legally own a piece of your business, and they
investor, check out the have certain rights under the law. Not only are they entitled to a share of
Angel Capital Association your profits but they have other rights as well. They are also entitled to a
(www.angelcapitalas- share of your losses for tax purposes. The involvement of investors makes
sociation.com) or The dealing with legal issues, decision-making, taxes, and many other matters
Angels’ Forum (www. more complicated and expensive. And if things go wrong, having inves-
angelsforum.com). The
tors can make everything a lot messier.
National Venture Capital
Association (www.nvca. If you decide you absolutely need investors, make certain you spend as much
org) represents the ven- time as possible getting to know any potential investor—after all, you’ll be
ture capital industry in tied to each other for a long time. It’s unlikely you can ask as many prob-
the U.S. ing questions of a potential investor as you can a potential partner, because
investors usually view the investment process as an examination of you—not
the other way around. Nevertheless, find out if they’ve invested in other
companies before. If so, speak to other entrepreneurs who’ve worked with
them. What are their financial and business motivations for investing? Are
W E E K O N E | 23
those goals a good fit with your own? How much control do they want in
the business?
Of course, when you need money to start a business, you may feel lucky
to get the money you need from anyone. But over time, if you have a
fearful, intrusive, or controlling investor, you may soon regret being
involved with them.
If you decide you need investors, you’ll find more information in Week
Five, including Questions to Ask before you accept financing (page 236) See pages
and a worksheet for comparing investors. 238–239
Even if you never use the word “partner,” if you and a friend decide to
start selling used golf balls online together, in the eyes of the law you’ve
RED TAPE become partners. The best way for things to stay friendly between part-
ALERT! ners is to have a clearly defined partnership agreement before you begin
the company. Prepare a legally binding contract spelling out the terms
of your partnership: who owns what percent, how decisions are made, what happens to the
company if one or more of the partners wishes to leave, how and whether additional part-
ners can be added, and so on. It is also advisable to work out a “Buy/Sell” agreement, so the
terms of how and to whom a partner can leave or sell their interest in the business are clear.
You may want provisions limiting their ability to sell their interest to others and, in the case of
a partner’s death or disability, to have other partners buy out their heirs at a fair price—you
don’t necessarily want to wind up running the business with your partners’ spouse or child.
Consider potential exit strategies

When you build a business, you don’t spend a lot of time envisioning how
you’ll eventually get out of it. Oh, maybe you think one day you’ll make
enough money to retire, but while you can envision yourself sailing or
gardening, what’s happened to your company? You need an “exit plan.”
An exit plan is a long-term strategy for transferring ownership of your
company to others. The idea of thinking of an exit when you’re just
starting out may seem incongruous. After all, you hardly know what
you’re going to be doing next month; why try to figure out what you’re
going to do with your company 10 or 20 years from now?
If you’re looking for an investor in your company, they’ll want to know

your long-term goals and will ask you to spell out an exit strategy. They
want to know how they’ll get their money back.
If you’re going to have a partner, then discussing your exit strategy reduc-
es the friction that comes when you have unspoken but differing exit
assumptions. You may hope to grow the business substantially and later
sell, while they may want to maintain the business at a modest level and
perhaps someday have a relative take over.
Even if you own the company yourself and hope to have it last through
the ages, an exit plan helps direct the growth of your company. If, for
instance, you would ideally like to be acquired by a larger company, you
might target your product development and marketing efforts in ways
that would interest acquiring companies.
There are a number of ways you can exit your company or have the value
of the company become “liquid”:
n Sell. This
is often the simplest way to get value out. All types of com-
panies can be sold, not just retail or manufacturing enterprises. Profes-
sional practices are “bought into” by new partners, or a one-person
consulting business can be sold to someone who wants a built-in cus-
tomer base.
n Be acquired. Your company may be a good fit for a larger company
that wants the part of the market, capabilities, or technologies you
have developed.
n Merge. Thisis similar to being acquired, but the assets of the merging
companies form a new entity.
n “Go public.”When you issue shares in your company that are traded
in a stock market—an initial public offering (IPO)—it is referred to as
“going public.” This doesn’t necessarily mean you depart from manage-
ment of the company, but you now have a way to get money for your
ownership interest by selling some of your personal shares.
n Arrange for family members to take over. When Levi Strauss started
selling blue jeans, he probably didn’t envision a family-owned com-
pany bearing his name 160 years later. Even if you know you’d like this
to happen, you need a plan. Your family members might not want to
run your company, or be capable of doing so.
W E E K O N E | 25
A no-interest loan from a friend or family member may face what’s called
“imputed interest” by the U.S. Internal Revenue Service. If the IRS views the
RED TAPE loan as a gift, the lender will have to pay taxes on the money if it’s more than
ALERT! the maximum allowed by law. All lenders must charge an interest rate that
reflects a fair market value.
n Employee buyout. An excellent way to keep your company together

and to retain the jobs you’ve created is to structure a way for either
key management or employees as a whole to buy the company. An
“ESOP”—Employee Stock Ownership Plan—can help them finance
the purchase and give you the cash you need.
n Go out of business. This is the easiest exit (assuming you have no
debts or major employee commitments), but you also get the least
financial reward. Sometimes though, you just want to close up shop
and get on with the rest of your life.
Discuss the impact of starting a business

with your family
When you launch a business, it has an impact on everyone around you,
especially your family. You’ll almost certainly have to make financial
sacrifices, spend less free time with those closest to you, and have more
things on your mind than before you started. If you’re married, owning a
business may have legal and/or tax implications for your spouse.
Sit down and fully discuss your plans with the other people in your life
who may be directly affected. Help them to understand what you see as
the opportunities, while at the same time being clear about the potential
risks and probable sacrifices.
Ask for their input, too. They may have suggestions of ways they can be
supportive. In most small businesses, family members frequently lend a
hand. Allow them to share some of their fears or concerns so you get a
realistic idea of what’s on their minds. Discuss ways to make certain that
your family responsibilities are met even while you build your business.
Make them feel a part of your new, exciting adventure.
Be careful, however, about asking for loans or investments from family

or close friends—you may risk both the business and the personal rela-
tionship. Of course, there are exceptions: If the person understands the
nature of your business, truly appreciates the risks, and is someone with
whom you can communicate well, the situation may work. Always have
loan or investment papers drawn up with the terms of the repayment or
investment absolutely clear.
You can find more information about getting and working with investors
in Week Five.
Make an appointment with an

SBDC counselor
Check It Out One of the best, least-known services provided by the U.S. Government
to small businesses is a national network of Small Business Development
Great sources of advice
for entrepreneurs include
Centers (SBDCs). There are over 1,000 SBDCs, located primarily at
the publisher of this universities and community colleges.
book, PlanningShop
SBDCs provide free one-on-one counseling and low-cost training pro-
(www.PlanningShop.
grams to small businesses and startup entrepreneurs. SBDC counselors
com), the Edward Lowe
Foundation (www.
are trained professionals; most have run small businesses themselves as
edwardlowe.org), the
well as having expertise in particular aspects of management.
National Association for
Almost all SBDC locations also maintain libraries with books and other
the Self-Employed (www.
materials to assist you in planning and running your business.
nase.org), SCORE: Service
Corps of Retired Execu- SBDCs serve over 700,000 small businesses a year in face-to-face coun-
tives (www.score.org), seling and training sessions, and another 500,000 businesses turn to
and the Small Business
them for information, resources, and call-in assistance. They’ve been
Administration of the U.S.
doing this for more than 35 years.
Government (www.sba.
gov). SBDCs offer assistance with many of the following:
n Understanding local and state business laws and regulations
n Sources of market and competitive research
n Business plan development guidance
n Computer software training programs
n Budgeting
Years ago, I turned to an SBDC for assistance in doing a trademark

search (this was before the Internet made it easy to do a first-level
search). The SBDC staff was helpful, supportive, and encouraging.
W E E K O N E | 27
SBDC counselors can assist you not only as you start your business, but
as you grow your business as well.
I highly recommend checking out your local SBDC sooner rather than
later. You can find a link to a list of SBDCs online at www.americassbdc.org.
Set up an appointment with a counselor to discuss your business and
business research, and for ongoing guidance as your business grows.
Accomplishment #2:
Create your company identity
My Checklist:
Choose a name
Check out trademarks
Secure a domain name
Consider logos, taglines, and colors
Get a graphic designer
Right from Week One, you’re going to be eager to begin working on one
of the most challenging and creative aspects of starting your own busi-
ness—developing your company identity: name, image, logo, tagline,
and so on.
Coming up with a company identity can be fun, creative, and exciting.

But if you’re not careful, it can also paralyze you. You may think that
finding just the right name or logo is absolutely critical for success.
Please don’t let this process overwhelm you. While choosing the right
name and image for your company is important, it doesn’t determine
your company’s future. After all, not many people would consider names
such as “Microsoft,” “Safeway,” or the “Walt Disney Company” as being
particularly inspired or critical to the company’s eventual success.
Nevertheless, creating your company identity certainly is an important

part of getting your business under way. Your corporate identity helps
WORKSHEET business name comparison chart
Questions Name Name

What are the business names you
have considered so far?
What about the name tells your

customers what you do?
What about the name tells your

customers what they get?
What about the name conveys a

feeling? What kind of feeling?
Are the names already trade-

marked by another business?
Was the name trademarked in a

different category? Which one?
By whom?
Are there companies with similar

or confusing names?
Is the domain name (i.e., web

address) available for this com-
pany name?
If the domain name is not avail-

able, is there another one that
would work well with this com-
pany name?
Who likes the name? Why?
Who dislikes the name? Why?
Other comments/questions
about each name:
Name Name Name
customers remember you, understand what you do, and even develop a
certain feeling about you. Your company name and logo make your busi-
ness feel “real,” both to you and to potential customers, suppliers, and
others. Your identity is your brand image.
The key elements to a corporate identity are:

n Name
n Logo
n Tagline
n Colors
In addition, you might have other unique, distinguishing elements that

make up your identity, such as clever or unusual packaging.
Once you’ve developed a certain identity, you’ll use those elements con-
sistently and repeatedly—on your business cards, stationery, signs, adver-
tising, vehicles, uniforms, and website.
Creating an identity can be done very inexpensively or cost thousands

of dollars. You may want to use the services of a graphic designer to help
you create your logo and other aspects of your company’s image.
Choose a name
I collect cute business names: “All You Knead” (a bakery), “The Barking
Lot” (a dog groomer), “Shear Ecstasy” (a hair salon). A clever business
name can be an excellent marketing tool—helping make your company
memorable—but coming up with a good name can seem frustrating. Big
companies spend thousands of dollars researching names, and sometimes
even they fail.
In small companies, you are the brand, and usually the best name for
your company is your own, perhaps adding a descriptive phrase to clarify
what you do. My first business was called “Abrams Business Strategies”
since I developed business and marketing plans.
If you plan on growing your business substantially though, you may

not want to use your own name, or any person’s name. Having a name
closely associated with the owner may later make a company harder to
sell and can create expectations among customers that they will be get-
ting personal attention from the owner.
W E E K O N E | 31
A good company name achieves several goals:

n Communicates the correct information. You want to avoid anything
in your business name that could substantially confuse potential cus-
tomers about what you do. So even if you think your name is crystal
clear (e.g., Jim’s Photo Services), ask a few other people if they can
easily figure out what business you’re in (e.g., do they think you take
photos, process film, provide digital photo touch-ups?). A very clear
company name, such as “Main Street Volvo Repair,” immediately lets
customers know what to expect, but watch out if your services later
change or if you run into trademark problems—see below.
n Conveys the right feeling. You generally want to choose a name with
positive connotations: A day spa named “Haven” or “Oasis” transmits
the sense that customers are going to escape the stresses in their lives.
Even words such as “Main Street” or another location tells potential
customers that the service is local and convenient.
n Won’t get dated quickly. Be careful not to choose names too closely
identified with recent trends or that are too limiting. You are likely to
change the scope of your products or services over time. Look at all
those ecommerce companies that had to drop the words “dot com” from
their company names. When Twentieth Century Fox Film Studios was
founded in 1935 (merging Fox and Twentieth Century studios), the
name “Twentieth Century” seemed associated with the idea of some-
thing young and new. Of course, by the end of that century, it no longer
seemed fresh, and the company now uses just the name “Fox” for some
of its entertainment units.
If a name is too hard to spell, it becomes harder
n Is easy to spell.
for a potential customer to remember. Spelling becomes even more
important when you use your company’s name as part of your website
domain name or if you’re in a business where clients have to spell your
company’s name often.
n Is easy to pronounce. People have a harder time remembering names they
can’t say easily, and they feel uncomfortable doing business with compa-
nies whose names they can’t pronounce.
n Is memorable. Obviously,
if clients or customers have an easier time
remembering your name, they’re more likely to do business with you
again. A memorable name isn’t absolutely necessary or always even
possible. In fact, a company with a straightforward name, such as “Des

Moines Chiropractic Clinic” may develop a better business than a
company with a cute name like “Back Attack.”
In the end, however, one of the most important considerations is wheth-
er you like the name and feel comfortable with it. After all, you’re the one
who will see it and say it the most.
Most important, don’t get stuck trying to decide on your name, slowing
down the start of your business. At some point, you just need to make a
choice and get on with it.
Use the worksheet “Business Name Comparison Chart” to compare some
See page 28–29 of the names you’re thinking of for your business, and their pros and cons.
Check out trademarks

You’re thrilled! You’ve settled on a name for your new breakfast cereal com-
pany: “Yummy Tummy.” You’ve even invented a cartoon character, “Yummy
Tummy Tillie,” to symbolize your brand. You’re ready to set the world on fire!
Not so fast. Before you can make your company a household name, you
need to make sure you can use and protect that name. You don’t want to
invest money and time building “brand equity”—value associated with
the name of your company—just to discover someone else is already
using “Yummy Tummy.”
That’s where trademark laws come in. There are two primary kinds of
trademarks:
n Trademark
n Service mark
When you acquire the rights to a trademark or service mark, you get legal
protection from other companies’ using your company’s name, logos, tag-
lines, or other distinctive marks on competing products or services.
Even when you are granted a trademark, you don’t “own” the name in
all instances. As part of the trademark application process, you’ll indicate
the specific category or categories of products or services for which you’ll
use the name. For instance, if you’re using “Yummy Tummy” for break-
fast cereal, someone else could get the rights to use the same name for
unrelated products or services—a weight-loss program, for instance.
W E E K O N E | 33
ABOUT TRADEMARKS
What is a trademark or service mark?
n A trademark is a word, phrase, symbol, or design, or a combination of words, phrases, symbols, or
designs, that identifies and distinguishes the source of the goods of one party from those of others.
n A service mark is the same as a trademark, except that it identifies and distinguishes the source of
a service rather than a product. The USPTO uses the terms “trademark” and “mark” to refer to both trade-
marks and service marks. [In Canada, a trademark can be used for either a product or a service.]
Is registration of my mark required?

No. You can establish rights in a mark based on its legitimate use. But in the United States, owning a fed-
eral trademark registration on the Principal Register secures the following advantages:
n Constructive notice to the public of the registrant’s claim of ownership of the mark;
n A legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use
the mark nationwide on or in connection with the goods and/or services listed in the registration;
n The ability to bring an action concerning the mark in federal court;
n The use of the U.S. registration as a basis to obtain registration in foreign countries; and
n The ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing
foreign goods.
When can I use the trademark symbols TM, SM and

® ?
Any time you claim rights in a mark, you may use the “TM” (trademark) or “SM” (service mark) designation
to alert the public to your claim, regardless of whether you have filed an application with the USPTO. How-
®
ever, you may use the federal registration symbol “ ” only after the USPTO actually registers a mark, and
not while an application is pending. Also, you may use the registration symbol with the mark only on or in
connection with the goods and/or services listed in the federal trademark registration.
—from the U.S. Patent and Trademark Office

There are, of course, limits to what you can trademark. Indeed, it’s often
frustrating to find that you can’t trademark the simplest names. That’s
because the U.S. Patent and Trademark Office requires a mark to be
“distinctive” and not simply “descriptive.” For instance, you can’t get a
trademark for a health resort called “Spa,” because it’s merely descriptive.
But you almost certainly could trademark the name “Spa” for a brand of
body lotions (assuming it wasn’t already trademarked by someone else).
In fact, if you’re inventing a whole new product category, you may need
to come up with a generic way to describe the category in order to trade-
mark your chosen name. A client of mine, Patrick McConnell, invented
a dry-land snowboard, which he called the MountainBoard. To get that
name trademarked, however, Patrick had to come up with a generic
term—“all-terrain board”—to avoid his brand name’s being viewed as
merely descriptive.
Doing a trademark search
Check It Out Getting the trademark process under way is fairly simple, but you’ll want
to discuss the trademark process when you see an attorney (Week Three),
Start your trademark
search at the U.S. Patent
as well as discussing other protections of your “intellectual property”—
and Trademark Office
such as copyrights and patents.
website, www.uspto.gov
To get started on your name and trademark search, begin at the website
of the U.S. Patent and Trademark Office. Find the section for Trade-
In Canada, you can do a
marks and follow the links for “Search.”
trademark search on the
website of the Canadian Begin by searching as broadly as possible—singular and plural forms of
Intellectual Property your words, similar words, alternate spellings, and so on. Results may
Office, www.cipo.ic.
show both “live” and “dead” marks. Dead marks are those that previous
gc.ca
owners have let lapse.
Keep in mind that even if a particular name or mark does not show up
as being taken, this does not necessarily mean you will be able to trade-
mark the name/mark. Some names may already be in use in interstate
commerce but may not have been officially registered. Other names/
marks may not be allowed to be registered as trademarks. So don’t print
up thousands of dollars worth of brochures just yet!
And remember, you may run into difficulty if you use a name that is
similar to a bigger, better-known company even if you think you can get
a trademark. A juice bar company, for instance, was able to keep other
juice bars from using names starting with the letter “J” just by taking
W E E K O N E | 35
them to court. Often, it’s the company with the biggest bank account
and most lawyers, rather than the ones with the law on their side, that
controls a name or trademark.
If you are going to spend a great deal of money investing in a name and
trademark, you might consider using a professional trademark search
firm or hiring a trademark attorney to conduct a more complete search.
Check It Out
Sites you can use to
Secure a domain name register your domain
An important part of choosing a business name and getting a trademark name include Network
Solutions (www.
is researching the website addresses that are available. Before the Inter-
networksolutions.com),
net, you might have happily been able to do business in one state with-
Google Apps (https://
out being confused with a business using the same name in another one. domains.google), and
Today, however, you need a “domain name” that is utterly unique, not Squarespace (www.
just in your city or state, but in the world. squarespace.com/
domain-name-search).
A “domain name” is the name by which your website is identified and
found. It is also known as your company’s URL (which stands for uni-
versal resource locator).
To find out if your preferred URL has already been claimed by another
company, you can check with any of the companies that host web-
sites or with the Network Solutions website, www.networksolutions.
com. (Network Solutions was one of the original official keepers of the
domain name registry.) Type into the search box the name you’d like to
use, including the suffix (.com, .net, .org, .shop, .us, .club, and so forth)
you’d prefer. For example, if your desired company name is Widget
Manufacturers, type in widget.com.
Don’t be disappointed if your desired business name (even your trade-
marked name) has already been taken. It can be difficult to find a website
name that exactly matches your business name. With so many companies
vying for valuable virtual real estate around the world, chances are good
that another organization has already claimed what you would consider
the perfect URL. It might not seem right, but even if you get a trademark
for your business name, someone else may legally own the right to that
domain name, especially since companies can have the same trademark
name in different categories.
Try to find a domain name that is as close as possible to your desired
company name. Use the entire company name, for example, widgetman-
ufacturing.com, or adding a “co” or “inc” to the end of the name—i.e.,

widgetmanufacturinginc.com—if the basic URL is taken. And you can
choose a different suffix, such as widget.online, to distinguish your URL
from one with the more popular .com suffix.
Although a domain name is only as good as the marketing budget—and

the business—that it is attached to, it is, for most, a critical part of doing
business. Some people even modify their company names slightly to make
sure they can get a domain name that works for them. And, of course, you
can always investigate who owns your perfect domain name (by typing it
into your browser) to see if it’s for sale, and make an offer if it is.
Ultimately, however, the success of your business won’t rise or fall on

your domain name. You will have many other means for spreading the
word about your business—business cards, social media, brochures, net-
working events, advertising, word-of-mouth, and so forth. If customers
like you and your company, they’ll find you online.
Consider logos, taglines, and colors

Your company identity consists of more than just your company name. The
colors you choose, the typeface you use, and what kind of tagline and logo
you develop (if any) convey a message to potential customers. Right from
the beginning of your business, you should consider what message you want
to send and select a corporate identity appropriate for the type of business
you’re starting. You should then use those elements of your corporate identi-
ty consistently throughout all your marketing and communication materials.
Logos
All of us are familiar with logos: the Nike “swoosh,” McDonald’s golden
arches, Apple Computer’s apple-with-a-bite, Target’s red bull’s-eye. A
logo is an image associated with your company, giving the public anoth-
er way to remember you.
Visual images make your company more memorable. There’s a reason for
this: People learn things and remember things in many different ways.
When prospective customers see your logo as well as see or hear your
company’s name, they’re using more of their brains to process the infor-
mation—both the verbal and the visual kind. So you make more of a
mental impact when people associate you with both words and images.
W E E K O N E | 37
A good logo conveys something positive about your company. The Tar-
get logo, for instance, is simple and elegant. It tells customers that Target
stores are where they’ll find exactly what they want at exactly the right
price. The bull’s-eye logo also suggests competitiveness, accuracy, and
efficiency, traits that shoppers—and shareholders—will appreciate:
If you don’t have the money to have a logo designed, an inexpensive way
to add a visual element to your business name is to just add geometric
elements: lines, squares, diamonds, and so on. In my first business—
business consulting—I used three sideways triangles, suggesting to pro-
spective clients that I would help them move their business forward:
A logo doesn’t have to be a drawing or illustration—you can make an

“illustration” of just words. This is called a “logotype,” and it can be very
effective. Think of Coca-Cola:
When we were developing a logo for this content company—Planning-

Shop—we wanted an image that would convey the message that products
from PlanningShop enable people to “complete” their business planning
projects. We decided that the concept of the last piece of a puzzle would
visually convey that feeling of completion. Here’s what we came up with:
Use the “Creating My Identity” worksheet to make notes or drawings of

possible logos for your business. See page 38
Taglines
Many companies use a motto or tagline either to better explain the nature
of the business or to create a feeling about the company or product.
WORKSHEET creating my identity
Use the space below to begin developing your corporate identity. You may want to draw
pictures, as well as use words and phrases, to develop the look, feel, and message you
want to convey. You will continue this process in Week Six.
Business name
Tagline and keywords for marketing material
Logo
Colors
Distinct product design
Distinct packaging
Decor, employee clothing, or other unique identifying features

W E E K O N E | 39
A tagline helps customers remember what is unique about your business:
n “Personalized service at practical prices”

n “Legal services for the real estate industry”
Taglines don’t have to be “catchy” to be memorable to your target audi-

ence. “Manufacturers of packing materials for technology products” may
seem boring but be very effective if you make and sell boxes for comput-
ers. This lets your potential customers know—and reminds current cus-
tomers—that you specialize in exactly what they need.
Taglines can become the basis of your advertising and marketing pieces.
Of course, you would use your tagline in all your advertising. But even if
you don’t have much of a marketing budget, you can use your tagline on
your business cards, packaging, and stationery, even at the end of emails.
You don’t have to have a tagline, and you certainly don’t have to choose
one before you even open your doors. But developing a tagline helps you
clarify what makes your business special and enables you to sum up your
competitive position in just a few words.
Colors
Many people start their businesses without giving colors much thought,
and yet most of us intend to use some colors in our business—in our
decor, on our business cards, brochures, packaging, website, and so on.
What often happens is that you end up using one color for one thing
(let’s say a brochure), another color for something else (for your statio-
nery, perhaps) and yet another color elsewhere (maybe your website).
Check It Out
The Color Marketing
The result? You lose the opportunity to develop a strong brand image for Group forecasts color
your company and perhaps even risk confusing your customer. trends for the next
12–18 months for a vari-
Instead, come up with a consistent use of color—your “color palette”— ety of industries. www.
to give you another tool that reminds customers who you are and con- colormarketing.org
veys a feeling about your company.
Some colors are associated with certain feelings. Blue is considered calm-
ing and reassuring, so banks and financial institutions often use blue.
While red is considered lucky for some ethnic groups, it’s viewed as a
sign of danger or action to others, so consider your target market. Other
colors have developed different associations: pink is viewed as feminine,
pastels are associated with babies. Colors also go through fads, so be

careful to choose a color that won’t be dated too quickly.
Since referring to colors just by generic names (“blue,” “teal blue,” and
the like) is very imprecise, professionals use a system to identify particu-
lar colors. You’ll want to learn the “PMS” numbers (which stands for
“Pantone Matching System”) of the specific color(s) you choose so you
can give future printers and designers the exact colors you want.
Since you’re likely to use your color palette on your website, keep in
mind that some colors do not display well on computers, tablets, or
phones. Check your colors on several different devices before finalizing
your choice.
Be careful also about how many colors you use in your business. If you
use too many, it can become expensive to print your stationery, business
cards, packaging, and so on.
Write down your thoughts for logos, taglines, colors and other aspects of
See page 38 your corporate identity on the “Creating My Identity” worksheet.
Meet with a graphic designer

If you can afford it, you may want a graphic designer to help you create
your corporate identity: logos, website, stationery, and so forth. Obvi-
ously, when you hire a graphic designer, you should look at their port-
folio (samples of previous work for other clients) to see if you like their
style and if they have the right background for you. But once you’ve
committed yourself to working with a designer, the next step is to help
them understand your vision.
Have the designer read the business concept and basic business descrip-
tion you developed on pages 14 and 16. Give the designer a sense of
your goals and values so they can consider them in the design. Show
them other visual images you like so they can get a sense of your tastes
and preferences.
Use the guide “Questions to Ask: Graphic Designers” on page 41 as a

starting point. The more information you give your designer to work
with, the better they can develop a corporate identity that works for you.
W E E K O N E | 41
QUESTIONS TO ASK
Graphic Designers
Ask about: Their experience.
How they handle the design process.
Who’s going to do the work? The person you meet, assistants, or others?
What fees/costs are involved? What deliverables will you receive?
Ask for: At least three to five design options included in the initial fee.
Both black-and-white and color digital versions of your identity system.
Digital templates for all aspects of your identity system you select:
business cards, stationery, fax cover sheets, etc.
Color palette and numbers, both for print and for online.
A signed agreement giving you ownership and copyright of all designs
(very important!).
Tell them: What the company name represents and what your company does.
Whom your target market is: their ages, industries, and concerns.
How you want your customers to feel about you.
Whether you want a traditional or more innovative approach.
What color palettes you like or dislike.
Whom your competitors are and how you’re different.
Accomplishment #3:
Get organized
My Checklist:
Set up files
Create digital records
Set up a contact management system
Keep track of your company’s “vital statistics”
Keep track of expenses
Starting any new, big project can seem overwhelming. Some challenges are
fun: figuring out a name for your business, creating new products, think-
ing up innovative marketing ideas. Some tasks don’t seem like much fun:
setting up a budget, going to a lawyer, getting business licenses.
With so many things to do, it’s easy to forget or overlook some of the
most important things. So right from Week One, keep track of all the
basics and get organized so you don’t lose critical information.
Set up files
Trust me: You’re about to get a lot of stuff. You’ll quickly accumulate
a whole lot of tangible stuff (reports, brochures, samples, contracts) as
well as intangible stuff (information, data, advice, prices). You’ll gather
information on customers, competitors, suppliers, and distributors.
You’ll research and evaluate computers, facilities, and vendors. You’ll be
given names and numbers of people who can help you. And you’ll spend
money—money you can later deduct as business expenses if you track it
and retain receipts.
Instead of feeling like you’re making progress, all this stuff can over-
whelm you. And if you don’t stay on top of your stuff, it can directly
affect your chance of success—and your bottom line!
Get in the habit of putting the stuff you gather (tangible or intangible)
in the appropriate file as you go along. If you wait (“I’ll put this stuff
away this weekend”), those piles of paper will just get larger and larger…
In addition, I’d recommend getting a good-size box (like a large plastic

storage tub) to keep all your bulkier items (such as samples, large bro-
chures, research studies) in one place and easily retrievable.
Create digital records

In addition to all the physical stuff you’re going to accumulate, you’re going
to pile up information even faster.
Although you can start by keeping track of information such as what you
paid for office supplies in a notebook, pretty soon you’re going to find it
hard to quickly find and retrieve critical information. The answer: Put it in
electronic form so it can be easily searched for and found when you need it.
W E E K O N E | 43
Since it’s likely that you’ll do a lot of online research—regarding competi- Start It Free
tion, pricing, sources, and so on—you’ll discover it’s much easier to keep
Storing your information
track of this data if you’ve got a system set up on your computer.
in a free online, cloud-
One way to do this is to utilize the “folder” organizational structure used based application like
Dropbox (www.dropbox.
by most office automation software products. Start right away by setting up
com), Box (www.box.
computer folders and files as you gather information. For example, you can com), or IDrive (www.
create a folder called “Suppliers” and inside that folder put all documents— idrive.com) makes all of
whether word processing, spreadsheets, PDFs, or other types of files—con- that information you col-
taining the data about suppliers that you unearth during your research. lect accessible 24/7 from
any computer or mobile
device that has Internet
Set up a contact management system access. Later, when your
People who may not seem important during the early stages of your business grows, you
business may be very useful later. It’s a horrible feeling to realize a few can upgrade to a paid
account for more stor-
months down the road that you met the perfect supplier or distributor,
age space.
or the person who could introduce you to the right investor, but you’ve
lost the little slip of paper with their name, number, and email address.
Moreover, you’ll want to start building your database of prospects, refer-

ral sources, and friends so you can later invite them to your “Grand
Opening” and send them email newsletters (Week Six). Believe me,
when you launch your marketing program, you’ll be glad you have an
easy way to identify and contact people you want to communicate with.
So, right from Week One, establish a system for retaining and retriev-
ing individuals’ contact information. Set up a “contact management” or
“customer relationship management” (CRM) software program.
Contact management is so important that big corporations spend hun-

dreds of thousands—even millions—of dollars on huge, powerful CRM
systems. You don’t have to.
A contact management program can be as simple as an electronic Start It Free

“address book” such as one included as part of an email program, like Take a look at free CRM
Microsoft Outlook. As a start, that’s a good way to make sure you don’t solutions from Insightly
(insightly.com), Zoho
lose important contact information.
(zoho.com/crm), and
However, you’ll probably quickly outgrow the contact capabilities Apptivo (apptivo.com).
included in email programs and will want to get a dedicated contact
management software application.
With cloud-based CRM programs, you pay as you go and these appli-
cations can grow with you. So when you just start out and only have a
short list of contacts, you can subscribe to a plan that suits your needs
and your budget. Later, after you’ve grown, you simply upgrade to a
larger plan—without interrupting access to one of your company’s most
valuable assets: your contacts. Two popular cloud-based CRM applica-
tions are Salesforce CRM and SugarCRM.
At the very least, set up a file on your computer for contact information.
Don’t just let business cards stack up.
Keep track of your company’s

vital statistics
Throughout the life of your business, over and over again you’ll be asked
for certain information, such as your Tax ID number and your date of
incorporation. You’ll save a lot of time and aggravation later if you start
recording all important company dates, numbers, and data right from
the start.
Get in the habit of writing down—in one place—all of your company’s
“vital statistics.” Otherwise, you’ll find it’s annoying to have to dig
through files to find the same information repeatedly.
You’ll find a worksheet to keep track of all the vital statistics about your
See page 93 business in Week Three.
Keep track of expenses

In Week Five, you’ll deal with money matters, but don’t wait until then
Start It Free to start keeping track of the money you spend. After all, many of your
expenses may be tax deductible, and you’ll want to save every penny you
Look online for free
can when you’re first opening up shop.
expense trackers like
mint.com, shoeboxed. You can choose to wait until Week Five to ask your accountant for a rec-
com, and everlance.com. ommendation of a bookkeeping software program, but at the very least,
start right now to keep track of each and every expenditure you make.
week 2
week 1: lay the foundation
üweek 2: get the information you need


week 2
#1 Learn more about your industry
#2 Research your target market
#3 Check out your competition
#4 Find suppliers
#5 Consider strategic partners
#6 Broaden or establish your network

Attend a community, entrepreneur, or
industry organization meeting
Get the Info
You Need
T his week you’re going to sharpen your skills at find-
ing critical business information—whether it be about
your industry, target market, competitors, or other business
information you’ll need.
Don’t be put off by the word “research.” It probably conjures
up the image of term papers and school projects; this kind of
research isn’t like that. Instead, this week, you’ll get shortcuts
to finding reliable information to help you build your busi-
ness and make decisions.
The emphasis is on finding such information fast, easily, and
hopefully free (or at least pretty darn cheap).
Start with the “Learn more about your industry” section
because many of the skills and sources you’ll use will be the
same for other types of research (for instance, your target
market or suppliers).
To begin, get out your computer; most of the information-
gathering will occur online. And get ready to find the infor-
mation you need to build your company!
Accomplishment #1:
Learn more about your industry
My Checklist:
Make a list of your research questions
Contact your industry association(s)
Do online research
Make a list of your research questions

Once you start looking for information, you’re likely going to find more
information than you need—or not find the right information at all. A
good way to speed up the process of finding information is to start by
making a general statement that defines the basis of your business.
For example, if you are planning to start a company that provides online
psychological therapy, your general statement might be: “There is a
profitable way to provide psychological counseling via the Internet.”
Next, make a list of questions that logically follow from and challenge
that statement. Here are some questions you might ask about the online
therapy business:
n What companies are already providing such a service?
n What is the market size for all kinds of psychological counseling?
n What indications are there that consumers would be willing to get
counseling online?
n What portion of the existing psychological counseling market can you
reasonably expect to transfer to online counseling?
n How many consumers who do not currently get counseling could you
reasonably expect to be attracted to online counseling?
n What other companies are currently providing such online counseling
services? How many are there? How many clients do they have? What
is their ability to keep out new competitors? What do they charge?
n What are the costs involved in conducting an online therapy business?
n What are the key technology issues necessary to conduct such
counseling, securely, online?
n What laws or regulations would affect the offering of such services?
W EE K T W O | 49
Begin your list with the “My Research Questions” worksheet. Ask your-
self tough questions—it’s much better to uncover unpleasant truths now
rather than after you’ve invested your time and money.
After drawing up your list of questions, start looking for answers. Orga- See pages
nize your market research data in the files you set up last week. Refer to 50–51
it frequently as you design your marketing plan, look for funding, and
launch your operation.
Check It Out
As you prepare your questions, jot down any ideas about where you Every type of industry
might find answers. See “Research Sources” on page 53 for ideas. in North America has
been assigned a NAICS
code. You will often be
Contact your industry association(s) asked for this code when
researching business
When looking for information for your new business, the very first place
information. To search
to start is with an association serving your industry or related industries. for your industry’s
No matter what industry, trade, or profession you’re in, there’s almost NAICS code, go to
certainly at least one association covering yours. Why? Because there are www.census.gov/eos/
www/naics
over 37,000 industry and professional associations in the United States!
You’ll find industry, trade, or professional associations to be a highly

valuable source of information. Most associations conduct research or
collect data on trends of their industry. They monitor market size and
demographics, costs, regulation, and a variety of other issues specific to
their industry.
Typically, suppliers to an industry also often participate in that industry’s

associations. They’ll exhibit at trade shows and be listed on the associa-
tion’s website or other directories. That makes your industry association
an easy place to locate suppliers.
Most important, associations exist to help promote, train, and certify

people in that industry. They’ll hold trade shows, seminars, conventions,
provide coursework, and offer joint marketing opportunities.
Let’s say, for instance, you’re thinking about starting a dog grooming
business. You’re going to want information about suppliers, costs, train-
ing, certification, marketing, and as much other information as you can
get your paws on. A number of organizations exist to help pet groomers.
WORKSHEET my research questions
For each of the following categories, list questions affecting the future of your business.
Use these questions to guide your research efforts.
Industry
Which industry does my business fall under?
Which trade associations serve that industry?
What does the data show about the financial performance of that industry in recent years?
What does the research show about trends in that industry?
Other:
Target Market
What geographic area do I plan on serving?
What is the demographic profile of the customers I plan on serving? (e.g., age, gender, income, education level)
How many people fit that demographic profile in my target geographic area?
What trends affect my market?
What data (if any) indicates buying habits or preferences of my target market?
Other:
Competition
Who are the leading competitors in my market or geographic area?
What do my competitors charge?
What are their strengths? Shortcomings?
What primary methods do my competitors use to attract customers?
What, if anything, has caused previous competitors to close?
Other:
Suppliers/Vendors
What kind of equipment, materials, and services will I need?
Which leading or recommended vendors provide those?
What are the costs involved?
Other:
Other
Which laws or regulations (e.g., environmental, planning, etc.) typically affect my type of business?
Which companies could make potential strategic partners?
Other:
The easiest way to find an industry association is to do an online search.

You will also find a list of trade associations on the website of the pub-
lisher of this book at PlanningShop.com/associations.
Finding trade associations can be difficult because they often use names
that aren’t obvious. For instance, if you type in the word “dog groomer,”
you might not find what you want. So check other words, such as “pet
groomer” or “veterinary.”
When you search for associations, you may find a dozen or more, so start
with groups that contain the name “National,” “International,” or “Ameri-
can,” rather than local organizations. Don’t be afraid to look at national
trade organizations outside of your country as they often have information
such as standards, glossaries, other site listings, and so on.
Do online research
In addition to your industry association, you’ll find a substantial amount
of industry information and data online. Of course, you’ll want to make
Check It Out certain the information is accurate and up-to-date. Be careful to rely
Use Google’s news
on information from trustworthy sources, such as recognized market
search engine to look for
recent news about your
research companies. If possible, when using data from media sources
industry (www.news. (such as newspapers and magazines), find the original source of the data;
google.com). journalists, after all, have limited space and have to edit information,
often leaving out data that might be important for your planning.
You can also sign up for
email updates on topics The key to finding industry-specific information is to be patient and
of your choice (www. diligent. You’ll have to go to many sites and look around. When you find
google.com/alerts). a site of interest—let’s say an industry association site—follow links from
that site (look for links saying things like “Related Links”).
Another key is to visit websites of industries or associations you plan to

market to. For instance, as a dog groomer, you might look for any local
dog-owner websites or local petstore websites. They may give you ideas
for marketing opportunities as well as help you learn more about your
local market. Sometimes, you can buy membership lists, giving you a
built-in database of sales leads.
Look for established market research companies in your field. In tech-

nology, for instance, some of the major market research companies are
IDC, Gartner, and Forrester. If you’re in the fashion industry, that would
W EE K T W O | 53
Research Sources
Type of information Source Website
U.S. Government Census Bureau www.census.gov

Federal Statistics Online https://fedstats.sites.usa.gov/
American Fact Finder www.factfinder.census.gov
Economic Census www.census.gov/econ
Government Printing Office (access to www.gpo.gov
all federal documents and regulations)
Louisiana State University’s links to www.lib.lsu.edu/collections/govdocs

federal agencies

Canadian Government Statistics Canada www.statcan.gc.ca
Canadian Census www12.statcan.gc.ca/census-recensement/
index-eng.cfm
U.S. Census Bureau County Business Patterns www.census.gov/programs-surveys/cbp.html

state and local
Quick Facts www.census.gov/quickfacts
information
State Data Centers www.census.gov/about/partners/sdc.html
State/Local/Regional Each state government has a website www.state.[two-letter state code].us

information e.g., www.state.ca.us for California
www.state.md.us for Maryland
Library of Congress links to state and www.loc.gov/rr/news/stategov/stategov.html
local government sites
Links to state and local government www.statelocalgov.net
sites (this is a private company)
S.E.C. Annual reports S.E.C. Edgar database www.sec.gov/edgar.shtml
Company information Hoover’s www.Hoovers.com

Dun & Bradstreet www.dnb.com
Supplier information ThomasNet www.ThomasNet.com

eBay Business and Industrial www.ebay.com/rpp/business-industrial
Alibaba www.alibaba.com
Tradekey B2B directory www.tradekey.com
Trade shows Successful Meetings www.successfulmeetings.com

TSNN—Trade Show News Network www.tsnn.com
be the NPD Group. To find market research in your industry, do an

online search using the name of the industry plus “market research.”
Don’t forget to check for news stories about topics related to your indus-
try. You can look at general and specific media sites and use their search
and archive capabilities.
Start It Free
Free information—and You’ll find lots of information online, but I’m also a big believer in the
plenty of it—is available real world. Follow your online information hunt with real-world activi-
to anyone with a pub- ties, particularly attending trade shows. Get out there and talk to people,
lic library card. Public including suppliers, potential customers, even competitors. Who knows?
libraries maintain sub-
Perhaps other dog groomers will give you a leg up on your research, and
scriptions to databases
you’ll find that business isn’t such a dog-eat-dog world after all.
containing a surprising
amount of outstand-
ing business data, and Accomplishment #2:
you can access many of
these databases remote- Research your target market
ly from your home or
office through your
library’s website. My Checklist:
Define your target market
Determine if there are enough customers
Define your target market

If I asked you to tell me whom your customers—or potential custom-
ers—are, how would you answer?
Let’s say you’ve created a new breakfast cereal for children: “Yummy
Tummy Oats.” You’ve packed it with good things: vitamins, minerals,
great nutrition. You figure you’re going to wipe out the competition
because every parent wants a nutritious breakfast for their child.
There’s only one problem: Who’s your customer? Is it Mom or Dad

pushing the grocery cart down the cereal aisle, comparing the nutrition
information on the side of the box?
Or is it the end-user (the “consumer”) of your product—the kid—who

couldn’t care less about nutrition but wants cereal that tastes sweet, has
cartoon characters on the package, and packs toys inside?
WORKSHEET who are my customers?
Describe who your customers are in each of the following categories. You’ll find that the
number of customers in each category grows the closer you get to the “end user.”
End Users / Consumers
Purchasers / Decision Maker (if different from above)
Retail Sales Personnel
Retailer Decision Maker(s)
Wholesale / Distributor Sales Personnel
Wholesale / Distributor
Decision Maker(s)
Others:
WORKSHEET my customer profile
Rank the characteristics of your customers that are most important in determining how
receptive they’ll be to your product or service. For the characteristics that have no bearing
on whether or not they’ll buy from you, leave the space blank.
Gender Education level Children in household

Age Race or ethnicity Home ownership
Income level Religious affiliation Recreational activities
Occupation Marital status Proximity to your business
Rank the characteristics of your product or service that are most important to your target customers.
Price Convenience Product features

Service Reliability Design
Status Other:____________________ Other:___________________
Now describe your customers according to the characteristics you have identified.
Start with the characteristic you ranked as most important, providing details on how you
think that characteristic will influence your customers’ buying decisions.
Characteristic #1
Characteristic #2
Characteristic #3
Characteristic #4
Characteristic #5
W EE K T W O | 57
FIND YOUR NICHE

WHAT
WOULD What’s the one sure way to fail in small business? Try to sell to everyone. A
RHONDA key to small business success is carving out a niche — a particular specialty
DO? or narrow market segment — rather than competing for every customer.
Don’t just be a marketing consultant: be a marketing consultant for a certain
industry. Don’t be a general store — focus on a specific type of product or customer. Small busi-
nesses just don’t have the resources of time or money to be a generalist.
Or is it the cereal buyer for the grocery store chain? He cares little about nutri-
tion or cartoon characters. His concerns are more down-to-earth: how much
money you’re going to spend on advertising, how quickly you’ll replenish
inventory, and whether you’ll pay him a “stocking fee” to obtain shelf space.
Parents and children aren’t going to have a chance to buy or eat “Yummy
Tummy Oats” if you don’t meet the supermarket buyer’s needs first.
On top of that, if you don’t have your own sales and distribution force,
you may first have to find a cereal distributor and convince them to
carry your product.
The parent. The child. The store buyer. The distributor. That’s a lot of
“customers” you have to satisfy with each box of “Yummy Tummy Oats.”
You give yourself a competitive edge by thinking of each of these “cus-
tomers” and planning for their needs and motivation.
Being responsive to the details that are important to distributors, retail-
ers, sales representatives, and others helps you plan your marketing mate-
rials, operations, packaging, even the nature of the product itself. If yours
is an industry where sales reps must purchase their samples, for instance,
you can set yourself apart by supplying samples free. If retailers can fit
more square packages on a shelf than round packages, you’ll be more
competitive by choosing a square package.
Even if you think you’ll market “directly to consumers” online, you’ll
discover there are still many entities between you and your “customer”
in cyberspace. In the case of “Yummy Tummy Oats,” your intermediary
might be the online grocery store, the health food site, the children’s site,
or the search engine that will help customers find you. So you’ll still have
more than just parents and kids to please.
As you begin to define your customers, both the end-users and the inter-
mediaries, describe all of their various attributes: age, location, indus-
try, purchasing patterns, buying sensitivities, “psychographics” (what
motivates them), and the like. Be realistic about how people actually
behave—not how they should behave.
Use the worksheets “Who Are My Customers” and “My Customer Profile”
to describe your customers. The first worksheet allows you to consider
the types of “customers” you have. The second worksheet gets you started
See pages describing the characteristics of each of those. You may need to make cop-
55 and 56 ies of the customer profile worksheet—one for each type of “customer.”
Determine if there are enough customers

Ever wonder why there seem to be three or four fast-food joints at the
same intersection? Or why, all of a sudden, not one but three big office
supply stores open in a community?
The answer is they all rely on similar statistics to analyze a market. They look
for certain factors: population density, characteristics of nearby residents
(age, gender, income), number and type of local businesses, and so forth.
Big corporations hire consulting firms to compile these statistics. You’ve got
an even bigger consulting group doing it for you—free! The United States
Government, particularly the Census Bureau, compiles all kinds of informa-
tion useful for businesses, and it has put much of it online.
Start It Free
As you conduct your First, a few key websites to remember:
research, you’ll need to
n Fedstats (https://fedstats.sites.usa.gov): The main portal for finding govern-
keep track of it. Three note
taking apps that can help ment statistics. The government really has tried to make this accessible, but if
you organize notes, links, you don’t know what you’re looking for, it may be hard to find at this site.
and images are Evernote
n The U.S. Census Bureau (www.census.gov): Bookmark this! This gives
(www.evernote.com),
SimpleNote (https:// you access to all Census data about people, businesses, trade, and
simplenote.com), and much more.
for iPhone, iPad, and
n County Business Patterns (www.census.gov/programs-surveys/cbp.
Mac only, Bear (www.
bear-writer.com).
html): Eureka! This site has the nitty-gritty about businesses in your
own area, down to zip code level. This is an easy-to-use database with
detailed info. When viewing the data, be sure to click the box with the
word “Detail” to get more information. If you want to know what’s
going on in your home town, this is the place.
W EE K T W O | 59
n Quick Facts (www.census.gov/quickfacts): This is an easy way to access

a wide variety of information about population characteristics at the
state or county level.
n American FactFinder (www.factfinder.census.gov): A gateway site of
the Census Bureau that leads you to specific information on people,
housing, and economic and geographic data.
n The “Economic Census” (www.census.gov/econ): Compiled every five
years, the Economic Census gathers very detailed information on busi-
ness activity, by industry and subsectors of industries, down to the zip
code level. These can provide you with very specific information for
your target area.
n The Census Bureau’s State Data Centers (www.census.gov/about/part-
ners/sdc.html): The U.S. Census Bureau maintains this site, linking to
each state’s main statistic sites.
n Statistics Canada (www.statcan.gc.ca). The entry page for data about
Canada compiled by the Canadian Government. Search by subject,
such as “Families, household and housing,” “Income, pensions, spend-
ing and wealth,” and “Population and demography,” or search by
resource, such as “Articles and reports” and “Data tables.”
WORKSHEET size of my market
Determine if the market is large enough to bring you sufficient sales.
Estimated size of my market:_ _______________________________________________________________

Is this number growing or declining? _________________________________________________________
By what amount per year? __________________________________________________________________
Estimated number of competitors in my market:________________________________________________
Is this number growing or declining? _________________________________________________________
By what amount per year?_ _________________________________________________________________
Realistic assessment of the opportunity for additional competitors in my market:
Outstanding Good Moderate Poor

While this all seems daunting—you’ll have to click through many pages
to find what you want—you can find amazing information.
Of course, researching online is just a starting point. You’ve got to drive
or walk around the neighborhood, look at the competition, talk to other
merchants. You still have to use your own good judgment. But if you’re
looking for hard numbers, the government’s got them. McDonald’s uses
them, why not you?
And don’t forget to visit the same online sources you used to gather
industry data to gather more data about your target market. Go to the
websites of industry associations, market research firms, media outlets,
and so forth.
As you compile data on the size of your market, fill in the worksheet
See page 59 “Size of My Market.”
Accomplishment #3:
Check out your competition
My Checklist:
Identify your competitors
Analyze your competition
Compare competitors’ pricing
Identify your competitors

In general, I’m not a big believer in spending much time or energy wor-
rying about what the other guy is doing. Over the years, I’ve learned that
success for a small business depends much more on what you do, rather
than on what your competitors do.
Yes, big businesses spend millions of dollars fighting over each percentage
point of market share (just think Coke versus Pepsi, Hertz versus Avis).
But for a small company, that’s not very productive.
But that doesn’t mean you can just ignore the competition. From time to
time, you should investigate who’s out there, what they offer, and what
they charge.
W EE K T W O | 61
If you approach this competitive analysis exercise as an opportunity to

learn, you may find ways to enhance your products or services, or at least
to improve your marketing.
Competition comes in as many as six forms:
1. Direct competitors. The ones who keep you up at night. These other
small companies resemble yours: close to customers, ambitious, and trying
to reach the same target market. Most markets have enough business to go
around, but you’d better know what your direct competition is doing.
2. Online competitors. Your competition isn’t just on the next block,
or even within your state. You could find yourself battling it out for
customers with someone from the other side of the world. Be sure to
take these online competitors very, very seriously. And if you run a
bricks-and-mortar store, you’ll no doubt also experience “showroom- Check It Out
ing”—customers walking into your store, checking out your merchan- To find out information
dise, then going online to buy the items more cheaply. You’ll need to on industries, trends,
develop strategies for combatting this practice. your competitors, and
more, consult publica-
3. The big guys. The Walmarts, Home Depots, Lawyers ‘R’ Us— tions such as the Wall
national companies or franchises with huge marketing budgets. Street Journal (www.
Don’t just dismiss these as being inferior because they’re big—a lot wsj.com), Business Week
of them have adopted customer service practices that used to be the (www.businessweek.
hallmark of small business. These are very real competitors to you, com), The Economist
especially if you plan to compete on the basis of price. (www.economist.com),
and Forbes (www.
4. Other ways to spend money. When thinking about competition, forbes.com).
you also have to consider all the other ways customers can spend
their time and money. I can remodel my bathroom or go on a vaca-
tion. I can buy new electronic gadgets or new clothes. As a new busi-
ness, you don’t have the marketing dollars to compete against this
kind of nebulous competition.
5. Inertia factors. Alternatively, your potential customers can simply
decide not to spend their money on anything at all. Especially dur-
ing tough economic periods, it can be difficult to persuade people to
part with their hard-earned cash. And even in the best of times it can
be hard to get people to care enough to spend their money.
6. Potential future competitors. Then there are the competitors you will
face tomorrow. Note that these might differ from what you expect. Keep
your eyes open—competition can emerge from the unlikeliest places.
In most situations, you’ll concentrate your energy on looking at what

your direct competitors are doing—whom they are, what their competi-
tive strengths and weaknesses are, and how much they charge.
You can identify these direct competitors by looking through directories
(online directories, trade association directories, business databases, and
the like) and advertisements. You can also ask suppliers and distributors
to name the major competition in your area. See if your competitors are
exhibiting at trade shows. And you can even do a survey of potential cus-
tomers, asking them to name your competition.
Analyze your competition

“Let’s go shopping!” While those are three of my favorite words, this
spree is limited: We’re going to check out what the competition is up to.
The easiest way to begin your competitive analysis is online. Here’s the
plan of attack:
1. Direct competitors’ websites. Drill down way beyond the home
page. Be sure to read the “About Us” section and any press informa-
tion, as well as descriptions of their products or services. Here are
some of the things to look for on your competitors’ sites:
n Descriptions of products/services
n Prices
n Client/customer lists—testimonials
n Staff—to see what size company they have and their qualifications
n Their strengths
n How they position themselves—self-descriptions
n Which segment of the market they appear to be targeting
2. You can also see if any of your competitors have been written
about in the press recently by checking their names at the Google
News directory. Go to http://news.google.com.
3. At the Google home page, do searches on the names of your com-
petitors and the generic description of your product or service
category and location (if appropriate). Use alternative phrases as well.
In other words, if you want to find out who’s competing with you
in the landscape business in Mobile, also try phrases like “lawn care”
and Alabama.
WORKSHEET my competitors
Use this worksheet to identify your competitors. What businesses compete with you directly?
What other forces influence how or if your customers will spend their money on your
product or service? Be realistic and honest in this assessment.
Competitor Their Advantages/Strengths My Advantages/Strengths

Direct Competitors:
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
Online Competitors:
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
The Big Guys:

________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
Other Ways to Spend Money:

________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
Inertia Factors:
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
Potential Future Competitors:

________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________
________________________________________________ ________________________________________________ _______________________________________________

WORKSHEET competitor’s price comparison chart
Product/Service #1 Product/Service #2 Product/Service #3
Competitor A:
Competitor’s price:
Competitor’s costs (if known):
Basis for competitor’s

advantage (if any):
Competitor B:

advantage (if any):
Competitor C:

advantage (if any):
W EE K T W O | 65
4. If you target specific industries as customers, check out the

websites of those industry associations by searching for listings
of exhibitors at past trade shows (you might need to check under
“events” or “conventions”). That will give you an idea of whether
your competitors are actively marketing to the same industry.
5. If you’re willing to spend a bit of money, and your competitors are
pretty well established, you can order a Dun & Bradstreet report on
them. Go to www.dnb.com. This highly regarded agency was designed
to help businesses check on the credit-worthiness of potential business
customers. But it also gives you the opportunity to purchase a report
containing financial and credit information about your competitors.
Finally, not all competitive analysis can be done online. Check to see if your
competitors advertise in the newspaper. You might phone or visit a competitor
to see what they offer and how much they charge. Don’t request proposals or
bids—just ask for a simple brochure or have a quick discussion on the phone.
Better yet, join a local chapter of your trade association and get to know your
competitors personally. Then, you can sit down and discuss what they’re doing
face-to-face. You may be surprised to find that some are actually helpful—and
even a source of potential referrals!
In the best of all possible worlds, the fact that you have competition
should cause you to constantly improve your products and services. That
way, you’ll make more money—and can really go shopping!
Use the worksheet “My Competitors” to identify and assess your com-
petitors. See page 63
Compare competitors’ pricing

One of the most important things you’ll want to know when gathering
data on your competition is what they charge. After all, setting prices is
one of the most critical aspects of starting a new business. This is espe-
cially true in service industries, where prices can vary greatly from one
provider to another.
Of course, finding out what others charge is not always easy. If you’re lucky,
they post their prices directly on their websites or in their written materials.
In other cases, such as when you open a retail store or restaurant, your
competitors’ prices are visible when you go into their place of business.
Just visiting their establishment enables you to check their prices.
Unfortunately, it’s much more difficult to determine pricing patterns in

professions and trades where prices are set on a one-on-one basis or negoti-
ated. In these situations, you’ll most likely find out about pricing patterns by
asking others already in the field, by talking to potential clients, and by par-
ticipating in trade associations. In some cases, you may be able to speak with
customers of other businesses in your industry about pricing.
Keep track of the information you find about competitors’ pricing pat-
See page 64 terns on the worksheet “Competitors’ Price Comparison Chart.”
Accomplishment #4:
Find suppliers
If you’re opening a toy shop, how do you find the toys to put on your
shelves? On the other hand, if you’re manufacturing toys, how do you
get your toys onto toy shop shelves?
In the business world, whether you’re buying or selling, you’re likely to

Check It Out need a “middle man”—a person or company that puts buyers and sellers
Will you manufacture together. While “middle men” may be much maligned, in reality they
products to sell inter- serve very valuable functions.
nationally? Then you’ll
likely want to follow With the advent of the Internet, the business world was supposed to
procedures to get your become “dis-intermediated”; in other words, we were supposed to be
products or processes able to get rid of the middle man. Now, after all, manufacturers are able
certified as meeting qual- to sell directly to end users, without the need for all those people in the
ity standards set by the middle—wholesalers, distributors, retailers, and others. Theoretically,
International Organiza- this should make everything less expensive because there would be fewer
tion for Standardization
hands taking a cut, and making a profit, at each step of the way.
or ISO (www.iso.org).
But while this dis-intermediation has occurred in a few instances (buying
a Dell computer directly from Dell), for the most part, manufacturers
don’t want to be bothered with selling goods on a “one-off ” basis, then
having to deal with fulfilling small orders and all those pesky custom-
ers. And buyers don’t want to wade through dozens—even hundreds or
thousands—of choices.
No, we need middle men: wholesalers, distributors, and independent

sales representatives. They serve as the marketing, sales, and service arm
for manufacturers.
W EE K T W O | 67
In turn, middle men also serve buyers as “editors” (selecting the best
choices from the myriad of options), and provide individualized service
and order fulfillment, especially for smaller customers.
But if you’re new to business, where do you find these valuable interme-
diaries and vendors?
n Word-of-mouth: The best way to find a supplier or distributor is the
old-fashioned way—asking someone who’s knowledgeable for a rec-
ommendation. When I first started my publishing company, I asked
another publisher for names of book distributors and printers. I didn’t
use their distributor, but their printing company was my primary ven-
dor for many years.
If you don’t know anyone in the same industry, ask others in related
industries (for instance, ask a printer for the names of graphic design-
ers or vice versa) or those who might have a similar need (such as for
shipping services or sign painters).
n Trade associations: Trade associations are an excellent source for
locating suppliers. Besides holding annual or regional conventions and
trade shows where suppliers exhibit their products and services, many
associations publish supplier directories, both in print and online. Use
the methods listed in the section “Learn more about your industry” to
find an association serving your industry.
n ThomasNet: Consult ThomasNet, the ultimate resource for locating
suppliers and vendors. Its website features a free, searchable database
of products manufactured in the United States. You’ll find this site
particularly useful for hard-to-find industrial products. Go to www.
thomasnet.com.
n Tradekey B2B directory: Tradekey is one of the world’s largest online
marketplaces for importers and exporters. It connects worldwide
wholesale buyers with importers and exporters, distributors, and agents
in more than 220 countries. Go to www.tradekey.com.
n eBay Business and Industrial: Most people think of eBay for consum-
ers, but eBay also has a section for industrial supplies and products
sold in large lots. Go to http://business.shop.ebay.com.
n Alibaba. Based in China, this online international marketplace lists
hundreds of millions of products, and connects millions of suppliers
with buyers from over 190 countries and regions around the world.
Go to www.alibaba.com.
Accomplishment #5:
Consider strategic partners
You don’t have to do everything alone. A strategic partnership is a relationship
with another company for purposes such as distribution, product development,
promotion, or add-on sales. A strong strategic partner that is already serving
your target market can give you a real edge in reaching that market.
For example, you might use a partnership for:

n Distribution agreement: This is an agreement whereby one company
carries another’s product line and sells its products or services. This is
the most common type of strategic partnership.
n Licensing: One company may grant permission to another to use its
product, name, or trademark. Instead of selling your product or ser-
vice directly, you might license it to another company to sell under
its name and brand. Examples abound in the entertainment industry
where, for instance, toy manufacturers will license a movie’s brand and
create toys around the movie’s main characters. Professional athletes
often also license their likenesses for promoting consumer goods.
n Cooperative advertising: This type of advertising occurs when two
companies are mentioned in an advertisement and each company pays
part of the costs. This is a frequent practice in many industries. Start
with your trade association when looking for such opportunities. Man-
ufacturers also often put together co-op advertising packages for their
distributors and retailers.
n Bundling: In this type of relationship, one company includes another
company’s product or service as part of a total package. You keep your
own identity, but get the advantage of being included in their package.
Securing a major company as a key partner can not only give your
company specific competitive advantages, but also add credibility with
customers and funders.
Use the worksheet “Potential Strategic Partners” to identify those with
See page 69 whom you might form a strategic partnership in which you both benefit.
Worksheet: TITLE
WORKSHEET potential strategic partners
List here potential strategic partners, how you can help each other,
and how you can secure the relationship.
Potential Strategic Partners Mutual Benefits Ways to Start a Relationship
Forming a virtual company

Once you’re up and running your company, you may find that you
fail to land prospective clients because they think your business is too
small or that you can’t serve the scope of their needs. One way to add
size, depth, and strength to your company without adding even a single
employee is to form a “virtual company.”
For instance, in a brochure for a consulting company I use, in the sec-

tion “The Team,” it lists an impressive group of people, each with top
credentials and expertise. Looking closely, I can see that only two of
these consultants are actually employed by the company. Instead, the
two company founders have an alliance with a group of experts.
This isn’t being deceptive. Below the name of each “team member” is
clearly printed the name of their own individual businesses. Neverthe-
less, by listing these experts together as a team, the consulting company
creates a positive impression; I have a full range of top specialists at my
disposal.
Creating a “virtual” company enables you to:

n Offer clients a broader range of services. Sure, you may believe that
you can serve all of your clients’ needs, but the client may not feel the
same way. Many clients prefer to hire specialists rather than generalists.
By offering clients a team of specialists, you’re more likely to get—and
keep—their business.
n Reduce clients’ apprehension. Many clients are reluctant to hire new
businesses, or one-person or very small companies. They’re fearful that
they could be stranded if something happens to the one key person.
n Present a more impressive image. Together with your partners, you’re
going to have a longer list of former clients, as well as a broader range
of experience, awards, and other references, than you would have on
your own.
One of the biggest barriers to putting together a virtual company is

recognizing that it’s not always best to go it alone. You may have to give
part of a client’s business to someone else. Are you willing to get a small
piece of a big pie rather than all of a very small pie—or no pie at all?
W EE K T W O | 71
Keep in mind that virtual companies are not legal entities. There are no
rules—one member of the alliance can bill the client and then subcon-
tract with the other members, or each individual member can bill sepa-
rately. The key is to stay flexible so you can meet the client’s needs.
When you’re looking to put together a “virtual company,” seek out part-
ners that fit your own style of communication and that maintain the
same level of quality. And, as always, only do business with those you
trust and respect.
Remember, you can’t be everything to all clients, and you can’t do every-
thing yourself. As the old saying goes, “The whole is greater than the
sum of its parts.”
accomplishment #6:
Broaden or establish your network
My Checklist:
Attend a community, entrepreneur, or industry
organization meeting
Build your online connections
There’s one piece of advice I always give entrepreneurs as they’re starting

out in business: Join an organization. You can’t build a company if you’re
sitting in your office by yourself; you need to be part of a community or
an industry or, better yet, both.
Since I began my business, I’ve participated in many groups—entre-

preneurs’ clubs, industry associations, women’s business groups, local
Chambers of Commerce, and more. I’ve never sat down and figured out
how much I’ve spent on memberships, meetings, and meals, but I’m sure
it adds up to quite a sum. And I can say, without a doubt, it’s been worth
every penny.
After all, it was at a referrals group that I first learned how to give an
“elevator pitch” (the short description of my services). And that’s where
I found many of my clients during my early years in business. In fact, it
was through someone at an entrepreneurs’ group that I made the con-

nection that led to my first book contract. And that changed my life!
Entrepreneurs are even more fortunate now. There are many more
resources to help you launch your business, learn your industry, and
make important contacts than when I was starting my company.
What will you get out of joining an organization?

n Community: Working alone or in a very small business, it’s easy to feel iso-
lated. Joining organizations helps you become part of a larger community.
n Connections: If you’re looking for the name of an attorney or graphic
artist, trying to find a supplier, or just need advice on how to handle a
problem or price your services, you’ll have connections to others with
experience.
n Education: Many groups, especially entrepreneur and industry associa-
tions, provide valuable information and training. They can help you
stay on top of current trends.
n Friends: You can meet people who become your personal friends,
regardless of any business connection or benefit.
n New business: Of course, it’s ideal if you get clients or referrals as a
result of joining an organization. But I should warn you, if that’s your
only goal, you’re likely to drop out fairly quickly.
Attend a community, entrepreneur, or

industry organization meeting
Every community has its share of organizations. Some types of groups
you can join:
n Entrepreneurs’ groups: You’re likely to find lots of entrepreneur
Check It Out groups, both formal associations and informal get-togethers. Don’t for-
Find a trade association get the grand-daddy of them all—the Chamber of Commerce.
for you at www.
planningshop.com/ n Industry associations: With more than 37,000 industry and profes-
associations sional associations in the United States, it’s likely there’s a local chapter
of interest in your community.
n Group-specific entrepreneur associations: You’ll find business orga-
nizations aimed at women, minorities, religious groups, gays and lesbi-
ans, youth, immigrants, and more.
WORKSHEET organizations to join
Use this worksheet to research networking, trade, business, charity, and social organizations
you will join or in which you will participate.
Organization Meeting Time & Place Dues

n Civic organizations: In big cities, you’ll find organizations dedicated

to civic or world affairs, politics, and so forth. You’re certain to find
service groups such as Rotary International, Kiwanis, or Lions Clubs
in your town. Established business leaders are more likely to belong to
civic organizations than to entrepreneur groups.
Check the following to find out if there’s a group that’s right for you in
your town:
n Business section of your local newspaper for calendar of meetings/
events of entrepreneur groups.
n Community calendar of your local newspaper for civic organizations.
n Small Business Development Centers for a list of local entrepreneur
groups. To find a contact for an SBDC office in your state, go to www.
americassbdc.org/home/find-your-sbdc.html.
n Websites of trade associations. Find an appropriate industry association
by using the methods in the section “Learn more about your industry.”
n MeetUp. With over 30 million members scattered across thousands of
cities, MeetUp brings together people with common interests, including
entrepreneurship. Search for a group in your city at www.meetup.com.
n Websites of women’s groups, particularly National Association of
Women Business Owners (www.nawbo.org).
n Websites of civic organizations. Do an online search for a civic orga-
nization in your area, or visit the site of the specific group, e.g., www.
rotary.org or www.kiwanis.org.
Once you have found groups that interest you, you’ll want to evaluate
the following:
n Types of businesses represented and fit for your target market.
Since you’ll be looking for clients or referral sources, you’ll want to
make sure members are the types of people who have a need for or
can use your products or services. For instance, if your target market
is small businesses, you might join a Chamber of Commerce, since
its members are mostly small businesses. If you’re hoping to gather
with professional colleagues for mutual benefit (like trade education,
resources, influence, and discounts on services), choose an association
that serves your industry.
W EE K T W O | 75
n Number of members. Bigger groups work well when you want to

find as many potential clients, or leads, as possible and your products
or services can serve many types of people. Smaller groups are better
when you’re targeting a specific industry or need only a few big clients,
whom you’ll have a better chance of meeting and landing in a close-
knit environment.
n Convenience. Check to see when the group meets, where, how often,
and at what cost to ensure that you can be a regular participant.
n Networking opportunities. Do the meetings and events allow time for
you to easily meet and get to know other members, or is the time struc-
tured solely for educational sessions? Will you have other opportunities to
tell members about your business (for example, by making presentations,
giving your elevator pitch, or being featured in emails or newsletters)?
n Cost. Some organizations can be extremely expensive, particularly for-
profit networking and leads groups. Check the prices not just of mem-
bership but also of attending events (including meals and parking) and
compare them with those for other groups you might join. Also find
out how many meetings you can attend as a guest before joining.
When deciding whether to join a group and when evaluating it after
you’ve joined, be sure your goals are realistic. What do you hope to
achieve by joining? How much business do you expect to attract? If you
want to get the most out of an organization, don’t just go to one or two
meetings; attend regularly, volunteer, or serve on a committee. That’s
how people will get to know you, and both you and the organization
will be more likely to succeed. As with any form of marketing, you need
repeat exposures to make an impact.
Use the worksheet “Organizations to Join” to track your research into
organizations. See page 73
Build your online connections

Social networking sites are a dynamic way to stay on top of the people,
trends, and news that affect your business. Use these sites to gather busi-
ness intelligence, connect with former colleagues, get in touch with poten-
tial customers, mine for information, and market your product or service.
Create profiles on the sites that make sense for you and post useful infor-
mation, updates, words of wisdom, and offers as a way to stay visible and
remain top-of-mind with potential customers (more in Week Six).
Check It Out Some of these sites also feature virtual networking groups—including
entrepreneurship groups. These groups can be great sources of informa-
Intuit’s QuickBooks
Resource Center
tion on suppliers and vendors, best practices, educational opportunities,
(http://quickbooks.
and the like. Post a specific question and receive credible answers from
intuit.com/r) explores people “who have been there”—sometimes in just a matter of hours. In
topics that concern some cases, you’ll find you’re hobnobbing with the top names in your
small business owners. industry!
Another good resource,
StartUpNation https://
Keep in mind, however, that just as in the real world, these groups typi-
startupnation.com), is
cally have codes of conduct and generally accepted rules of etiquette.
by entrepreneurs, for Most, for instance, frown on blatant advertising of one’s business or
entrepreneurs. products. It’s always a good practice to spend a week or two “lurking”—
reading other participants’ postings, learning who’s who, getting the lay
of the land—before you venture in with your own postings.
Also, as with the real world, consider the source before you apply any-
one’s advice to your business. While many groups provide good sources
of information and camaraderie, the Internet unfortunately provides an
accommodating home for both unscrupulous people and plenty who,
innocently enough, simply offer poor advice.
You’ll find hundreds of entrepreneurship groups on LinkedIn and Face-
book. Simply type in “entrepreneur” in the search bar on either site and
Check It Out dozens of entrepreneur groups will pop up. You’ll find entrepreneurship
Keep up with small groups for women, for millennials, for various industries, and from vari-
business news at: ous geographic locations around the world. Many of these entrepreneurs
www.bizsugar.com; groups have tens of thousands of members.
www.inc.com; www.
allbusiness.com; In addition to these groups on social media sites, there are thousands of
www.forbes.com/ entrepreneurship forums online. Your industry association’s website is a
entrepreneurs; and good place to search for one as it may have information on members-
usatoday.com/money/ only forums. If yours offers such a service, sign up and jump in.
business.
So this week, get out there and mingle! Take the plunge. Spread the word
about your business. Face any fears of meeting new people or engaging
in an online dialogue. No matter what type of business you’re starting,
your networks will prove to be critical to your success. So start building
them now!
week 3
üweek 3: cut through red tape


week 3
#1 Deal with legal and licensing matters
#2 Build your team and employee structure

Attorney
Cut Through
Red Tape
Y uck! No one enjoys dealing with the red tape—the
paperwork and legal requirements—of starting and run-
ning a business. But, unfortunately, it has to be done, so this
week we’ll get it out of the way.
The key activity is meeting with an attorney. After that, you
may have to run around to city, state, or other government
offices to file paperwork to get permits, licenses, and so on.
If yours is a simple business, this may all go pretty quickly.
But even if yours is a one-person business and you work out
of your home, don’t think you can just forego the legal issues
altogether. An ounce of legal prevention now can prevent a
ton of legal trouble later.
Aside from dealing with legal issues, this week you’ll get start-
ed on building your team. Taking advantage of the time you
spend with a lawyer, you can ask for advice on personnel mat-
ters—hiring, benefits, taxes, and other issues to make sure you
follow the law—and then hire the right people, treat them
fairly, and manage them well.
You’ll also plan whom you need on your team, including what
kind of advisors you may want or need. You can even get the
hiring process under way!
Accomplishment #1:
Deal with legal and
licensing matters
My Checklist:
Choose a legal form and ownership structure
for your company
Discuss ownership of your company
The origin of the Apply for business licenses, permits, and identification
numbers
term “Red Tape”
In England, at least as Discuss collecting sales tax
far back as the 17th Draw up basic contracts and other legal agreements
century, stacks of legal
Protect your intellectual property
documents were tied in
red cloth ribbon. By the
19th century, “red tape” Taking care of your company’s legal health is like taking care of your
had come to connote personal health: An ounce of prevention is better than a pound of cure.
any kind of bureaucratic
Time after time, entrepreneurs end up in legal battles costing thousands
or legal complication.
of dollars that could have been avoided with a $300 trip to an attorney.
Make your first visit to a lawyer right at the beginning of your business
life. Look for an attorney who handles general business law, especially
with new or small companies. Ideally, he or she will have experience with
companies in your industry, but that is certainly not necessary unless you
are in an industry that is highly regulated. The best way to find a lawyer
is by asking for referrals, especially from others in your field.
When I went into business for the first time with my own consulting
practice, I spent two hours with a lawyer. We not only wrote a simple
letter-of-agreement I could use with clients, but we also discussed how
to price my services, collect overdue fees, and minimize taxes.
Most lawyers charge by the hour, but some have set fees for specific
tasks such as incorporation. Don’t hesitate to interview your prospective
lawyer and ask about costs before engaging their services. You have the
right to choose someone you’re comfortable with and can afford.
W EE K TH R EE | 81
Then, establish a good working relationship with a business attorney and

become used to consulting with them before you make major business
decisions.
In addition to making that vital trip to a lawyer’s office, you can also
consult a number of other resources to help you with legal and licensing
issues. These include:
n Small Business Development Centers (see page 26): Your local SBDC
office is likely to be able to help you understand the specific business
regulations you’ll have to deal with in your community. The SBDC
Start It Free
will also have contact information for city, county, and state offices Online since 1995, Free-
(such as a County recorder or city planning department). Advice offers hands-on
and easy-to-understand
n BusinessUSA (www.business.usa.gov): Setup and maintained by legal information to con-
the U.S. Government, this site serves as a one-stop platform through sumers and small busi-
which businesses can access the resources and services they need, nesses. Although not a
including business laws, both federal and state. replacement for getting
input from your own
n Individual state business portals: Individual U.S. states all have their attorney, FreeAdvice is a
own websites. Many of these also have set up gateways or “portals” to very useful place to start
assist those who want to do business in that state. These portals com- researching basic busi-
pile a great deal of information in one place. Here are a few tricks to ness legal issues.
find your state’s business gateway: http://business-law.
freeadvice.com/
l Try www.state.[your state’s two-letter abbreviation].us. In business-law/
other words, for California, the website would be www.state.
ca.us; for Pennsylvania, www.state.pa.us. Once at your state’s
site, look for “Business,” “Starting a Business,” or similar.
l Ata search engine, type in your state and the words “business
resources.” In other words, for Iowa, type in “Iowa business
resources.” This may turn up additional state business sites.
n Individual city or county websites: Many cities and counties, especial-
ly in large metropolitan areas, maintain business information on their
websites. Use a search engine to find your city or county website.
Choose a legal form and ownership

structure for your company
When starting a business, one of the first choices you need to make is
which legal form your business will take.
QUESTIONS TO ASK
when choosing an attorney
What is your specialty or particular area of expertise?
Have you ever worked with businesses in my industry?
Do you have any clients who are in similar businesses? Competing businesses?
Is there any reason you’d have a conflict of interest representing me?
What is your workload like? Are you generally available when clients call?
Will I be working with you or with an associate or other attorney?
How much do you charge per hour? How do you charge for additional expenses (pass-
through, add on a percentage, etc.)? How much do you charge for the services of associ-
ates or paralegals?
Now, this may sound like a question that shouldn’t be important to

a very small business. After all, if you’re going to be a consultant or a
graphic designer or an electrical contractor, why bother dealing with the
government? Who needs to pay a few hundred dollars in corporation or
legal fees?
But choosing a legal form affects how much you pay in taxes, who can
invest in your company, and most importantly, your personal financial
security.
Three things to keep in mind when choosing a legal form are:
n Liability: Legally, corporations are considered individual entities. As
such, the corporation—not individual shareholders—is responsible
for the actions of the business. In other words, if something goes very
wrong and a corporation is sued, only the assets of the corporation are
at stake—not the owners’ personal assets. (There are some exceptions to
this rule, but generally, your personal liability is greatly limited.) Obvi-
ously, having liability limited to the company’s assets is quite desirable,
since it means your personal assets—your home, investments, savings—
can’t be seized if your company has a legal judgment against it.
n Double taxation: No one likes paying taxes, and you certainly don’t
want to pay taxes twice—once on income for the business and then
W EE K TH R EE | 83
again when that income is distributed as profits to you. Instead, look

for a legal form that allows for the profits of the company to “pass
through” to the owners, without having to pay corporate taxes first.
n Ownership: Some legal forms of business limit the number or type of
people who can invest in your company. If you’re seeking a large num-
ber of investors or international investors, find a corporate structure
(for instance, a “C” corporation) that permits such stockholders.
When you meet with your attorney, these are the legal structures you can
consider:
n Sole proprietorship: A business owned by one person with no formal
legal structure. Advantages: It’s simple! Just start your business; there’s
no additional paperwork. You don’t file corporate income taxes—just
a Schedule “C” with your personal income taxes. Disadvantages:
You have no personal liability protection. If your business is sued, you
could lose everything you own—and in some cases, your spouse could
lose his or her assets also.
n Partnership: A business with more than one owner who actively
engages in the management of the company. Advantages: No required Check It Out
legal forms (although you’d be well advised to draw up a partnership After you’ve chosen a
agreement). No double taxation—profits pass through to the partners. legal form for your busi-
Disadvantages: Each partner has unlimited personal liability, even ness, you can file the
for actions taken by other partners. Be warned: If you go into business necessary forms online
with others, you’ve got a partnership in the eyes of the law whether or through MyCorporation
not you’ve drawn up any paperwork. (www.mycorporation.
com) or LegalZoom
There is also a “Limited Partnership” form, in which the General Part- (www.legalzoom.com).
ners actively manage the affairs of the company and the “Limited Part-
ners” are passive investors, not permitted to participate in the manage-
ment of the company (and have limited financial exposure).
n Limited Liability Company (LLC) or Limited Liability Partnership
(LLP): A legal form that provides liability protection for the company’s
owners without requiring incorporation. LLCs have become the form
of choice for many small companies. A Limited Liability Partnership
(not to be confused with a “Limited Partnership,” above) is almost
the same as an LLC but is used for certain professional practices, such
as firms of attorneys or accountants. Advantages: Personal liability
protection for all owners and pass-through profits without corporate
Types of Legal Forms of U.S. Business Organizations
Legal Form What Is It? Advantages?
Sole Proprietorship An unincorporated business owned by Simple. No legal forms or costs to

one person. If you don’t set up a legal establish. No double taxation.
structure, and no one else owns any
part of your business, you have a sole
proprietorship.
General Partnership A business with more than one owner. You have the time and talents of more
All partners actively participate in the than one person. No double taxation.
business.
Limited Partnership A business with an owner or owners Protects the personal assets of limited
who manage the business (general partners, who aren’t responsible for the
partners) and other partners who do debts and obligations of the business.
not (limited partners). Limits investors’ financial exposure.
Limited Liability A popular legal form that provides Protects personal assets against most
Company (LLC) or much of the protection of incorporat- business losses. No double taxation.
Limited Liability ing with most of the simplicity of a Relatively simple, inexpensive to
Partnership (LLP) sole proprietorship. LLPs are LLCs for establish and maintain. Can distribute
certain professional practices. profits and losses disproportionately.
“C” Corporation A corporation is a legal entity, separate Protects owners’ personal assets
from its owners. Major investors often against corporate losses and obliga-
want companies to be C corporations. tions. Can issue stock. Unlimited
number of stockholders. Costs of
benefits for employees and owners
are deductible.
“S” Corporation A type of corporation that allows pass- The personal liability protection of a
through taxation instead of double corporation with the pass-through
taxation. S corporations are less popu- taxation treatment of a sole propri-
lar since the introduction of LLCs. etorship.
“B” Corporation A type of corporation, allowed for in Gives directors of a company more
several states, that is organized for the legal protection and responsibility
public benefit as well as for the benefit for making decisions motivated by
of the shareholders. achieving a public good rather than
merely maximizing profits.
Not-for-Profit, An organization, agency, institution, No federal income taxes; usually

“501(c)(3)” charity, or company with charitable, exempt from state and local taxes.
Organization educational, or other public benefit Donations are tax deductible. Has
goals, that has been certified as tax members and Board of Directors
exempt by the IRS. rather than shareholders.
Disadvantages? Tax Treatment? Watch Out For
The business owner, and possibly Pass-through profits and losses. In community property states,
their spouse, has unlimited personal The business owner can deduct spouses may be liable for business
liability for the debts, obligations, losses against other personal debts as well as having an owner-
and judgments against the income. ship interest in the company.
company.
Each partner can enter into Pass-through profits and losses If in business with others, you
contracts and incur debts for which to the partners who pay tax at have a partnership whether you
all partners are responsible and their individual rates. Partner- draw up documents or not, and
have unlimited personal liability. ship pays no taxes but must file a partners have a share of the busi-
Form 1065. ness and other rights.
Limited partners cannot participate Limited partners can deduct If a limited partner participates in
in running the company. General “passive” losses against “passive any way in the management of
partners are all liable for the income” only, and the amount the company, they can lose their
company’s obligations. they can invest is capped. liability protection.
Each owner can enter into contracts Pass-through profits and losses Can be cumbersome converting
and incur debts for the entire LLC. to each owner. LLCs pay no taxes from an LLC to a C corporation in
Must file Articles of Organization but must file a Form 1065. order to accept VC financing or
with your state; often requires to be acquired by a large corpo-
annual state fees. ration in return for stock.
Double taxation. Must file articles Double taxation: Corporation Securities rules affect how
of incorporation with your state. and shareholders each pay tax you sell stock and to whom.
Annual state fees. Requires record- on income. However, if the cor- Use a lawyer to help you deter-
keeping, annual meetings, and a poration keeps significant cash mine whether to set up a C
Board of Directors in most states if reserves, this can have lower tax corporation.
more than one stockholder. consequences than pass-through
taxation.
Disadvantages over an LLC include Pass-through taxation, but prof- Ask your lawyer if there is any
limits on number and residency its and losses must be allocated benefit in choosing an S corpora-
of stockholders, less flexibility in at same percentage as owner- tion over an LLC or C corporation
distribution of profits and losses, ship. in your specific situation.
and more record keeping.
Not all states allow this option. Same tax treatment as other Requires an annual “benefit
corporations. report,” detailing which pub-
lic benefits the company has
achieved, that meets indepen-
dent, third-party standards.
Must not be operated for the Tax exempt. Typically must raise money
financial benefit of any individuals; through contributions and
no profits distributed to individuals. grants. Board of Directors can
Must meet IRS requirements. oust founders or restrict salaries.
taxes. Another benefit: Profits can be distributed unequally—a 60%

shareholder can take only 10% of the profits. This allows more flexibil-
ity for tax planning and for rewarding owners who bear more manage-
ment responsibilities. Disadvantages: LLC laws vary by state; you are
likely limited in the number of owners (investors) you can have, and
some states do not permit international investors.
n “S” corporation: A type of corporation that provides personal liabil-
ity protection but permits pass-through (rather than double) taxation.
Advantages: Lawyers and accountants are very familiar with laws relat-
ing to “S” corporations. Disadvantages: You cannot distribute profits
unevenly as you can with LLCs. You also pay state corporation fees.
n “C” corporation: A corporate form that allows for the most investors
and significant liability protection. Advantages: No limit to the num-
ber of people who can own stock. Legal form for companies that are
going to be publicly traded. Disadvantage: Double taxation.
n “B” corporation: Also known as a “benefit” corporation, these kinds
of businesses have as their very purpose to create a benefit for the pub-
lic as well as the shareholders. Advantages: Because company directors
make decisions based on public good, not merely profits, they have
more legal protection and control. Disadvantages: Allowed in a lim-
ited number of states.
n Not-for-profit, “501(c)(3)” organization: A tax-exempt organization,
agency, institution, charity, or company with charitable, educational, or
other goals based on public good. Advantages: No federal income taxes.
Often exempt from state and local taxes. Donations are tax deductible.
Has a Board of Directors rather than shareholders. Disadvantages: No
profits. Must meet IRS requirements.
A chart outlining the pros and cons of the different types of legal entities
is included on pages 84–85.
Discuss ownership of your company

One of the key issues involved in choosing a legal form for your business
is determining who owns it. In a sole proprietorship, you own it. In any
other form, you share ownership, with either a partner or shareholders.
If this is your first time in business, you may imagine that you can get
someone to invest in your company and then leave you completely
W EE K TH R EE | 87
alone. Wouldn’t that be nice! The truth is, when someone invests in your
company, they become a part-owner. And the minute someone owns a
piece of your company, they acquire certain rights.
Some forms of ownership give investors more rights than others. Also, if you
haven’t set up either a corporation, an LLC, or a limited partnership, your
investors are likely to become legally responsible for your company’s debts.
You may also think you’re protected from other shareholders meddling
in the business as long as you keep more than 50% ownership in the
company. Beware: Depending on your corporate form, whether you have
a Board of Directors, in which U.S. state your company is incorporated,
and other factors, shareholders not only have rights, they make binding
decisions for the company, and can even remove you from management.
Before you begin parting with any ownership interest in your company
—even taking on a good friend or family member as partner—discuss
the ramifications with your attorney.
Corporations can issue stock

In the early days of your S or C corporation, when you have very limited
money, you may be tempted to promise or hand out a small share of own-
ership to anyone who invests money in your company or provides you
Any time you deal with stock in your company, you face a host of potential
legal and tax implications. Be very cautious about distributing or promising
RED TAPE stock in your company and don’t do it before you’ve discussed it thoroughly
ALERT! with a competent attorney and accountant! If, for instance, in the early days
of your company, you give a consultant an amount of stock in return for
a certain monetary value of service (e.g., 10,000 shares of stock for $5,000 worth of graphic
design work), you may inadvertently be placing a value on all other stock that the company
has issued or will issue, including the stock you and other founders own. This can have a signifi-
cant tax impact on you and others. If you issue stock to company founders, or stock options to
employees, be sure the correct paperwork, including a “Form 83B Election,” has been done, or
you may all incur significantly higher taxes.
WORKSHEET people you’ve given or promised stock
Track here people to whom you’ve given or promised stock. When starting a new company,
you may use promises of stock in many ways—from raising venture money to getting your logo
designed. Discuss with your lawyer how to draw up these formal agreements.
Name Amount or Value of Stock

WORKSHEET stock distribution plan
What percentage of the company do you want or need to give to others? In a young
company, the number of shares is not as important as the percentage ownership those shares
represent. Use this worksheet to plan the distribution of stock in your company.
Number of Percent of Vesting

Shares Ownership Period
Founder #1
Founder #2
Founder #3
CEO
Chief operating officer
Chief technology officer
Chief financial officer
Other officer level employees
VP level employees
Director level employees
Manager level employees
Other longtime or key employees
Other employee levels
Investors
Consultants/professional service firms
Advisory Committee members
Board of Directors members
Strategic partners
Others
with products or services. After all, it seems a lot cheaper to pay someone
with stock than with cash. And it seems a promising sign that others feel
that stock in your company will be worth something someday.
Anytime you issue stock, you have to deal with legal and financial con-
siderations. Moreover, you’re also diluting your own ownership of the
company. When you give someone stock, they’re getting a “share” of the
company and a percentage of the ownership.
Corporations—not sole proprietorships or LLCs—are the only legal
entities that can issue stock. For an LLC, instead of stock, you spell out
what percent of ownership each partner or investor receives in the LLC
documents. Corporations, however, cannot only issue stock, they can
issue different classes of stock—preferred or common—with some share-
holders getting better financial treatment than others. For instance, pre-
ferred stock shareholders may get paid before common stock sharehold-
ers if the company closes and remaining assets are distributed.
If you decide to issue stock in your company, before you start making
promises of stock to anyone else, come up with a “Stock Distribution
Plan.” Investors, of course, will take a significant piece of the ownership,
as will you and any other company founders. Set aside a pool of stock for
key employees you’ll recruit in the future and all other employees. You
may also choose to give stock to consultants or other service providers,
as well as grant stock to your Advisory Committee members, strategic
partners, and others.
Decide at what point a person’s stock “vests” or actually becomes theirs.
Because your goal is to keep good employees with the business, you typi-
cally want their stock to vest over a period of years. If you set up a four-
year vesting period, for example, employees might be entitled to one-
fourth of their stock after the first year, and then another 1/48th of their
stock each month (4 years times 12 months). That way, if they leave
before their stock vests, they don’t receive more than they deserve.
See pages Use the worksheets “People You’ve Given or Promised Stock” and “Stock
88 and 89 Distribution Plan” to outline stock distributions.
WORKSHEET business licenses and permits
List the licenses and permits you need, including where and how to apply, requirements and fees.
License Type Agency and Requirements Fees

Contact Info
Local licenses:
Local permits:
County licenses/permits:
State licenses:
DBA required:
Federal certification:
Other:
Apply for business licenses, permits, and

identification numbers
Whoa! You may be ready to start your business, but the authorities may
not want you to—at least not without making sure you have the proper
licenses or permits. As frustrating as it may seem, you can’t just rent an
office or a store and set up shop.
The bureaucratic things you’ll deal with fall into three general categories:
1. Identification numbers: to keep track of your business with gov-
ernment authorities. Example: federal identification numbers for
income tax purposes, such as the Employer Identification Number
(EIN) in the United States or the Business Number (BN) in Canada.
2. Licenses (or certifications): required to engage either in any busi-
ness (in a specific locality) or in certain types of businesses or profes-
sions. Examples: a city business license, a contractor’s license, license
to sell alcoholic beverages, an optometrist certification.
3. Permits: required for particular, often more limited, actions. Examples:
construction permits, special event permits.
Sometimes, these terms are used interchangeably, such as “permit”
instead of “license” or vice versa.
To make matters more complicated, you may need to get licenses, per-
mits, or identification numbers from different levels of government.
These may include:
n Federal
n State
n County
n City
The requirements vary greatly depending on the type of business you’re

opening and the state, county, or city in which you plan to do business.
That’s why it’s good to ask your attorney about these types of licenses.
Listed below are some of the most common issues you’re likely to deal
with in getting permits, licenses, and identification numbers.
Use the worksheet “Business Licenses and Permits” to keep track of which
See page 91 ones you’ll need.
WORKSHEET vital statistics
Use this worksheet to keep track of important dates, numbers and information about the
legal status of your business or yourself. You may be asked to refer to these often.
Date of incorporation:
Corporation number:
Formal company name:
“DBA”/in what county filed/date/number:
Federal Employer Identification Number (“EIN”):
State Employer Identification Number:
Federal business license or permit number:
State business license or permit number:
City business license or permit number:
Better Business Bureau number:
Unemployment insurance provider/date of instatement, renewal date:
Other:
Federal tax ID number

One number you’ll be asked for repeatedly is your Federal Employer
Identification Number. This may also be referred to as your Employer
Identification Number or Tax ID number or a variety of different abbre-
Check It Out viations: FIN, TIN, FEIN, and so on. It’s one of the most important
To apply for an EIN on identification numbers you’ll need. Fortunately it’s very easy to get.
the IRS website (www.
irs.gov), click on “Tools” You’ll need a federal tax ID number if your business has employees, or
and look for “Online is formed as a corporation, LLC, or partnership. Don’t be misled by the
Employer Identification word “Employer” in the name—you do not need to have employees to
Number.” In Canada, go get a Federal Employer Identification Number.
to the Canada.ca website
and enter “business Even if you’re not required by law to have a Federal Tax ID number—for
number registration” to instance, if you’re operating as a sole proprietor—you may still want to get
find a link to register for one. That’s because many of your customers—especially if they are other
your BN.
companies, institutions, or government entities—will ask for your Tax ID
number. It seems much more professional to have a Tax ID number than
to give them your Social Security Number. It’s also a lot safer; this way you
don’t give your personal Social Security Number to strangers.
It’s very easy to get a Tax ID number. You can apply online at www.irs.
gov. You can also call 1-800-TAX-FORM to request IRS Form SS-4.
Be prepared to answer the questions on that form, then call 1-800-829-
4933 (toll-free), and the IRS can assign you a Tax ID number over the
phone. There’s no charge.
Because you’ll be asked your Tax ID number frequently, as well as other

key company information (for example, date of incorporation), start
keeping track of these numbers and dates. Use the worksheet “Vital Sta-
See page 93 tistics” to keep these handy.
State licenses, certifications, and ID numbers

Individual U.S. states may also assign you an identification or account
number for various reasons. The usual are: corporation number for
incorporated businesses, employer account number for employer busi-
nesses, certificate numbers for specific licenses.
You may also need licenses from the state or other authorities to operate
certain businesses. States regulate many industries, from liquor stores to
barbershops.
W EE K TH R EE | 95
Certain professions require you to pass a certification test in order to

practice that profession in your state. For instance, to practice law in a
state, you must pass an exam administered by that state’s Bar Association
and meet that state’s Bar requirements. You may have to take tests for
many other trades, such as a Realtor, hairdresser, or contractor.
As to federal involvement in issuing permits and licenses, generally, the
federal government doesn’t get involved with regulating local or state Check It Out
businesses. There are exceptions, of course, especially if you are involved Find local state and local
in interstate transportation (such as interstate moving companies or government information
trucking). And there may be federal requirements regarding your pro- at: www.statelocalgov.
duction processes, especially if you use hazardous or environmentally net. This is a private
sensitive materials. website, but easy to use.
This is the Library of
This may all seem overwhelming. Ask your attorney, or consult with a Congress guide to state
local Small Business Development Counselor, about the licenses you’ll websites: www.loc.
need in your community and for your type of business. gov/rr/news/stategov/
stategov.html
Reseller’s license
There’s one government permit you won’t mind getting—a reseller’s license
or reseller’s permit. If you are a manufacturer, wholesaler, or retailer, and
your state collects sales tax, you may qualify for a reseller’s license.
Such a license enables your company to purchase goods or materials for
manufacture or sale without your having to pay sales tax, since you are
not the ultimate consumer—your customer is.
In other words, if I own a sporting goods store, I can buy golf clubs from
the manufacturer without paying sales tax because I will charge my cus-
tomers the tax. If I’m going to use the clubs myself, I do need to pay the
sales tax since the exemption is allowed only on goods I will resell.
Once again, each state has its own requirements and terminology. So
check your own state’s rules. Some states don’t even require a license
for you to get an exemption from sales tax—just a signed statement of
intent to resell goods.
County and city licenses, permits, and ID numbers

Most cities or counties require some form of basic business license no matter
what kind of business you’re in. If you want to open up shop—whether a
retail store, a dentist’s office, or even a consulting practice—you have to get
a business license from your county or city. This may feel like “Big Brother,”
but it provides your local government with information on what kinds of
businesses are being operated in the community and who is responsible for
the company. Of course, there are usually fees or taxes they collect too!
In addition to basic business licenses, cities frequently require permits to
operate some kinds of businesses, install various types of business equip-
ment, or make changes in buildings or facilities.
Use the worksheet “Business Licenses and Permits” to keep track of all
See page 91 the state business licenses and permits you need.
“DBA” (Doing Business As) or fictitious business name

If you use any name other than your own personal name for doing busi-
ness, you’ll need to file a “doing business as” or fictitious business state-
ment, usually with your county government. This enables the public to
know who’s actually operating a company. In some states, you may have
to publish this information in a local newspaper.
In other words, if I own a flower shop called “Blooming Nuts,” I must
file a DBA, so people will know that I’m the nut behind Blooming Nuts.
But even if I use the business name “Abrams and Associates,” I have to
file a DBA, since that is not my full legal name (it’s Rhonda Abrams).
Check with your attorney, SBDC, or county government regarding the
fictitious name requirements in your area.
Discuss collecting sales tax

As a buyer, when I purchase something from a local business, I pay sales
tax. I may not like the extra cost, but it’s a pretty seamless transaction—
the seller just tacks on the appropriate percentage, and I pay the total
amount. But what happens when I’m the seller?
How do you, as a businessperson, know whether you have to collect sales
tax? Here’s the short answer: Collect sales tax on most goods and some
services that are delivered to a customer in any U.S. state in which you
have any physical presence.
The long answer is much more complicated. Sales tax rates and rules
vary from state to state, city to city. There’s truly a hodgepodge of laws
and taxing authorities. According to the National Retail Federation,
W EE K TH R EE | 97
45 states and more than 7,500 cities, counties, and jurisdictions impose
sales taxes.
States call these taxes by various names: sales tax, franchise tax, transac-
tion privilege tax, use tax, and more. Some are the responsibility of the
seller, others the buyer. But governments figured out that it was easier
and more reliable to make the seller collect the tax than to get individual
Start It Free
consumers to send in tax on every purchase. So, businesses are typically TaxCloud (www.taxcloud.
responsible for collecting sales tax and sending it to the state. net) is an application
that both online and
Generally, if you’re going to collect sales tax, you must get a license from bricks-and-mortar retail-
your state. On each taxable transaction, you calculate the applicable sales ers can use to calculate,
tax, collect it from the buyer, keep tax records, and then file a tax return collect, and file sales
and pay the taxes to your state. You’ll pay monthly, quarterly, or annu- taxes for free. The tax
ally, depending on your level of sales. management applica-
tion integrates with
Each state makes its own rules as to what sales are taxable. Typically, most accounting sys-
most products sold to end users are taxable. Major exemptions include: tems and online shop-
ping carts, automati-
n Prescription drugs cally calculating sales tax
n Food, especially groceries and nonprepared food rates based on the origin
n Animal feed, seed, and many agricultural products of the shipment, the des-
n Products for resale—raw materials, inventory, and other items that are tination, and the class of
going to be sold, rather than used, by your customer goods. You can also use
the site to simply look
Many states also exempt services from sales tax. But that varies greatly up sales tax rates for any
from state to state, and even within a state the rules as to what is taxable city in the U.S.
and what is not seem very inconsistent.
As for sales taxes on remote sales, meaning sales you make to customers
outside of your home state, most likely you will be exempt from collect-
ing these if your remote sales are less than $1 million a year. Remote sales
include online sales and catalog sales—for example, to customers who live
in a state other than your own, and in which you have no physical pres-
ence. A physical presence in a state can include a location, facility, employ-
ee, call center, warehouse, address, or even one independent salesperson.
At the time of the publication of this book, ecommerce sales tax laws were
still in flux, and as you read this, rules and tools for collecting taxes are
likely still developing. But keep this in mind: Most likely, you will have to
deal with collecting taxes on sales you make outside of your state if you sell
over $1 million a year remotely; most small businesses just launching will
not reach that number.
One thing’s for certain—if you’re going to make sales in any state with
a sales tax, talk to your attorney. You may also want to discuss this issue
with your accountant (Week Five). It’s not easy to figure out all the
details on your own.
Draw up basic contracts and other legal

agreements
While the days of doing business with just a handshake may not be over
entirely, doing so leaves you at risk. Ours is a litigious society, and the best way
to avoid ending up in court—or in hot water—is to get things in writing.
You’re likely to find you have a number of agreements or contracts that

you’ll use over and over. For instance, a consultant may have a simple let-
ter of engagement; an electrician might have a standard contract. Have
your attorney help you draft a standard template for these documents,
into which you can just plug the specifics each time.
Start It Free
You can find templates Some of the many types of legal agreements you may need are:
for some simple con-
tracts and agreements n Contract
online. Three sites to n Letter of agreement or engagement
try are Free Legal Docu- n Leases
ments (www.free-legal- n Employment contracts
document.com), Legal
n Distribution agreements
Forms (www.legalforms.
name), and FindForms.
n Project proposals
com (www.findforms. n Work-for-hire agreements
com). n Statements of work (SOWs)
n Nondisclosure agreements
n Noncompete agreements
Protect your intellectual property

What is the value of the Nike “swoosh?” The design of a Macintosh
computer? The content of a Beatles song? We all recognize that these
things have a value far beyond the “physical property” of the running
shoes, computers, or CDs themselves because of the “intellectual proper-
ty” of the swoosh, the design, or the wonderful music and lyrics of John
Lennon and Paul McCartney.
W EE K TH R EE | 99
Every company has certain intangible things that are, or can be, very
valuable. Many of these come under the heading of “Intellectual Prop-
erty”—assets that have value because of the knowledge, recognition,
inventiveness, and so on, that they consist of. Indeed, some companies
only have products composed of intellectual property—software develop-
ers, writers, inventors, consultants, and many more.
So just as you would protect the physical property of your company, you
need to protect your intellectual property.
Trade secrets: Just about every company has ideas or knowledge that gives
them a competitive edge, and which would be harmful if shared with oth-
ers. If you’re only starting out, your business concept may be one of your
major assets. But “trade secrets” covers a huge range of things—from how
you make a product to the preferences of your best customer.
The law provides a certain amount of protection to you for your trade
secrets—but only if you take steps to keep such information secret. So
be careful how you disseminate information: Mark documents “confi-
dential,” get others to sign nondisclosure agreements, put passwords and
other security measures on “work-in-progress” websites or computer pro-
grams, and be careful whom you talk to!
Nondisclosure agreements: One of the simplest ways to protect your
ideas is to get a signed nondisclosure agreement or confidentiality agree-
ment before discussing your concepts with others. This is a typical pro-
cedure, and you’ll often be asked to sign NDAs if you’re trying to do
business with another company. Venture capitalists will not sign NDAs,
as they see too many new business ideas.
TRADEMARKS
WHAT
WOULD I’d be sure to avoid any name close to or potentially confusing with a big
company’s trademark. It may seem silly when a big corporation goes after a
RHONDA tiny company, but if a big company doesn’t protect its trademark, the law says
DO? they can lose it. They have no choice but to sue. Even if you’re legally in the
clear, with a trademark issued to you, the reality is that in trademark issues,
the side with the greatest ability and willingness to spend money on lawyers gets their way.
McDonald’s, for instance, vigorously goes after any company that uses the prefix “Mc” even for
products or services that could not possibly be confused with food. So don’t even think of nam-
ing your barber shop “McHaircut.”
Noncompete agreements: Once a trade secret is learned, it can’t be

unlearned. So sometimes the biggest fear you have is that a valuable
and knowledgeable employee will go to work for a competitor. To help
guard against this, you may want to have employees sign an agreement
limiting their ability to go work for a competing company (or start their
own competing company) for a period of time. Noncompete agreements
provide a measure of protection, but courts don’t like enforcing them,
so make certain they are carefully written and appropriately used. Some
states, like California, may not enforce noncompete agreements.
Trademarks/service marks: In Week One you spent some time deter-

mining whether or not the trademarks and service marks you plan to use
are available (see page 32).
The Internet makes trademark issues particularly baffling. A company may

have happily and legally been doing business in one state for decades with-
out being confused with a business using the same name in another state.
Now one of these companies puts up a site online, and customers don’t
know who’s who.
Check It Out Since many companies can have the same trademarked name in different
categories, your domain name may legally be taken by another trade-
Although your work is
automatically copyright-
mark owner, leaving you without any recourse.
ed at the time you create
So now’s the time to talk with your attorney about ensuring that your
it, you may want to fur-
ther protect yourself by
marks are protected—both online and off.
registering your creation Copyrights: If you create works that others might want to copy—con-
with the U.S. Copyright
tent, music, art, software, illustrations, and the like—you’ll want to pro-
Office (www.copyright.
gov). In Canada, register
tect what you’ve created. This is where copyright law comes in.
your copyright with the Copyrights cover any type of work that is “fixed” and “tangible”—even
Canadian Intellectual
if it’s only computer code, words spoken on an audiotape, or images
Property Office (www.
cipo.ic.gc.ca).
“fixed” on a movie.
Copyrights do not cover “ideas” no matter how unique, just the particu-
lar fixed expression of that idea. For instance, you can’t copyright your
idea to have a boy go off to a school for wizards, but you can copyright
your novel telling the story of this boy.
Once you have a copyright, you retain the rights to that creation, and no
one else can make a movie about your hero without your permission.
W EE K TH R EE | 101
Whenever others help you create any of your intellectual property, you
want to make clear who owns what they develop. For instance, if you hire a
RED TAPE graphic designer to create your logo, software developers to write computer
ALERT! code, or writers to create content, who owns the rights to all those creations?
In most cases, you want to make sure you do! So in your contract or agree-
ment, clarify the ownership of the work product, make certain that they are required to transfer
any copyright or other ownership if necessary, and specify that you are hiring them on a “work-
for-hire” basis, with all work product becoming your property. And have the agreement looked
at by an attorney.
You also can’t copyright “facts.” So if what you’re creating is purely the
compilation of facts, you won’t be able to copyright that.
Copyrights are easy to get. The rights to your creation are yours at the
moment you create it; theoretically, you don’t have to do anything to ensure
your copyright. But that puts you at some risk. The easiest thing to do to
protect your copyright is to add a simple copyright notice whenever you
produce something. Just add the word “copyright,” the © symbol, the year,
and your name (copyright ©2018, Rhonda Abrams).
Patents: Copyrights are easy to get; patents are incredibly tough. Copy-
rights cost little; patents are very expensive. Copyrights are yours the
instant you create the work; patents can take years to get. Patents are
also difficult and costly to enforce—if someone violates your patent and
starts selling a knock-off of your product, it may take a lot of money (in
legal fees) and time to put a stop to it—and if they’re overseas, enforce-
ment will be even harder. So if you’re building your business around a
new invention, process, machine, recipe, or formula that needs to be pat-
ented, it’ll be tough going.
If, however, you have a new invention or a new process that is indeed
unique, “nonobvious” (a requirement for qualifying for a patent), and
worth a lot of money, then pursue the patent process. The first thing
you’ll need—after you’ve come up with your invention or idea—is a
good patent attorney. A good one will warn you of the costs and pitfalls
before you get too far down the road. To find a competent patent lawyer,
start by asking your business attorney.
Accomplishment #2:
Build your team and
personnel structure
My Checklist:
Consider your support structure
Decide whom you need on your team
Figure out how much you can afford
Examine the use of independent contractors
Understand employment laws and consider your
personnel policies
Appraise your management style
Consider your support structure

You don’t have to have employees to build a team. Even if yours is a one-
person business, you’ll want to find people to turn to for guidance as you
start, run, and grow your company. Building a company can be lonely
work. Advisors can be one of the most valuable assets an entrepreneur
can have, providing support, contacts, and advice.
Business buddies/mentors: In my early years in business—when I worked

alone and out of my home—I had my “business buddy,” Jennifer. Jennifer
was a good friend who had started a consulting practice at about the same
time I did. Her work was similar to mine, although in a different industry.
Jennifer and I would share templates for writing proposals or sending

invoices. We’d discuss how to bill or collect from our clients and swap
solutions to client problems we were having. Sometimes the most impor-
tant thing was just to have a conversation in the middle of the afternoon
when one of us felt lonely or overwhelmed.
Finding a novice entrepreneur who’s in the same stage of business as

you can be a great way to get support. You’ll have each other to think
through ideas, learn from, and be each other’s cheerleader.
WORKSHEET my support system
Use this worksheet to list the names of people or organizations you can turn to for support
and advice. Include potential supporters from whom you may want to seek help in the future.
Business buddies:
Mentors:
Entrepreneurs’ groups:
Blogs/online communities:
Industry groups:
Advisory Committee members:
Board of Directors members:
Others:
If you can, find a more experienced businessperson to serve as your

informal “mentor.” Many accomplished entrepreneurs enjoy helping
others, and you can learn from someone who’s already gone through the
process of setting up a business.
Don’t be afraid to ask for help. Many people are willing to be of assis-
tance, especially if you’re professional in your approach and realistic
about what kind of help you need and what they’re able to offer.
Advisory Committee: An Advisory Committee is an informal group
with no legal authority, no legal liability, and no set rules about when to
meet or how many people must be involved. In fact, they don’t ever have
to meet; your Advisory Committee can simply be a few people who’ve
agreed to let you turn to them for advice.
The point of having advisors is to seek advice, so look for people whose
advice you trust to serve on your committee. Ideally you’ll find wise folks
who are seasoned entrepreneurs from your industry. Be wary of asking
potential investors, customers, employees, or, naturally, competitors. You
don’t need many advisors, and you don’t have to ask everybody at once.
Most people willing to be an advisor aren’t motivated by money—they’re
motivated to help you succeed. If you do want to reward them, and
you’re setting up stock in your company, granting stock would be a good
form of compensation; that way, your advisors will share in your success.
Of course, make sure your advisors get any company trinkets—t-shirts,
coffee mugs, pens, and the like.
One of the best things about formally asking people to serve as members
of your Advisory Committee is that they then have a sense of ownership
and continuing interest in your company. They may initiate conversa-
tions with you, make suggestions, or provide useful connections. Setting
up an Advisory Committee is a good way to get support from people
you trust and admire.
Board of Directors: This is typically a legal entity required for an incor-
porated company (check with your lawyer for rules relating to corpora-
tions and Boards of Directors in your state). It has legal responsibilities
established by the state and will probably be required to meet at least
once a year and record minutes of its meetings.
Members of the Board of Directors have a fiduciary duty to protect the
interests of the shareholders of the company—not to protect you. They
can control the decisions about management of the company even if you
own a controlling interest in the stock. They have legal liability for the
company’s actions, so they should take their role very seriously. In many
companies, especially large companies, board members are paid—or at
least reimbursed for their expenses incurred coming to board meetings or
doing company business.
In some states, you may not need to have any members of the board
other than yourself or the company owners or founders and you may
not need any outside board members. But there are occasions when you
might want to—or need to—invite outside people to sit on your board.
For instance, if you have investors, especially venture capitalists, they’ll
expect to be on the board. If you are able to secure well-known individu-
als from your industry, or a related industry, you can gain valuable advice
and insight as well as adding stature and connections to your company.
Whom should you ask to be on your board? Since the board makes legal-
ly binding decisions for the company, be very careful about whom you
ask. The best board members are those who understand your business,
are supportive of you (even when they challenge particular decisions),
have a long-range view of your company’s growth, and bring excellent
connections to the business or financial world.
Use the worksheet “My Support System” to list potential supporters. See page 103
Decide whom you need on your team

What kind of help will you need to succeed? Who will handle your
financial affairs, make sales, plan operations, and produce your goods?
What roles do you need to fill “in-house” and what jobs can you fill with
outside contractors or suppliers?
Every company’s need for staff is unique—a restaurant clearly has dif-
ferent staffing needs than a medical equipment manufacturer or an out-
source design firm. Some companies—such as consulting firms—can be
more flexible in their hiring arrangements, perhaps only hiring employ-
ees or using independent contractors after a client or project is secured.
Others—such as manufacturers—usually need staff before they can
actually make a sale. Even if you’re a “solopreneur,” here’s something to
keep in mind: If you want to grow a company with real value beyond the
hours you put in, you’re going to need help.
WORKSHEET whom do i need on my team?
List the job titles needed in each area. Some suggestions for managers and officers are in
parentheses, but you should hire only those your company really needs as it grows.
Key Personnel Responsibilities Desired Experience/Background
Top Management
(President/CEO)
Administrative
(Office Manager,
Administrative Assistants)
Financial
(Controller, Bookkeeper, etc.)
Marketing/Sales/PR
(VP Marketing,
Salesperson, PR Director)
Operations/Production
(Production Manager)
Technology
(Chief Technology Officer,
Website Developer, Tech
Support)
Human Resources
(Personnel Director)
Logistics Staff
(Shipping Clerk, Janitor)
Other:
Desired Education/
Desired Attitudes/Habits Skills Desired Compensation
Training
Hiring enables you to:

n Serve more customers
n Produce more products or services
n Add additional skills and talents to your business
n Spend your time on the things you do best and like to do
n Make money when someone else is working
n Grow your company
Whom do you need on your team? Brainstorm about the jobs you need
done in your business. After compiling your list, indicate whether you
want to keep these tasks for yourself, hand them over to someone else,
or share these duties. This will start to give you an idea of the jobs you’d
like to hire others to complete.
Check It Out You’re almost certain to have a long, long list of things you’d like some-
Small businesses
one else to do. Prioritize what you’d like accomplished. Can they all be
create most of the jobs.
undertaken by the same person? In a small business, it’s typical for peo-
According to the Small
Business Administration
ple to wear many hats, but you still have to consider whether one real-
(SBA), small businesses live person can manage very different tasks. For instance, is it realistic to
create 64% of new imagine that the person who handles your administrative paperwork can
private sector jobs in also do some bookkeeping, shipping, and basic work on your website?
the U.S. Probably. But is it realistic to think the person who’s going to handle
your administrative tasks can also manage your computer network, han-
dle your back-end technology needs, and make sales calls? Probably not.
Also consider how much time you’ll require from an employee. Based on
your job requirements—and your budget—consider the range of your
options for getting the help you need. Not all new hires need to be full-
time employees. It might make sense for you to hire part-time workers, a
short-term contractor or independent consultant, even college interns.
Common functions for small business employees include:
n Administrative
n Sales/customer service
n Billing/bookkeeping
n Production
n Shipping
n Marketing
n IT/technology planning
Use the worksheet “Whom Do I Need on My Team?” to identify the

positions you need to fill and the specifics of each job.
Figure out how much you can afford

See pages
One of the biggest hurdles to overcome when deciding to hire is figuring 106–107
out how much you can afford. Fear over making enough money is prob-
ably the biggest obstacle to becoming an employer. After all, if you don’t
make enough money in a month, you still have to pay your employ- Start It Free
ees—it’s the law. That means you might not have enough money to pay
Many online tools make
for other things—your rent, your suppliers, or yourself. But employees
sharing and collaborat-
are an investment in your business—not simply a cost—and the goal is
ing with your team easy.
greater growth. As with every investment, you can address your concerns Share large files using
with some careful planning. the free version of High-
tail (www.hightail.com).
When figuring out how much you can pay an employee, take the follow-
Store, share, and collabo-
ing steps:
rate on documents with
1. Review your monthly cash flow. Even if your business is profitable Google Drive (https://
at the end of the year, you have to make payroll every two weeks or drive.google.com) and
Zoho Docs (www.zoho.
so. That means you need cash in the bank. Take a realistic look at
com/docs).
your monthly dollars in and dollars out.
2. Estimate your monthly profit. Will you consistently generate
enough income to support the type of employee you need, as well as
yourself?
3. Estimate expected additional income. The goal of hiring employ-
ees is to make more money. How much will they realistically help
you generate? In what time frame? Be conservative in these projec-
tions.
4. Estimate how much you’ll pay an employee. Once you decide what
role and tasks you want your new employee to assume, investigate
comparable pay rates.
5. Estimate monthly taxes and benefits. Budget an additional
15–30% of their salary for payroll taxes and benefits.
6. Estimate additional costs. With the new employee on board, will
you pay higher rent for more space? Have increased telecom or travel
expenses? Greater use of office equipment? Make a guesstimate of
these costs as well.
A good plan is to save up for payroll just as you save for other invest-
ments. Set up a separate payroll account with enough money to cover at
least three months’ worth of payroll and taxes. Expect to make payroll
from monthly cash flow rather than this separate account, which acts as
an emergency backup in case you have a bad month. This financial cush-
ion allows you to hire with more confidence.
Use the worksheet “How Much Can I Afford?” to calculate how much
See page 111 money you’ll have available each month for wages.
Examine the use of independent

contractors
Start It Free Most companies use outside providers to perform certain tasks. It’s not
At Upwork (www.upwork. necessary that you handle every function—even relatively critical func-
com), PeoplePerHour tions—with people you employ on your own staff.
(www.peopleperhour.
com), and Guru (www. You can outsource all kinds of responsibilities, including bookkeeping,
guru.com), you’ll find website design and hosting, payroll management, public relations, mar-
thousands of contrac- keting, employee training, and even many aspects of production.
tors for projects such as
software and app devel- To provide these functions, you can use other companies or hire self-
opment, website design, employed individuals—independent contractors.
writing, marketing, and so
on. You can post your jobs Indeed, it may be that you—or your business—might serve as an outside
for free. You pay only after provider of services or as an independent contractor for other companies.
the candidate you hire This is especially true if you provide services like those listed above.
completes the job.
Few areas of employment law are murkier than who qualifies as an inde-
pendent contractor for tax purposes and who doesn’t. And few areas
of tax law can get a business—or an independent contractor—in more
trouble with the IRS. Here’s why:
As a business owner, you—naturally—want to reduce your costs as

much as possible. When you hire someone to work for you, you can pay
them in one of two ways:
n as an employee: paying additional payroll, Social Security, and unem-
ployment taxes (and typically providing benefits); or
n as an independent contractor: paying no additional taxes (and typi-
cally not providing any benefits).
WORKSHEET how much can i afford?
Use this worksheet to estimate how much money you’ll have available
each month to pay wages or salaries.
A. Current monthly profit
B. Estimated increased monthly income
C. Subtotal: Add (A) profit and (B) increased income
D. Expected monthly salary/wages
E. Estimated monthly taxes/benefits
F. Estimated other monthly costs
G. Subtotal: Add (D) wages, (E) taxes/benefits, and (F) other costs
TOTAL: Subtract line G from line C.

As an individual working for others, you can work:

n As an employee: receiving less money in your pocket due to withhold-
ing taxes but also receiving more legal protections and typically more
benefits; or
n As an independent contractor: often getting more money in your
pocket since there are no withholding taxes, but also receiving no ben-
efits and little or no worker protection, and having to deal with the
hassle and paperwork of handling and paying your own taxes quarterly
or at the end of the year.
Employee vs. Independent Contractor: The Right Classification
Employees… Independent Contractors…
Do not run their own business Are independent businesspeople, especially if

they are incorporated
Work in your office and use equipment you Choose their work location and provide their own
provide equipment, tools, and materials
Work hours specified by you Set their own hours
Work per your instructions and may receive Decide how to perform their services, in what
training from you order, and usually receive no training
Are paid for their labor regardless of business Can earn a profit or suffer a loss depending on
performance the quality and quantity of services they provide
Work for you on a continuing basis Typically manage multiple clients or customers
and work for you on an as-needed project basis
Receive employee benefits Are responsible for their own benefits
Are usually paid by unit of time Are usually paid a flat rate or by project
Can quit or be fired at any time Can be terminated or leave according to the
terms of their agreement with you
Obviously, many businesses would prefer to treat “employees” as inde-

pendent contractors and avoid all those pesky taxes and worker protec- Start It Free
tions. Equally obviously, the federal government, states, and cities, want If you expect to receive a
to make certain that anyone who actually does the work of an employee large number of resumes
gets treated—and protected—as such, and that all payroll and Social for your job opening,
Security taxes are paid. you may want to man-
age them online with
So watch out! The IRS is particularly aggressive in pursuing companies a cloud-based tool like
that intentionally—or unintentionally—inappropriately pay workers as Zoho Recruit (www.
independent contractors instead of as employees. zoho.com/recruit).
This solution enables
There used to be a list of specific rules governing independent contrac- you to collect resumes
tor status, but the IRS, responding to the legitimate needs of businesses from your website, track
for greater flexibility in hiring independent contractors, made the rules applicants, schedule
broader. Yet that leaves more room for misunderstanding. and track interviews,
and more. The free plan
In determining employee status, the IRS looks at three areas:
supports several job
n Behavioral: Does the worker control how they do the work? Who openings.
controls:
—When and where the worker does the work?
—What tools or equipment they use?
—Where they purchase supplies?
—What order or sequence of work to follow?
n Financial: Does the worker have a significant investment (e.g., own

their own tools)? Can they make a profit or loss? Do they make their
services available to others or work for other businesses?
n Type of relationship: How permanent is the relationship? Is there a
written contract? Is the worker responsible for their own benefits? Is
the work performed a critical and regular part of the business?
Because the rules are somewhat fuzzy, the IRS does provide some protec-
tion for businesses that make mistakes in treating employees as indepen-
dent contractors—as long as those mistakes were made in good faith.
They’ll look to see whether a business relied on advice of an attorney or
accountant, followed industry practice, and treated workers consistently.
But—and this is critical—there’s absolutely no protection for a company
that doesn’t file the necessary tax forms. Each year, you are required to
file a Form 1099-MISC, reporting payment to independent contractors
over a certain dollar figure. If you fail to file 1099s and the IRS later
challenges you on the classification of independent contractors, you’re in

very hot water.
Check It Out As an employer, before using independent contractors, consider the impact
IRS Publication 15-A can
help you make sure you
on your workers’ productivity. Legitimate, self-employed contractors are
stay well within the IRS’s usually highly motivated to do a good job; they want to keep you as a cli-
employment rules. ent and have you refer others. The opposite happens when a business needs
www.irs.gov/pub/ employees—with definite work hours, specific work, and supervisors directly
irs-pdf/p15a.pdf managing them—but treats them as independent contractors. Such workers
are demoralized, less productive, eager to find better employment, and more
likely to call the IRS if you’re not following the law.
If you plan on using independent contractors, be certain to ask your

attorney (this week) about how to stay well within the law, and check
with your accountant (Week Five) about filing all necessary tax forms.
Federal and state governments impose several laws on compensation,

treatment, and protection of employees. Among the many regulations
RED TAPE your business must follow are the following:
ALERT! n OSHA safety rules and record keeping
n Minimum wage and hour laws and child labor laws
n Tax withholdings, including income, Social Security, and unemployment taxes
n Insurance requirements, including workers’ compensation and “COBRA” requirements
n Anti-discrimination laws
n Immigration laws
n Family and medical leave laws
n Employee vs. independent contractor distinctions
n Exept vs. non-exempt employee distinctions
n Posters and record keeping laws
n Employee vs. independent contractor distinctions
n Exempt vs. non-exempt employee distinctions
n Posters and record keeping laws
Understand employment laws and

consider your personnel policies
As soon as you decide to hire your first employee, you’ll need to under-
stand critical personnel laws. There are many government protections
for workers, as well as extra taxes and obligations on you as an employer.
Things such as questions you can’t ask in an interview, how many hours
an employee can work without getting paid overtime, even how long
a lunch break must be are all likely to be covered under federal or state
labor laws. You want to avoid running into any trouble with government
agencies just because you inadvertently violated employment laws. Check It Out
Labor laws vary from
Additionally, you’ll need to come up with basic personnel policies: ben-
state to state. Visit the
efits, vacation, holidays, sick days, working hours, and so forth. Even U.S. Department of
in a very small company, a written set of policies helps create a sense of Labor for federal rules
security and fairness for employees. (www.dol.gov), then
enter “state labor offices”
Developing company policies doesn’t mean you need a five-inch-thick
into the search field to
rule book. You can develop a simple set of policies, listing: find links to your state’s
site.
n Number of vacation days earned each year, and how many of these
days can be carried forward if not used
n Number of sick days each year
n Number of personal leave days, and whether these can be taken as
partial days
n Paid holidays
n Working hours
In a very small company—with highly motivated staff—you may be able

to keep these issues flexible (as long as you follow the law, of course).
As you develop your company policies, be clear, allow flexibility when
you can, and above all, be fair. Treating people fairly does not necessarily
mean treating people equally: A salesperson may need a paid cell phone;
a stockroom clerk may not. An employee with a terminally ill relative
may need more flexible work schedules than others. Part of your job as
an employer is to constantly examine your own actions for bias. Apply
the same standards—not the same rules—to all.
Sometimes you can’t be flexible—rules have to be followed. This is par-
ticularly true when company policy is dictated by law. When you have to
follow inflexible rules, let employees know why. Is it for safety, to obey
WORKSHEET my personnel policies
Always check with an attorney or human resources specialist before finalizing your
policies, as state and federal laws may affect your policies regarding overtime,
work hours, family leave, and so on.
Work Hours
Starting time:
Ending time:
Flex time policies:
Overtime policies:
Other:
Vacation Days
Number of days per year:
When do they become available?
Increases after years of service? How many?
Can unused vacation days be accumulated? How many? How long?
What times of year can they be taken? How do they have to notify you?
Sick Leave
How many paid sick days off per year?
Can they be accumulated?
Special circumstances?
Personal Leave
Will you allow any paid personal leave time? How much?

How much notice do employees have to give for personal leave?
Holidays
Which holidays will be time off with pay?

Any “floating” holidays?
Any other time-off policies, either paid or unpaid, sabbaticals, etc.?

Reimbursement Policies?
Which expenses will the company reimburse employees for? (e.g., travel, commute, parking, public transportation):

How will those have to be documented/submitted?

Insurance
List the insurance coverage you’ll offer and how and whether dependents are covered:
Health insurance:
Dental insurance:
Vision insurance:
Life insurance:
Disability:
Other:
Retirement Program
Will you offer a retirement plan?
List details: who is covered, when the plans vest, what amount employees have to contribute, etc.:

Training/Education
What ongoing training will you offer employees?
Will you reimburse/pay for noncompany-sponsored education/training programs/tuition?

Benefits
List any other special perks/benefits offered (e.g., cell phones, auto lease, birthdays off, etc.):

Employees Who Telecommute/Work from Home Offices

What reimbursements do you offer them? (e.g., phone, Internet connection, cell phone, office supplies, electricity, furni-
ture allowance, etc.):

How do they get reimbursements (submit monthly form or give ongoing amount?):
How many days/weeks are they expected to be at the main office?
Other:
Performance Review
How often will you do performance reviews?
On what basis will performance be judged?
Who will participate in reviewing employees?
Other:
laws, or to meet certain standards? Help people understand why a rule

isn’t silly.
Nordstrom, the upscale department store, became famous for its out-
standing customer service. How does Nordstrom instill such dedication
and loyalty in its employees? One factor may be its personnel policies.
The Nordstrom personnel manual contains only one sentence: “Use
good judgement in all situations.”
See pages Use the worksheet “My Personnel Policies” to establish the main policies
116–117 your business will follow in dealing with employees.
Finding and hiring good people

Your business is only as good as the people who work for it. No matter
how good your product, how necessary your service, or how innovative
your technology, it’s the people in your company that will ultimately
determine your success. That’s why it’s important to find the right peo-
ple, then train, nurture, and reward them.
When you have an immediate need for help, you might be tempted to
hire anyone you can get, but it’s often better to leave a position unfilled
until you can find a person you consider capable and trustworthy.
Here’s something to keep in mind right from the start: Hire for attitude,
train for skills. You want people on your team with good work habits, a
positive attitude, and an ability to get along with others. In most cases,
you can teach a smart and willing person a particular skill (such as how
to use a software program or operate a piece of machinery). It’s much
more challenging—and a lot more work—to instill the right attitude in
the wrong person.
The key to successful hiring is to have a very clear definition of the posi-
tion you’re filling. Job descriptions spell out the critical duties, roles, and
responsibilities of a specific job. When a candidate reads a well-crafted
job description, they should be clear about what the position involves.
This clarity should help them figure out whether the job suits their
interests, skills, and background. A well-crafted job description helps you
attract the candidates you want and weed out the ones you don’t.
QUESTIONS TO ASK
POTENTIAL employees
Don’t wait until a job applicant is sitting in the waiting room before figuring out what to ask.
Take time well before the first interview and make a list of things you’d like to know about your
candidate, such as whether they have the right experience, skills, education, and so forth. Ask
specific questions in those areas, “What were your exact responsibilities?”, “What computer
programs did you use regularly?” And so on. Find out, also, what they liked and didn’t like
about their previous jobs and what they hope for in their new position. That gives you a better
sense of whether they are a good fit for your job and your company.
During interviews, don’t do all the talking! It’s appropriate to explain the job and, in many
cases, to try to “sell” the job to the candidate, but most of the time the candidate should be
talking, not you. You may want others to also interview the applicant, especially the prospect’s
direct manager, and possibly coworkers and even people who will work for him or her.
In addition to direct work-related questions, it’s important to ask questions that give you a
sense of the applicant as a person and their attitudes toward responsibility, working in a team,
how flexible they are when faced with change or uncertainty, and so forth. But be careful!
Some questions are illegal to ask. You can’t, for instance, ask a candidate about their marital
status, plans for having children, religion, or age (in most cases). But it’s perfectly legal to ask
about hobbies, interests, and long-term goals.
And never, never discriminate on the basis of race, gender, age, national origin, and the like. It’s
not just illegal—you’ll eliminate some terrific potential employees.
Consider the following criteria when writing a job description:

Envision the daily tasks and activities your new hire
n Skill sets desired.
will have to perform. What are the must-have skills? What would be
nice to have?
n Past experience needed. Which critical aspects of the job would ben-
efit from specific past work experience? Are you looking for a particu-
lar educational background or someone with specialized training? Do
they need prior industry knowledge or experience performing certain
job functions?
n Personal characteristics desired. Do you need an outgoing and

friendly employee for a customer service job? A creative one for a
marketing position? It’s OK to include personal traits if they’re key to
finding a good fit, but avoid potential legal problems by focusing on
qualities needed to do the job well, not qualities like age or gender.
n Where you’ll compromise. Know if you’d be willing to provide on-
the-job training for a candidate with the right personality and less
experience. Make sure your job description emphasizes the things that
are the most important to you.
As you jot down a list of job duties and responsibilities, think not only
of the tasks you want help with right now, but of your long-term needs
also. As your business grows and attracts more customers, what duties
Check It Out will you want this employee to perform? Forecast for your reasonable
Popular online job sites
immediate future growth and plan ahead.
include Craigslist (www.
Here are other ways to increase the quality of job applicants:
craigslist.org), Monster
(www.monster.com), n Create an ongoing recruitment campaign: Develop a network of
Indeed (www.indeed. referral sources, and remind everyone in your company to be on the
com), CareerBuilder
lookout for great employees.
(www.careerbuilder.
com), and LinkedIn When you place a “help-wanted ad,” create
n Be creative in your ads:
(www.linkedin.com)
as much attention and interest as possible. Express the “personality” of
your company in your ads.
n Hire the unusual: Increase your applicant pool by expanding your
vision of a typical employee. Does your industry usually hire young
people? Try recruiting retirees. How about looking for employees
with disabilities? Or from different ethnic groups? Sometimes the best
employees don’t look like the ones you already have.
n Be in the game on salary and benefits: As a new company, you may
not be able to pay more than big companies or give as many benefits,
but you’d better be fairly competitive. You can’t be so far apart that any
applicant would feel like a fool for accepting your job.
n Offer creative “perks”: We allow employees to bring their dogs to
work; I give employees their birthday as a paid holiday. One of the
best perks is flexibility. An applicant may want to start work at 10 a.m.
to avoid rush hour and stay later, or come to work earlier and leave at
3:30 p.m. to be home with the kids after school. Of course, this isn’t
always possible, but flexibility is a highly desired job benefit.
n Act fast: If you see someone you really like, be prepared to decide and
make an offer. But don’t ever hire out of desperation; it’s better to keep
a job open than be stuck with the wrong person.
n Get a reputation as a great place to work: Sure, all applicants look
at tangible benefits. But in the long run, what encourages current
employees to recruit others, reduces turnover, and attracts the best new
applicants, is building a business where people feel good about going
to work—a company with integrity, that shows respect for all, and that
lets people also have fun. Do that, and they’ll line up at your door.
Use the worksheet “Recruiting Employees” to identify places to seek See page 123
employees.
Hire Your First Employee guides you step-by-step through everything

you need to make the decision to hire, find the right people, and lead
and manage your team. It’s available in bookstores throughout the U.S.
Compensation
To attract good employees, you have to offer salaries and benefits that are
competitive with similar businesses in your area. Most employees’ main
financial concern is the salary or wage offered, but they will also decide
to accept a job based on the total “package,” including:
n Base salary/wage
n Bonuses, based on either individual performance, group or company Check It Out
performance, or guaranteed bonus Research comparable
n Overtime, which may be set by law compensation at
n Signing bonus, as an incentive in a very tight job market www.salary.com or
n Commissions, given on sales made
www.salaryexpert.com
n Profit sharing, a portion of the overall company profits Find out the average
n Stock options or stock purchase plans, giving the employee a compensation for over
discounted means to purchase a direct financial stake in the company 800 occupations from
the Bureau of Labor Sta-
To determine the “going rate” for your new employee, do some research tistics, www.bls.gov/oes
to determine how much other companies pay. Keep in mind that you
want to look for comparable pay based on job duties, location, industry,
and business size.
Discrimination. It’s not good business. It’s not good behavior. And it’s against
the law. In virtually all situations, it is illegal to discriminate against employ-
RED TAPE ees because of race, religion, sex, or national origin. In many situations, it’s
ALERT! illegal to discriminate on the basis of age, physical disability, or sexual ori-
entation. You may not discriminate in hiring, promotion, pay, or treatment.
Moreover, it is your responsibility as an employer to create an environment that is not hostile
to any individual or group based on such factors. You must also make “reasonable accom-
modation” to employees’ religious observance needs, such as allowing them time off on their
sabbaths or holy days or wearing articles of religious attire (unless there is a significant safety
concern). Ask your attorney about conforming to regulations laid out in the Civil Rights Act,
Americans with Disabilities Act (ADA), and other anti-discrimination laws.
Benefits
When a potential employee—especially a well-qualified employee—
considers accepting a job, they’re going to weigh many things besides
simply how much the job pays. They’re going to look at the full range of
benefits they receive—things such as health care, vacation, retirement,
sick leave, and more. In human resource terms, this is called the “pack-
age,” and employees always consider the total package of benefits they’ll
receive.
You’ll be surprised at how few benefits you’re actually required to offer
by law. In most states, you don’t even have to offer sick leave, let alone
health insurance. So why bother? Consider the upside of providing good
benefits:
n Acompetitive benefits package, especially one with good health insur-
ance, helps you attract and retain great employees. Offering insurance
makes you more competitive with other employers.
n Employees will often accept better benefits in lieu of a higher salary,
which can translate to financial savings for you.
n When it’s tax time, you can deduct the cost of benefits.
n Your
own benefits—especially health insurance—costs substantially less
when you purchase them as a group rather than on an individual basis.
WORKSHEET recruiting employees
What recruitment efforts will you use to find employees?
What ongoing training will you offer employees?
What features of your company and/or specific job do you want to mention in your ads or listings?
What unusual or particularly appealing aspects of your company and/or specific job can you describe that would
make you stand out from others?
Other aspects to mention in ads or interviews:
List specific places you could advertise/look for employees:

Newspapers:
Online career/hiring sites:
Social networking sites:
Schools/colleges/universities:
Career fairs:
Trade organizations:
Other organizations:
Bulletin boards:
Unemployment offices:
Former employees:
Personal network:
Other referral sources:
Competitors:
Others:
n Many benefits, such as good health insurance, actually decrease absen-

teeism and improve employee health and wellness.
n Benefits
are good for morale and enhance the caring, family-like envi-
ronment of a small business. And, it’s the right thing to do.
As a small business owner, you need to distinguish yourself from other
businesses when competing for the best employees. So get creative! Per-
haps you can provide more flexible work hours or paid time off. Many
nontraditional benefits—such as season tickets for a local sports team,
a bring-your-dog-to-work policy, or free team lunch on Fridays—won’t
cost you much but may help make your employees very loyal to you.
Training
Just as you have to continually improve your own skills, you want to
continually improve the capabilities of your employees. The best compa-
nies make a strong commitment to ongoing training and education.
Often the easiest way to provide training, especially for a small company,
is to pay for employees to attend outside seminars or classes. These are
offered by a wide range of providers. As your company grows, you may
want to develop some in-house training programs or bring in seminar
leaders or speakers.
Don’t just provide training for specific skills. While these may be neces-
sary, it’s also beneficial to educate employees in broader areas, such as
overall business strategy, industry trends, etc. The smarter, more knowl-
edgeable an employee, the more he or she can contribute to your success.
Appraise your management style

When you run a small company, you can’t afford to waste resources, yet
many business owners often squander one of their most valuable assets:
their employees. I’m always surprised when I encounter an employer
who views having employees as a necessary evil to be endured rather than
a resource to be developed. If you waste the intelligence, energy, or skills
of employees, it’s like throwing money out the window.
Your attitude toward the people you hire goes a long way in determin-
ing their attitude about the job they do. The surest way to get the most
from employees is to treat each one with respect. No matter what kind
of work a person does, they like to have a sense that their opinion and
input counts. When you allow your employees to think about how to
solve problems, not just carry out specific tasks, you can unleash an
amazing amount of creativity and energy.
But having employees is also a challenge. In addition to dealing with all

the laws, paperwork, and policies, you’ve got to deal with employees as
people—each with a distinct personality. That means some of your time
will be diverted from specific tasks to personality issues—how people get
along, communicate, and solve problems. You can view this as a distrac-
tion from your “real” work or you can recognize that this is part of the
job of being a boss.
Being a boss is tough. It’s one of the most demanding challenges of run-
ning a company. You have to inspire, lead, motivate, discipline, and
reward. Some of the most important leadership skills are:
n Communicating goals: Let people know why they are doing some-
thing, not just how to do it; employees are far more motivated when
they understand the purpose of a task.
n Setting standards:You are responsible for establishing—and demon-
strating—the standards you expect others to maintain.
n Being fair:Make sure your standards are reasonable and fair, and that
goals are actually reachable.
Manager vs. Leader—Wearing Both Hats Is Required

A Manager …. A Leader….
Tells employees what needs to be done Sets high-level goals and strategy; establishes clear
standards and values
Trains employees (or arranges for training) on how Keeps the business on track to reach those goals
to do their jobs well
Monitors/measures success on a daily procedural/ Monitors/measures success at the financial/organi-

process level zational level
Helps prevent things from going wrong Helps things go right
Fixes problems when they do occur Empowers others to take action to fix problems
Start It Free n Listening: Learn to talk with and not just talk to your employees;
enlist their suggestions and set goals together.
Once you have your
team assembled, you’ll n Making decisions: The buck has to stop somewhere; employees look
need to find a way to to their leaders to make choices and stick with them.
manage projects and
tasks. Project manage-
Rewarding and acknowledging
ment applications Asana
(https://asana.com), Everyone wants acknowledgment for a job well done. Few things are
Wrike (www.wrike.com), more dispiriting than to excel at a task and then have your hard work
and Teamwork (www. ignored. Moreover, it’s only human nature to try harder to please those
teamwork.com) offer who appreciate us than those who ignore us.
free versions to get you
started. As your com- Give credit to all employees who do their job well, with particular
pany grows, you can add rewards for those who perform exceptionally. Give praise quickly and
paid premium features publicly. If you need to discipline an employee, do that privately. Find
to each these products. fun or creative ways to congratulate people. But often, just a public
“thank you” or a round of applause shows that you’ve noticed their con-
tribution. Take time to celebrate successes, especially with everyone in
the company. It’s a morale booster.
Recognizing that employee turnover is costly, especially in a small com-
pany, think about how to build an atmosphere where employees are
likely to want to stay.
Here are five ways to retain employees:

1. Trust them. Give your employees responsibility and authority. Show
them what has to be done and the standards you want them to meet.
Then, let them do their jobs.
2. Offer them the opportunity to grow. Although some people might
be content to perform the same tasks month after month and year
after year, most people would prefer to learn new skills and be given
more responsibility as time goes on.
3. Communicate. You reduce the chance for misunderstandings and
increase the chance of success when everyone on your team knows
what’s going on. Even short meetings can be helpful and keep you
and your employees in sync.
4. Recognize effort and accomplishment. Everyone wants to have
their hard work acknowledged, even when things don’t work out
as planned. People thrive when they feel appreciated, and a simple
“thank you” can make your staff members feel that they’re a valuable,
contributing part of your team. Recognition has been shown to be
an extremely positive motivator of employee behavior.
5. Reward accomplishment. Rewards reinforce behavior. Even small
rewards—whether cash, promotions, time off, gifts, something as
simple as a candy bar or certificate of achievement—show that you
appreciate what they are doing for you and your business and keep
employees wanting to do more.
So what kind of boss will you be? Will you have the skills to lead your
company rather than micromanage your employees? Can you create an
environment that encourages employees to do their best? Fill out the
“My Leadership Skills” worksheet to evaluate your own experiences and
abilities as a leader. See page 128
Pay attention to choosing, training, developing, and rewarding the

people on your team—because they are your most important resource.
One of the best ways to motivate employees is to make your company
an organization they’re proud to work for. Everyone, including your
employees, wants a sense of pride and purpose in what they do.
WORKSHEET my leadership skills
Rate yourself in each area below as either excellent, good, fair, or needs work.
Skill Excellent Good Fair Needs Work

Decision making
Communicating goals
Setting standards
Listening
Consistently being fair
Patience
Creating a learning atmosphere
Training others
Motivating others to do their best
Constructively communicating
problems/disagreements
Acknowledging and rewarding

the contributions of others
Other leadership skills:

List things you’ll do to improve your leadership and management skills (classes, training, books, etc.):
week 4
üweek 4: take care of operations


week 4
#1 Find and secure a location
#2 Design your work and production space
#3 Research and purchase computers, software, and
other technology
#4 Consider how you will distribute your products
#5 Design procedures for handling administrative tasks
#6 Deal with insurance

Real estate agent
Suppliers
Insurance agent
Take Care of
Operations
W here will you work, make, or sell your products?
What kind of equipment do you need? How will you
keep track of paperwork? Even something as basic as a desk
and a chair can turn your business into a reality, but which
desk? Which chair?
During this week, you’ll deal with issues such as choosing a
place to work, selecting furniture and equipment, purchasing
inventory, and handling the day-to-day operations required to
turn your vision into an operational business.
How you handle the operations and administration of your
company directly affects your success. While these details may
s seem mundane, in fact, they may make all the difference in
whether you are profitable, have sufficient cash flow to pay
your bills, or stay out of trouble with authorities. The wrong
location can doom a retail business; a poor manufacturing
process can result in higher costs, lower quality, or too much
waste. These issues are so important that you may want to
develop a detailed operations plan or manual to outline your
processes in greater detail.
Accomplishment #1:
Find and secure a location
How important is location to the success of your business? If you have a
business serving a particular neighborhood or community, you need to
be physically located in or near that area. If you’re in retail, the choice
of location is absolutely critical and may determine whether you have
enough customers to stay in business. A factor as seemingly insignificant
as which side of a particular street you’re on can dramatically affect the
amount of customer traffic you’ll receive.
If you’re a manufacturer, you’ll need access to raw materials, a shipping

system (whether that’s trucks, air, ships, or rail), and a good labor force,
but location may otherwise not be that important.
And then there are lots of companies that provide services from a dis-
tance (thanks in large part to the Internet) so business needs don’t direct
their choice of location at all.
Even if the site of your business isn’t critical to your revenues—for example,
if you deliver your services at client sites, or if you sell your products solely
online—the choice of your neighborhood has an impact on how you and
your employees feel about coming to work. A pleasant building, in a safe
neighborhood, with nearby parking and friendly neighbors can make work
more enjoyable. It can even help in recruiting employees.
Many entrepreneurs know exactly where they want to work—at home! Work-
ing at home can be a great advantage but it also presents some challenges
especially if children or a spouse are there. Planning your home office—its
space, storage, and policies—helps you make the most of this arrangement.
Some people run their businesses almost entirely from their vehicles—
cars, pickups, food trucks, vans. If you work from a vehicle, plan that
“office,” too.
Many new companies today launch in shared spaces, alongside other

entrepreneurs at the same stage of business. This type of arrangement cuts
down on expenses and can also foster important business connections.
W EE K F O U R | 133
In this section, the task of finding and securing your location depends
on what kind of space you’re planning for your business, either:
n rented space n home office
n office in a vehicle n shared space
Go to the section appropriate for your business to see the checklist asso-
ciated with your needs.
OPTION a:
Rent space
My Checklist:
Decide on the necessary attributes of your location
Meet with a real estate agent
Compare properties
Consider whether you need more than one location
Decide on the necessary attributes of

your location
Before you begin to search for rented space, prioritize your needs. General-
ly, this depends on what kind of business you’re in—retail, manufacturing,
service, or other type of industry—and your specific business activities.
For instance, as a publisher, my company deals with heavy boxes of books
daily. So when we looked for new facilities, even for our administrative
offices, we wanted to find space either on the ground floor or with elevator
access, so we didn’t have to carry those heavy boxes up flights of stairs.
Don’t forget less tangible issues, especially ones important to the quality
of life for you and your employees. After all, you aren’t starting your own
business to hate the place where you go to work! In my case, I wanted
offices where I could still walk to work from home, and where employees
could bring their dogs. Those issues certainly narrowed our search.
Of course, you need to figure out about how much space you need and
what your budget can handle. You may want to start small—with a
short-term lease—until you establish yourself somewhat.
WORKSHEET things to consider when renting space
Questions and terms to negotiate in lease Notes

Cost of rent: In addition to my rent, must I also pay the taxes, insur-
ance, or even a percent of my income? Am I required to pay a portion
of rent on “common areas”?
Length of lease and subletting: Can I get an option to renew? At what
rent? Can I sublet some or all of the space?
Layout: Does the layout of the space suit my work style or production
needs? Is there lots of wasted space I pay for?
Leasehold improvements/remodeling: Who is responsible for
improving the facility—me or the landlord? Am I responsible for return-
ing the facility back to its original condition when I move?
Utilities: What utilities are included in the rent? Are adequate utilities
available—electricity, water, and heat?
Janitorial/maintenance: Who is responsible for cleaning and repairs?
Who is responsible for waste disposal?
Zoning laws and other use restrictions: Are there any limits on how I
may make use of the premises?
Permits/planning departments: What kind of permits will I need
to operate my business or remodel? What are the costs and time
involved?
Storage: Is there adequate space for storing supplies, raw materials,
and inventory? Is it easily accessible?
Furniture/equipment: Does the space come with any furniture, equip-
ment, or fixtures? If so, are those included in the rent?
Safety/security: Is the location safe for employees, customers, and my

equipment and inventory?
Expansion: Is there sufficient space for me to grow? How soon will my
needs exceed this space?
Environmental: What environmental limitations or concerns apply
to this space? Is noise a factor—either noise I produce or noise from
outside?
Insurance: What insurance does the owner have? What insurance must
I provide? Will I have any difficulty getting adequate insurance for this
location?
Access/parking: Is the site easily accessible for customers, employees,
shipments? Are there adequate parking spaces provided? Is it near
public transportation?
Office space considerations
Appearance: Will I meet clients or customers at the office and need to
make a positive impression? Does the office have a waiting area?
Office space considerations (continued) Notes
Privacy: Does the office have sufficient privacy for my business needs?
Meeting space/conference rooms: Do I have sufficient access to con-

ference rooms or other meeting space?
Mail shipping and receiving: Can I receive mail or shipments? Is it

secure? What time does it arrive?
Coffee/kitchen/eating areas: Is there access to any coffee, food prepa-

ration, or eating areas? Is water convenient?
Lighting: Does the space have lighting adequate enough to prevent

eye strain and fatigue?
Wiring/data lines: Is the space already wired for high-speed Internet

access? If not, will it be difficult or expensive to install wiring?
Retail space considerations

History of others in the space: How have other retail or restaurant
businesses fared at this location?
Fellow tenants/neighbors: Are the retail neighbors compatible, with

similar market demographics?
Quality of the space itself: Does it feel welcoming and make showing
off my merchandise easy?
Limitations on space, additional fees: Are there any limits on my

hours of operation, or requirements to pay additional fees or partici-
pate in certain promotions (common in malls or business improvement
districts)?
Manufacturing space considerations
Docks/shipping facilities: Can I receive/ship my expected materials/
inventory? Does the location incur additional shipping fees?
Utilities: Are there adequate utilities for my production needs — water,

electricity, natural gas, etc.?
Waste disposal: Is there adequate access to waste disposal, including

any hazardous materials resulting from my production process? Costs?
Proximity to suppliers and distributors: How long will it take to

replenish materials, to send my product to distributors and customers?
Costs?
Other lease provisions?
What other fees, duties, or limitations are part of the lease agreement?
As you ponder the necessary attributes of your space, consider your

needs, depending on the use of your facilities:
Office/Administrative: Virtually all businesses need at least some office

space. Many businesses only need office space—professional, sales, or
administrative offices. On the other hand, if the main purpose of your
business is retail or manufacturing, your “office” may only be a small
portion of your total site.
Check It Out Since you are just starting out, and if your company has just one or two
When setting up a retail
staff people, one approach to securing office space may be to sublet space
shop, you’ll need to from another company or to find a coworking space (see page 151 for
know the demographics more information). This gets you up-and-running much faster, since it
of the neighborhood. may be set up with furniture, Internet access, conference room, and the
Sperling’s Best Places use of office equipment (copiers, printers, fax machine). It may also give
(www.bestplaces.net) you the flexibility of a short-term or month-to-month lease.
includes comprehensive
information on county, Retail: Location, location, location. One of the most important consid-
city, and neighborhood erations for a retail business is the choice of location. Do you want to be
demographics across the
in a mall? On a popular pedestrian street? In a particular neighborhood?
U.S. For more resources
for researching a market, If your business is easily seen by passers-by (such as in a mall or well-
see pages 58–60 in
trafficked street) you can save considerably on marketing and advertising
Week Two.
costs. Of course, these locations typically charge higher rent. However,
paying higher rent to get a more visible and accessible space may be well
worth it.
In addition to being visible, your store must be accessible. If customers

have easy access—either walking, driving, or taking public transporta-
tion—you have a competitive advantage over businesses that are hard to
reach or find.
Manufacturing/Production: What do you make? Toys? Computer

peripherals? Packaged organic vegetables? Obviously, the nature of your
product dictates the kind of facilities you need.
Your production facilities can have a direct impact on your profitability.

Are you set up to save on energy use and costs? Can you lay out your
production processes efficiently? Are you near your customers or ship-
ping facilities? How much does it cost to have waste removed? Under-
stand all costs and benefits as you choose your space.
Also consider whether you need your own facilities or whether contract
manufacturing facilities are available. Some industries have contract
manufacturing or production facilities (such as contract kitchens) that
give you the flexibility to start up without investing large sums of capital.
Warehouse/Storage: Some facilities are used primarily for storage. In
these situations, you have many of the same concerns as manufacturing:
shipping, docks, utilities, safety, access, security, and proximity to dis-
tributors. Be particularly cautious of environmental considerations that
may affect the products or materials you store.
Use the worksheet “Things to Consider When Renting Space” for a
more detailed checklist of issues related to renting space. It includes
items of general concern if you are renting space, and items specific to See pages
the type of space you are renting. 134–135
Meet with a real estate agent

Once you know what you need, you can begin shopping for space.
The first thing to do is to start driving—or walking—around the area
that interests you. You might want to drive around a few different areas
before settling in on your first choice. You’re likely to find some “For
Rent” signs if lots of properties are available.
However, commercial properties are harder to find than residential.
They’re not as likely to be listed online or in the newspaper, and often,
there’s not even a “For Rent” sign in available commercial property win-
dows. There isn’t a “Multiple Listing Service” as there is for home sales.
As a result, you will probably want to work with a commercial real estate
agent, especially if you need a lot of space.
You’ll have to be persistent. It’s often difficult to get fast action from
agents or landlords if you only need a small amount of space. So you
have to stay on top of the process.
Find a real estate agent who specializes in either the location that inter-
ests you or your type of business. Ask other entrepreneurs if they have
any agents to recommend.
Remember, most commercial real estate agents represent landlords and
specific properties, so you may end up working with different agents
for different properties. Make sure someone who’s looking out for your
interests reviews any leases or contracts you sign.
Compare properties
Once you start looking for space, you’ll need to know common commer-
cial real estate rental practices and terms.
Typically, you’ll be quoted rental prices on a “per square foot” or “s.f.”
basis. (If you’re subletting or renting executive office space, you might be
quoted a flat rate.) In most of the U.S., the square foot price is given on
an annualized basis (e.g., $24 a square foot); in parts of the western U.S.,
it’s quoted on a monthly basis (e.g., $2 a square foot).
Before you make your first call, familiarize yourself with terms brokers
and landlords toss around. Beware! Definitions vary from landlord to
landlord, so have them be clear about what’s included:
n Triple Net or NNN: You, the tenant, are responsible for all costs of your
portion of the building, including property taxes, insurance, utilities,
and maintenance. In other words, you pay these costs in addition to
your monthly rent.
n Full service or Gross: Your rent includes all—or some—of those
triple net costs, so you need not pay them separately. It’s most likely to
include taxes and insurance. Ideally, it includes utilities, janitorial, and
perhaps—if you’re subletting—Internet access.
n Modified Full Service: The rental price includes some, but not all, of
triple net costs. Typically, utilities and maintenance are excluded.
n CAM or Common Area Maintenance or Load Factor: An additional
amount—usually a percentage of your base rent—you’re charged for
common areas you share with other tenants, such as halls, bathrooms,
entryways. So while the space you’re renting may be 1,000 s.f., your
landlord may charge you for 1,200 s.f.—the extra 200 s.f. you’re pay-
ing for is the CAM fee.
n T.I. or Tenant Improvements: In some cases, the landlord, at their own
expense, will be willing to make improvements or changes to the space
to accommodate a tenant’s specific needs. The larger the space, the
longer the lease, and the softer the rental market, the more willing a
landlord is to make improvements. Make it very clear in the lease what
improvements will be made—and paid for—by the landlord.
WORKSHEET location/space comparison chart
Location One Location Two Location Three

Address/contact info
Total sq. feet
Rent (per sq.ft., total)
Length of lease
(option to renew,
at what rent?)
What’s included?
(utilities, janitor,
data lines?)
What am I respon-
sible for? (utilities,
janitor, data lines?)
Legal issues (permits,

zoning, etc.)
Parking, access, and

safety issues
Insurance issues
Advantages
Disadvantages
Other:
Whether you use your space for retail (a store), administrative (office), man-
ufacturing (a plant), or storage purposes (a warehouse), you face many of the
same considerations. The worksheet “Location/Space Comparison Chart”
and the checklist on pages 134–135 can help you as you shop. You may also
See page 139 want to use the checklist as a basis for negotiating terms with your landlord.
That brings us to the question of how long a lease to ask for. This
depends on the stability and stage of your business, the quality and price
of the space, your future plans, and your comfort level with taking on
a long-term obligation. As a new business, you may be better off with a
short-term lease, even if rents increase in the future or you have to move.
If you take a long-term lease, make certain you can sublet it.
And remember, before you sign any contract, including a lease, go over it
with your lawyer first.
Consider whether you need more than

one location
In some instances, you may need more than one location for your busi-
ness. If you are in manufacturing, you may find it less expensive or
necessary to situate your manufacturing facilities in one city and your
administrative or sales offices elsewhere. An apparel manufacturer may
want a sales office in New York City, for example, while the actual pro-
duction occurs in New Jersey.
In most types of business, technology has made it relatively simple to
employ some remotely located workers, often far away from the main
office. This may be a good option if you want to hire individuals with cer-
tain skills who are located far from your main place of business.
Be warned, however: Having more than one site presents a number of
legal and logistical issues, in addition to the challenge of getting more
than one business location up-and-running. After all, it’s hard enough to
start a business in one place; why give yourself the added burden of oper-
ating in more than one location unless you have a pressing need?
You will particularly run into legal and tax issues if you employ work-
ers (even nonemployees) in more than one state. You may also have to
deal with that state’s payroll, business, and sales and income taxes. Each
state may enforce different insurance regulations, and if you offer health
insurance, you may need to get different providers for each state.
option B:
Set up a home office
My Checklist:
Find the space to work
Figure out your phone, fax, and Internet connections
Plan how to meet with customers
Decide whether you need a separate business address
Understand home-based office tax deductions
For many years, I ran my business from my home. I enjoyed working

from home, and I never had more than what I jokingly called my “one-
room commute.” When I finally decided to lease office space, I left home
with some regret. Running a business from home has many advantages,
but it has its challenges as well. The key is to set up a home office right.
Find the space to work

A home office can take many forms. It might simply be one end of your
dining room table. It could be the guest room, as long as no guests come
to visit. You might claim a section of your garage, and even build in walls
and install a window, shelves, heating, and air conditioning.
Check It Out
If you’re serious about your business, you need good work space. You For tips on setting up
don’t necessarily need a separate room, but find a space without too an ergonomic com-
puter station, check
many distractions. Once you’ve chosen the physical space for your office,
out OSHA’s eTool that
consider what will go in it: outlines the basic design
of a safe and comfort-
n A desk or work table. At the very minimum, you should have a desk able workstation. www.
or table used only for work. Having to clear your stuff off the dining osha.gov/SLTC/etools/
room table every night quickly gets old. Make certain it’s the right computerworkstations/
height for what you’re doing. index.html
n A good chair. Getout of that folding chair and buy yourself some-
thing comfortable enough to sit in for hours. Your shoulders and back
will thank you.
n Good lighting. Most homes don’t have sufficient lighting to work all
day, so in addition to overhead and indirect lighting, get a desk light.
Don’t put your computer monitor directly in front of a window (you’ll
squint all day), and watch for glare from other windows.
n Heaters or air conditioners. The temperature in your office is more
than just a matter of personal comfort (which is very important). If
you have equipment in your office, you need a stable temperature. I
ruined a computer hard drive because my office was in a room that got
very cold at night and condensation formed on the drive.
n Storage. When you run a business from home, you accumulate
stuff—a lot of stuff! You need someplace to put it. Purchase an office-
type storage cabinet or put shelves up in a closet. Put stuff you need
to use frequently within easy reach. Trust me, you’ll underestimate the
amount of storage space you need.
n Electricity. Surgeprotector strips have the benefit of increasing the
number of your electrical outlets, but be careful not to overload circuits.
Buy the kind of surge protectors that can handle “transformers”—those
big electrical plugs on many technology devices.
Figure out your phone, fax, and Internet

connections
I’m a big believer in a separate business phone line if you’re doing business
from your home on an ongoing basis. If your cell phone ever drops calls at
your house or if call quality is reduced, a traditional land line is helpful for
important client calls and teleconferences. And, once your toddler answers
a call from your most important client, you’ll see the necessity of a sepa-
rate line for incoming business calls. An extra phone line for business also
enables you to have an outgoing business message for that line and a fam-
ily message on your other line. If you get a high volume of faxes, you may
need a dedicated line for that as well.
Of course, you’ll need to have Internet access wherever you are. Generally,
you’ll choose from cable, DSL, or satellite. In addition to evaluating cost,
look at the speeds of data transmission and how that will be affected as you
add users.
Plan how to meet with customers

If you work out of your home, one of the biggest challenges is often fig-
uring out where and when to meet with customers. If you only meet cus-
tomers at their place of business, at trade shows, or online, no problem!
But if customers are going to come to you, how will you arrange your
space so you look professional?
If you’re going to meet with others regularly, ideally, you want to set up
your work space separately from your family surroundings. If possible,
have a separate entrance or at least a path to your office that doesn’t go
through a messy playroom or kitchen. If you’re meeting clients infre-
quently, or on a regular schedule, you may be able to use your own living
or dining room as a meeting space. Just make sure you don’t violate any
city zoning laws, homeowner’s association rules, or lease agreements.
Also make sure the rest of the family, if any, know to stay away!
What if you don’t want customers in your home but need to meet them
somewhere other than their offices? Look for other, “neutral” locations,
such as a lunch meeting in a restaurant or a morning meeting at the local
coffee house. If you have an ongoing need, find another company from
which you can sublet or rent a meeting space or conference room on
an hourly basis (such as a small law firm). Online you can also find and
book conference rooms and meeting spaces that you rent by the hour.
See a list of these booking sites in the Check It Out sidebar on page 153.
Decide whether you need a separate

business address
When you work from home, you face a dilemma: What address should
you give out?
If you use only your home address, are you comfortable putting it on
business cards and marketing brochures that you hand to strangers, or
put on a website where the world can see it? If you don’t put any address
on these marketing materials, you might seem less than professional.
One alternative is to get a post office box from the U.S. Postal Service.
The problem, however, is that then your business address is only a post
office box—or P.O. Box—number. That may make your business seem
somewhat insubstantial. Moreover, the U.S. Postal Service usually refuses

to accept deliveries from private delivery services such as FedEx or UPS.
Another, often better, alternative is to rent a mailbox from one of the
many private mailbox providers (such as “The UPS Store”), also called a
“commercial mail receiving agency.” A private mailbox gives you a secure
place to receive mail, and employees there can sign for and receive your
packages. They generally will accept deliveries from private services as
well as the U.S. Postal Service. Moreover, they often offer other services
such as mail forwarding, calling you if you receive a special delivery,
packing and shipping items, and allowing you to call in and check your
mail if you’re on the road.
One other advantage: With a private mailbox, you can usually use their
address, followed by the “#” symbol or the word “number” and your
box number, so that you don’t have to use the term “P.O. Box” as your
address. (For example, PlanningShop’s private post box address is 555
Bryant St., #180, Palo Alto, CA 94301). Just be sure to verify your
wording with your mailbox service before you print business cards.
Understand home-based office tax

deductions
When you work from home, one murky area you’ll need to deal with is
which business expenses are deductible and which aren’t. If you buy a
new work table that you use for both your office and for the kids’ home-
work projects, is that deductible? If you add a space heater to your office
in the garage, can you deduct the extra utility expenses? What if you let
your kids use your office supplies?
Tax deductions for home offices are daunting and confusing. If you’re
setting up a home office, you should add these questions to the list when
you meet with an accountant (Week Five).
Most normal business expenses that you’d have whether or not you were
working from home—postage, office supplies, advertising, wages—are
treated the same way as any other business. You can deduct those expens-
es as part of your regular deductions for the cost of doing business.
Some deductions become more problematic, especially when the expense
is—or could be—used for both business and personal purposes, such as
telephones, Internet connections, and equipment.
You have an additional tax savings option on your home office if you Check It Out
qualify, and if you choose to take it—the home office deduction. The The IRS answers ques-
home office deduction allows you to deduct a portion of your rent or tions about the tax
implications of running
mortgage based on the percent of your apartment or home used exclu-
your business from your
sively for business. That can be a nice extra tax deduction for you. home. www.irs.gov/
taxtopics/tc509.html
However, there are many considerations before you take the home office
deduction. You have to meet the IRS’s qualifications, and this is one
deduction that frequently leads to an audit. Also, there are tax implica-
tions if you later sell your home. So you certainly want to discuss the
home office deduction—and whether you should take it or skip it—with
your accountant or tax advisor. Use the guide “Questions to Ask: On
Home Office Deductions” below to get your conversation started.
QUESTIONS TO ASK
on home office deductions
What percentage of my rent or mortgage can I deduct?
Can I deduct costs of remodeling? Rewiring?
Can I deduct these expenses the first year, or do I have to capitalize them over a number
of years?
Is it wise for me to take the home office deduction?
What are the tax implications if I later sell my home?
What percentage of my phone or Internet connection costs can I deduct?
What percentage of my utilities or other expenses can I deduct?
What furniture and equipment expenses are deductible? Office supplies?
What transportation expenses can I deduct for getting from my office to customers?
Can I deduct expenses for artwork, decor, sound systems, or other amenities in my
home office?
What other business expenses can I deduct?
Plan ways to separate work life from

home life
One of the most difficult tasks for people who work from home is
establishing a clear distinction between work and home. If you’re not
disciplined, you may find yourself distracted by nonbusiness matters.
One friend said her house was never cleaner than when she worked from
home, since she did housework to avoid taking care of business.
On the other hand, many people who work from home find they never
leave “work.” They end up working day and night, much to the annoy-
ance of family and friends.
Separating your work life from home life can be especially difficult when
you live with others: a spouse, children, or guests who come to visit.
Friends and relatives often view home-based entrepreneurs as people who
are always available. They don’t understand why, in the middle of a work
day, you can’t run an errand, go to a movie, or pick up kids from school.
The best way to deal with working at home is to be as professional as
possible during the time you set aside for business, but allow yourself
some of the flexibility you want from working out of your home.
Establish work hours: One of the best ways to protect your valuable
personal time yet still have enough time to conduct business is by estab-
lishing set work hours.
Structure your week and your workday. Set a work routine that makes
you, your family, and others more conscious of your business life. That
doesn’t mean you have to work from 8 a.m. to 6 p.m.; just establish real
working hours.
For instance, you can tell others (and yourself ) something like: “I start
work right after I take the kids to school; take a half-hour housecleaning
break around 10:30; a quick lunch around 1 p.m.; go to the post office,
run errands, and drop kids off at classes or soccer from 4 to 6 p.m. Then,
if I have to, I catch up on paperwork after 9 p.m. On Tuesdays and
Thursdays, I leave work early to go to exercise class.”
Make sure that you, your clients, employees, friends, and family know
what your work hours are, when and why you can be interrupted, when
you’ll take days off, and when your busiest time of the day, week, or year
is (so they can leave you alone!).
But also make certain you know when your “free” time is and when your
workday is over. It’s only fair to others—and yourself—that you “leave”
the office after hours and go “home.”
Be clear with guests about your spare time: Whether your office is
in the guest room or the next town, having guests can be a strain on
any home-based entrepreneur. Often, guests don’t understand how self-
employed people structure their workdays or work weeks.
Allow yourself some time to spend with visitors, but be clear about when
you’ll be with them and the limits on your availability.
Let prospective guests know in advance how much time you’ll be able to
spend with them, so they’ll understand the situation before they arrive.
Put this in the most positive light: “I’m delighted I’ve been able to cancel
my meetings for Thursday afternoon to spend with you. Until then, I’m
sure you’ll enjoy exploring the city on your own.” If you need to, make
up a list of sights or keep brochures on hand so visitors can find ways to
entertain themselves.
Of course, even the best-laid plans may fly out the window when the in-
laws arrive!
Deal with kids and pets

Many parents find the greatest appeal of a home office is being at home
for their children. However, many former work-from-home parents have
found, after a year or so of working with crying or demanding children,
that an office away from home becomes a vital expense.
Make child care arrangements: Be realistic about the demands that kids
place on you. It’s not realistic to expect to get work done with kids com-
ing in and out, wanting to be driven places, needing a snack, or demand-
ing that you help settle an argument.
Don’t imagine, either, that you can just hand your kids off to a friend or
neighbor; tomorrow the neighbors’ kids may be in your backyard.
Realistically, you may need to make child care arrangements, depending

on your children’s ages and the nature of your work. Some businesses
are more flexible in terms of deadlines, hours, or phone calls. Others are
truly difficult to run when you have a needy two-year-old or teenager.
As a work-at-home parent, you have some added flexibility in child care

arrangements that typical office workers don’t. If you have school-aged
children, you may be able to schedule your work hours from 9:00 a.m. to
3:00 p.m., then spend time with the kids, and return to work at 8:00 p.m.,
when they’ve gone to bed. You may be able to share child care responsibili-
ties with a spouse—caring for them during the day, and retreating to your
home office at 5:00 p.m. when your spouse returns home from work.
Whatever your arrangement, develop a structured routine for your kids
that keeps them busy (and out of your hair) for a set period of time each
week so you can get work done. Since you’ll naturally want to spend
time with your children, set aside specific times. Tell your older children
when you’ll be available to run errands, make meals, or entertain them.
Pets: If you work at home, a pet is a great companion. A dog or cat
makes working at home less lonely. As someone who had a dog in my
own home office for years, I can offer some important tips to making the
most of a canine colleague.
n Barking: Justas you can’t have a screaming child in the background,
you can’t have a barking dog—at least not too often. If your dog barks
uncontrollably, put it in another room.
n Walking: Dog walking is an excellent way to meet new people, some
of whom might be great networking contacts. I got my very first cli-
ent walking my late dog, Teddy. A gray terrier mix, Teddy introduced
himself to a King Charles Spaniel whose owner happened to need a
business plan. Presto! My consulting service was launched.
n Responsibilities: If you work alone (and have a sense of humor), give
your dog a “title” in the company. I made Teddy my marketing director,
since over the years I met many additional clients while walking him.
Option C: Check It Out

Set up an “office” in your vehicle You’ll especially want a
fuel-efficient vehicle if
Many people run their businesses not from an office or from home, but you run a mobile busi-
ness. The U.S. Depart-
from a car, van, or truck. In some industries and lines of work—contrac-
ment of Energy’s site
tors, sales representatives, real estate agents, landscape designers, to name
(www.fueleconomy.
a few—an efficient and workable mobile office is a necessity. gov) provides a wealth
of information, from the
Since many people do not think of their vehicle as an “office,” they don’t
most fuel-efficient cars
organize the space appropriately. As a result, their “workplace” becomes
and trucks, to a guide on
unworkable, with important notes shoved in the glove compartment or hybrids, to tips for fuel
valuable equipment moving around loose in the back of the truck. efficiency.
If you know you’re going to use your vehicle for business, develop a
mobile office plan. There are many commercially available products to
outfit cars and trucks for specific purposes, including most kinds of con-
tractors or trades. There are even “desks” for your front seat.
Invest in dependable cell phone accessories for safe on-the-go commu-

nications. You’ll want a Bluetooth headset so you can keep your hands
on the wheel when a call comes in. A belt clip or dash mount keeps your
phone nearby and not lost in the clutter. Set up voice dailing if you can,
and maybe a solution to record conversations when you can’t take notes.
And don’t forget a car charger to make sure you’re never out of touch.
Since your vehicle is your office, you’ll also want to ensure that its con-
tents are safe. You probably don’t want to store the only copy of valu-
able documents or records in your vehicle. Where will you keep those
instead? Consider where you will park your vehicle overnight; you want
to make sure it’s safe and secure.
When you get insurance, make certain your policy covers not only the
vehicle itself but also your “office” contents or equipment, especially if
you regularly carry expensive tools or equipment. And, of course, talk to
your accountant or tax advisor about deductions for your mobile office.
Use the worksheet “Mobile Office Plan” to assist you in planning your
“office” in your vehicle. See page 150
WORKSHEET mobile office plan
What I will use my mobile office to do: (check those that apply)
Make phone calls Write up orders Use computer
Open mail Carry passengers Store samples/literature
Store supplies Haul equipment Other hauling
Other issues:
Other Issues: (check those that apply)
Issue My Solution
Cell phone and accessories
Storage
Writing surface
Office supplies
Work equipment
Climate control
Security
Safety
Insurance
Computer use
Internet connection
Parking
Other issues:
OPTION D:
Search for shared space: Incubator,
accelerators, and coworking spaces
The classic image of the would-be entrepreneur hoping to launch the next
Apple or Google is someone working on a fledgling enterprise in a garage or
dorm room. But working from home can be awfully lonely, and if Mom, the
kids, or hubby keep interrupting, it’s hard to create the next big thing.
Today, entrepreneurs have an alternative—spaces dedicated precisely for
early stage and novice small business owners. While these launch spaces
are exploding in tech-heavy places such as Silicon Valley and New York,
coworking, entrepreneur-friendly office spaces are popping up all over
America.
The following list outlines loosely the different types of shared working Check It Out
options for new businesses. Does renting a desk in
a “coworking” space
n Incubators. Prospective early stage and prelaunch companies must make sense for you?
apply for a spot in these types of spaces, and typically competition is Find available spaces at
high. You do not pay rent. In fact, expect to receive money and hands- Liquidspace (https://
on guidance as well as space in return for equity in your company. This liquidspace.com),
equity costs dearly in the long run, so make sure you are working with WeWork (www.wework.
com), ShareDesk (www.
people who have a proven track record of success.
sharedesk.net), Regus
n Accelerators. Thesehelp nurture high-growth companies after the (www.regus.com), and
incubation stage. The best accelerators help high-potential companies Premier Business Centers
grow quickly through introductions to customers, financiers, or key (www.pbcenters.com).
employees. They may charge rent or take equity. True accelerators are
highly selective.
n Coworking spaces. With these straightforward, turnkey rental spaces,
you get a desk or office—either assigned or drop in—as well as Internet
access, use of conference rooms (either included or for an extra fee),
and often some kind of coffee service or even a cafe. You do not give up
equity and typically no lease is required. They are not very selective.
Would-be entrepreneurs are themselves a lucrative market, and opportun-
ists have moved in to exploit their desire for exciting work environments
and their need for short-term, small space. So be careful when considering
these spaces. Make sure the costs are fair for what you receive, and don’t
give ownership in your company away without significant reward.
Accomplishment #2:
Design your work space and
production process
My Checklist:
Design your layout
Design your production process
Order/install utilities and facility improvements
Get furniture and equipment
Order inventory and/or raw materials
Design your layout

Once you’ve found your location—but before you move in—begin to
design how you’ll use your space.
When thinking through your needs for office and administrative space,
ask yourself the following questions:
n What are the necessary functions of your business?Administrative,
production, shipping, and the like, and how much space do you need
for each?
For
n Do certain functional areas need to be near other functions?
example, should packing be near shipping or bookkeeping near cus-
tomer service?
n How will you divide the space between different functions? Will
you want permanent partitions, such as walls, or temporary or partial
partitions?
n How many employees will work in each area of your space?
n Will employees work in an open environment? If so, will you need

cubicles or other ways to provide some noise abatement and privacy?
n Do some employees need private offices?
n How much equipment will you have and how large is it?
n Do you need conference or meeting rooms?

WORKSHEET office move-in checklist
To Do Notes
Arrange electrical/gas wiring/piping installation
Order electric and gas service
Arrange telephone cabling installation
Order telephone service
Arrange Internet and network cabling installation
Set up space for server/Internet equipment, if needed
Order Internet service
Arrange other utility equipment installation (water, etc.)
Order other utilities
Order waste disposal service
Order janitorial service
Ensure completion of landlord’s tenant improvements
Order and install interior and exterior signage
Arrange any interior and exterior painting
Order and install floor coverings
Order and install any necessary fixtures and equipment
Other:
n Do you need a reception/waiting area?
n Have you provided space for coffee/kitchen or other break-time/

lunchtime needs?
n How much space is needed for storage and where is it best located?
Don’t forget to provide adequate space for all the usual business support
functions—copying, faxing, mail preparation, bathrooms, and so on.
One way to design your space is to sketch a layout on a design grid, like
See page 156 the one provided for you in the worksheet “Floor Plan Layout.” Start
with a preliminary layout idea, measure your square footage, and then
assign each square on the grid a measurement—1 foot, 10 feet, and so
forth. Grab a pencil and start scribbling. You may want to make extra
copies of the grid in case you need to start over.
Of course, you could hire an interior decorator or ergonomics specialist
to help you with your floor plan, but resist spending more money than
you need to now.
Design your production process

Your production process will vary dramatically, depending on the nature
of your product. The process of creating handmade crafts is certainly far
different than the process of manufacturing high-tech electronics.
Nevertheless, you still need a “process”—a plan for how you’ll handle
your product or service from the time an order is placed until it is finally
delivered to the customer.
Even if you “produce” a service rather than a tangible product, you’ll benefit
by considering the process by which you prepare and carry out that service.
Some aspects of designing your production process are:
Check It Out n What raw materials or inventory do you need and how will you get
For methods and equip- them? Where will you store them?
ment to reduce energy
consumption and waste, n What are the steps for turning those materials into finished goods?
check the business infor- What labor is required for each step?
mation at Energy Star.
n How will you ensure quality control?
www.energystar.gov
n How will you ship your products or goods? What shipping providers
will you use?
n How will you pack your products? What materials will you need for
packing? Where will you store your packing materials? Where will
you do the packing?
n How will you prevent theft or loss?
n What kind of electricity, gas, water, or other utilities do you need as

part of your process?
n What methods can you implement to reduce waste and energy and
water consumption?
Use the worksheet “Designing My Production Process” to address these

key issues. See page 157
Order/install utilities and facility

improvements
Once you know how you will use your space and have a better under-
standing of your production process, you can start making your space
ready for your business.
One of the first things you’ll want to take care of is ordering any utilities
you need: telephone, electricity, gas, Internet, water, and waste disposal.
It may take more than a week for the utility company to be able to
install necessary wiring or turn on your service.
You will most likely need to install or adjust the wiring or location of
utilities to meet your needs. While utility companies provide this service,
you may want to hire private contractors to do the work instead.
Don’t forget to look at fixtures in your new space. Is there adequate over-
head lighting? And what kind of signage will you need? Signs are par-
ticularly important for retail businesses.
It’s easiest to make any tenant improvements—new paint, carpet, add-

ing or moving walls, changing fixtures, and the like—before you move
in. If you’ve negotiated for the landlord to pay for any of these tenant
improvements, check to make certain that the improvements will be fin-
ished in time for you to get your business under way.
Use the “Office Move-in Checklist” for planning your move into a new
space. See page 153
WORKSHEET FLoor plan layout
Use this grid for planning your office or production area layout. Each square is 1/8” x 1/8”.
For additional grid space, use graph paper.
WORKSHEET designing my production process
As you outline the steps involved in your production process—whether you produce a product
or a service—consider the following items, how long the steps take, and who is responsible.
What supplies do I need?
When do I need them?
How much labor is required?
How will I set standards?
How will I ensure those standards are met consistently?
How will I reduce inefficiencies in the process?
How will I ensure safety?
How will I ensure adequate access to necessary utilities?
How can I reduce waste and conserve energy and water?
How will I dispose of waste?

Get furniture and equipment

Few things make you feel like you’re finally “in business” as much as hav-
ing office furniture.
If you’re just starting out, getting your stuff off the dining room table
and onto your own desk reinforces the seriousness of your enterprise.
When you rent offices, how you furnish your space helps set the tone
and “culture” of your company and how you’ll be perceived by your staff,
clients, and yourself.
Don’t purchase your furniture until you know what space you’ll be using.
Start It Free Not only do you want to make certain that your furniture fits your
You can often find office space, but it is possible that you may be offered furniture as part of your
equipment and furniture
lease, especially in an “Executive Suite” or sublet situation.
for free through online
classifieds such as Craigs- If you expect to grow or move, look for furniture that is flexible, com-
list (www.craigslist.org). posed of various modules, and movable.
Click on the “free” cat-
egory under “for sale” Remember, “furniture” consists of more than just desks and chairs—
in any city. You’ll also you’ll need storage cabinets, work tables, floor coverings, lighting, and
find free items at the decorative items. Consider these as you develop your “furniture” budget.
Freecycle Network
(www.freecycle.org). When choosing business equipment, you may find vendors to be a good
source of information and advice. For instance, if you’re opening a res-
taurant, vendors of ovens and other kitchen equipment may be able to
help you design an efficient kitchen layout.
Some of the best sources of information about industry-specific equip-
ment are industry trade shows. Attending an industry convention or
trade show is an outstanding chance to compare products and prices and
become more aware of the range of options available.
When buying substantial business assets (furniture, equipment, vehicles), be

aware of tax implications. Some assets may be deducted (“expensed”) the year
RED TAPE you buy them, but the law imposes a maximum amount that can be expensed
ALERT! for any one year. After that—and for nonexpensable items—you must depreci-
ate the asset and spread the tax benefit over as many as 20 years.
BUY OR LEASE?
WHAT
WOULD Rhonda’s first rule: Purchase less expensive items; lease more costly ones. It
RHONDA generally doesn’t make much sense to lease a fax machine or printer; they’re
DO? less than a few hundred dollars. But if you need a major piece of equipment,
don’t tie up your cash.
Rhonda’s second rule: If you’re uncertain about your long-term plans or needs, take short-term
leases on your equipment. Even if this means making higher monthly payments in the short
run, you want the flexibility of getting out of your lease if your plans change.
Rhonda’s third rule: Check the tax implication of leasing versus buying: Some deductions can
make leasing actually cost less than buying, while “expensing” purchased equipment may lower
income taxes.
And Rhonda’s most important rule: Don’t get more than you need. Cash in the bank beats a
nice conference table any day.
When purchasing equipment, be certain you understand all the ongoing

costs of owning it, not just the initial price. Long-term equipment costs
include the cost of repairs or service contracts, the price and availability
of supplies, the amount of specialized training necessary to operate it,
vendor training, and technical support available.
Use the “Furniture Shopping List” to compare furniture and keep track
of what you’ve ordered. Then use the worksheet “Equipment Shopping See pages
List” to keep track of the equipment you’ll need. 162 and 163
Buying versus leasing: As you begin shopping, you’ll be faced with

deciding whether to purchase your furniture or equipment outright or to
lease it instead. All kinds of things can be leased: furniture, equipment,
vehicles, computers, telephone systems.
Leasing is tempting: You’ll spend less money now. That frees up your
capital, an important consideration for a young and likely cash-strapped
company. It also may mean that you’re able to upgrade or change your
equipment sooner than if you make an outright purchase. In a new com-
pany, this can be desirable since your business plan is still evolving.
However, in the long run, you’ll almost certainly end up paying much
more for a piece of equipment or furniture that you’ve leased rather than
bought outright.
Some vendors, especially of expensive equipment, may offer their own
financing, whether you’re purchasing or leasing. Ask! Supplier-financed
leases may be an attractive leasing option, as the vendor may make con-
cessions on either the price of the equipment or the financing costs to
capture your business (and will sell you continuing supplies or mainte-
nance). Ask also whether this kind of financing enables you to upgrade
to newer equipment during the life of the lease or loan.
Warranties/Service contracts: When shopping for equipment, evaluate
the warranties, service contracts, and technical support offered or available as
part of the purchase. A good warranty may be worth a substantial amount of
money, especially if repairs are very costly. The same is true for free or low-
cost technical support if the equipment is difficult to operate.
You may find that the cost of purchasing extended warranties, service
contracts, or additional technical support is well worth the peace of
mind you get from knowing that you won’t be hit with an unexpected
expense if something goes wrong.
If something does break down, how soon can you get the equipment
repaired? If a piece of equipment is crucial for your business, every day
lost while it’s broken is lost income for you.
To help you keep track of this equipment information, use the worksheet
See page 161 “Warranties and Service Contracts.”
TO keep warranties handy

WHAT
WOULD We keep a “Warranty Notebook” with the warranties and instruction manuals
RHONDA of every piece of equipment and furniture we purchase. This is an effortless
DO? way to keep all warranties very handy and easy-to-find when necessary. Mak-
ing a “Warranty Notebook” is simple—just take a thick (2") 3-ring binder and
add plastic “sheet protectors.” With each purchase, slip the warranty, all assembly directions, and
any other instructions in its own sleeve (or more than one sleeve if necessary). We now have a
few “Warranty Notebooks,” of course, so we date them by year.
WORKSHEET warranties and service contracts
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
WORKSHEET furniture shopping list
Cost per Date Delivery

Furniture Quantity Vendor
Item Ordered Date
Desks
Desk chairs
Reception desk
Guest/reception chairs
Work/equipment tables
Conference room tables

and chairs
Book and storage

shelves/cabinets
Filing cabinets
Lamps/lighting
Fire safe/security storage
White boards
Cubicles/space dividers
Floor coverings
Decorative items
Other:
Other:
WORKSHEET equipment shopping list
Equipment Cost per Date Delivery

Quantity Vendor
(list items) Item Ordered Date
Order inventory and/or raw materials

The perfect inventory situation for a small business to be in is to achieve
just-in-time inventory. That’s just what it sounds like: You stock your
inventory just in time to sell it. Your inventory is always at or near zero.
You’ve tied up no funds in excess inventory. Neither are you disappoint-
ing customers.
However ideal it is, just-in-time inventory is hard to achieve. If you have

real-time access to your suppliers’ inventory and can get it delivered
in less than a day, you’re in a good place to do this. But in general, the
longer the lead time of your suppliers, the less viable just-in-time inven-
tory management becomes, and the earlier you’ll want to order what you
need. Be careful, though. Inventory is money sitting around in a differ-
ent form. Make every item count.
Your suppliers are a vital part of your company’s lifeline, especially if

yours is a manufacturing or retail business. In effect, your suppliers
become your “partners.” You depend on them to be able to go forward
with your business. So when you select vendors, don’t just shop on the
basis of price: Make certain your suppliers are reliable, can maintain a
shipping schedule that works well with your ongoing needs, can respond
quickly if you have unusual needs, and can work with you on terms and
payment.
Try not to be dependent on only one or two suppliers. If you are, you’ll
have less flexibility on price, and you’ll be vulnerable if they experience
problems in their business. If you have very specialized needs, you may
be frustrated trying to find the supplies you require. Once again, indus-
try trade shows and associations are a good place to begin.
Remember, however, that if you have highly unusual requirements, you

may end up dependent on only one supplier. Instead, try to design your
production process so you can use more-standard materials.
Use the worksheet “Supplier Comparison Chart” to shop around for

See page 166 suppliers.
QUESTIONS TO ASK
A POTENTIAL Supplier
How long have you been in business?
What other customers do you serve in my industry?
What is your usual turnaround time on orders? What is the quickest time possible in
special circumstances?
What payment terms do you offer? How large a credit line will you extend to me?
Can you meet special packing or shipping requirements?
Do you have minimum order requirements? Are there discounts available?
Accomplishment # 3:
Research and purchase computers,
software, and other technology
My Checklist:
Develop an approach to buying technology
Choose a phone system
Choose software
Choose hardware
Get online
Meet your mobile needs
Find ways to get technical help
Technology is one part of your business you’ll love and hate at the same
time. Technology has enabled small companies to compete with large
ones and has dramatically lowered the cost of performing many business
functions. But dealing with technology can be an immense headache—
WORKSHEET supplier comparison chart
Supplier One Supplier Two Supplier Three

Name of Supplier
Sales Rep and

Contact Info
Range of Services/
Products Offered
Direct Costs
Additional Costs
Payment Terms
Order Turn-
around Time
Shipping Costs
Other Maintenance/
Support
Other:
Other:
decisions can be confusing and expensive to make, and difficult and

expensive to change.
Whether you love technology or hate it, you’ve got to deal with it. You
don’t need to become a geek, but you must learn some of the basics. Just
as you couldn’t run a business without knowing what “accounts receiv-
able” are, you can’t run a company without being comfortable discussing
Internet connections or databases.
Before you start shopping for technology, get a good idea of what you’ll
look for. Outline your critical business needs and then look for solutions
that fit those needs. Otherwise, it’s easy to get enamored of “gee whiz”
technology, even though you don’t have a real need for it.
TO ORGANIZE TECH “STUFF”

WHAT
WOULD Every time I buy a new piece of hardware or software, it comes with a variety
RHONDA of manuals, cords, installation guides, and more. Once it’s out of the box, it’s
DO? easy to get this stuff really confused with stuff from other equipment. Before
long, I don’t know which extra cord goes with which machine or which man-
ual goes with which software. So I buy extra-large Ziploc bags and put each product’s stuff in a
bag of its own. With a permanent marker, I write the name of the software or hardware product
and the date I purchased it on the outside of the bag. I then keep all these zipped plastic bags in
one big box. I can easily find what I need if I ever have to reinstall something or refer back to the
user manual.
Develop an approach to buying technology

With technology changing as rapidly as it does, how do you buy some-
thing that fits your budget today yet will continue to meet your needs as
your business grows and changes? Should you buy an economy model,
realizing you may quickly outgrow it, or should you buy the latest, fully
loaded version?
My own rule of thumb has always been to choose products I think will
meet my needs and handle technology upgrades for at least two to three
years. That rarely means the latest, greatest, fully loaded versions of
hardware such as computers, but it also means I skip the low-end model
that’s about to be discontinued.
Of course, in a new company, every dollar counts. That means you often
have to settle for less than you’d ideally desire. Fortunately, many low-
cost technology products—printers, copiers, and some computers—offer
excellent features that may meet your needs until your business has time
to get established.
When comparing your options in choosing technology products, here
are some questions to ask yourself:
n What features do you absolutely need? If your equipment won’t let you
do everything you need to do, then you’ve wasted money, even if you got
a bargain on that last laptop on the discount shelf. Consider what func-
tions you need to perform and make sure your technology can handle
those well. Having trouble figuring out what you need? Go to CNET
(www.cnet.com/reviews), ZDnet (www.zdnet.com/topic-reviews), or
engadget (www.engadget.com/reviews) for savvy reviews that speak your
language.
n Are your needs basic or complex? If your needs are fairly basic, you
can start very inexpensively, using low-cost online applications that
only require fairly low-powered computing devices. For instance, you
can find simple, cloud-based software applications—often for free—to
handle tasks such as word processing, bookkeeping, and customer rela-
tionship management (CRM). Because you access this software over
the Internet, rather than running it on your own machines, you need
only the most inexpensive computers.
Complicated or specialized tasks require more-powerful equipment and
software. For example, if in your business you will need to create high-
end presentations, you will need more-expensive graphics software and
more computing power to produce those. If you have a brick-and-mor-
tar retail store, you will need P.O.S. (point-of-sale) systems to keep track
of your sales and inventory. If you’re in a specific industry, there may be
a V.A.R. (value-added reseller) who can help you design and install the
appropriate programs and equipment you’ll need.
Generally, identify the processes you will need for your specific business,
then determine how much computing power those processes will actu-
ally require. But whenever possible, look to the cloud (Internet-based
applications) for solutions. Cloud-based versions enable you to scale up
or down as you add or subtract employees or as your needs change (as
they often do in a new business), and you can access cloud applications
anytime, anywhere, from any device that has an Internet connection.

You will pay a monthly subscription instead of an upfront purchase fee,
so you keep more of your cash available for your new company.
It’s always a good idea to first decide what kind of software you’ll
run—on premise or in the cloud—and from that choose hardware that
will support it properly.
n Does your new technology have to be compatible with other
technology? We live in an increasingly interconnected world where
everything has to work with everything else. So be careful buying an
unknown brand of hardware or software unless you’ve checked out
that it will work with the other technology you purchase.
One of the many great advantages of cloud-based, or SaaS, applica-
tions is that many of these solutions can “talk” to one another and to
on-premise software programs, by sharing data. For example, if you
use Web-based Salesforce CRM, you can share customer data with an
on-premise QuickBooks financial program. When you add new cus-
tomers to your CRM, their names, contact information, sales transac-
tions, and so forth automatically flow into QuickBooks. You’ll want
other applications to integrate as well. Your shopping cart for your
ecommerce store should integrate with your shipping application. If
your shopping cart can also integrate with CRM and accounting, even
better! Not only will you enter data only once, saving time and reduc-
ing errors, you’ll have access to richer data, and you’ll be able to share
information more efficiently with your team.
n Do you want single purpose or multifunction equipment? Many
pieces of equipment can handle multiple functions, such as a fax/print-
er/copier/scanner all-in-one. But although these can be a good value if
you have a fairly minimal need for the various functions offered, keep
in mind that such machines don’t provide leading-edge capabilities.
If you have sophisticated copying demands, for instance, don’t buy a
combined copier/fax/printer, or you’ll just get frustrated.
n Are replacement supplies readily available, and how much do they
cost? Especially with printers, fax machines, and copiers, “consum-
ables” and servicing actually become much more important issues than
the underlying hardware after purchase. It’s not unusual for the cost of
a printer cartridge—whether ink-jet or laser—to cost more than the
printer itself! Certainly, by the time you’ve owned the printer for six
months you will have paid more in consumables than you did for the
equipment. And office and discount stores usually carry only supplies
for or service the most well-known brands. So if you run out on a day
you’re under deadline, you could be in trouble if you have to order
your supplies direct from the manufacturer. Take all this into consider-
ation before buying.
n How cool do you want to be? While you probably don’t need the latest
and greatest gadgets, you will want to choose a machine for its good
design and ease of use, especially if you’re a one-person business who
works on a computer all day. The bottom line is you want to enjoy
using your equipment. So consider design and ergonomics as you shop
for technology—just make sure what you choose is compatible with all
your other purchases!
Choose a phone system

Even in this day of high-tech devices, your phone system is a key piece of
business communication equipment.
Start It Free In comparison to many other forms of business communication, phone

Bring everyone together
lines and phone calls are inexpensive. Compare the cost of your monthly
and save money on phone calls to the cost of printing and mailing even one brochure.
travel expenses by hold-
Yet, a typical scenario is the entrepreneur who takes months searching
ing “virtual” meetings.
for the right location, spends a bundle on a computer system, and then,
With FreeConferenceCall
(www.freeconference-
at the very last minute, plans a phone strategy. Missed calls and an inef-
call.com), you get your ficient phone system are the potential result.
own dedicated confer-
Today, no one would leave home without their cell phone in hand. Gone
ence call line with which
are the days when people were not reachable because they were away
you can make reserva-
tionless calls 24/7 with a
from their desks. Depending on the business you’re in, a smartphone
large number of partici- may be the only line you need. You can check your email, surf the Inter-
pants. The service also net, and run applications while on the run yourself—and be a part of the
offers free videoconfer- increasingly mobile workforce.
ence calls.
Another telephone technology you should know about is VoIP (for Voice
over Internet Protocol). It is a popular alternative to traditional tele-
phone service that sends voice signals over the Internet using the same
network that your data flows over. The advantage of VoIP: cost. It may
cut your phone bill to a fraction of what it would be with a normal land
or cell phone line. The downside can sometimes be reduced reliability
and quality of service.
WORKSHEET my phone needs
How Many? Service Provider? Special Features?

Voice lines
Fax/data lines
Voicemail boxes
Long-distance service
Cell phones/
smartphones
White Pages, Yellow

Pages, and online
directory listings
Other:
Who is your local service provider? Do you have a choice in provider?
Will you have phone numbers in remote locations? Where should they ring?
How will you receive and direct incoming calls? Will you have a receptionist, an automated system, or an answering
service?
What types of on-hold features do you need? How can you transfer calls between phone lines?
Do you want or need features such as Caller ID, 3-way calling, call forwarding, etc.? How much do they cost?
Can you integrate your phone system with your database, other software, or a VoIP application? Can integration better
serve your business?
Can you integrate your phone system with other devices, such as cell phones? Can integration better serve your business?

Hosted Phone Systems

WHAT
WOULD Thanks to the popularity of VoIP, you can get “hosted” phone service for
RHONDA business, in which a third-party vendor handles all aspects of installing,
DO? maintaining, and managing your phone system for a low monthly fee. This is
an increasingly common choice among small businesses in particular, which
typically don’t have the in-house technology staff to troubleshoot and maintain complicated
phone systems.
As you plan your phone system, keep all this in mind:

n Develop a telephone plan. Start by sitting down and planning your
phone service, just as you would any other important aspect of your
business. How do you use your phones now or anticipate using them?
What features must you have? How many lines do you need? How
many phone lines should be wireless?
n Consider special features.Phone companies offer many enhance-
ments to basic phone services. Investigate ways your phone can be a
powerful business tool.
n Keep it simple. On the other hand, if your phones are too compli-
cated, they’ll be a nuisance to use. Phones come with a variety of fea-
tures—many of which you’ll rarely use. Don’t buy “bells and whistles”
that will get in the way of using your phone as a phone.
n Comparison shop. The features and costs of phone service and equip-
ment vary widely. Shop around for long-distance plans and other ser-
vices to find the right fit for your business.
n Think long term. Will you be expanding, moving, changing your
needs? If so, either buy a scalable and changeable system, or buy an
inexpensive system that you can replace without a large financial loss.
See page 171 The worksheet”My Phone Needs” will help you plan your phone system.
Choose software
Before you select your computers, think through your software needs—
and consider them carefully. Your choice of computers can largely be
driven by your software needs. If, for instance, you need powerful soft-
ware programs, you’ll probably need powerful computers. Also, it may
be less expensive to buy your computers with programs preloaded than

to buy them separately.
Moreover, once you’ve committed your business to a particular software

package, it’s often difficult to change, either because you can’t export
your data easily or because the time and effort needed to learn a new
program is a barrier to making a switch. Start It Free
The most widely used
Your most basic business functions are probably best served by “off-the- VoIP is Skype. Use it to
shelf,” widely available software programs. An integrated office program make free Skype-to-
(such as Microsoft Office or Microsoft Works), a basic bookkeeping Skype calls and low-cost
program (such as QuickBooks or Quicken for very small companies), an calls to cell phones and
Internet browser, an email program, and a calendar or task program will land lines. www.skype.
com
get you started.
Another critical software need is your database. Your bookkeeping pro-

gram (especially one like QuickBooks) might serve as your database for
your customer records and billing. However, you are almost certainly
going to need a database to handle customer contact management, and
perhaps also to meet special needs such as tracking inventory.
All of these programs are also available in cloud-based versions. By that,

I mean these key business functions—payroll, accounting, sales manage-
ment, document sharing, data backup, and even word processing—are
handled somewhere out there in the web-based clouds of cyberspace.
These cloud-computing solutions are also known as web-based or online
services and SaaS (software as a service).
Advantages of web-based services:

n You
pay for what you need now and can add more resources as your
company grows
n You always have the latest upgrade, without paying extra
n Predictable costs, usually a low monthly subscription
n More features than you could devise yourself
n No internal tech staff required
n Can access from any computer with an Internet connection
n Many applications integrate; for example, you may be able to link your
inventory management software to your sales application
n Information secure and backed up
WORKSHEET my software needs
Things to Consider Office Suite Accounting Customer Management

What key tasks do I need to per-
form with the software?
What features would be nice, but

are not necessarily mandatory?
Does the software need to be

accessible from remote or mobile
locations?
Which program offers these fea-

tures at the most reasonable price?
What is the price?
How simple is the product to learn

and operate?
How much free technical support

is available?
What will additional technical sup-

port cost?
Can I find employees/consultants

who know how to use it? At what
price? If not, is training available?
Will the product integrate with my

other software and applications?
How are the reviews and word-of-

mouth about this product?
Other:
Inventory Management Specialty Software Specialty Software Specialty Software
n Reduces your need for an office computer network

n Relatively easy to move to a more appropriate cloud alternative
n Real-time data and analytics
n Typically, easy to learn and use
Disadvantages:
n Need a fast, reliable Internet connection
n Ongoing monthly cost, even when you don’t use it
n Privacy and security concerns, especially if you’re not careful
n If the cloud-based company goes out of business, you may lose your data
If you have highly specialized needs, turn to your industry association to
find out if software has already been developed for your type of business.
Industry-specific software can be considerably more expensive than basic
software, so be sure to talk with several users to find out if they’re satis-
fied with the product.
Another approach if you have unusual needs is to have software designed
or customized for your own use. However, customized software is more
expensive to purchase and maintain, and if you have problems, you may
not be able to find personnel to assist you.
See pages Use the worksheet “My Software Needs” to help you choose software
174–175 and to compare prices.
Disaster Recovery and Business Continuity

WHAT
WOULD Technology is great, but it can break down, fail to work if there’s no power,
RHONDA and can even get stolen (especially laptops, tablets, and smartphones).
DO? Being without our technological tools can spell disaster for a business. You
should plan at the beginning of your business for disaster recovery/business
continuity: how you will keep your business running if your hardware and software and data
aren’t available. Backing up your files is the first, very minimal, action you must take, but there
are others. It might make sense to have a consultation with an expert as you set up your tech-
nology. Paying a couple of hundred dollars upfront could save you thousands—or even your
very business—down the road.
Geeks to the Rescue

WHAT
WOULD Because technology can be bewildering, small businesses frequently need help. Yet
RHONDA very few have technology expertise on staff—most have to turn to outside consul-
tants to help them buy, set up, troubleshoot, and manage their technology invest-
DO? ments. To meet this need, a broad range of tech support businesses have sprung up
to offer tech support services to individuals and smaller businesses. Such businesses
can be a boon if you lack technical knowledge yourself. However, before hiring a tech consultant, call
your local Better Business Bureau, and always check references.
Choose hardware
It’s easy to get excited when you look at all the electronic gadgets and
goodies that are out there. Cool-looking monitors, oversized color print-
ers, and super-sleek computers are all very tempting (until you look at
the price tags, of course).
But buying hardware can also be stressful because there are so many
choices. There’s so much information out there about those choices—
much of it written in technobabble—and so much money on the line.
Once again, the thing to do is to plan before you shop. Your needs and
your pocketbook should determine your hardware choices. I’ve seen
new companies that start with all the latest hardware before they’ve even
developed a product or found a customer—and that’s not the way to
spend your money. Instead, buy what you need when you need it.
Almost every business needs the basics: computers, printers, monitors,
copiers, and a way to receive faxes. But you don’t need to buy it all at
once. If you’re starting out slow, you can make your copies at the local
copy shop. Or send and receive your faxes online or at a local business
center. For especially small businesses, you can consider multifunction
combination printer/fax/copier/scanner machines. These cost less than
buying each machine separately and take up less room. Alternatively,
don’t scrimp on things you really need. If you’re going to do a lot of
printing, for example, you will want a laser rather than an ink-jet printer
because of the superior quality and speed.
START YOUR BUSINESS IN THE CLOUD

WHAT
WOULD At its most basic level, the cloud offers you computing resources—applica-
RHONDA tions, file storage and sharing, and processing power—that you access over
DO? the Internet, from a distance. You can use these resources even though they
do not reside on hardware (computers or servers) in your business or home.
You use your computer, smartphone, tablet, or indeed any “smart” device, to tap into those
resources online. Another term for the cloud computing most small and medium businesses
need is SaaS—or “software as a service.”
As they became more available, I moved many of my company’s critical business functions to
the cloud: email, customer relationship management (CRM), email newsletters, and payroll, for
example. If I launched my business today, I would choose cloud-based applications right from
the get-go. Why? Generally, they save you time, money, and headaches. That’s because cloud-
based applications are easy to use, you pay for only what you need, and upgrades are always
up-to-date and seamless.
As far as computers go, if you plan to use a number of cloud-based appli-

cations, you’ll need less computing power. This is good news, as you’ll
save money. However, you probably don’t want to buy the lowest-powered
Check It Out computer you can find. Choose something that can grow with you.
Three online, automatic
You’ll also have to decide whether to purchase desktops or laptops or
backup programs to
other mobile devices. Although some people have a desktop for office
try are IDrive (www.
use and a laptop or tablet for taking work home and for traveling, many
idrive.com), CrashPlan
(www.crashplan.com),
people opt to have a laptop computer as their only computer. They keep
and Carbonite (www. a full-sized monitor and keyboard on their desk to plug the laptop into
carbonite.com). but then also have the mobility they need to take their work home or on
the road.
Another thing to consider is how you will do the all-important job of
backing up your computer files. There is special backup hardware and
software you can buy so you can regularly copy all the contents of your
computers to a safe location—either a special disk drive or onto CDs.
There are also many fine cloud-based automatic backup services that
you access online. These will automatically back up all your files onto
a remote computer. You can then retrieve them if anything goes wrong
and your computers crash or are otherwise unavailable. Use the work-
See page 179 sheet “My Hardware Needs” to outline your hardware needs.
WORKSHEET my hardware needs
Use this worksheet to identify hardware you’ll need in specific areas of your business.
To outline your needs for software, use the worksheet on pages 174–175.
Admin/
Accounting Sales Other
Production
Computers
Tablets, smartphones,
and other mobile
devices
Printers
Copiers/fax
machines
Other peripherals
(scanners, etc.)
Internet access
devices
Network/servers
Data storage devices
Cables, surge
protectors, back-up
generators
Other:
Get online
The Internet is as much a part of your business as the phone or mail. It’s
an essential communication and ecommerce tool. Virtually every busi-
ness uses it on a daily basis.
Internet connection. The first issue you’ll face is how to connect to the
Internet. The options keep changing, so you’ll want to stay abreast of the
choices in your area.
To get online, you’ll need an Internet Service Provider (ISP). An ISP
provides you with access to the Internet, and, typically, with your email.
Most ISPs also offer additional services for additional fees. Such services
may include hosting your company’s website or registering your com-
pany’s domain name. Other companies can provide additional related
QUESTIONS TO ASK
a technology consultant
When selecting a consultant or technician, keep these questions handy:
How long have you been in business?
Do you do this full-time or is it a part-time activity?
Which software programs do you have experience with?
Which hardware do you have experience with?
Have you worked with companies in my industry before?
Have you worked with companies my size before?
How much do you charge?
If you charge by the hour, will you give me a written estimate of how many hours my job
will take?
How much time do you have available?
Are you available for quick help in “emergencies”?
Are you available to answer tech-related questions over the phone?
Do you guarantee your work?
Do you have references I can contact?
WORKSHEET comparison chart: internet hosting companies
Use this worksheet to compare options for Internet Service Providers (ISPs).
ISP Option One ISP Option Two ISP Option Three

Company Name
Connection Speed
Hardware Required
Installation Cost
Monthy/Ongoing Fees
Services/Capacity Provided
Website Hosting Available
Additional Services
Available
Reviews/
Recommendations
Other Considerations:
services such as website design, database hosting, or writing small soft-

ware programs. Use the worksheet “Comparison Chart: Internet Hosting
Companies” to help you choose and ISP.
Email. This is an all-pervasive aspect of business life. Virtually all ISPs

See page 181
include an email program with their Internet access, but you don’t have
to use the email program that comes from your ISP as your only choice.
Indeed, many ISP-provided email programs are limited in their ability to
handle attachments or graphics, and you may want to choose a different
email program. If you travel frequently, you’ll need cloud-based email
accessible from the Web so you can check messages from any computer
with online access.
Most office-suite software comes with an email program. The best-known

is Outlook from Microsoft, which comes with Microsoft Office. Microsoft
also offers Office 365, with a web-based email program from which you can
access your email using any computer connected to the Internet. Outlook.
com, along with Gmail and Yahoo! Mail, are also free, web-based email
programs. However, you may not want an Outlook, Gmail, or Yahoo! email
address as your business email address, as it doesn’t give as professional an
Check It Out appearance as having your own name. Still, some of these services offer, for a
To customize your Gmail fee, web-based email with your own domain name.
email address to one that
uses your domain, go to Domain name: In Week One, you learned how to reserve your own
https://gsuite.google. “domain name”—the name by which a site is identified and located on
com. To customize a the Web. The domain name of the company that publishes this book,
Yahoo! account, go to
for instance, is PlanningShop.com. The Internet address for that domain
https://smallbusiness.
yahoo.com/email.
name—or URL (universal resource locator)—is www.PlanningShop.com.
Once you have your own domain name, you can use that for your com-
pany’s website address and for your email (e.g., Rhonda@PlanningShop.
com). This obviously looks more professional than having a more generic
email address (e.g., [email protected]).
More importantly, you can use your domain name with virtually any ISP,
website hosting company, or email program. This gives you the flexibil-
ity to shop around, use the email program that best fits your needs, and
change providers if desired.
Ask your ISP, a technical consultant, or a tech-savvy friend how to get set
up to use your own domain name with your ISP and email program.
Website: In Week Six, you will set up a company website, with an eye
to how you want to market your products or services. During this week,
you want to make sure you consider who will host your website as you
go about choosing an ISP. After all, you may use the same company that
provides you with online access to host your website.
It’s not necessary, of course, to have one ISP provide you with both
Internet access and website hosting services. However, it is frequently less
expensive and less hassle to have one company do both, especially if you
have modest requirements for your website.
However, if you want unique features on your website, you may want to
use a company that specializes in hosting business websites. The types
of features you might want to include on your site are a blog, online
forms for customers and prospects to fill out, a connection to a database
of information (such as a catalog), or a shopping cart to enable custom-
ers to make purchases. Ask other entrepreneurs for recommendations of
website hosting companies that they use.
You might also want to search for website hosting companies that spe-
cialize in your industry. These might have “turnkey” solutions for you
that can get your website up and running faster than if you had someone
design a website for you. They might even provide some kind of joint
marketing services. Check with your industry trade association for names
of website service providers. Check It Out
Running a restaurant?
Network: You may want to build your own company internal net- Check out Let’s Eat
work—a local area network, or LAN—so all your computers can work (www.letseat.at) for
together. There are many advantages to having your own network, a website builder
including the ability to share office equipment, share and store data, designed just for restau-
rants. Photographers can
provide security, handle Internet access, and maintain your own inter-
try Zenfolio (www.zen-
nal company email. folio.com), SmugMug
(www.smugmug.com),
But having a network is also more complicated than having stand-
or PhotoShelter (www.
alone computers. You may need someone who can maintain the net- photoshelter.com).
work. You’ll also need wiring and hubs or routers to connect all the
machines, and you may decide that you want a dedicated “server”—a
computer whose sole purpose is to handle email, store and/or back up
files from other computers, route print jobs to the office printer, and
so forth.
Smaller and newer companies can usually get by without a network—

often using the Internet itself as their network, sharing files via email or
file-storing and sharing programs such as Dropbox (www.dropbox.com)
or Box (www.box.com).
If you aren’t technologically experienced, hire an experienced company
or consultant to set up your company network for you, ideally someone
you can turn to on an ongoing basis for assistance. Don’t depend on your
brother-in-law’s cousin who used to install telephones. You’ll regret it.
Meet your mobile needs

People no longer run their businesses exclusively from behind their desks
or inside a physical store. Assume right from the start of your business
that you’ll want to access data, to perform certain functions, and to keep
operations running smoothly even when you’re on the go. You can do
this with mobile devices from which you access cloud-based applications
for online payroll, time tracking, invoicing, mobile payment processing,
inventory management, and so on. You may also hire employees or con-
tractors who travel frequently or work offsite. Choose technology that
they will feel comfortable using.
When deciding on cloud-based applications for your mobile needs,
remember to research providers thoroughly and ask questions about
security and privacy. And always make sure that anyone with access
to your precious data uses a password-protected device. Finally, when
employees leave, be sure to turn “off ” their access to your data.
After you’ve done your research and have chosen your cloud-based appli-
Start It Free cations, you’ll find many also have apps for Android and iOS mobile
Some of the apps listed devices. The following list outlines some of the most useful apps for run-
on the next several pages ning your business on the go. Search for these at either the App Store or
are either free or offer Google Play Store, download, and get to work wherever you are.
free, pared-down ver-
sions, which will usually Be aware that apps constantly change. Companies change the names of
suffice for most business- their apps and their offerings, or they merge with other app companies.
es just starting out. As If you don’t see an app here for the task you need to accomplish, just
you grow—and increase search for it. Most likely, several options will pop up.
your revenues—you can
upgrade to any premium Document Storage and Sharing
versions these compa-
nies may offer. What beats carrying 35 folders and three binders of photos to your
meeting? Storing, sharing, and accessing them from any device.
n Dropbox
n Box
n Google Drive
n Zoho Docs
n Hightail Spaces
Note-Taking Apps
If you’re like me, you come up with half a dozen great new business ideas
before breakfast. Capture your ideas, store your research, and find your
images and documents quickly.
n Evernote
n SimpleNote
Money Management and Accounting

You’ll save several hours every week with good money management apps.
Use these to send out invoices, track time, pay bills, run payroll, store
receipts, track mileage, and more.
n QuickBooks Online
n Intuit Online Payroll
n Xero
n FreshBooks
n Harvest
n Wave
n Bill.com
n Mint
n Shoeboxed
n Everlance
Fundraising
Raising money through crowdfunding? Track your campaign’s progress,
respond to comments, engage with backers, and post updates on the run.
n Kickstarter
n Indiegogo
Building Your Team

If you want to grow your business, you’re going to need help. These apps
help you find and recruit employees and hire independent contractors.
n Indeed Employer
n Zoho Recruit
n Upwork
n Linkedin Recruiter
Project Management
Teamwork without email—on the go. Stay on top of projects and get
things done with your team, without hundreds of emails back and forth.
n Asana
n Wrike
n Basecamp
n Teamwork
n Wunderlist
n Any.do
Communications
While you’re out on the road growing your business, you’ll need to com-
municate with customers and manage your team back home.
n Skype
n Google Hangouts
n WhatsApp
n Join.Me
n Webex
Social Media Marketing

So much marketing today is done through social media—Facebook,
Instagram, Twitter, Pinterest, Snapchat, Linkedin. These apps help you
manage the deluge of posts, tweets, like, and pins, and all the comments
that come along with them.
n WordPress
n Hootsuite
n Buffer
n Crowdfire
Newsletters
With these apps, manage and monitor newsletter campaigns that you’ve
created in advance on your desktop.
n MailChimp
n Constant Contact
n Emma
n Aweber
Scheduling
With a scheduling app, you can say goodbye to back and forth phone
calls and emails. Take online bookings, accept payment upfront, organize
your appointments, send clients reminders, manage appointments, and
more, all on your mobile device.
n Square Appointments
n HouseCall Pro
n Acuity Scheduling
n Timely
n Eventbrite Organizer
n Evite
Website
Your website is your customers’ window to your business. Work on your
site, view activity, manage your online store, write and posts blogs, and
view traffic on the go.
n Weebly
n Wix
n Strikingly
n Jimdo
Sales and Payments

These mobile apps help you make the sale and receive payments instant-
ly from customers.
n Square
n PayPal Here
n QuickBooks GoPayment
n Shopify
n Etsy
Customer Relationship Management

With a good CRM app, you can build and manage your database of cus-
tomers, prospects, referral sources, and more.
n Salesforce
n Infusionsoft
n Insightly CRM
n Zoho CRM
n Apptivo
n Method CRM
Customer Service
Without customers, you have no business. Keep yours coming back by
providing stellar customer service.
n Freshdesk
n Zendesk Support
n Zendesk Chat
Travel
These apps help ensure you get the most out of your investment in busi-
ness travel, from rewards tracking, to booking, to getting the lowdown
on the city you visit.
n AwardWallet
n Tripit
n Hopper
n Kayak
n TripAdvisor
n Lyft
n Uber
n Waze
n Dwellr
n LocalEats
Find ways to get technical help

Without a doubt, one of the most frustrating aspects of dealing
with technology is the lack of capable, affordable help. Unless you
have technology-proficient people on your own staff, you will be frus-
trated trying to find consultants or service businesses to assist you.
If you can find reliable consultants or technicians, use them. Especially when
you first get started, use the assistance of a consultant to help you plan and
install your equipment and software. Ask for recommendations, especially
from other entrepreneurs, of technology consultants they’ve used. And make
sure they speak in nontechnical language that you can understand.
Accomplishment #4:
Consider how you will distribute
your products
If you are a manufacturer, you will almost certainly use other parties to
bring your product to market—distributors, wholesalers, or retailers.
Choosing the right distributor and retailer for your product is vital to
your success.
Check It Out
For a list of associations
These intermediaries provide a variety of assistance in getting your prod- of distributors in dozens
uct or service to customers, including: of industries, check the
membership list of the
n Their sales efforts and sales team National Association of
n Their reputation and relationships with customers/retailers Wholesale Distributors.
n Their expertise in understanding the market www.naw.org/about/
assoclist.php
n Their advertising and marketing efforts
n Their additional services to you—warehousing, shipping, etc.
n Their additional services to customers—shipping, product training or
support, installation, etc.
Distributors: Few decisions directly affect your business and your financ-
es as much as the selection of a distributor. To a large extent, they control
whether or not your products have a fair chance to ever reach potential
customers. If your distributor can’t get your products on retailers’ store
shelves, you won’t be able to make sales.
Your distributor’s financial practices—how long they take to pay you,

how often, how they report sales, and what percentages they charge—in
large part determine your cash flow and profits. And, of course, you
want to make certain your distributor is honest and stable.
When just starting out, you may feel lucky to get any distributor to rep-
resent your product, because good distributors are in demand by many
manufacturers. Nevertheless, be selective!
“Shop” for distributors, and don’t choose solely on the basis of how
much (what percentage) they’ll charge for their services. Compare at
least a few distributors. If possible, meet with a representative face-to-
face. Always ask for references and check with some of the other manu-
facturers the distributor represents. Have their other clients been satis-
fied? Have they encountered problems?
To find a list of potential distributors, contact your industry trade asso-
ciation. Well-respected and known distributors are likely to be active in
trade associations, and many associations maintain lists of distributors.
When entering into a distribution agreement, you should absolutely get
a legally binding contract, spelling out all the various aspects of your
arrangement. Hire an attorney knowledgeable about distribution agree-
ments to review your contract—even if the distributor says it’s their
“standard” contract. Some of the issues to include in your agreement are
See page 191 covered in the worksheet “Distribution Agreement.”
Sales representatives: In many industries, independent sales representa-
tives serve many of the same functions as distributors (although they are
much less likely to do warehousing or shipping of products). These inde-
pendent sales reps find and call on retailers (or customers) who might
want your product. However, in most cases, these independent sales
representatives work for many manufacturers at once, and your products
become part of the broad list of products they show potential customers.
Working with good independent sales representatives may be an excel-
lent way to secure the services of a talented, well-connected sales force
without the cost of hiring an inside sales team. However, good sales rep-
resentatives are in demand, and you will have to convince them that you
are worth taking on as a client.
Moreover, because independent sales representatives handle many manu-
facturers at once, your products can easily get overlooked in their portfolio.
WORKSHEET distribution agreement
When you enter into a distribution contract, here are some considerations to negotiate.
Be certain to have any and all agreements reviewed by a competent attorney.
Distributor One Distributor Two Distributor Three

Distributor Name and
Contact Information
Is the agreement exclusive

or nonexclusive? What is the
length of the terms, and how
can either party terminate the
agreement?
What percentage do
they charge? When
and how often do they pay
you, and what holdbacks
from your payments, if any,
do they make?
What other services do they

offer at what fees? What are
the total fees you and the dis-
tributor are responsible for?
Who is responsible
for nonpayment by
their customers?
What minimum per-

formance guarantees
do they offer?
What marketing efforts

do they guarantee? What
charges for marketing efforts
do you incur or which sales
materials are you responsible
for?
How are damaged

goods handled/paid for?
As a result, you need to develop and maintain a strong, ongoing relation-

ship with your independent sales representatives. After all, you want to
make certain they continually remember to include your products in their
sales presentations to prospective customers.
Once again, the best place to find a list of potential sales representatives
is through an industry trade association.
Retailers: Your choice of retailers, too, is critical. The retailer needs to be
able to attract a sufficient number of customers, promote and merchan-
dise your products, and then pay you in a timely fashion.
Don’t be entranced by big or well-known retailers. My first client was
a sportswear manufacturer who was thrilled when he landed a major
department store to carry his line. Over time, however, he discovered
this store had costly requirements about how he had to package and ship
his merchandise, and then it made payments very late. And many large
retailers are notoriously tough negotiators when it comes to price.
You may think that the deal you finally closed with that well-known big-
box retailer is a dream come true, but once you discover how thin your
profit margin will be, coupled with the retailer’s strict requirements on
everything from how you label your boxes to which shipping company
you use, you may end up feeling that all the effort and expense of fulfill-
ing this huge order just isn’t worth it.
If you sell directly to retailers (instead of using a distributor to reach them) be
sure you understand all the terms of your arrangement. Who pays shipping?
Will returns be permitted? Under what circumstances? What discount will
you give them? How long will they have to make payments? Use the work-
See page 193 sheet “Retailer Comparison Chart” to keep track of each retailer’s specifics.
Accomplishment #5:
Design procedures for handling
administrative tasks
Once your business is up and running, you’ll quickly find yourself deal-
ing with a wide variety of ongoing administrative tasks. If you don’t
prepare to deal with these, inevitably you’ll soon feel overwhelmed and
things will start falling through the cracks.
WORKSHEET retailer comparison chart
Retailer One Retailer Two Retailer Three

Retailer Name and
Contact Information
What discount sched-

ule/price will they pay
you?
Are sales final or can

unsold merchandise
be returned?
What are their pack-

aging/shipping
requirements, if any?
Who is responsible for

damaged goods?
What are their pay-

ment terms/schedule?
What promotions,
advertising, or other
sales efforts will they
make?
What “co-op” advertis-
ing or other promo-
tions will you have to
participate in?
What charge-backs
or other fees do they
take?
What is their
reputation with
other wholesalers?
Other:
You can prevent this by establishing some positive time management

habits right from the start of your business and by setting up procedures
to help you keep track of all the many tasks and administrative details
you have to manage.
Of course, in a new business you don’t yet know all of the administrative
issues you’ll have to deal with. Don’t worry, your administrative proce-
dures will certainly evolve and change over time.
Nevertheless, every business—whether large or small—has to deal with
many of the same administrative functions: making sure bills are paid,
invoices are sent out, and things that should get done actually get done.
These can be broken down by general area of responsibility/function:
General office management:
n Answering the phones
n Responding to emails
n Handling incoming mail and packages
n Preparing outgoing mail
n Answering customer inquiries
n Ordering supplies
n Scheduling
n Project management
n Managing the “to do” list
Bookkeeping/accounting:
n Paying bills
n Sending invoices
n Collecting on outstanding invoices
n Reconciling bank statements
n Transferring funds from accounts
n Preparing forecasts and financial statements
n Meeting tax deadlines and completing tax forms
Order fulfillment:
n Order taking
n Packing
n Shipping
n Tracking shipments
n Handling customer complaints
n Ensuring sufficient supplies and inventory levels
One way to approach these issues is to begin an “Operations Manual”

detailing how you handle the tasks you perform repeatedly. As you deal
with an administrative task, jot down the steps you’ve used to com-
plete it. That gives you the beginning of a procedures manual, so you
won’t have to reinvent the process each time. Also, it will make training
employees much easier.
Another useful approach is to create “templates” of all the forms you’ll
use over and over again, such as invoices, statements, proposals, product/
service descriptions, and the like. You can often find standard templates
as part of your software programs (such as invoices, statements, and
packing slips in QuickBooks) or from your industry trade association.
You can even prepare standard answers to email or phone inquiries. It’s
OK to use the same form over and over or to repeat yourself from one
customer or client to the next. After all, you don’t have to be very cre-
ative in handling these tasks.
Here are a few ways to make the most of your time and reduce adminis-
trative hassles:
n Maintain a calendar and keep it visible: You can use a paper calendar
on your desk or on the wall, but you may find some of the features
of calendar software programs (such as pop-up reminders) helpful.
A good calendar feature is included in Outlook, included in Microsoft
Office. Be careful, however, that you don’t forget your appointments
when the computer is turned off. You can also download an Outlook
or other calendar app for your smartphone.
n Make a “To Do” list:Keep it somewhere where you can see it all the
time. Look at it frequently and revise it daily. Check off tasks as you
complete them—that gives you a sense of accomplishment.
n Prioritize:Often the things that are most important to your business
don’t have deadlines. Make sure those vital tasks are on your “to do”
list and keep them on the top of the list. Don’t let the pressing but
unimportant details of your business keep you from attending to the
truly critical.
n Set time aside: Make “appointments” with yourself to do important
tasks, and don’t allow interruptions. Make certain you schedule time
for sending out your invoices.
n Reduce shopping time: Keep a list of things you need so you reduce
repeat trips. Make certain you have enough of supplies you use regu-
larly. Order online and have supplies delivered.
n Eliminate errands: Keep a list of errands and do a number of them at
one time. Schedule your errands for the end of the business day, rather
than prime time. Use delivery (and pickup) service for frequently used
services (such as copy companies and shipping).
n Use your “Vital Statistics” list:
In Week Three (page 93) you started
developing a list of key company data. You’re likely to be asked this
information on many forms or dealing with suppliers or government
agencies. Have it handy so you don’t have to go digging through files.
n Make color-coded files: Use files of different colors—or at least dif-
ferent colored labels—so you can quickly find the kind of information
you need on your desk or in your file drawers. You might want to use
blue files for client project-related documents, green files for financial
information, yellow files for suppliers, or whatever works for your
company. Mark your files by year, so you can easily archive older files.
n Keep frequently used files handy: Get a desk with at least one file
drawer so you can access the files you need regularly without having to
get up and go to a filing cabinet.
n Become an email power user: Take time to learn a few key tasks in
your email program, particularly setting up folders and filters. Create
your address book or email “groups” for those you’ll email regularly.
n Handle mail once: The ideal way to manage paper is to handle incom-
ing mail only once. In other words, as soon as you read it, deal with it.
If you don’t need it, throw it out. If it should be filed, file immediately.
If you have to take action, do so. Of course, this isn’t always possible,
but get in the habit of deciding what to do with stuff as you get it.
Outsourcing administrative tasks

One of the things that has freed up entrepreneurs and small business
owners to be more creative is the trend toward “outsourcing.” When you
outsource, you delegate—for a fee, of course—some aspect of your busi-
ness to be done by people or organizations outside of your four walls.
Of course, small businesses outsource all the time. Chances are good,
for example, that you don’t have an on-staff accountant or lawyer, but
instead use the services of outside professionals on an as-needed basis.
Likewise, you probably don’t keep a janitorial staff, but outsource that to
a cleaning service.
With the Internet and related technology, outsourcing has been taken to
a new level. You can outsource your receptionist: calls from your office
can be routed transparently to a call center in another state, where some-
one answers your phone with your company name, tracks you down
on your cell phone if needed, and takes messages for you that can be
delivered to your cell phone via text messaging. Or you can outsource
your warehousing and shipping by having all orders for products trans-
mitted electronically to a business that fulfills all your orders remotely,
and updates your internal databases when an order is shipped so that a
customer can be billed.
Then there are cloud-based, or SaaS, applications. Rather than having to
buy hardware and software to do a certain task—let’s say, payroll —and then
hire someone to install, use, and manage that system, you can outsource the
entire thing. A number of SaaS providers offer payroll services on-demand:
you log onto their website, and securely enter payroll information into an
easy-to-use interface. The service generates all the forms, reminds you when
to make payments and how much, keeps track of payroll taxes and benefits,
and generally acts as your bookkeeper—for much less than it would cost to
buy the software and have a bookkeeper work on your premises. You can
outsource just about every business function there is this way—if it’s not a
core part of your business, there’s someone out there with the technological
tools and the know-how to do it for you.
Accomplishment #6:
Deal with insurance Check It Out
The National Association
One of the most frustrating expenses you’ll incur when running a busi- of Insurance Commis-
ness is the money you spend on insurance. After all, you can’t “see” what sioners has links on its
you’re getting. If this is your first business, you’ll be absolutely over- website to each state
whelmed by the different types of insurance you’ll need or want. insurance office website.
www.naic.org/state_
Figuring out your insurance coverage will be daunting. Guaranteed! So web_map.htm
you’ll need a good insurance agent, or two or three! Ideally, you’ll find
an agent who understands business insurance for companies of your size
and industry. It’s best if they’re a “broker” who can offer you policies
from a number of different companies rather than just representing one
insurance company’s products.
If you don’t know any insurance agents, ask for referrals from other busi-
ness owners or from service providers. You’ll want someone whose advice
you can trust because you are likely going to rely on their recommenda-
tions for the type and amount of coverage you should have.
Also, check with your industry trade association. Many trade associations
offer lower-cost insurance specifically for the needs of companies such
as yours. But still be cautious: Just because a policy comes from a trade
association doesn’t necessarily mean it’s best for you.
When you sit down with an insurance agent, consider three aspects:
n Incentive:insurance you want because it’s desired by your workers
(including yourself ) such as medical, dental, life insurance, retirement
n Protection: insurance in case something unexpected happens: liability,
accident, fire, theft, business interruption
n Legal necessity: insurance others require—perhaps your landlord,
such as fire or liability, or required by state law, such as workers’ com-
pensation if you have employees; because the Affordable Health Care
Act requires companies with 50 employees or more to provide workers
with health insurance, most likely you will not have to provide this
coverage when just launching your business
Health insurance is the kind of insurance most desired by your employ-
ees. To keep costs manageable, you may want to look for health insur-
ance policies provided by:
n HMO—Health Maintenance Organization: HMOs cost less than
PPOs since the number of health care provider choices is limited.
n PPO—Preferred Provider Organization: for a wider range of choices
of doctors and hospitals that agree to set prices for services. Make
certain there’s a long—and good—list of choices for you and your
employees.
n POS—Point of Service plan: A POS plan is the middle-of-the-road
option in managed plans, falling between HMOs and PPOs in
terms of premium costs and provider flexibility.
n EPO—Exclusive Provider Organization: Generally these plans cost

less than HMOs or PPOs as coverage is limited to a select group of
providers who must be within the EPO network.
Traditional indemnity plans are nonnetwork or “fee-for-service” plans.

They have the highest premiums and offer employees the most freedom
to select providers and hospitals.
When looking for health insurance, here are some of the things you’ll
want to find out:
n Do you have to, or want to, provide the same benefits for all
employees—or all of a certain class of employees (such as full-time

employees)? This is likely the case, as a result of either state law or
insurance company policy. That means you will get the same kind of
coverage for yourself and make the same amount of financial contribu-
tion as your employees.
n How much of a contribution do you want to make to employees’
coverage? What percent of coverage or what dollar figure?
n Do you want to pay all or part of dependents’ coverage?
n How long of a “sabbatical” do you want to offer—in case employees

take a leave of absence from the company or medical leave?
“Cafeteria” plans allow employees to choose among benefits. Employees

receive a certain dollar figure credit from you, their employer. They can
then each choose the benefits that are best for their individual situation.
This gives your employees more flexibility and is particularly good when
you have a diverse workforce. However, there may be some financial
costs in setting up or administering these cafeteria plans. Check with
your accountant, attorney, or insurance agent.
Some kinds of insurance coverage—often health benefits—require you

to have been in business a period of time before coverage can begin.
Always ask about the strength and honesty of your insurance provider—
the company itself as well as the agent. You want to make sure the com-
pany is financially strong. After all, you need them to cover their policies
in case there’s a major disaster such as an earthquake or flood.
Deciding what types and how much insurance to carry is always a jug-
gling act. You want to have enough coverage in case of problems, but the
costs can be discouraging, especially for a young company.
Use the worksheets “My Health Insurance Questions” and “Comparison
See pages Chart: Insurance Coverage” to help you plan and compare your insur-
201 and 202 ance needs.
Health Options Pros and Cons
Pros Cons
HMO HMO
Lower premiums than PPOs Limited provider choice
Minimal co-pays and deductibles Minimal or no out-of-network coverage
Free or cheap preventive care Need referral from primary physician
PPO PPO
Affordable premiums Higher premiums than HMOs
More in-network providers than HMOs May be difficult to find providers in some locations
Can go out of network Expensive to go out-of-network
POS POS
More affordable than indemnity plans Higher premiums than HMOs
Minimal costs staying in-network Need referrals from primary physician
Some coverage for out-of-network Costly to go out-of-network
EPO
Premiums generally lower than HMOs or PPOs Must choose providers within network
Lower deductibles and co-pays No out-of-network coverage unless an emergency
No referral needed for in-network specialists Less common so may be difficult to find
Indemnity Indemnity
Greatest choice of providers Most expensive
No referrals required May have most paperwork for policyholder
May be only/best option in some communities High co-pays and deductibles
Worksheet My Health Insurance Questions
How much can I afford to pay in premiums every month and still make payroll and my other monthly expenses?
How comprehensive do I want or need our health care benefits to be? For instance, do I just want to provide catastrophic
coverage or do I want to cover routine illnesses?
How do I feel about limits on choice of doctors or hospitals? Are those limits realistic in my geographic area? Will my
employees have sufficient choice of providers if they become ill?
What kind of group insurance plan makes most sense for the kind of employees I want to attract? (example: young
employees may be fine with high-deductibles, families most likely want coverage for routine procedures, older
workers may be concerned about prescription benefits)
Other concerns and questions I have:

WORKSHEET comparison chart: insurance coverage
Option One Option Two Option Three

Health
Dental
Vision
Life/Disability
Workers’ Compensation
Fire
Loss/Theft
Business Interruption
Malpractice
(errors & omissions)
Vehicles
Unemployment
Offsite equipment
Offsite employees
Other:
Other:
week 5
üweek 5: deal with money issues

week 5
#1 Deal with money matters
#2 Consider financing options

Accountant
Banker
Deal with
Money Issues
M oney, money, money. This week is all about dealing
with the financial side of your business, from setting up
your accounts to opening up a bank account to figuring out
how you’re going to finance your new company.
We each bring our own personal issues to the topic of money.
Almost all of us are uncomfortable talking about it. Money,
after all, is one of the few things left in modern life we don’t
discuss openly with even our closest friends or family members.
In a business context, this discomfort often extends to a reluc-
tance to deal with budgets, bookkeeping, and accounting.
Most of us are intimidated by numbers. (Who, after all, really
liked math class?) More often, we just find it unpleasant to
think about cash flow and profit margins and, especially, debt.
Well, it’s time to deal with it. You must learn to deal with
money and numbers in a matter-of-fact, businesslike fashion.
You have to look at your financial reports without imagining
they’re a report card of your character, discuss a raise with an
employee without feeling you’re under attack, and tell a client
the price of your services without flinching.
Accomplishment #1:
Deal with money matters
My Checklist:
Meet with an accountant
Learn the lingo
Take stock of your personal financial situation
Clean up your credit
Set up your books
Establish your prices
Open a bank account
Consider accepting credit cards
Prepare simple financial forecasts
Learn about taxes
Money is at the heart of every business, and understanding money—how

to raise it, account for it, and manage it—is critical to business success.
Managing money is particularly important. It’s not enough to just make
a profit; it is certainly possible to be profitable and still not have the cash
on hand to pay your bills. That’s why understanding and planning cash
flow are important. Likewise, it’s possible to grow a healthy business
while you’re not yet profitable—by planning the right kind of financing.
Setting up financial procedures right from the start of your business will
help you avoid problems as you grow.
Meet with an accountant

As you get your business under way, you’ll need the assistance of a good,
small business accountant to help you in most aspects of managing
your money. An accountant who understands small business issues can
help you set up your accounting procedures and books, can explain any
financial or tax issues you’ll face, and can help you in tax planning. You’ll
avoid a lot of problems by getting things set up the correct way right
from the start. And you’ll almost certainly lower your taxes too!
W EE K F I V E | 207
Believe me, a good accountant can save you more than you pay them.
Some accounting firms can also provide you with bookkeeping or bill-
paying services or recommend a reputable outside bookkeeper. If your
business will require lots of invoices, bills, or bookkeeping, you may
want to ask about these options, especially if you don’t have the funds
to hire an in-house bookkeeper.
Read through this entire section before you meet with your accountant,
so that you have a more thorough understanding of the issues you need
to discuss.
Use the guide “Questions to Ask an Accountant” on page 208 when you
meet with your accountant for the first time.
Learn the lingo

Once you’re in business, you’ll encounter some money-related terms
repeatedly. Don’t be afraid to ask someone what they mean. No one
expects you to understand it all.
But to make you seem less like a novice, here’s a list of some frequently
used money buzzwords. Soon you’ll sound like you’ve been discussing
money for decades:
n “Red ink” or “in the red.” On accounting ledgers, negative numbers
used to be written in red ink. So the expressions “red ink” or “in the
red” refer to showing a loss.
n “In the black.” Positive numbers, on the other hand, were written in
black ink. So if your accounts finish “in the black,” you’ve come out
with a profit.
n The “bottom line.” At the top of your financial statements, you list
your income. You then deduct your expenses. The number you’re left
with on the last line of your profit and loss statement is how much
money you’ve made—or lost. That’s your company’s “bottom line.”
n Overhead, or fixed expenses, or your “nut.” These terms refer to the
expenses you have each month, even if you don’t make a sale. Fixed
expenses include items such as rent, utilities, insurance, phone service,
and administrative salaries. Your “nut” is the total amount of these fixed
expenses.
QUESTIONS TO ASK
An accountant
What kinds of taxes will I have to pay? What are my tax deadlines?
How can I reduce my taxes? Which expenses are deductible, are nondeductible, or have to
be depreciated?
What kind of bookkeeping system should I set up? How can I set up systems to reduce the
possibility of theft or embezzlement?
How should I pay myself—salary or draw?—and what are the tax implications?
Should I use the cash or accrual form of bookkeeping?
Do I need to keep track of inventory? If so, what method do I use?
How do I handle payroll taxes?
Do I have to collect sales tax? When? From whom?
What are the implications of doing business in more than one state?
What kind of retirement program can I set up and how much can I contribute each year?
What kind of retirement programs can I set up for my employees?
What other accounting and tax considerations are there for my type of business?
n Your “burn rate.” Thisis how much money you go through each
month. This can be different than your fixed expenses, depending on
what you spend on variable expenses, such as marketing, temporary
help, buying new equipment, and so on.
n Variable expenses. These are the costs that change depending on
how many sales you make. In other words, if you run a sporting goods
store, your rent is fixed no matter how many golf clubs you sell, but
the amount you spend on marketing may change.
n Cost of goods sold (COGS). This refers to what it costs you to purchase
inventory to sell to others or to purchase materials to manufacture
your products.
n General and administrative expenses (G&A) or operating expenses:
The amount you spend to operate your business other than COGS or
sales costs. This includes all overhead expenses (such as rent, utilities),
salaries, marketing, and so on.
n Revenue: Total amount of money received from sales.

n Income: The amount of money received from any source. You can, for
example, bring money into your business from loans or as a result of
investments.
n Profit: Money you have left after deducting your costs. There’s gross
profit or net profit.
n Gross profit: The amount of money left after deducting the cost of
goods sold but before deducting general and administrative expenses.
n Net profit: The amount of money you receive after deducting the cost
of goods sold, sales costs, and operating expenses.
n Net loss: The amount of money you’re in the red if, after deducting all
expenses from all revenue, you have lost money instead of having made
money. (Let’s not even think about that for now…)
Take stock of your personal financial

situation
When you start a business, you may hope to use OPM—“other people’s
money”—to build your company. Be warned: You’re going to have to
rely on your own money and your own credit to be the primary source
of funding—at least until you start making sales!
So as you begin to deal with your new company’s finances, take stock of
your personal financial situation and monetary assets. This will help you
plan your expenditures and prepare you to meet with an accountant.
Of course, many of the most important assets for starting a business are
not financial—assets such as ambition, perseverance, willingness to work
hard, intelligence, creativity, and so on.
But it certainly helps to also have some financial assets—such as savings
in the bank, liquid investments, home equity, or a spouse’s income.
Use the worksheet “Taking Stock: What Are My Existing Assets?” to
note your existing financial assets and the specifics of each. See page 210
Also, take note of current or upcoming financial obligations that will

reduce your financial assets. This gives you a clearer picture of your over-
all financial situation.
WORKSHEET taking stock: what are my existing assets?
Specifics How Readily

(amount, type, etc.) Available
Financial Assets:
Savings
Income from other sources
Spouse’s income
Credit lines/credit cards
Stocks and other liquid assets
Home equity
Retirement funds
Tangible Assets:
Equipment
Furniture
Space and location

Business/Professional Assets:
Marketable skills
Specialized knowledge
Business experience
Certifications/credentials
Licenses, memberships
Ability to make sales
Good customer relationships

Personal Assets:
Education and training
Intelligence
Excellent communication skills
Outstanding work habits
Business or financial connections
Rich relatives or friends
Supportive family or friends
Ambition and passion
Other:
Other:
Right from the start, keep track of the money you invest in your new
company. There are important reasons for this. One, you want to be
certain you can take every tax deduction you’re entitled to, and without
records it can be a lot more difficult. Two, you want an accurate record
of all expenses and sources of income. And finally, you may want to treat
some of this money as loans you are making to your business rather than
as an investment. Ask about the tax implications of doing so when you
meet with your accountant this week.
Clean up your credit

According to a study by the Small Business Administration, personal
credit cards are the number one source of financing for small companies.
Expect to use your personal credit—or give personal guarantees—for
many business-related purchases or credit needs.
So you’re going to want to make certain you clean up your personal
credit record and give yourself as much credit as possible.
This doesn’t mean it’s impossible to start a business if you have bad
credit—not at all. But the better your credit record looks, the easier
time you’ll have getting financing from suppliers, landlords, and lending
sources such as banks. Even investors may check your credit report.
n Get a credit report: Your credit history (payments on things such as
credit cards, car purchases, mortgages, student loans) gets reported and
recorded. Under the Fair Credit Reporting Act, you are entitled to a
free copy of your credit report once a year from each of the three main
credit reporting agencies: Equifax (www.equifax.com), Experian (www.
experian.com), and Trans Union (www.transunion.com). Not all credit-
Check It Out
You can purchase a com-
granting or credit-checking companies use all three, so you may want
bined report of all three
to get copies from each of them.
agencies plus your credit
n Learn your credit score: As a result of these reports, you will be score, from Fair Isaac
(www1.myfico.com).
assigned a credit “score.” The primary credit scoring agency is a private
company, Fair Isaac (FICO). Most major financial institutions—par-
ticularly banks and mortgage lenders—use your FICO to determine
how good your credit is and whether they will lend to you. So you
certainly want to check your FICO score. You can do that online.
n Make certain everything is accurate: Read over your credit reports
in detail. If you find any inaccuracies, contact the credit bureaus and
the lender to correct any incorrect or outdated information. They are

required to investigate within 30 days, but this doesn’t mean your
credit report will get cleaned up within that time, so get on top of this
as fast as possible.
n Pay your bills on time: You want to start creating a clean credit history
as soon as you can. The best way to do this is to pay your bills on time
every month. If necessary, just pay the minimum amounts required,
even if you have to maintain higher balances. Remember, you’ll need
credit a year from now, so if you start paying your bills on time today,
in 12 months you’ll have a much stronger credit report regardless of
what it looks like now.
n Don’t increase your debt: If your credit is really bad, cut up
your credit cards and pay for everything in cash. Don’t cancel your
accounts—even old accounts. It’s generally better to have more credit
available to you than you actually use. And don’t think that cutting up
your cards means you don’t have to pay the outstanding balances!
n Increase your credit limits: If your credit is good, and you handle
credit well, ask for an increase in your credit limits. Now that you’re in
business, it may come in handy to have more funds available, especially
if you need to purchase materials to fill an order or travel for business.
n Reduce your interest rates: You may have fairly high interest rates on
some of your credit cards, especially if you’ve had them for some time.
Call the companies and ask them to reduce your rates to be more com-
petitive with current rates.
n Make a list of your credit cards: You’ll find it very handy to have a
master list of all your credit cards, credit limits, interest rates, and
balances. That way, when you need to use a credit card, you’ll know
which one to choose. Since you may not be able to get business credit
for a while, designate certain credit cards to use only for business and
keep those records separate.
Use the worksheet “My Credit Cards” to make a list of your credit cards
See page 213 and their current balances.
WORKSHEET my credit cards
Use this space to track credit card offers, credit cards you already have, credit card debt
you need to pay off, or other useful information about your credit cards.
Name of Card Credit Interest Other Current

Card Issuer Number Limit Rate Fees Balance
Set up your books

I’m not sure where the term “books” first came to be used for a com-
pany’s accounts, but that’s the basis of the term “bookkeeping.” Perhaps
it’s because the record of a company’s financials transactions were written
down in a journal or book.
In fact, many small businesses still keep their books in an actual book. I
did. My first set of company “books” was a simple lined ledger. On one set
of pages, I wrote down my income as I received it—that gave me a picture
of my total income for the year. On other pages I wrote down each time I
billed a client and their payments—that gave me a record for each client. On
another set of pages, I wrote down each time I spent money or paid a bill for
my business—that gave me a picture of my total expenses for the year.
Start It Free
Track income and This was hardly the most efficient way to keep accounts, but at least I
expenses, upload infor- could see how much money I had made, how much each client owed
mation from your bank me, and, at the end of the year, how much to deduct when preparing
accounts and credit taxes. Of course, it was tedious to have to figure out how much I spent
cards, create reports,
on different categories of expenses (equipment, travel, meals, office sup-
send invoices, and more
plies, etc.) and I couldn’t do any kind of “data mining” to later market or
with the free accounting
program Wave (www.
follow-up with clients. But it worked much better than nothing!
waveapps.com). Harvest
Today, simple and inexpensive computer programs enable you to keep track of
(www.getharvest.com),
your company’s accounts quickly, and give you a lot more power in analyzing
an invoicing application
with a free version,
your expenses, following up on customers, and preparing your taxes.
enables you to easily
Bookkeeping software: If yours is a very small business, you may be
track time, create invoices,
able to handle all your bookkeeping needs with a simple “checkbook”
and organize expenses.
money-management program, such as Quicken, made by Intuit. This
is designed primarily for personal record-keeping, but many small busi-
nesses use Quicken and find that it’s quite sufficient.
However, it’s likely that you’ll need a more powerful bookkeeping
program, such as QuickBooks. QuickBooks, also made by Intuit, has
become the standard for small business accounting, and your accoun-
tant or bookkeeper is likely to be very familiar with it. Because it’s the
standard, it’s easy to find forms (such as blank checks) from third-party
providers. It’s fairly easy to learn and use, and it’s not very expensive. It’s
what we use in our office. Intuit offers both an online version and an on-
premise version.
There are other small business bookkeeping programs, such as Xero (www. Check It Out
xero.com/us) or FreshBooks (https://www.freshbooks.com), to name just
Compare features of
two. Both of these are online, cloud-based accounting programs. You may Quicken and the dif-
also be able to find industry-specific bookkeeping programs; check with ferent versions of
your industry association. However, be careful of getting programs that do Quickbooks, including
not integrate well with other standard programs (such as Microsoft Excel). an online version, at
www.quicken.com and
Accounting method: One thing you’ll need to determine is whether to https://quickbooks.
keep your accounts on a “cash” or on an “accrual” basis. Your accountant intuit.com.
will advise you.

n Cash basis: You enter expenses and income as they actually are paid
or received. This is by far the easier method of accounting. Most small
companies can keep their accounts on a cash basis.
n Accrual basis: You enter expenses and income as they are incurred—
whether or not they are paid or received. This is more complicated,
but the IRS requires certain businesses (especially those with inven-
tory) and larger companies to keep their accounts on an accrual basis.
In other words, let’s say you sign an agreement to purchase $5,000

worth of inventory in January, but you don’t pay the bill until March.
On a cash basis, that purchase would show up on your books in
March; on an accrual basis, you’d enter that purchase as an expense in
January. Of course, which method you use has significant tax implica-
tions requiring you to talk to an accountant.
Establish your prices

Figuring out how to price your products or services is certainly one of
the most perplexing questions for first-time entrepreneurs or those who
are new to an industry.
Here’s an old joke: A store owner purchases pencils for ten cents apiece
and then sells them for a nickel. Noticing this bizarre behavior, his part-
ner asks, “How do you expect us to stay in business that way?” The man
replies, “Volume!”
Surprisingly, many novice entrepreneurs choose a relatively similar busi-

ness strategy. They imagine all that’s necessary for success is to price their
products or services less than the competition. Low prices, they assume,
will generate sufficient sales to more than make up for smaller profits.
Competing on price alone is risky. Some discount outlets do build thriv-
ing businesses on low prices, but this strategy almost always means nar-
row profit margins, which in turn means less cash floating around your
company. With a small financial cushion, you’re vulnerable with every
slight increase in costs. The landlord raises your rent 5%? That may
be your entire year’s profit. And you’re at risk from competitors: If you
become a serious threat and they have deeper cash reserves, they can just
undercut your prices and wait until you’re squeezed out of the market.
Moreover, customers attracted solely by price are fickle. If they shopped
around a lot before choosing you, they’re probably going to shop around
continually. And as soon as someone has a lower price, you’re history!
Of course, when you’re just starting out in business, you may want to set
your prices lower (even much lower) than the competition. This gives
you a chance to build a customer base and get some experience. Especial-
ly if you’re in a service industry, you’re going to be learning a lot while
working for your first customers, so it’s only fair to charge them less.
In Week Two, you did some research on the prices competitors are
charging (see page 64), and that should help you get an idea of the mar-
ket as you establish your own prices.
Professional service fees

Setting fees is more of an art than a science when what you’re selling is
expertise. After all, if you’re smarter than the lawyer down the street but
he has more experience, should you charge less or more? What if you
work faster? Why does one management consultant charge $50 an hour
and another $250? Is the second really five times better than the first?
Clearly, setting professional fees is inexact. Nevertheless, there are generally
accepted practices and ranges. The two primary ways of pricing services
are on an “hourly” basis or on a “project” basis.
n Hourly: Most professional services can be charged on an hourly
fee. This rewards you appropriately when you are performing long,
complicated tasks for a client. However, you may find yourself short-
changed when what you are selling is your existing knowledge or
expertise, and it doesn’t take long to convey that to your client.
n Project: On a “project” or task basis, you establish a set or minimum

fee for an entire project. Clients often like to pay on a project basis
because they like knowing what they will be charged before they com-
mit. Project fees reward you when your knowledge enables you to
finish projects quickly but penalize you if you’ve badly misjudged the
amount of time a given project will take.
One way to establish fees is to determine typical fees charged by others

for similar services. Contact an industry association, ideally located in
your geographic area, to get a sense of typical fee structures and ranges.
Money management TIPS

WHAT
WOULD n Review your books regularly. When you’re running your business, you
RHONDA may not take the time to sit down and look at your financials. But you can’t
DO? manage your money without having the facts. At least once a month, pref-
erably once a week, look at your figures: accounts payable and receivable,
expenses, cash flow, and so on.
n Send them your bill! I’m always surprised by how many businesspeople, especially consul-
tants and professional service providers, delay sending out their invoices. You may feel uncom-
fortable asking someone for money, afraid of being challenged on how much you’ve billed, or
just too busy working. But the longer you wait to send out your invoices, the greater the chance
you won’t get paid.
n Watch your inventory. If you produce goods, you’ll always be tempted to produce more
because you get savings based on volume. But inventory can go “bad”—become outdated,
unsaleable, or time- or weather-worn. Inventory doesn’t just apply to finished goods for resale.
You may have “inventory” in the form of marketing materials. Keep an eye on your actual use
and make your purchases not only on the basis of price but also on whether you can get small
quantities only when you actually need them.
n Manage your growth. You want your business to get bigger, but if you grow too fast you
may not be able to sustain it. Growth costs money—you incur many expenses before you see
additional income. Plan your growth so you have the financial resources to pay for it.
n Save. Every business has income fluctuations. The best way to have cash when you need it is
to put some away when you’ve got it.
In the final analysis, the appropriate fee is always the same: whatever the
market will bear. Only time will help you sort that out.
Prices for goods and other services

If you are a retailer or a reseller of products or services produced by oth-
ers, it’s often relatively easy to figure out how much to charge. Most
industries have generally accepted markups over the cost of goods (for
example, 100% in department stores, 200% for jewelry).
Understanding normal practice in your industry is a good place to start

when figuring how much you want to charge. Suppliers themselves will
often let you know what the normal markup is on their goods (but be
careful—there are some laws limiting suppliers from setting the final
prices of their goods). Of course, you may want to price your goods
more aggressively, especially in the earliest days of your business.
If you are the manufacturer or producer of goods or services sold by oth-

ers, the reseller will set the final price to the end-user. They, in turn, are
going to set their prices based, on large part, by what you charge them.
If your costs to the reseller are too high, then they won’t be able to make
money and won’t purchase from you. It’s critical for you to know what
your competitors are charging those same resellers.
Of course, you have to cover your costs and make a profit. And that’s
typically how manufacturers and others set prices. This is “bottom-up”
planning: Figure your costs for raw materials, labor, overhead, shipping,
returns, and so forth, and then set a reasonable figure for profit.
Some brilliant businesspeople have built great companies by knowing

how to maintain ultralow prices or convince customers to pay premium
prices. Most of us, however, need to stick to the normal range.
Open a bank account

A good relationship with a bank can be a big help to a growing company.
Many people just select the bank located close to them, or the one with
the lowest fees. But that doesn’t mean it’s the right bank for you, espe-
cially as you grow your business. Ideally, you want a bank that will work
with you and your company as you grow, that will provide some under-
standing of your situation and allow some flexibility in dealing with you.
“Interview” a number of banks and meet their business account repre-

sentatives. Develop a relationship with a good business bank while your
business is still small. But expect that relationship to pay off—in terms
of credit—as you get larger.
Take some time to shop for a bank for your business. The worksheet “Com-
parison Chart: Banks” can help you compare banks and banking services. See page 220
Consider accepting credit cards

Credit cards! We like using them and so do our customers. But getting
approved to accept credit cards—be a “credit card merchant”—isn’t nec-
essarily easy, especially for a new business. You will have to go through
a credit check and submit financial documents, and even with excellent
credit, you may still not get approved.
The first thing to do is to check with your bank to see if they can help
you become a credit card merchant. They may be a bit more expen-
sive than other credit card processors, but you may be more likely to
be approved by your own bank. Be careful to avoid scam artists—your
email is likely to be filled with spam offering you the chance to “accept
credit cards.” Beware—you’re going to give them a lot of personal finan-
cial information. Only deal with a reputable company.
Accepting credit cards benefits you as well as your customers:
n You receive payment right away. If you bill your customers yourself,
they may take 30 days or more to pay.
n The credit card company, instead of you, generally assumes the risk
of nonpaying customers.
n You have less paperwork since you don’t have to send invoices or
statements.
n It increases the number of customers who do business with you.
These benefits come at a cost, however. Consider some of the fees:

n “Discount” fee. The credit card issuer (typically a bank) takes a small
percentage (2–4%) of every charge. This is the basic cost of adminis-
tering the credit and assuming the risk, as well as marketing.
n Transaction charge. This is a small set amount (25 cents to 50 cents)
on each transaction regardless of amount.
n Monthly minimums you must meet.
WORKSHEET comparison chart: banks
Bank Option One Bank Option Two Bank Option Three

Bank name
Location/phone
number
Name of bank
rep. handling
business accounts
Accounts offered
and fees charged
Loan or credit
lines available
Special business
services offered
Your overall
impression of
this bank and its
services
Other notes:
n Setup fees.
n Equipment purchase or leasing.
n Chargebacks. Thisis the amount the issuer will charge any time a cus-
tomer refuses payment on a charge of yours stating dissatisfaction with
the product.
For instance, if the bank’s discount was 2%, the transaction fee $0.30
and the monthly minimum $20, each $100 transaction would cost you
$2.30. If you conducted ten $100 transactions in a month, the bank
would make $23.00, but if you only made five transactions, the credit
card issuer would only have made $11.50 ($2.30 times five), and you’d
be charged another $8.50 to meet your minimum.
The manner in which you accept credit cards affects your costs. If a cus- Check It Out
tomer presents the card to you in person, and you can physically see and Intuit Merchant Services
swipe the card, you’ll be charged less than if you accept phone, fax, mail, (https://quickbooks.
or online orders. The reasoning behind this is that there is less fraud intuit.com/payments/)
committed when a customer has to physically present the card. offers a few methods of
credit card processing—
Deciding which provider to use depends on how you’ll deal with credit point-of-sale, online, and
cards. If you’ll have few point-of-sale (POS) credit card charges, look for mobile—all of which
a low monthly minimum, even if the discount or transaction fee is some- can integrate with the
accounting program
what higher. If you expect large transactions, shop for a low discount rate.
QuickBooks.
If you’re not ever going to see or “swipe” cards, you theoretically
shouldn’t have to pay for the credit card equipment. However, that’s in
theory. Many companies make you lease the equipment anyway, but
don’t accept that without asking.
Once you decide to accept credit cards, be careful to follow the issuer’s
rules. Credit card companies typically have strict rules prohibiting mer-
chants from applying extra charges for accepting credit cards.
One less expensive alternative is using an online credit card payment

service such as PayPal (www.paypal.com). A big advantage is there are no
setup fees, monthly minimums, or equipment rentals. PayPal charges a
modest fee per transaction. For some premium flavors of PayPal you also
pay a monthly fee. You can use PayPal to accept payments from PayPal
members, or from anyone via credit or debit cards.
To accept payments with minimum fuss, consider mobile payment pro-

cessing. With mobile payment services, you run credit or debit cards
through your smartphone or tablet wherever you are. This type of accep-
tance is a boon for mobile small businesses—plumbers, electricians, lawn
services, and so forth—and those who sell at locations such as crafts fairs
or farmers markets. Increasingly, brick-and-mortar businesses and pro-
fessional service companies are tearing out their POS systems and also
accepting mobile payments.
Three established mobile payment services are QuickBooks GoPayment

from Intuit (www.gopayment.com), Square (www.squareup.com), and
PayPal Here (www.paypalhere.com).
To begin, simply go to the website and sign up. You’ll receive a small
device to swipe cards that plugs into your phone or tablet. Download
the accompanying app, and start swiping cards and processing payments.
These mobile applications also work with a cash drawer and printers,
so you can still provide paper receipts to customers. (You can also email
receipts.) QuickBooks GoPayment and PayPal Here may run a credit
check before approving you.
Intuit’s QuickBooks GoPayment gives business owners the greatest inte-

gration with QuickBooks and other back-office systems, reducing double
entry and giving you greater business intelligence than other options.
Square has built-in loyalty tools, enabling small businesses to offer free or
discounted services to regular or new customers. And PayPal Here gives
merchants a debit card, and money is available on that card right after a
transaction. You can use it to make purchases or to withdraw cash from
an ATM.
Of course, costs matter, and the most affordable solution depends on how
many transactions you typically do, and at what dollar amounts. Fees for
these three services can range from 2.4% to 2.75% for swiped transactions
to 2.9% to 3.5% plus transaction fees for “unswiped” charges.
Read the fine print. Some swiped cards incur higher fees, and extra
charges may apply if you go above certain transaction amounts.
Prepare simple financial forecasts

People in business usually fall into one of two categories—those who
are fascinated with numbers, and those who are frightened by them. If
you’re in the second category, you’re probably intimidated by the very
prospect of having to fill in the financial forms in this section.
Take heart. Numbers are neither magical, mysterious, nor menacing.
They merely reflect decisions you have already made in your busi-
ness planning process. Every decision leads to a number, but numbers
themselves are not decisions. You cannot pull a number out of thin air
because the financial forms call for a specific figure on a specific line.
If yours is a very small business, you may only need to prepare a simple
budget: a forecast of your estimated sales and a list of how much you
plan to spend on the various components of your business. Most other
businesses will benefit from preparing at least simple financial forms—
especially cash flow projections to help you determine or adjust your
spending. And if you seek outside financing, you’ll need a range of finan-
cial documents to give to potential lenders or investors.
Besides helping you figure out your spending, there’s another reason to
draw up financial forecasts—it helps you set goals. Writing down specific
numbers for your anticipated sales gives you a target to work toward.
One key to good financial planning is to create your financial projections
at the same time you plan your business. If you choose to locate your
business in one town versus another, there’s a cost associated with that. If
you exhibit at a trade show, there’s a cost with that, too.
Budgeting strategies
Successful financial projections are achieved by budgeting from the “bot-
tom up,” not the “top down.”
“Top down” numbers are enticing to work with because they always
come out looking good, but they’re not realistic. Here’s how they work:
you look at the big picture—the total market size, growth rate, average
sales price, and average profit margins. You make what seem to be rea-
sonable assumptions, something like achieving a 10% market penetra-
tion, or improving margins by 2%. Then you fill in your financial state-
ments to make the totals come out to the big numbers projected.
For example, let’s say you’ve invented a new golf club, and you project
achieving 1% market penetration within 3 years. If total annual sales of
golf clubs is $2 billion, then you’ll achieve $20 million in annual sales.
With a profit margin of 15%, your net profit will be $3 million.
Sounds good, doesn’t it? “Top down” projections result in some very
impressive numbers—the kind that make you and perhaps some poten-
tial investors excited. They’re just not very realistic.
Instead, the best financials are developed from the “bottom up.” You do
the real business-building legwork: examine different distribution chan-
nels, source manufacturers and suppliers, develop a staffing chart, outline
your marketing program, and design operations. You plug in numbers
from these realistic projections of how much things will cost, and then
you determine how much income you need to sustain that cost.
So, let’s say you’re that same golf club manufacturer, and you build your
financials from the “bottom up”; here’s how it would work:
You first compare distribution channels, and then choose one. Let’s say
you decide to sell through specialty golf retailers and country clubs. This
channel has associated costs and impact on income. You’ll need to bud-
get for a sales force to sell to those shops, exhibit at the annual sporting
good trade shows, and advertise in Golf Retailer magazine. But you will
only receive 40–45% of the final sales price of the club, since the retailer
takes half and the salesperson receives a commission.
Now you’re starting to get real numbers to plug in to each of the lines of your
financial forms. You’ve got numbers for advertising, staffing, and income.
All this planning takes work, but there’s help. The best place to start is by
speaking with others in your industry, attending trade shows, and con-
tacting your industry association.
Cash flow
If the three most important things in real estate are “location, location,
location,” the first three rules of business are “cash, cash, cash.”
It’s necessary, of course, to be profitable, but “profit” is a number that
shows up on your accounts at the end of the year; cash is money you
have in the bank. In a small company, it’s cash that determines whether
you can pay your bills.
No matter what your business is, you’re going to have a lag between
outgo and income. If you’re a consultant, you have to pay for your
phone, computer, marketing materials, and rent before you get your first
client. Once you’ve got them, you’re not going to see complete payment
for at least 30–60 days after you finish a project.
Things are much worse if you’re a manufacturer. You’ve got to pay for
raw material, equipment, and employees many months before you’ll see
final payment.
The following methods help improve your cash flow:
n Sell sooner. Through pre-sales, early season sales, and gift cards, you
can sell your product or service before you actually fulfill the order.
n Get paid faster. Make it as easy as possible for customers to pay you.
Accept credit cards and mobile payments, and always send out your
invoices out as soon as possible.
n Reduce costs and waste. Reduce costs by forecasting what you need and
purchasing carefully. If you don’t really need it, don’t buy it. Whether it’s
extra inventory, shipping materials, utilities, or trips in your van, if it’s
unnecessary, you’re spending money for something you didn’t use.
n Defer payments. Negotiate payments terms, ask for payment install-
ments, or pay bills with a credit card. If you run an ecommerce site,
arrange for a vendor to directly fulfill your customer orders—you hold
little or no inventory, and receive cash before you make the expenditure.
So draw up a cash flow projection. Even if you don’t write up a budget
or income statement, it’s a good idea to sketch out when you expect
money to come in and when you need money to go out.
Use the financial worksheets “Sales Projections,” “Marketing Budget,” and
“Profit & Loss Projection” to develop the range of financial forecasts for
your business. Be certain to do the “Cash Flow Projection” worksheet to
forecast your cash needs. You can find electronic versions of these work- See pages
sheets at www.PlanningShop.com. 226–231
Learn about taxes

Nobody likes paying taxes, but if you’re in business, you’re going to have
to pay them. In fact, the more successful you are, the more taxes you’ll
probably pay.
WORKSHEET sales projections
Monthly Total Monthly Total Monthly Total

1st Year 1st Year 2nd Year 2nd Year 3rd Year 3rd Year

Product Line 1
Unit volume
Price
Gross sales
(Commissions)
(Returns and allowances)
Net Sales
(Cost of goods sold)
GROSS PROFIT

Product Line 2
Unit volume
Price
Gross sales
(Commissions)
(Returns and allowances)
Net Sales
(Cost of goods sold)
GROSS PROFIT

TOTALS FOR ALL PRODUCT LINES
Total Unit volume
Total gross sales
(Total commissions)
(Total returns and allowances)
Total Net Sales
(Total cost of goods sold)
TOTAL GROSS PROFIT
! NOTE: An extended, computerized version of this worksheet is available in PlanningShop’s

Business Plan Financials package, available from www.PlanningShop.com.
WORKSHEET marketing budget
Monthly Total Monthly Total Monthly Total

1st Year 1st Year 2nd Year 2nd Year 3rd Year 3rd Year
Professional Assistance
Marketing/PR consultants
Advertising agencies
Direct mail specialists
SEO specialists
Graphic/Web design
Brochures/Leaflets/Flyers
Signs/Billboards
Merchandising Displays
Sampling/Premiums
Media Advertising
Print (newspaper, etc.)
Television and radio
Online
Other media
Phone Directories
Advertising Specialties
Direct Mail
Website
Development/programming
Maintenance and hosting
Trade Shows
Fees and setup
Travel/shipping
Exhibits/signs
Public Relations/Materials
Informal Marketing/Networking
Membership/meetings
Entertainment
Other
GRAND TOTAL COSTS
! NOTE: An extended, computerized version of this worksheet is available in PlanningShop’s

WORKSHEET profit & Loss projection
Year: January February March April May

INCOME
Gross Sales
(Commissions)
(Returns & Allowances)
Net Sales
(Cost of Goods)
GROSS PROFIT
EXPENSES - General & Administrative

Salaries and wages
Employee benefits
Payroll taxes
Professional services
Marketing and advertising
Rent
Equipment rental
Maintenance
Depreciation
Insurance
Telecommunications
Utilities
Office supplies
Postage and shipping
Travel
Entertainment
Interest on loans
Other:
Other:
TOTAL EXPENSES
Net income before taxes
Provision for taxes on income
NET PROFIT
! NOTE: A computerized version of this worksheet is available in PlanningShop’s

June July August September October November December TOTAL

WORKSHEET cash flow projection
Year: January February March April May

CASH RECEIPTS
Income from Sales
Cash sales
Collections
Total Cash from Sales
Income from Financing
Interest income
Loan proceeds
Total Cash from Financing
Other cash receipts
TOTAL CASH RECEIPTS

CASH DISBURSEMENTS
Inventory
Operating expenses
Commissions/returns & allowances
Capital purchases
Loan payments
Income tax payments
Investor dividend payments
Owner’s draw
TOTAL CASH DISBURSEMENTS
NET CASH FLOW
Opening cash balance

Cash receipts
Cash disbursements
ENDING CASH BALANCE
! NOTE: A computerized version of this worksheet is available in PlanningShop’s

Worksheet: TITLE
June July August September October November December TOTAL

Check It Out Understanding key tax concerns is critical for most businesses. You will
make some decisions—or alter them—based on tax implications.
PlanningShop offers a
Business Plan Financials Some business expenses are fully deductible, others are only partially
package that will help deductible, others have to be depreciated over a number of years, and
you develop a meaning-
others are not deductible at all. You should have at least a fair under-
ful financial plan for your
standing of those issues as you make choices in your business.
business. Visit www.
PlanningShop.com for If you purchase a very expensive piece of equipment, for instance,
more information and expecting to deduct the total cost of that from your income, you may be
to download.
rudely surprised that the expense has to be spread out over as many as
five to 10, even 20 years.
Tax codes are complicated and always changing. Certain tax laws apply
to incorporated businesses and not unincorporated ones, or vice versa,
and business tax laws differ from regulations for individuals. And of
course, every U.S. state has its own tax laws as well!
So, plan on spending some time with your accountant just talking about
taxes. Ask him or her to help you understand which taxes you’re liable
for, when your taxes are due (e.g., quarterly income taxes), and how
various transactions and expenses are taxed (meals and entertainment
expenses, for instance, cannot typically be fully deducted while other
marketing expenses usually can be). Have your accountant help you plan
how to reduce your tax liability.
Many businesspeople find it helpful to set up separate savings accounts
just for income taxes. With each check they receive, they set aside a cer-
tain percentage in this separate tax account, so when income tax time
arrives they have the money necessary to pay their bill.
As a business, you often have responsibility for collecting and then pay-
ing taxes owed by others. For instance, if you are a retailer, you must
charge and collect the sales tax on items you sell to consumers. Set up
records to keep track of those taxes that you’ve collected—and pay them
by the dates due.
You may want to—or sometimes be required to—set up separate accounts
to keep the taxes you collect distinct from your other funds. Governments,
whether federal, state, or city, really frown on your keeping their money.
You may be surprised by the variety of taxes you face. There are income
taxes, sales taxes, payroll taxes, property taxes, personal property taxes,
WORKSHEET my tax deadlines
Tax Amount Where to Send/File Dates Due

Income tax: federal, state,
county, perhaps local (e.g.
New York City)
Payroll and other employ-

ment-related taxes (Social
Security, Medicare, work-
ers’ compensation, unem-
ployment, etc.)
Sales tax
Personal property tax and

use taxes
Property tax
Special taxes (hotel, food,

transportation, etc.)
Import/export, custom
taxes and duties
Transfer taxes
Capital gains taxes
Inventory taxes
Other:
MANaGING PAYROLL
WHAT
WOULD Soon after I hired my first full-time employee, I started using a payroll service.
RHONDA Determining payroll deductions and depositing payroll taxes with the proper
DO? authorities can be time-consuming and exacting. Moreover, the penalties for
being late or getting things wrong can be substantial. It’s much easier—and
safer—to hire a professional service to take care of the administrative details of payroll for you.
A payroll service charges a modest amount, based on the number of your employees, and how
many states they are located in, but you’re likely to easily save at least this amount in terms of
your own administrative staff time, bookkeeper’s or accountant’s help, and any penalties you
may incur for late or inaccurate payments.
inventory taxes, special use taxes, general business taxes, and others.
Some taxes incur substantial penalties for late or under payments, so
be certain to keep track of when taxes are due and give yourself enough
time to prepare them.
Sales tax
Sales taxes were discussed in Week Three—see page 96 to review what
sales taxes you’ll need to collect. Then talk to your accountant this week
about any questions you have about sales taxes.
The worksheet “My Tax Deadlines” can help you keep track of your tax
See page 233 obligations and due dates.
Accomplishment # 2:
Consider financing
My Checklist:
Determine whose money you want
Consider crowdfunding
Develop a business plan
Ask an entrepreneur starting or expanding a business to name their big-

gest problem, and you’ll probably hear: “Where do I get the money?”
What may come as a shock is how long it will take for your business to
reach a level of income where it can pay its own way. If you’re dependent
on your business income to support yourself or your family, you may
Check It Out
You can pay your
want to consider looking for outside funding.
employees with an
Just be warned: Raising money is not easy and it’s not fast. It’s unlikely online SaaS payroll
you’ll be able to get financing within a six-week time frame, especially service like Intuit Online
if you’re seeking investors. And looking for outside money may distract Payroll (https://payroll.
intuit.com/) or ADP’s
you from going after the most important source of funds—making sales!
Small Business Payroll
One basic difference you must know before looking for money is the dif- (www.adp.com/
ference between “debt” and “equity” financing. solutions/Small-
Business/Services.aspx).
n Debt: This is usually a loan, line of credit, or equipment financing. Both handle payroll
The money must be paid back whether or not the business flourishes. electronically and each
You often begin making payments on the debt soon after receiving the offers a mobile app so
loan (“debt service”) so you have an additional monthly expense. You you can run your payroll
give up no ownership of the company, however. from your smartphone.
n Equity: Thisis usually referred to as getting an “investment.” With

equity financing, you give an investor a piece of the ownership of the
company and a share of future profits and, often, a say in decision-
making. But if the company fails you do not have to pay anyone back.
There are also a few forms of financing that combine the two, such as
“convertible debt” in which a loan can be turned into stock. If you or
your investors or lenders want to explore some of these options, consult
an attorney or accountant.
Determine whose money you want

Not all money is equal. When you first start looking for financing, you
may be tempted to take any money you can find. Be careful. The various
sources of money seek different rates of return on their loans or invest-
ments, have varying levels of sophistication and comfort with risk, and
provide you with significantly different advantages and disadvantages.
Remember, you’ll have an ongoing relationship with your money source.
You’ll save yourself a lot of time and grief if you seek money only from
sources that are right for you.
QUESTIONS TO ASK
POTENTIAL investors
Why are you investing in this business?
What aspect of this business is most appealing to you?
What other businesses have you invested in before?
May I call some entrepreneurs you’ve invested with before?
How soon do you expect to see a return on this investment?
How would it affect you if you were to lose the money you’re investing?
If you felt I was not capable of building this company to the stage you’d like,
what would you do?
How do you see decisions being made? By whom?
What role do you want, if any, in the company (e.g., board membership, etc.)?
Do you understand all the risks in making this investment?
The main funding sources for starting or expanding a business are:
Your own assets. Forget the old saying about using “other people’s
money.” It’s better to start or grow a business with your own money. If
you have sufficient assets, particularly savings or other income that doesn’t
require you to take on additional debt, you’re in the best financial position.
You don’t go into debt, and you don’t give up equity. If your savings are
owned jointly with a spouse or partner, be certain to get their acceptance
and understanding of your plans.
Sales/Income. The very best way to fund a business is from sales revenues. If
you can grow your company based on money received from customers, then
you don’t take on debt and you don’t give up equity. This is not as impossible
as it sounds, especially if you are starting a low-cost business. The key is to
try to line up clients before you actually set up shop, and to grow only as big
as your revenues permit. Your growth may be slower, and it doesn’t seem as
sexy as getting a huge investment, but you’ll sleep better at night.
Credit cards. Experts will tell you credit cards are a terrible way to
finance a business—they cost a lot (high interest rates) and put your
personal credit at risk. The experts are right—if you have other alterna-
tives. The truth is most people use credit cards at one time or another to
pay business expenses, particularly in the startup phase. And credit cards
can be a useful way to handle short-term cash flow problems; if you
realistically expect income soon, credit cards may be an easier or better
alternative than other loans or taking on an investor.
But be careful! Credit cards are generally an expensive form of financing

(exceptions are low introductory rates). You can incur very high charges
if you are even a day or two late on your payments. Credit card debt eas-
ily gets out of hand, and you have to pay the money back.
If you haven’t already, fill out the worksheet “My Credit Cards” to keep
track of the credit cards you have. See page 213
Friends and family. Want to lose a friend? Borrow money from them or
have them invest in your business. Getting family or friends involved in
your business is dangerous, but there are exceptions. If the person under-
stands your business, truly comprehends the risks, and is someone with
whom you can communicate well, the situation may work. Always have
loan or investment papers drawn up with the terms of the repayment or
investment absolutely clear.
BEWARE FINTECH FAST CASH LOANS

WHAT
WOULD Having trouble getting a bank loan for your new small business? You’re not
RHONDA alone. Traditional banks are often hesitant to issue loans for smaller amounts
DO? of money—typically less than $250,000. And it’s always difficult to raise
funds for a brand new business. Recognizing the large number of small busi-
nesses that need money, typically fast, dozens of online financing companies have jumped in to
fill this need. Companies such as OnDeck, Kabbage, FundBox, BlueVine, Prosper, and others are
eager to lend money to small businesses. These so-called “fintech” lenders use different ways
to assess a company’s credit-worthiness than traditional bankers. For example, with your per-
mission, they can directly access your company’s QuickBooks accounts, and they’ll check your
social media engagement. They’ll act fast; you’ll get approved or denied within hours, some-
times even minutes. But beware! You are likely to pay sky-high interest rates, and lenders pile on
fees, often hidden from you. A short-term loan can turn into a long-term nightmare. Use fintech
loans only as a last resort.
WORKSHEET comparison chart: investors
Investor One Investor Two

Investor’s name
Contact info (email,

phone, address, fax)
What type of investor is

this? (venture capitalist,
angel, family, other)
What industries do they

invest in?
What stage of companies

do they invest in? (seed,
startup, second round,
etc.)
What range of amount
of investment do they
make?
What geographic areas

do they invest in?
What are their other

criteria for investment?
What other companies

have they invested in?
Whom do I know who

can help me reach this
investor?
How do they prefer to be

contacted?
Investor Three Investor Four Investor Five
A no-interest loan from a friend or family member may face what’s called
“imputed interest” by the IRS. The lender may not be receiving any interest
RED TAPE from you, but the IRS will tax them as if they were. If the IRS views the loan as
ALERT! a gift, the lender is subject to federal gift tax rules and will have to pay taxes
on the money if it is more than the maximum allowed by law. The lender
must charge an interest rate that reflects a fair market value. Talk to your accountant if you’re
getting money from friends or family members.
Banks. Realistically, banks loan money only to companies that have been
in business for at least one or two years and have been successful. As your
Check It Out company grows, you’ll likely want a line of credit from a bank to help you
To find out more about manage your cash flow. If you do get a bank loan for a new business, you’ll
loans through the SBA, almost certainly have to give a personal guarantee and have to put up
go to www.sba.gov. For personal assets as collateral. The Small Business Administration provides
information about the loan guarantees to banks to encourage them to make small business loans.
Canadian government’s
In Canada, the Canada Small Business Financing Program (CSBFP) pro-
loan program, go to
vides guarantees to lenders who make loans to qualified small businesses.
www.ic.gc.ca/eic/site/
But keep in mind, the government doesn’t give out business loans—it just
csbfp-pfpec.nsf/eng/
Home.
assumes a percentage of the risk on behalf of the lender.
Strategic partners. There may be other businesses that want you to suc-
ceed, and they may be willing to help you get under way. Perhaps they
are a supplier, customer, or business serving the same market. In some
cases, they may directly invest in your business or give you loans. Perhaps
they would let you use their offices or equipment or otherwise help off-
set some of your expenses in return for the benefits you bring them.
how long will it take?

Finding an angel investor takes time. The time you spend looking for investment funds is time spent
away from running your business. Factor this into your planning and consider delegating some, or
possibly all, of the fund-raising work to one of your partners or a trusted advisor.
Find angels Meet with Negotiate Due diligence/ Total

and set up angels terms Draft final time
meetings documents
1–4 months 3–6 months 1–3 months 1–3 months 6–16 months
QUESTIONS TO ASK
before you seek financing
Are you willing to give up some amount of ownership of your company?
Are you willing to incur debt that you must repay?
Are you willing to risk property or other assets?
How much control of the oversight of your company are you willing to relinquish?
What other help do you want from a funder besides money?
How fast do you want to grow?
How big do you want your company to be?
What do you see as the long-term relationship between you and your funding source?
Venture capitalists. Venture capitalists are professional investors using Check It Out
institutional money. They generally only invest in companies needing Looking for an angel?
substantial sums of money to grow very large very quickly, and will serve First look for Finding an
very large markets. They do provide early–stage investments as well as Angel Investor In A Day at
financing for companies that are growing. They are particularly active your bookstore.
in technology-related businesses. VCs have high expectations of return
on their investment but are willing to take substantial risks. VCs take an
active role in managing the companies they invest in, often even replac-
ing or removing the founders from management.
“Angels.” Angel is the term applied to private individuals who invest
their own money in new companies. Because it is their own money,
they often invest in a wider range of kinds of companies, and seek
more-diverse types of returns on their investment, than professional
investors such as venture capitalists. They usually invest a smaller
amount of money than professional sources. Angels are generally much
more accessible and more appropriate for small companies. A number of
“angel networks” or organizations have sprung up in large cities.
Use the worksheet “Comparison Chart: Investors” to help you

decide whose money you want. Consider your various financing
sources, and answer the questions to find the one that suits you and See pages
your business best. 238–239
Consider Crowdfunding
When people refer to crowdfunding, they generally mean raising money
in return for a small amount of stock or ownership in the new company.
However, there are actually two types of crowdfunding:
n Equity Crowdfunding: soliciting funds from a large number of indi-
viduals in return for small amounts of stock or equity in the new com-
pany. The rules and regulations for this type of crowdfunding continue
to evolve. In the United States, there are both federal and state laws
covering this type of fund-raising.
n Nonequity or “Rewards-Based” Crowdfunding: soliciting funds in
return for a benefit that does not include receiving stock or equity.
Rewards might include prerelease products, invitations to special
events, recognition, or T-shirts. Nonequity crowdfunding has fewer
legal restrictions than equity-related crowdfunding.
Equity crowdfunding
Equity crowdfunding enables large numbers of people to invest small
amounts of money in new ventures in return for a small piece of owner-
ship, or shares, or equity.
Historically, to protect unsophisticated people from losing money in

high risk and uncertain ventures, many countries limited those who
could invest in startup businesses. In the United States, only “accred-
ited investors”—those who had assets sufficient enough that they could
afford to lose their investment—could invest in fledgling ventures. Most
new companies could secure funds from just a handful of nonaccredited
investors.
This policy worked well to protect the general public until the dot-com
era in the late 1990s, when suddenly, many startups quickly grew into
powerhouse corporations, making early investors rich. But, due to the
accredited investor rule (and other Securities regulations), average small
investors were kept from getting in on the ground floor of these block-
buster investments.
Of course, they were also protected from losing money from the many
flops. Yet, there seemed to be a basic unfairness.
More importantly, such investing restrictions also severely limited the

amount of money available to entrepreneurs to help them get their new
ventures off the ground. As the number and type of people wanting to
launch entrepreneurial companies expanded, it seemed only fair to make
it easier for them to reach a more diverse group of potential investors
than only the traditional venture capitalists or angels.
In 2012, the United States Congress passed the Jumpstart Our Business
Startups (JOBS) Act, making it possible for entrepreneurs to raise funds
from a large number of small investors. The U.S. Security and Exchange
Commission (SEC), wanting to protect investors from fraud and to keep
ill-equipped investors from losing significant sums in risky ventures,
developed a large set of rules to govern this type of crowdfunding (also
referred to as “Regulation Crowdfunding” in the U.S.), and these regula-
tions continue to evolve as the investment community gets more experi-
ence with equity crowdfunding.
From an American entrepreneur’s point-of-view, some of the most
important limitations on equity crowdfunding include the provision that
you must raise funds through a licensed online crowdfunding portal, a
limit on how much money you can raise, and a limit on how much any
one individual can invest.
Some of the laws relating to equity crowdfunding in the U.S. are:
n Depending on income and net worth, individual average investors can
generally invest a maximum of $2,200
n Maximum amount entrepreneurs can raise is $1,070,000 in a
12-month period
n Must raise equity funds through an SEC registered online portal
n Must have a specific business plan
n Must be a U.S. company
n Must disclose specific, detailed information about the company,
including information about officers, directors, and owners of 20% or
more of the company
n Must disclose detailed financial statements; if raising over $107,000,
statements must be reviewed by a CPA, and in some cases, if raising
over $535,000, statements must be audited
n Must file annual reports
These rules are subject to revision by Congress and the SEC over time.
To view these rules, go to the SEC information site (www.sec.gov/info/
smallbus/secg/rccomplianceguide-051316.htm). Other countries may
have different crowdfunding rules.
Non-equity or “rewards-based” crowdfunding

Before the rules were enacted to enable equity crowdfunding, startups
realized they could raise a lot of money and gain a lot of support by pro-
viding prerelease products, rewards, or benefits to those who believed in,
and wanted to support, their vision.
Through online crowdfunding platforms, and by driving support

through social media and other activities, entrepreneurs could make early
sales of their prerelease products to fund their new ventures. In return
for a certain “donation,” supporters would receive products once they
finally became available. In essence, these prerelease customers—instead
of professional investors—crowdfunded the new business.
To help facilitate such crowdfunding, a number of platforms launched,

many of which now enable both equity and nonequity crowdfund-
ing. Leading platforms include IndieGoGo (www.indiegogo.com) and
Kickstarter (www.kickstarter.com). Many crowdfunding sites now serve
specific industries or niches, such as CircleUp (www.circleup.com) for
consumer and retail products and RallyMe (www.rallyme.com) for ath-
letes trying to raise support.
Keys to success in crowdfunding

As with other forms of funding, you’ll have to be prepared—and do your
homework. As crowdfunding investors get more sophisticated, they’ll
want more than just a great video to motivate them to part with their
money. They’ll want to see that you have a team that can execute, a rea-
sonable business plan, and that they have a good chance of making their
money back—or that at least you’ll use the money as intended. Simply
because the amounts of cash exchanging hands are smaller doesn’t mean
you won’t face some of the same scrutiny you would from established
investors.
n Have the right type of business or product. For crowdfunding suc- Check It Out
cess, your idea must be easily understandable by a large number of Some crowdfunding
people (on that platform). Consumer, food, consumer electronics, and sites to check out:
fashion products are particularly well suited to this. Complex concepts n Crowdfunder
and many business-to-business ventures are likely to have a harder time (crowdfunder.com)
n Flashfunders
gathering widespread support. (flashfunders.com)
n IndieGoGo
n Create a compelling video. A great video helps engage potential
(indiegogo.com)
funders, as most funders will want to hear your story, see you, and n Kickstarter
view prototypes of your product (if any). (kickstarter.com)
n Republic
n Raise sufficient funds.On some crowdfunding platforms, you don’t (republic.co)
receive any money until your goal amount is raised in total. This n SeedInvest
(seedinvest.com)
means you want to set an achievable fund-raising target. However, on
n StartEngine
some platforms, you can raise no more than the financial target you (startengine.com)
originally set. So you want to make sure you are raising enough to n Wefunder
execute on your vision. This can be very hard to get right—even for (wefunder.com)
seasoned entrepreneurs.
n Choose the right crowdfunding platform. Make sure the platform you
choose meets your particular needs—type of product or service, type
of rewards or equity you can give, amount of money you can raise and
whether you need to raise the full amount before receiving any of it.
n Have good-quality photos as part of your campaign. Pics help sup-

porters spread the word through social media.
n Have a “coolness” factor. Your idea is more likely to garner support

and go viral if it’s unique, attractive, or cutting-edge.
n Plan a marketing campaign. You must plan your crowdfunding fund-

raising campaign like you would for launching any new product. It
will take time, effort, and creativity.
To help you plan and execute a successful crowdfunding campaign, use

the worksheet “My Crowdfunding Plan.” See page 247
Crowdfunding Pros and Cons
Pros Cons
Market feedback: Your idea is public:
You get real-time feedback from the people you On a crowdfunding platform, anyone can see what
value most—potential customers and investors. you’re planning, including potential competitors.
Customer engagement: Marketing ability:
You develop highly enthusiastic and committed To raise sufficient funds, you need to generate a
fans before you even launch a product or company. great deal of interest in your idea, requiring signifi-
They become your advocates and evangelists. cant marketing effort.
Presales: Limited fund-raising rounds:
Many people will pay for new and innovative You may not be able to raise more money when
products well before they’re actually ready for needed to grow; startups often return to professional
market. investors for second or third rounds of funding.
More control: Unsophisticated investors:
Since equity is spread around so many small inves- Public supporters do not bring the business knowl-
tors, you don’t have to answer to one or two major edge, contacts, and financial acumen of profes-
financial backers. sional investors.
Raise more money: Time:
You may be able to raise money for projects that You will only succeed if you make the crowdfund-
professional investors are not interested in. ing aspect of your company a real priority.
Anyone can do it: Nonliquid stock:
You don’t need to know or have access to VCs Although with equity crowdfunding you’ll be selling
or private investors. stock in your company, there really isn’t a secondary
market to sell those shares to others.
Marketing tool: Legal concerns:
A very successful campaign can drive traffic to You’ll need to navigate a still-evolving sea of laws at
your website and social media outlets, and create both the federal and state level.
awareness about your company.
WORKSHEET MY CROWDFUNDING PLAN
The story (who, what, where, when, why)
The goal $
Possible crowdfunding platforms
Flexible or all-or-nothing campaign
Marketing
Contact lists you’ll share your campaign with (e.g., friends, family, influencers, bloggers, media, followers)
Social media plan
Press release
Email newsletter
Launch party
Possible strategic partners/sponsors
Rewards for non-equity crowdfunding

Be realistic when choosing rewards for your campaign. You’ll have to both pay for and fulfill these rewards. Add rows for
additional reward levels.
Reward Level Description of Reward Cost of Reward

(e.g. $10, $25, $50)
Level 1
Level 2
Level 3
Level 4
Level 5
Expenses
Platform fees
Rewards (for non-equity crowdfunding)
Video production
Marketing expenses
Develop a business plan

If you’re going to seek funds from outside investors or lenders, you’ll
need a business plan. This is a document that outlines your entire busi-
ness strategy, financing, competition, staffing, future developments, and
the steps necessary to achieve your results. It’s different from an operat-
ing plan, which is designed primarily to help company management
organize day-to-day activities. And it’s different from this guide, which
is designed to get you up-and-running!
Successful Business Plan: Secrets & Strategies leads you step-by-step
through the process of developing and writing a business plan and
looking for funding. It’s available in bookstores throughout the U.S.
week 6
üweek 6: open your doors!

week 6
#1 Develop your marketing messages
#2 Set up a simple website
#3 Begin offline marketing
#4 Begin online marketing
#5 Start making sales
#6 Hold your grand opening
#7 Look toward the future

Potential customers
Key referral sources
Open Your
Doors!
G et ready to open your doors! This is the week when
you’re finally ready to start making sales. After all, the most
important component in running a business—at least a success-
ful one—is the ability to attract and keep customers.
In earlier weeks, you’ve set up your business, taken care of
red tape, found a location, dealt with money matters, and got
your operations up-and-running. This week you’ll design your
marketing plan and sales strategy, centered on a clear message
for your company. Then you’ll go out and call on potential
clients or customers—or open your doors so they can call on
you. You might even hold a grand opening. Congratulations!
Accomplishment #1:
Develop your marketing messages
My Checklist:
Clarify your company’s message
Check It Out Come up with your elevator pitch
Successful Marketing:
Secrets & Strategies is full
of advice and ideas to
You need to have customers to stay in business: It’s the most basic busi-
help enterpreneurs and
small business owners
ness truth. Since reaching customers costs money, and money is always
get the most out of their limited, your marketing strategy must be carefully and thoughtfully
marketing dollars. Find it designed. That’s why you need an overall marketing plan.
at your local bookstore.
First, let’s define the terms “marketing” and “sales” and how they differ.
Marketing increases customer awareness and delivers your message. It

includes activities such as advertising, social media marketing, creating
brochures and collateral materials, and doing public relations.
Marketing also includes what’s called “networking”—meeting potential

customers and referral sources through informal activities, such as join-
ing organizations, attending industry events, or taking people to lunch.
In smaller companies, networking may be the major marketing activity.
Sales, on the other hand, is the direct action taken to secure customer
orders. The term “sales” encompasses telemarketing, sales calls, special
promotions, and direct-mail solicitations.
In each of these activities—whether it’s a direct sales call, an advertising

campaign, or a Rotary luncheon—you want to convey a consistent, clear
message about your business, and more importantly, what your product
or service does for your customer: its features and benefits.
Clarify your company’s message

Every business sends a message through its marketing. Your message is
based on the strategic position your company stakes out for itself, such as
“low-price leader” or “one-day service.” Your message could also specify
W EE K SI X | 253
a particular market niche: “specialists in estate planning” or “software for

residential architects.”
Most marketing strategists agree that people buy benefits, not features.
Customers are more concerned about how a purchase will affect their
lives than about how the company achieves those results. No matter how
cool you think your new improved business process is, your marketing
message should concentrate on the benefits customers receive.
The four Ps of marketing

What messages do you send customers to motivate them to purchase
your product or service? Traditional marketing experts emphasize the ele-
ments known as “the Four Ps” in influencing customers to buy:
1. Product. The tangible product or service itself.
2. Price. The cost advantage.
3. Place. The location’s convenience and decor.
4. Promotion. The amount and nature of the marketing activities.
These elements leave a lot out of the marketing picture, however—espe-

cially as customers look for products or services not just to fill an imme-
diate need but to enhance their overall sense of well-being.
What customers want: Rhonda’s five Fs

A better way to sum up what customers want is through the Five Fs:
1. Functions. How does the product or service meet customers’ con-
crete needs?
2. Finances. How will the purchase affect customers’ overall financial
situation? Finances include not just the price of the product or ser-
vice, but also potential savings and increased productivity.
3. Freedom. How convenient is it to purchase and use the product or
service? How will customers gain more time and reduce worry in
other aspects of their lives?
4. Feelings. How does the product or service make customers feel
about themselves, and how does it affect and relate to their self-
image? Do they like and respect the salesperson and the company?
5. Future. How will customers deal with the product or service and
company over time? Will support and service be available? How will
the product or service affect their lives in the coming years, and will
they have an increased sense of security about the future?
Customers, of course, would like to receive benefits in all these areas,
and you should be aware of how your product or service fulfills the
entire range of their needs. But your primary message must concentrate
on one or two of these benefits that can effectively motivate your cus-
tomers.
When you don’t understand what customers want, it’s tough to effec-
tively sell your product or service.
Come up with your Elevator Pitch

When someone asks, “What does your company do?” you need a brief,
clear answer that quickly sums up the nature of your business. This has
to be short!
Here’s the test for whether a marketing statement is brief enough: Could
you explain your business if you ran into a potential client on an elevator
ride in a three-story building? That’s why it’s called the “elevator pitch.”
If it takes you more than three floors to describe your company, you’re
saying too much.
The message must not only be short; it must be clear. Unless you’re in a
highly technical field, your neighbor or your grandmother should be able
to understand your services well enough to describe them to someone
else. If people you meet can’t quickly grasp what you do, they’ll never be
able to do business with you or send business your way.
Every successful business has its strengths—its place in the market. So
how do you get your message across?
Your elevator pitch should touch—very briefly—on the products or ser-
vices you sell, what market you serve, and your competitive advantage.
If you’re in an easy-to-understand business, your elevator pitch theoreti-
cally could be very short: “I sell real estate.” But that doesn’t distinguish
you from all the other Realtors out there. A more memorable elevator
pitch sets you apart: “I sell homes in the Lakewood district, specializing
in first-time buyers.”
WORKSHEET my elevator pitch
Use this worksheet to develop your elevator pitch. Remember to keep it short; focus on
what customers get, not what you do; and make it easy to remember.
My Company…
Is named:
Does:
Serves this market:
Makes money by:
Is like these other companies:
Will succeed because:
Aims to achieve:
When you can cut straight to the heart of the matter with your eleva-
tor pitch, customers immediately understand your benefits. It’s like the
Vietnamese restaurant I used to go to; I never knew the real name, but
always referred to it by the big sign out front: “Fresh, Cheap, Good.”
Fill out the worksheet “My Elevator Pitch.” After you’ve written a draft
or two, time yourself saying it out loud. Can you deliver it in three floors
See page 255 or fewer? If not, you’ve said too much.
Accomplishment #2:
Set up a simple website
Your website is a key part of your marketing program. Your customers
and potential customers will turn to it to get information about you
and your company. The first step in building a successful website is to
be clear on what you want it to achieve—and make sure those goals are
realistic. Many entrepreneurs suffer from the “if you build it, they will
come” syndrome, imagining that if they put up a website, they’ll get a
flood of new customers. That’s not a realistic goal.
Websites can take many forms and serve a multitude of purposes. In fact,
most sites combine a number of functions, such as informing the public
Check It Out about the company and selling products or providing customer service.
You can set up an online From a marketing point of view, however, you’ll want to concentrate on
store through a market- how your website attracts, retains, and motivates customers to do busi-
place such as Etsy (www. ness with you.
etsy.com) or ArtFire
(www.artfire.com) for Websites can be categorized generally along the following lines:
handmade crafts. With
n Brochure sites. Like a print brochure, a good brochure website
the ecommerce site
Shopify (www.shopify. includes an overview of a company’s products or services, basic infor-
com), you can set up an mation about the company (such as location and hours of operation),
online shop within min- and background on the company’s history and the people who run it.
utes and start selling just Brochure sites serve as the face of a company for anyone interested in
about anything. learning more. Brochure sites are not generally used for ecommerce,
though some such sites provide links to purchase products or services.
n Ecommerce sites. The primary purpose of ecommerce sites is to sell
products and services directly to customers. Although this type of site
may well include information about a company and its products or
services, its primary function is to promote and process sales.
WORKSHEET my website checklist
Check off the elements you plan to include on your website, noting what each section will say:
Website Information/Features Details/Description
Home page
Overview of products/services
About the company
The team: founders/key employees
Contact info
Relevant content/info/advice
Pictures/videos
Client list
Testimonials/awards
Samples/demos
Catalog
Newsletter signup
Links to company social media sites
User-generated content
Media/press coverage
Customer service info and/or forms
FAQs (Frequently Asked Questions)
Job opportunities
Site map/search box
Investor information:
Other:
n Content sites. These are websites with the primary function to provide
information, advice, or entertainment to users. The content of such sites
may be created especially for the sites, adapted from other media (such
as magazines), or brought together (aggregated) from other sources
(such as websites, blogs, and videos). In most cases, these sites are sup-
ported by advertising and are free to users. In other cases, companies
offer content related to their products or services as a way to draw in
and retain visitors.
n Lead generation sites. One of the primary purposes of such sites is
collecting leads for salespeople to call upon. Such sites often require
Check It Out that visitors provide contact info if they’re to access the site’s content,
A number of companies videos, and/or downloads. The company then uses this contact info to
offer a range of website
follow up with users.
hosting services and
do-it-yourself website n Portal sites. Thebasic function of these sites is to attract users who share
design templates. Three a common interest, then send them to related sites and show them rel-
of these companies are evant advertisements. For example, a portal site for a vacation spot such
Wix (www.wix.com), as Hawaii might have nothing more than ads from people who own
Duda (www.duda.com), condos and beach homes in Hawaii that they want to rent out.
and Squarespace (www.
n Social networking sites. These sites are designed to let users develop
squarespace.com).
communities, interact with one another, create connections, make
referrals, and have fun. Some of the best known are Twitter, Facebook,
Pinterest, Instagram, and LinkedIn. Remember to add icons on your
website that link out to your company’s social media pages.
n Customer service sites. Customers often need support for the prod-
ucts and services they purchase. These sites provide it. Offering
everything from technical advice to shipping information, such sites—
whether they’re devoted exclusively to customer service or represent a
portion of an existing site devoted to the topic—enable companies to
reduce costs and increase customer satisfaction.
When deciding what you’re going to use your website for, keep in mind
not only the initial cost of the site’s design and development, but the
ongoing maintenance. If your site will require frequent updates and
changes, you’ll want to make sure the site is designed in such a way that
you can easily make those changes yourself.
Remember, most companies can succeed very well with a simple website
that describes the company’s services and products, basic details, and
answers to most-asked questions.
W EE K SI X | 259
Use the worksheet “My Website Checklist” to plan the functions and
information you want on your website.
Website design and hosting:

See page 257
In putting up your website, you basically have two options:
1. Do it yourself. Many website hosting providers offer tools to help

you design your own business website, and then they will host that
site for you. This can be a fairly inexpensive way to get your website
up-and-running. But be warned—even though this is getting easier
all the time, it may still be frustrating, especially if you have compli-
cated requirements or you are not tech-savvy. But if you’re willing to
spend some time learning the necessary skills, developing your own
Start It Free
site may be a viable option.
You can get your web-
site up quickly without
2. Get someone else to do it for you. There are a wealth of website
paying a cent using one
designers and hosting companies out there for you to choose from. of many free website
But the very fact that there are so many—and the costs are so var- builders. Three to con-
ied—makes it difficult to know which one to choose. So ask around sider are Weebly (www.
weebly.com), Strikingly,
and get recommendations from others. Certainly check with your
(www.strikingly.com),
industry or professional association; you’ll probably find some devel- and Jimdo (www.jimdo.
opers who specialize in just your type of business. Also, ask other com).
entrepreneurs in your community for recommendations. But don’t
think that hiring someone else to develop your site lets you off the
hook for planning it—you’ll still need to decide on exactly what you
want and need, then communicate that clearly to your developer.
Spend some time looking at other sites related to your industry, and
then make a list of what you like and don’t like. Let this help guide
your planning sessions with your developer.
A general word of caution: Don’t spend a ton of money on your web-

site until you’ve been in business for a while. Most new companies find
that they have to adjust the nature of their products or services as they
encounter the realities of the market. So, don’t lock yourself in to an
expensive website that is likely to need changing within a year.
Accomplishment #3:
Begin offline marketing
Once you’ve clarified what you want to tell customers, you have to get
that message out there. How will you reach your customers? And how
much will it cost?
The methods you choose are called your “marketing vehicles.” You have
a variety of marketing vehicles to choose from. The best methods for you
Check It Out depend on your marketing budget, target market, product or service,
One of the first things and marketing message.
you’ll need when you
go into business is a Create a marketing budget
business card. Both Vista
Print (www.vistaprint. The most important part of your marketing program is that you can
com) and DCP Print afford it. Every marketing vehicle costs money, so carefully plan how
(www.dcp-print.com) you intend to spend your marketing dollars. Often the best marketing
offer reasonably priced vehicles are not the most obvious or the most expensive. A large ad in
business cards. DCP Print
a specialty publication may prove far more effective and less expensive
also offers free business
cards—you pay only for
than a small one in a general newspaper.
shipping. However, the
If you spend a ton of money on a huge advertising campaign but it
company prints its small
promotional message on
leaves you without the money to pay the rent or make payroll, you’re
the back of the cards. So going to be in hot water. So, make sure you can afford the choices you
you may want to spend make. In devising your overall marketing program, be sure you look for:
the extra money and
splurge on cards with a Your marketing vehicles must reach your actual target customer
n Fit.
blank back, as they look and be appropriate to your image.

more professional.
Use more than one method so customers get exposure to you
n Mix.
from a number of sources.
n Repetition. It takes many exposures before a customer becomes aware
of a message.
n Affordability. Do these vehicles fit within your budget?
The worksheets in this section help you choose between a variety of mar-
keting vehicles. Several worksheets focus on specific marketing vehicles,
such as printed materials, trade shows, and public relations. Use the
W EE K SI X | 261
techniques that follow to get your message to the right people offline.
The next accomplishment (#4) will cover online marketing.
Printed marketing material

Every company needs “stuff ” to hand out. Whether you call them bro-
chures, sales collateral, or “leave behinds,” you must have printed materi-
als. The most important piece of printed material is your business card.
Get those done right away. Use the worksheet “My Printing Needs” to
plan and budget for your printed materials. See page 263
Customer-based marketing
The best business is repeat business. So remind past customers you exist.
Keep a mailing list, send postcards or email newletters when you have spe-
cial offers, or send a note or holiday greeting. In general, contact past cus-
tomers no less than twice a year and no more than every month. Specialty
items, such as pens, mugs, or calendars, are another good way to remind
customers you exist. And most importantly, ask customers for referrals!
Trade shows Check It Out

Trade shows are a great way to meet potential new customers and for To search for upcom-
them to meet you. A face-to-face meeting makes doing business with ing trade shows in your
you a lot more inviting, and the trade show setting makes it easy for industry, go to the web-
site of the Trade Show
them to ask you questions about your company.
News Network (www.
Trade shows can be expensive—the cost of being an exhibitor, prepar- tsnn.com).
ing your booth, printing marketing materials, and, of course, bringing
enough personnel to staff the booth. But a trade show is often the best
place to reach your target market.
Before choosing to exhibit, however, find out as much as you can from
the show’s organizers about who will be attending. Talk to exhibitors from
previous years’ shows and ask how successful they were. Use the worksheet
“Trade Shows and Industry Events” to keep a list of potential trade shows
to attend. See page 264
Public relations/publicity
The best publicity is often “free” publicity. Getting a story about your
business in the local newspaper or on TV can be more powerful than a
paid advertisement. But that’s not to say that such coverage won’t cost
you: While you don’t pay for the stories directly, it will take time and
effort to get the media’s attention and, in the end, you may have to hire a
public relations specialist.
If you want to get a story about your business in the newspaper, in a

magazine, on the radio, or on TV, the typical way is to send a press
release. Of course, it takes a lot more than just sending out a press release
to get coverage, but writing up a press release is a necessary—though not
sufficient—way to get media coverage.
When designing your press release, remember that most people in the
media are overworked. The more you’re able to make your story “easy”
for them—in the sense that the details are all there—the better your
chances of getting publicity.
Most important, of course, you’ve got to have something the readers, lis-
teners, or viewers of a media outlet will find interesting. Sure, you think
it’s important you’re opening a dry cleaning business, but why should the
newspaper care? Is yours the first dry cleaning business in the city? Do
you provide a genuinely unique process for cleaning clothes?
What you need is a “hook.” A hook is an aspect of your story that

“hooks” readers in—the thing that makes your news compelling. Some
stories, of course, are naturally compelling: a closely contested election, a
hot sports contest, a really cool new consumer product. But let’s face it:
Most of us don’t have stories that are naturally gripping.
Instead, we must find an angle for reporters, showing our story is timely,
amusing, or informative. One way is to tie your story to outside events
that generate their own publicity, such as holidays, local celebrations,
sporting events, or new legislation. Reporters always need timely tie-ins.
Here are other tips to help your press release be successful:

n Be creative. Reporters are tired of seeing the same old stories. The off-
beat and unusual grabs attention. Sometimes just a little “twist” on a
story is enough. For instance, in advance of Earth Day, you might send
out a release about how your new dry cleaning process is environmen-
tally friendly. If you’re an accountant, you might want to send out a
list of the “Ten Worst Tax Deductions” instead of the Ten Best.
WORKSHEET my printing needs
Use this worksheet to project how many professionally printed materials you will need.
Color or Cost
B&W Quantity Printer per Unit Total Cost
Business cards
Brochures
Pamphlets
Fliers
Publicity photo
Advertising specialties
(mugs, pens, etc.)
Signage
Vehicle signs
Uniforms, t-shirts, etc.
Other:
WORKSHEET trade shows and industry events
Use this worksheet to track trade shows or events that you are considering. List the costs to
attend and to exhibit, and note specific details about the type of people who attend.
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
W EE K SI X | 265
n Be visual. Television, in particular, needs visually stimulating stories,

but offering a good photo opportunity will help you make it into the
newspaper, too. Find ways to make your story visual: like the pet store
that holds an Easter parade with pets in Easter bonnets. In your imag-
es, avoid “BOPSA”: Bunch of People Sitting Around.
n Work with others. Leverage the power of other organizations to gain

visibility; consider unlikely coalitions, not just similar interest groups.
n Come up with statistics. Media outlets love numbers. If you can pro-
vide objective, trustworthy information related to your industry or
market, you’ve got a better chance of having the story covered. Include
colorful graphic representations of the statistics if possible.
n Be available. No one can cover or quote you if they can’t reach you.
Include all your phone numbers and contact information in your press
release. And don’t send out a press release and then leave on vacation.
n Follow-up. Reporters get hundreds of press releases a week. They’re

not necessarily going to read yours. Make a follow-up phone call.
n Respect deadlines. Don’t call reporters when they’re “on deadline,”

typically late afternoon for daily journalists. Mid-morning is usually
the best time.
n Do your homework. Get to know which media outlets (TV, radio,

newspapers, websites, and trade publications) cover your industry or
the type of story you’re likely to have.
n Develop a database of appropriate journalists, and keep in touch

with them. If possible, get to know them personally. Reporters need
reliable sources they can turn to quickly.
Finally, keep trying—over and over! The companies that often get the
most coverage are those that regularly and repeatedly send press releases.
A one-time press release is far less likely to get you coverage than an
ongoing public relations campaign.
Use the worksheets “Getting Publicity” and “Media Contacts” to keep a See pages
list of publicity opportunities and contacts. 266 and 267
WORKSHEET Getting publicity
Use this worksheet to list newsworthy ideas related to you and your
business that can generate free publicity for your company.
Timely stories: Tie your activities to events such as holidays, local celebrations, or new legislation.
Creative angles: The unusual, amusing, or extraordinary always gets attention. If you can, involve celebrities.
Joint publicity opportunities: Consider unlikely coalitions, not just similar interest groups.
Visual stories: Television, in particular, needs visually stimulating stories.
Issues on which you’re the “expert”: Provide trustworthy, objective information, preferably with statistics.
WORKSHEET media contacts
Keep a list of potential media contacts: reporters, editors, columnists,

and bloggers who cover issues relating to your company.
Name: Name:
Title: Title:
Media outlet: Media outlet:
Areas of interest: Areas of interest:
Contact info: Contact info:
Name: Name:
Title: Title:
Name: Name:
Title: Title:
Name: Name:
Title: Title:

Advertising
Advertising works. It gets your company’s name and message to a large
number of people with relatively little effort on your part. But it costs
money. Don’t buy ads based merely on the number of people they’ll
reach; make sure the ad reaches the right people: the customers you want.
A badly designed and poorly written ad may be worse than no ad at all,
so spend the time and money to develop a good one.
One of the most frequent mistakes people make when designing ads is
to omit necessary details, such as the company’s location, hours of opera-
tion, phone number, website, or social media profiles and pages. Usually
the reason is that the person writing the ad takes basic information for
granted. After all, you already know what city you’re in or what your area
code is, so you forget that it’s not obvious to the reader.
Essential details:
1. The name of your company!
2. The nature of your product or service. Unless you own Macy’s or

Microsoft, don’t assume readers automatically know what your busi-
ness sells. Even if you send your ad only to existing customers, many
people remember a business by what it sells—not its name (e.g.,
“The drycleaners at Main and Second Streets,” “that cute clothing
store downtown”).
3. Where you’re located. Include the city and state (even your country
if doing business internationally or online). This is critical if you’re
in retail, but even if your customers don’t come to your store or
office, including a location helps customers relate to your business.
4. Hours and days you’re open or hours and days of the sale.
5. Website address.
6. Phone number with area code. If you’re not going to be available

to answer calls, record a message with vital information. Include the
country code if you do business internationally.
7. Email address.
8. Special terms or limitations, if any. In other words, are the dis-

counts not applicable to certain types of items or services, or does
the offer expire after a certain date?
W EE K SI X | 269
9. Social media sites. If you use Facebook, Twitter, Instagram, or Pin-

terest, for example, to market your company, be sure to include your
information so potential customers can find and follow you.
Those are the basics. Once you’ve got those covered, what can you do to
make your ads more effective in getting sales?
1. Create an eye-catching headline. The first thing you have to do is
get attention. This doesn’t have to be incredibly clever—“Fifty per-
cent off ” gets my attention.
2. Tell the benefits. Let potential customers immediately know why
they should be interested in doing business with you. This can be
something as simple as “Lowest Price for Your Auto Insurance.”
3. Provide lots of information. Ads chock-full of specific products are
often surprisingly effective, as long as they’re not too cluttered.
4. Have a pleasing design. This doesn’t have to be the most creative or
unique design, but be certain to have appropriate “white space” and
don’t use more than one or two typefaces.
5. Include a call to action. Customers often respond to a direct appeal
for action, such as “Hurry—Supplies are limited,” or “Call today to
book your appointment!”
Beware! Not all marketing expenses are treated the same by the IRS. While
taking an ad out in a newspaper is 100% deductible, taking a client out to
RED TAPE lunch is not. Although business entertainment is often the major marketing
ALERT! expense for smaller companies, most meal and entertainment expenses are
only 50% deductible.
For example, if you spend $60 on lunch for you and your customer, you can claim only $30 as a
deductible expense. Meals are also only 50% deductible when you’re traveling, even on a totally
business-related trip. There are a very few exceptions to the 50% rule, such as when you’re pro-
viding food for a company employee retreat or picnic. But far more often, the IRS takes a careful
and dim view of entertainment expenses. Be able to verify that business was actually discussed
and you had a legitimate business purpose.
Finally—before you go to print, have two other people read your ad.
Also keep in mind that professionals estimate it takes an average of nine
exposures to an ad before it registers in a viewer’s mind. So be prepared
to run your ad repeatedly!
Promotional products
Look around your desk. How many advertisements do you have sitting
at your fingertips? None? Maybe one—a clipping from the newspaper
about something you’re thinking of buying this week? Otherwise, most
of us don’t keep ads framed above our desks.
Look again. You probably have quite a few ads, yet you just don’t think
of them that way. Many of the ads you’re likely to have are in the form of
Check It Out calendars, pens, pencils, magnets, mugs, notepads, mouse pads, and vari-
From pens, to clothing, ous gadgets—all imprinted with a company name.
to water bottles, and
more, you can have your These represent some of the most powerful, affordable, and overlooked
company name and logo
forms of marketing: “specialty advertising” or “promotional products.”
imprinted on just about
anything at Concepts One of the great advantages of this kind of marketing is that your cus-
in Advertising (www.
tomers see your name repeatedly. Studies show it takes multiple expo-
imprintedeverythings.
com). sures to an ad before a person notices it. How many radio advertisements
can you afford? Compare that to the cost of calendars or pens. If some-
one wants a pizza, and they have a magnet with the name and phone
number of your pizza restaurant on their refrigerator, your chances of
their calling you—rather than your competition—increase greatly.
Promotional products can also make other forms of advertising more

effective. Offering a free gift in your online ads for new customers or
sending a small item in your direct mail piece can make customers pay
more attention.
Interestingly, the largest percentage of promotional items sold are what

the advertising specialty industry calls “wearables”: t-shirts, caps, wind-
breakers, and the like. Many of these are given not to customers, but
to employees, as a reward for reaching certain goals (such as safety), to
promote an internal company campaign or message, or most important-
ly, to reinforce the company’s image and logo.
W EE K SI X | 271
To get the most of your specialty ads, keep this in mind:

1. Target your market. Is your audience male or female? Do they
spend most of their time in the office, home, or car? Choose items
your target customers will use and see repeatedly.
2. Choose items that are useful, different, or interesting. A lot of
people get the same thing over and over.
3. Choose a gift related to your business and appropriate for your
customers. A keychain may work for a mechanic; an accountant
might want to give calculators or big erasers.
4. Simple messages are better. You don’t have a lot of space.
5. Don’t just look for price. Customers often will keep higher quality,
more thoughtful items longer, increasing the effectiveness of your
promotional product.
Networking
Networking is a vital part of a company’s marketing program, especially
smaller companies. Join professional or industry associations and become
active. Participate in community groups. Bring business cards with you
when you attend events, whether they’re Chamber of Commerce meet-
ings or assemblies at your child’s school.
“Guerrilla marketing”
Finding inexpensive and unique ways to reach potential customers has
become commonly referred to as “guerrilla marketing” since the term
was popularized in the 1980s.
The term reflects the concept of guerrilla warfare—using methods that
are surprising, indirect, and cheap. Guerrilla marketing, however, doesn’t
need to be clever or outrageous to do the job. As long as the campaign
carefully targets the right people and has some flair, it’s likely to be suc-
cessful. Here are some real-life examples:
n When my first book, Successful Business Plan, debuted, I had thousands
of paper napkins printed with a humorous description of a “Business
Plan on a Napkin.” I attended the huge American booksellers’ trade
show and put stacks of these napkins on the coffee carts around the
convention center hall and convention hotel bars.
n My niece, Adeena, while handling the public relations for a company,

ordered Chinese fortune cookies with clever sayings inside mentioning the
business she represented. She then researched which Chinese restaurants
were near the offices of the newspapers and magazines she hoped would
write about her company, and gave them the cookies—free—to use when-
ever someone from those publications ordered Chinese food delivered.
n A bank near my office gives free Vidalia onions away once a year to
anyone who comes in. It’s such a fond, and odd, local tradition that
the bank gets lots of local press coverage each year.
n When my hairdresser moved to a new location, with few pedestrians,

he had to get creative. The biggest source of walk-in customers comes
from the popular dry cleaners across the street. He gave the owners of
the dry cleaners free haircuts in return for putting discount coupons
on their counter.
n Weekly, a Houston restaurant donates appetizers to a nearby motel for

the hotel’s afternoon guest reception. In return, at no charge, the res-
taurant posts ads in each room.
As with guerrilla warfare, the problem with most guerrilla marketing

campaigns is that they use a scattershot approach, hitting everything
within reach. That means spending lots of time and money on things
that never bring actual customers. And small businesses can’t afford that.
So while you might want to adopt some guerrilla marketing techniques,

don’t forget that you still need an overall, disciplined marketing plan.
Customer loyalty programs

In my wallet, I have:
n Two airlines’ frequent flyer cards

n A punch card from a beauty supply store
n A coffee house frequent buyer card
n A frequent parker card for the airport parking lot
n A punch card from a car wash
n Three hotel chains’ membership reward cards
W EE K SI X | 273
All these cards are evidence of my participation in these companies’ cus-

tomer loyalty programs. Programs like these have exploded over the last
few decades, as companies have realized the importance of retaining their
customers, not just attracting new ones.
The key to creating a successful loyalty program is being aware of what
you want to achieve. Some goals for a loyalty program are:
n Customer retention. Even if customers spend no more than they
would have without a program, how much are you willing to do to
keep them in your store rather than a competitor’s?
n Maintain spending habits. Perhaps more important than retaining a
customer may be inducing them to keep their current level of spend-
ing. So you may want to reward customers for purchasing a certain
number of products or spending a particular dollar amount with you
each week/month/year.
n Rewarding customers. As airlines have learned, frequent user pro-
grams can often be most effective by giving rewards to their best cus-
tomers. Making customers feel appreciated can be a powerful tool for
maintaining their spending and loyalty.
n Information gathering. One benefit of loyalty programs is finding out
what your customers—individually as well as collectively—want. Gro-
cery store loyalty programs use this as a way of selectively marketing
products based on customers’ buying habits.
n Increasing sales. The hope is that customers will actually spend more
if they feel loyal to you.
What kinds of loyalty programs tend to be effective?
n Buy-ahead discount. When I purchase a prepaid card for $20 at my
nearby coffee store, I get one free drink at the time of purchase. My
neighbor gets a 10% discount when she prepurchases a series of exer-
cise classes. The benefit is immediately apparent to the customer, and
you get money in the bank now. A certain percentage of prepaid cards
will be lost or never used, increasing your profit margins.
n Free reward after reaching purchase level. The long-term airport
parking lot gives me one free day after I stay 35; I get one free car wash
after buying 10. Besides feeling encouraged to keep coming back, I carry
these cards with me—which serves as a constant ad for the business.
n Upgrades/special treatment. Giving extras to your loyal customers

may cost relatively little but mean a lot. Some examples: an upgrade at
a hotel, free dessert at a restaurant, free alterations at a clothing store.
n Surprise rewards. Periodically, I receive a coupon for a big discount
or $10 or $25 off any purchase from companies where we do a lot of
business—office supply stores, copy shops, and so on. It’s like getting
an unexpected gift from a friend.
n Membership/clubs. You can offer discounts or rewards to people
who agree to sign up to be a member of your club or to be associated
with you. These include “supermarket clubs,” where customers get
discounts and special offers in return for enabling the supermarket to
track their purchases and continue to market to them. These work well
with customers who are regularly targeted by competitors’ marketing
campaigns.
n Discounts after purchase. Discounts given as a reward after purchase
serve to encourage additional purchases and to thank customers. An
example would be a discount coupon for the next purchase placed in
an order shipped from a clothing company.
What kind of loyalty programs do I find less effective?
n “Percent off” discount after reaching purchase level. Unless the dis-
counts are substantial, these tend to feel more like a promotion for the
business rather than a reward. These are different from a specific dollar
amount off or a specific reward free.
n End-of-year rebates. Waiting 12 months defers gratification too long.
The customers who are likely to be motivated by such programs are
those who are most cost sensitive, not necessarily your most profitable.
No program, though, can overcome bad service and bad products. A few
years ago, I switched airlines even though I had premier status, because I had
tired of the continually rude treatment, not to mention all of the canceled
flights. Treating customers like they’re platinum keeps you in the gold.
W EE K SI X | 275
Accomplishment #4:
Begin online marketing
SEO and SEM
“Build your website, and they will come,” right? Not necessarily. For
starters, how will people know you even have a website and that it con-
tains something they’re interested in? Sure, you’ll do everything possible
offline to direct people to your website—put its address on your business
cards, brochures, ads, and so on—but the people in the best position
to visit your website immediately are already online. So how do you get
them to notice you? One of the best ways is by making sure your site is
easy to find via search engines—Google, Yahoo!, and Bing, for example.
For the vast majority of online users, search engines serve as the main
gateway to information on the Web. This means that if your website is
highly visible in the results that appear when someone types in a key-
Check It Out
word or phrase associated with your type of business, there’s a decent Do a search for “Google
SEO Starter Guide” to
chance that person will click on over to your website. There are two pri-
find a link to a helpful
mary ways to ensure that your website is highly visible on search engines.
PDF file full of basic
Search engine optimization (SEO) is the process of trying to design information on SEO.
your website and the words on it so that it appears naturally in the top
results when someone types a keyword into a search engine. With SEO,
you don’t pay search engines to have your site appear high on results
pages. SEO is often referred to as organic search.
SEO is an art and a science, based on secret algorithms from the search
engines. It’s unlikely that you will master it on your own to make your
site consistently appear at the top of unpaid search results. Nevertheless,
you should understand at least the basics of SEO to ensure that your site
shows up, over time.
The first thing you need to do is figure out which words your target
customers will most likely use when searching for the types of products
or services (or content) you offer. Once you’ve determined that, repeat
those keywords throughout your site—in your content, headlines, page
names, and more.
Imagine, for instance, that you own a company that creates and sells
educational software parents use to help teach their kids math. There are
lots of terms you’d expect searchers to use when looking for products like
yours—and these are the terms you’d use when developing your site’s con-
tent, regardless of whether you were considering SEO: terms such as “soft-
ware,” “educational software,” “math software,” and even “kids software.”
These, though, are all rather broad terms—that is, lots of companies sell
math software or educational software. This means your site is unlikely to
show up high in natural search results based on those keywords because
millions (yes, millions) of other sites are also using them. Instead, you’d be
better off focusing on keywords that are more specific to your products—
so in the case of that educational software company, something like “kids
math software” used over and over would yield better results.
And since these keywords need to be peppered throughout your site if

a search engine is to list it high in its results, you need to have SEO in
mind right from the start as you develop and update your site.
Search engine marketing (SEM) refers to the process of paying search

Check It Out engine companies to ensure that your website (or specific pages of it)
You’ll need to choose
relevant keywords for
appears in users’ search results, typically either at the top or in a column
your business for both that appears beside other, nonpaid results. This is also referred to as search
SEO and SEM. A good engine advertising, paid placement, paid search, or sponsored listings.
place to start is with
Google’s free keyword
Here’s how SEM works: Advertisers choose the keywords that they think
tool (https://adwords. searchers will most likely use when looking for products, services, and
google.com/home/ content similar to theirs. Then, when the customer enters into a search
tools/keyword-planner). engine one of the keywords that advertiser has purchased, a small ad
appears either above or near the list of naturally generated search results.
Most such ads consist of just simple text, often indistinguishable from
the actual search results except for their placement on the page or a faint
background color. These ads are quite small—usually just a headline,
followed by 10 words or so, plus an inviting link to a website or a page
within a website.
SEM has proven to be an extremely effective advertising medium for two

primary reasons:
n Highly qualified prospects. Searchers are often highly qualified pros-
pects—especially for the most narrowly defined terms. For instance, if
someone types in the term “bike repair San Francisco,” there’s a good
chance they or someone they know is in Northern California with an
immediate need to get their bicycle fixed.
W EE K SI X | 277
n Effectiveness of pay per click (PPC). Another reason that SEM is so

popular is that advertisers pay only when a searcher clicks on their
ads (called a click-through). Advertisers do not pay simply for having
Check It Out
Google’s Adwords
their ad displayed—and this fact distinguishes PPC advertising from (https://adwords.google.
virtually every other type. If you run an ad for your bike repair shop com) and Microsoft’s
in the newspaper or the Yellow Pages, for example, you’ll pay the same Bing Ads (https://
amount for that ad no matter how many people actually see it. You secure.azure.bingads.
may get zero response, but you’ll still have to pay. With PPC, you pay microsoft.com) are
two providers of search
only for each click-through to your site that a prospect makes.
engine marketing.
Ways of Calculating SEO and SEM Success

The three most common ways in which online advertising is purchased
are CPM, CPC, and CPA.
n CPM (Cost Per Thousand) is where advertisers pay for exposure Start It Free
of their message to a specific audience. CPM costs are priced per
Google Analytics (www.
thousand impressions. The M in the acronym is the Roman numer- google.com/analytics)
al for 1,000. is an easy-to-use tool
that analyzes your web-
n CPC (Cost Per Click)is also known as Pay Per Click (PPC). Advertisers site traffic—how many
pay only when users click on their listings and are redirected to their people are visiting your
websites. site—and gives you an
impressive array of infor-
n CPA (Cost Per Action; Cost Per Acquisition) Advertisers pay for actual mation about them, such
results, based on those who complete a transaction, such as making a as what pages they are
purchase or signing up for a service. viewing, how long they
view them, at what point
As with every other aspect of your marketing plan, you should carefully they abandon your site,
evaluate the return on investment (ROI) of your SEO and SEM mar- and so forth. It’s extreme-
keting efforts. Fortunately, this is one area of marketing where ROI is ly versatile and offers a
broad array of reports to
extremely easy to measure.
help you make changes
in your site to improve
Web analytics quantifies website traffic and every action taken in your
your results.
SEM activities and by your website visitors. It can tell you how many
times your ad was shown to searchers (called impressions), how many
times it was clicked through, what Web pages users visited once they
clicked through, how long searchers stayed on your site, whether they
took certain actions (such as making a purchase) after they had clicked
through to your site, and more.
Social Media Marketing

Facebook. Twitter. Instagram. LinkedIn. YouTube. Blogger. Pinterest.
The digital world is a connected world, and is forever expanding. A huge
number of people are constantly attached to the Web, their phones, and
each other. And as any good marketer will tell you, any time millions of
people are connected, a marketing opportunity exists.
Start It Free
Along with new social
Where once social media sites like those named above were designed
media platforms have merely to enable individuals to share their interests and opinions, they’re
come many tools to now also vehicles for promoting products and services. Many oppor-
make campaigns tunities abound—whether you pay for ads in social media sites or you
more efficient. You can actively use social media efforts to make your business more visible and
pre-load posts and fol- create connections to your target market.
low activity in your vari-
ous social media plat- One of the first things you need to determine is which social media plat-
forms with Hootsuite forms best suit your target market. Are you trying to reach consumers
(www.hootsuite.com), or businesses? Does a mass-market site (Facebook, Twitter, YouTube), or
Manageflitter (https:// a special interest site (such as Chowhound for food), or a professional
manageflitter.com), or networking site (like LinkedIn) suit your offerings? Before launching
Tweetdeck (www. a social media campaign on a given site, be certain that its audience is
tweetdeck.com). Hoot-
truly interested in your offerings.
suite and Manageflitter
also offer paid plans with Once you’ve identified the most appropriate social media sites, the key to
more features. your marketing campaign’s success will be providing content that appeals
to your target audience. Social media can be a powerful tool for getting
a message out fast. If you can capture the attention of an audience with
something clever, controversial, or timely, you may be able to generate a
powerful viral marketing campaign.
Like anything else in your business, social media marketing requires both
a strategy and time to execute successfully.
Use social media sites to:
n Spread the word and create buzz about your products or services
n Advertise with campaigns designed to target your specific audience
n Create your own group or community to get feedback from customers
n Build referral sources and networking connections
n Engage more deeply with prospects and customers
n Enhance your credibility by contributing meaningful content
W EE K SI X | 279
Blogs
Blogs, short for “Web logs,” are frequently updated online journals that
can contain text, audio, video, graphics, and photos. From a marketing
perspective, blogs work well for businesses in which expertise is valued— Start It Free
for consultants, technology service providers, professional service busi- You can set up a blog
nesses, and so on. quicky, easily and for
$0 on Blogger (www.
Whether you create your own blog or regularly contribute to a popular
blogger.com) or Word-
blog in your field, your blogging efforts can greatly enhance your visibility
press (www.wordpress.
and credibility. If you offer readers something of value (beyond a sales mes- com). Wordpress has the
sage), it’s likely you’ll attract people looking for your services or products. added benefit of poten-
tially sending traffic your
Effective use of blogs can:
way. After you post a
n Build name and brand recognition blog, it will appear in the
Discover section of the
n Establish you as an expert
site. There, if it catches
n Attract customers and clients the eye of interested
n Create links to your website readers, you’ll get some
clicks on your post.
n Generate buzz around a new product
n Tap into a committed market
Other online social media marketing tactics

Creating your own podcast—a radio or TV program that gets down-
loaded to computers and mobile devices—might be a good option if you
have compelling content on the most popular podcast topics: technol-
ogy, politics, and business. What about a video? While YouTube is the
best known of the video-sharing sites, many others are out there, and
some of them focus on “how-to” videos, possibly providing a perfect
opportunity to showcase your expertise.
Consider your social media efforts an investment

WHAT
WOULD It can be difficult to measure ROI (return on investment) of your time and
expenditure on sites such as Facebook, Twitter, Instagram, and Google+. But
RHONDA using social media increases your visibility—and attracts customers in the long
DO? run. Just be sure to keep an eye on how much time you spend on these sites.
Choosing a social media marketing strategy

With so many interactive online marketing tools to consider, how do
you choose the right one for you?
n Make sure your target market actually participates in these online
activities. Closely follow the LinkedIn groups or Facebook pages, read
the blogs, listen to the podcasts, and participate in the community
before you decide to spend a great deal of time and money on any
particular site.
n Determine whether you have the time for “unpaid” social media. Are
you willing to develop and maintain an active online presence? If you lack
the time, then pay for ads—they can be persistent even when you can’t.
n Understand that online activities can come with pitfalls. Most notably,
dissatisfied customers may make unfavorable comments—not all of them
even fair or honest—about your products, services, or customer service.
n Keep experimenting. Because the Internet is a fast-moving medium,
you can quickly adapt marketing strategies to find the approaches that
work best for you. And new social networks develop continually. Use the
See pages worksheet “My Social Media Strategy” to outline how you’ll use social
282–283 media in your marketing plan.
Daily Deals
The prospect of getting a bargain has driven the phenomenal success of
daily deal sites such as Groupon, Living Social, and hundreds of others.
For some companies, these offers are invaluable business builders. Other
companies, which have lost money and attracted only bargain-hunting
customers, have rued the day they ever signed up.
A deal site sends an email daily to those who’ve registered. People interest-
ed in your discounted product or service purchase your deal. You typically
pay nothing to be included, but the deal site gets a hefty piece of the sale:
30% to 50%. And typically, you must offer at least a 50% discount. So if
your business creates custom photo books using images your customers
upload to your site, here’s what a money breakdown might look like: You
offer your $40 leather-bound photo book for $20. With each sale, you get
$10; the site gets $10. Those who never redeem the coupon add to your
profit margin: Businesses report 5% to 40% nonredemption rates.
W EE K SI X | 281
Deals are best offered to launch a new business or get your name out
there, for slow or off-season periods to drive new traffic, and to move
excess or last season’s inventory.
If you’re considering offering a daily deal, keep these 10 strategies in mind:
1. Offer services, rather than products. It’s generally far less costly since
you won’t have the cost of goods.
2. To help build a committed customer base, create offers for which
customers must come back repeatedly (“your third visit free”; “four
manicures for $99”; and the like).
3. Try not to cannibalize existing customers. Craft deals that are more
likely to appeal to new customers.
4. Experiment with different offers and several sites to determine what
works for you. A more-targeted site may be a better fit and less costly
than a general, national one.
5. Include your own fine print. Limit redemption to “only one per
customer,” “not to be combined with other discounts,” and other
restrictions that make sense, to protect you.
6. Avoid sites that require you to deal with them exclusively. Some sites
affect your ability to offer deals on other sites; limit your involve-
ment with those.
7. Understand the fees and terms. Make sure you know about all other
fees. Some sites charge credit-card processing fees; others may pay
you slowly or in long-drawn-out installments.
8. Build your marketing list. Look for sites that give you a list of those
who’ve bought the deal. Some sites give you only an identification
number. Others will give you names and email addresses—enabling
you to keep marketing to those prospects.
9. Do everything you can to ask for and capture contact information
from new customers so you can continue to market beyond the deal
or coupon.
10. Negotiate with deal sites. And negotiate hard. There are lots of daily
deal sites. Most important, know what works best for you and for
your business. Don’t let salespeople pressure you.
WORKSHEET my social media strategy
Use this worksheet to plan your social media marketing strategy. Remember that social
media can take up an inordinate amount of your time. Budget your hours wisely.
My Target Widgets and

Type of Content
Social Media Site Audience Visuals I’ll Add Third-Party Appli-
I’ll Post
on This Site cations I’ll Use
Facebook
Twitter
LinkedIn
Pinterest
Instagram
YouTube
Google+
Other social
media site
Other social
media site
Blogs to
follow
Blogs to write
Podcasts
Other:
Who Will Maintain Resoures Required
Will I Use
My Goals for This Site the Site, Number of (for writing, posting,
Paid Advertising?
Hours Weekly pictures, etc.)
Keep your expectations realistic. And remember, these sites are more a
marketing tactic than a way to make quick sales. They are a good exam-
ple of loss leaders—offering a product or service at or below cost so as to
bring people through your doors.
Mobile marketing
Mobile devices have transformed the way customers deal with local busi-
nesses. How long has it been since you used your smartphone to find a
business? To reserve a table at a restaurant? To get directions? Likely, not
long. Most of us use mobile devices to shop. That’s a lot of people look-
ing for businesses on their mobile devices. Depending on the type of
startup you launch—mobile marketing is especially well-suited to local
businesses that deal with consumers—you’ll want to take advantage of
mobile marketing.
You don’t have to develop a gee-whiz app or use every mobile method
available in order to reach the increasing number of people searching for
businesses like yours on their mobile devices. You do, however, need a
mobile version of your website.
Most of the following mobile marketing techniques are easy, and often free:
n Get found. “Claim” your business for free on sites such as Google My
Business, Bing Places, and Yelp. When someone in your area looks for
a business like yours, you’ll show up in the search results.
n Offer coupons and deals. Like adding your listing, this is also free and
easy to do. You simply add a coupon to the sites listed above.
n Build relationships with customers. Do this through social media
sites such as Facebook, Instagram, or Twitter.
n Advertise on Facebook. Although the ads will cost you some money,
consider this: In the U.S., over 80 percent of smartphone users spend
their time using just five apps. Facebook is number one. With Facebook
ads, you can target a very specific audience, control your budget, track
your results in real-time, and change your ads quickly if necessary.
n Display your location, hours, and main products or services. Make
sure your home page has the most critical information in highly readable
type—large fonts and dark print on a light or white background—that
doesn’t require typing or moving away from the home page.
W EE K SI X | 285
n Accept payment. In many mobile service businesses, such as plumbing

and contracting, you can accept payment right on your smartphone.
Services like Square (https://squareup.com), Quickbooks GoPayment
(https://quickbooks.intuit.com/payments), or PayPal Here (www.pay-
pal.com) provide credit card swipers that attach to your mobile device.
They keep a percentage of every charge processed, but you get paid on
the spot.
Review Sites
Positive reviews on sites such as Yelp, Angie’s List, TripAdvisor, Zagat,
Google My Business, and the like, can be powerful marketing tools for
your business. Customers often use—and rely on—sites like these before
making reservations, booking appointments, or purchasing products.
Although you have no control over what reviewers post about you, you
can claim your business page on these sites and add information about
your company.
Use the following tips to manage your online reviews:
n Encourage satisfied customers to post reviews.
n Monitor your reviews at least weekly.
n If a site allows “owner’s response,” respond to negative reviews

with clear, nonargumentative explanations and thank positive
Check It Out
reviewers. Many companies pro-
vide easy-to-use, turnkey
n Prevent negative reviews: Train your employees on excellent online email newsletter
customer service. services to help you
create and send email
n If available, “claim” your page; add business info, pictures, and newsletters in a snap.
coupons. Here’s a short list of
some: AWeber (www.
n Don’t try to “game” the system; concentrate on building a great
aweber.com), Constant
business.
Contact (www.constant-
contact.com), Emma
Email Newsletters (www.myemma.com),
A financial planning consultant sends an email newsletter containing 10 and Vertical Response
(www.verticalresponse.
investment tips to her customers. A retail store sends an announcement of an
com).
upcoming sale via email. A dentist’s patient gets a notice in his inbox alerting
him that it’s time for a checkup. All of these represent ways businesses can
stay in touch with customers and prospects via email newsletters.
In an email newsletter, you can include information and tips your cus-
tomers can use, short articles, business updates, special announcements,
or coupons and special offers. For most businesses, avoid filling your
newsletter solely with sales information about your products and ser-
vices—instead, provide recipients with some benefit for opening your
email. That way, they’re more likely to read the next one you send. If,
however, your business strictly sells products, then “news” of discounts,
sales, and new products may be all the benefit your customers look for.
Of course, people are deluged with email, and as with any kind of mar-
Start It Free keting piece, there’s the possibility that your communication may well
just get tossed—after all, it’s easy to hit that Delete button. But if an
At this point in your
email communication comes from a recognized and trusted source and
business, your con-
tact list of customers offers something of interest to the recipient, there’s a good chance it will
and prospects may be be opened—and perhaps even viewed as something valuable.
short. Email newslet-
ter service MailChimp
Email marketing is:
(www.mailchimp.com) n Effective. Customers and prospects look at their email continually.
offers a “forever free”
account that allows n Affordable. Email is significantly less expensive than print communi-
users with smaller lists cation.
to create and send out
n Quick. Messages can be prepared and sent virtually immediately.
email newsletters at no
cost. As your business n Easy. A variety of email communication services make it a snap to stay
grows, you can upgrade in touch via email.
to a paid subscription
account without any But a word of caution about all email marketing: Be careful not to abuse
disruption to your news- it. Send email only to those who’ve signed up to receive email from you
letter marketing cam- or have had some dealings with you (including giving you their business
paigns. card), or you may be breaking the law. Limit the frequency of your mes-
sages; generally once or twice a month is enough for an email newsletter.
Try to use a compelling “Subject” line to increase the chance that people
will open and read your mail. And make sure your mailings are mean-
ingful, are valuable, and don’t contain offensive content or language. If
not, recipients will soon block your email, and if enough people do that,
email filters will block your messages to many larger servers.
Use the worksheet “My Email Newsletter” to help plan your email news-
See page 287 letter marketing campaign.
WORKSHEET my email newsletter
Use this worksheet to outline specifics of an email newsletter your business could
produce and distribute to current and potential customers.
What kinds of useful information and tips will it contain?
How will you promote your products or services without driving readers away?
Who will be responsible for developing and writing the content?
How will you develop your mailing list?
How frequently will you produce and send a newsletter?
Which online email newsletter will you use to send your newsletter and maintain your mailing list?
How will you evaluate whether your email newsletter is serving as an effective marketing piece?
What are the criteria for success?
What other aspects of your email newsletter must you consider?
Your Trigger Events

List actions/events (in each category, if applicable) that you could use to trigger a communication via an auto responder.
What would you say in your email?
Trigger Event/Date What you’ll say in your email
Early/First Contacts
Pre-purchase Inquiry
After Purchase
Birthdays/Anniversaries
Meeting/Appointment Follow-ups
Other
Online Advertising
You’ll find them on just about any commercial website you visit. They’re
either lurking at the side of the page or incorporated right into the
design. Some are static; others blink or flash messages at you; and some
float across the page. Then there are those that pop up in front you,
obscuring the website you’re trying to view until you can figure out how
to get rid of them.
Even if you find most online ads bothersome, it’s a good bet that there
are others you’re happy to see. For instance, if you’re looking for envi-
ronmentally sensitive products—solar-powered heating, energy-efficient
lights, recycled building materials, and so on—and you come across a
website listing suppliers of such products, you’ll be thrilled. You won’t
care that these companies paid to be listed; you’re just glad to find all of
these resources in one location.
What’s important is that you design your online ads to attract (not
annoy) your target customers and then place them where potential cus-
tomers are most likely to see them.
Some major types of online website advertising opportunities are:
Website ads. Banner ads typically include graphics or photos as well as

text, and are placed adjacent to the content of the webpage itself. Inter-
ested viewers can then click through to the advertiser’s website.
Another form of website advertising is interstitial ads—that is, ads that

appear between (or before) other content and websites. With this type
of ad, viewers become a captive audience. After they type in a website
address, an ad appears before the actual site they want to visit opens.
Sponsorships. With a sponsorship, an advertiser pays to support a web-

site, portion of a website, content within a website, or the organization
behind the website. In return, the website gives the advertiser visibility
and recognition. Often, this visibility takes the form of a static banner
ad; however, it can also mean displaying the sponsor’s name, logo, or tag-
line in immediate proximity to content.
W EE K SI X | 289
Online classifieds. Some of the most effective ads are pure text (or, per-
haps, text augmented with a few pictures). These are the equivalent of
online “classified” ads.
The best known is Craigslist (www.craigslist.org). While most people

look for jobs or used goods on Craigslist, many businesses also use the
site to advertise their new products or their business or professional
services. Advertising on Craigslist takes time (you have to continually
update your ad to stay visible), but, in most cases, it’s free.
Affiliate auction. Online auction sites, such as eBay, are more than just
places for individuals to auction off used goods to the highest bidders. Rep-
resenting huge online marketplaces, such sites have created myriad market-
ing opportunities for entrepreneurs.
Sure, online auction sites are designed for ecommerce—that is, the direct
selling of products—but that doesn’t mean you can’t also use them as mar-
keting tools. Since you can set up “stores” on these sites or list products as
“Buy It Now” without conducting an auction, you can use auction sites as
an advertising medium—just as you would online classified sites.
All you need to do is register, pay the fees, and upload some descriptions
and photos to get your products—and your business—in front of a mar-
ketplace that consists of millions of eyeballs.
Affiliate programs. Affiliate advertising offers incentives for others to place

your ads on their sites in exchange for a piece of the action—usually in the
form of a sales commission on customers who come through their site. For
instance, let’s say you were selling your brand of tennis accessories. Other
websites—such as those for tennis magazines, tennis clubs, or sporting
good retailers—could agree to place your ad (including a link back to your
website) on their webpages. Then, if one of their site visitors clicks the ad,
goes to your site, and makes a purchase, the originating site gets a commis-
sion on the final sale.
WORKSHEET marketing vehicles comparison chart
QUESTION Print Media Broadcast Online Social Media

Newspapers, Media Website, SEO Marketing
magazines, Radio, TV and SEM, daily Blogs, Facebook,
phone book deals, mobile Twitter, LinkedIn,
marketing YouTube
What market do
they reach?
How big is their

reach?
What percent-
age of their market
is my target market?
What is the cost

per thousand (CPM)
reached?
What frequency
will I need to be
effective?
What is the
reasonable immedi-
ate response I can
expect?
How expensive
is the ad to prepare?
What are this

vehicle’s advan-
tages?
What are this

vehicle’s disadvan-
tages?
Other:
Marketing Networking, Signage Other
Collateral Trade Shows, Vehicles, buildings, In-store marketing,
Brochures, fliers, Public Relations billboards advertising specialties,
direct mail product placement
Accomplishment #5:
Start making sales!
If your marketing plan has been successful, you’ll soon have potential
customers interested. Now you have to make the actual sale!
Getting your first customer

While the Starship Enterprise may go “where no one has gone before,”
most customers only follow where others lead. Customers prefer to
patronize companies that already have other customers. What a dilem-
ma! You have to have customers to get customers.
Don’t despair; there are a number of tricks to snare that first client or
customer.
Check It Out The simplest method is to just give your product or service away. This
If you run a service isn’t as stupid as it sounds. Technology companies often give potential
business, make it easy customers “beta” or test versions of their software. They use this as a way
for clients to book both to improve their product and to expose future buyers to what they
appointments with
make. And Post-It Notes never caught on until 3M gave away thousands
you by accepting online
of samples. You, too, can allow potential customers to sample your prod-
bookings through a
service such as Square
ucts or services or to serve as “beta” testers.
Appointments Another approach is to charge your early clients far less than they would
(https://squareup.com/ pay elsewhere (and less than you’ll charge later). This enables you to start
appointments). building a reputation and perhaps creates some word-of-mouth advertis-
ing. Lots of companies use “introductory pricing” for their products or
services to start to build market share. Use community and social net-
working sites to help get the word out.
You might also find your first customer by asking your competitors for
excess work they can’t handle. Yes, I said “competitors.” One of the big-
gest mistakes I made when I started was that I avoided talking to others
in my field. I figured they would view me as a threat, and the less they
knew about me, the better. I was wrong. It turned out my “competitors”
were great sources for new business and industry information. Competi-
tors may be interested in subcontracting or referring work to you.
If you can do so legally, or if you’re on good terms with your former
employer, see if there are customers you can take from your last job.
Some of the most successful small businesses are those that serve custom-
ers that bigger businesses no longer wish to handle.
W EE K SI X | 293
Successful sales techniques

If you’re in business, sooner or later you have to make sales. Some entre-
preneurs view the prospect of a sales call with the same sense of fear and
loathing as having to face an IRS audit.
Take heart: Sales is a craft, not an art. It can be learned. Here are a few
keys to successful sales:
n Listen. No sales skill is more important than the ability to listen. A great
salesperson hears what the customer wants—their concerns and priori-
ties. When calling on a customer, it’s tempting to immediately launch
in to a sales pitch, especially if you’re nervous. But by listening, you can
better understand how your product or service meets the customer’s
needs and desires. If a woman shopping for a car says she likes to drive
fast, tell her about performance instead of cup holders. If a man is con-
cerned about safety, focus on the airbags and antilock brakes. Don’t just
tell the customer what you think they’ll be interested in or stick to your
standard sales patter.
n Ask questions. You can’t listen to a customer unless you get them talk-
ing. Ask relevant questions to draw them out: “What do you like in
your current car?” “What don’t you like?” “What features are the most
important?” Don’t just ask questions to qualify them as a hot prospect,
such as, “Are you ready to buy a car today?”
n Tell them what they get, not what you do. You work with your prod-
uct or service every day, so it’s natural to focus on details of your work.
But customers don’t want to know the ins and outs of your business;
they want to know how you meet their needs.
n Appreciate the benefits of your product or service. Genuine enthusi-
asm is contagious. If you truly believe you’re offering the customer some-
thing worthwhile, you’ll be a more effective salesperson. On the other
hand, if you don’t believe in your product, you shouldn’t be selling it.
n Don’t oversell. It’s tempting to land a sale by telling the customer
anything they want to hear, but that’s almost certain to lead to custom-
ers’ being dissatisfied or disappointed. An acquaintance of mine who
owns a successful chain of moderately priced hotels told me that his
strategy is to “promise customers a Chevy, then deliver a Cadillac.” By
underpromising and overdelivering, he has built an exceptionally loyal
customer base and generates terrific word-of-mouth marketing.
n Be honest. Lying is not only unethical and possibly illegal; it’s a sure-
fire way to lose customers and potential customers. You may even find
yourself facing a lawsuit.
n Compare, don’t criticize, your competition. Yes, I know, your product
or service is so much better than your competitor’s, and they’re really
not very nice people either. But disparaging your competition makes
you appear malicious. Instead, factually—and positively—compare
your benefits and value to those of your competitor.
n Build relationships. One of Rhonda’s Rules is “people do business
with other people.” We all prefer to do business with people we like
and trust. Consider the “lifetime value” of a customer, not just a one-
time sale. Often, you might want to make a little less profit to begin an
ongoing customer relationship. Get to know your customers; find out
about their businesses or families. One way small businesses can com-
pete with the big guys is by building strong customer relationships.
Your sales pitch

By listening to customers, you find out which issues are important to
them in making a purchasing decision. At some point, though, you will
need to make the pitch—actually ask a “prospect,” a prospective custom-
er, to buy your product or service.
A sales pitch can come in many forms, but it has three distinct stages:
n Your pitch
n The customer’s concerns and objections
n Your rejoinder, or reply, to those concerns and objections
After you’ve been in business for a while, you’ll know the objections or
concerns that keep most prospects from making the decision to buy.
Work on those, so you sound confident in responding to them should
they arise in the course of a sales call.
It’s generally best to anticipate objections and respond to them before

they’re even raised. This way, you can address whatever shortcomings or
problems the prospect may be thinking about but doesn’t want to men-
tion out loud.
W EE K SI X | 295
Use the worksheet “My Sales Pitch” to outline the points you’ll make
to prospective customers and how you’ll handle their reservations and
objections.
Feeling at ease making presentations See page 297

“I’d rather have a root canal!” my friend replied when I asked if she’d
rather go to the dentist or give a speech. She’s not alone. Most people
list speaking in public as one of their greatest fears. But in many types
of businesses, you’ll have to make presentations—often sales presenta-
tions—with the attention focused on you.
Whether you’re introducing yourself to 15 other entrepreneurs at a
Chamber of Commerce meeting, or describing your product to 300
potential customers at a trade conference, being comfortable in front
of people is a competitive advantage. When you’re at ease, listeners pay
more attention to your message.
The single biggest aid to increasing your comfort level when eyes are
turned in your direction is to accept yourself just as you are. We all have
aspects of ourselves we wish we could change. For one person it’s weight,
for someone else it’s a receding hairline, for another it’s a slight stutter
that kicks in only when they’re nervous. It’s important to remember that
everyone worries about their little “flaws”—it’s part of being human. But
it’s our imperfections that make each of us distinctive, unique, and real.
Learn to accept and even cherish that which makes you different, and
you’ll go a long way toward being a more confident speaker.
Nevertheless, learning to accept yourself as you are is probably a long-
term project, and it’s not much help if you’ve got a sales presentation to
give next Thursday. So here are a few tips to help you get over the jitters
when standing in front of people:
n Prepare. If you’re making an important sales call, learn everything you
can about the prospect’s company, needs, worries, market, experience
with other suppliers, and the like, so that you’re not “flying blind.”
Your audience will be impressed that you’ve taken the time to learn
about them and their needs. The same tip applies if you’re making a
presentation to a large group, perhaps your industry association—the
more you know about who they are, the more credible you’ll sound
to them and feel about yourself. You’ve heard it before: Knowledge is
power—and it can make you feel powerful, too!
n Practice.Run through your pitch or presentation in front of friends or

family. Have them ask questions, so you can practice coming up with
answers on the fly. Even if your presentation doesn’t justify develop-
ing a formal script, you’ll want to have an outline on hand to make
sure you cover all the important points. Also, rehearse the key phrases,
explanations, examples, statistics, anecdotes, and so on, that you’ll
want to draw upon, so they’ll roll off your tongue with ease.
n Wear something that gives you confidence. Whether it’s a new outfit
or your favorite tie, you’ll feel more relaxed if you think your clothes
are appropriate and make you look good. New clothes can give you a
sense of pride, but I know businesspeople who have one great suit or
dress they’ve had for years and always wear for initial meetings or pre-
sentations. Make sure your clothes are clean and neat; you can hardly
be relaxed if you think everyone’s staring at the spot on your shirt.
n Wear or carry something that makes you feel terrific. There’s great
power in knowing that you’re wearing the special watch your favorite
uncle gave you, or the “lucky” shoes that have seen you through other
anxiety-generating events. These “tokens” are more than superstition;
they remind you you’re someone special.
n Concentrate on what you’re good at. Remind yourself of the special
talents or knowledge you bring, and let your confidence grow from
those. You’ll look and act more assured.
n Stop looking in the mirror. It’s normal to check yourself before you
meet with people, but there’s a limit. If you’ve made certain your hair
is neat, makeup fixed, and fly zipped, don’t take “just one more look.”
n Bring visuals.If you’re nervous when people look at you, bring lots of
visual materials to distract attention. While the audience is staring at
your colorful charts, they won’t be looking at your face. Completely
petrified before you have to make a presentation in front of a group?
OK, then prepare a PowerPoint presentation, so most of the time
you’re in a dark room.
n Pay attention to others. You’llmake yourself more appealing by pay-
ing attention to your audience. Interact with them, ask questions,
make eye contact, smile. Think complimentary thoughts even if you
don’t speak them out loud (“What a nice group,” “She seems friendly”).
When you think well of others, you give off a welcoming glow.
WORKSHEET my sales pitch
Use this worksheet to develop your sales pitch. Under “My Pitch,” list the key strengths
that distinguish you from your competition. Then, anticipate objections prospective
customers might raise under “Their Objections.” Finally, prepare “My Rejoinder”
that counters the objection and convinces your prospect to buy.
My Pitch Their Objections My Rejoinder

You may never get used to standing up in front of others, but it doesn’t
have to feel as bad as dental surgery. Just organize your thoughts, put on
a nice outfit, smile, and you’ll get rave reviews.
One-page sales sheet

When a prospective customer asks for information about one of your
products or services, you’ll find it useful—and easy—to hand them a
one-page product or service sales sheet. You’ll find many uses for such a
sales sheet: trade shows, leave-behinds for sales appointments, packing
inserts, and material to send in response to phone or email requests.
To give you an idea of what a one-page sales sheet looks like, take a look at
one we frequently use (on page 301). Here’s how to make your own:
1. First, write up your text. Keep in mind one of Rhonda’s Rules:
“People don’t read.” So keep your copy short, snappy, and to the
point. Start with a one-paragraph description of your product or
service. Provide the basics: what it is, what it does, and why your
customer should buy it.
Focus on your product’s benefits, not just its features. In other
words, think of your product/service from your readers’ point of
view—you may be thrilled that you just bought a brand-new high-
end photocopier for your print shop, but what does that mean for
me, your customer? Better quality? Cheaper copies? Faster service?
Use bullet points to list key features and benefits. Use powerful,
descriptive—but true—adjectives.
2. Next, you need a photo of your product. Or a graphic. Or anything
visual. In this case, a picture really is worth a thousand words. If
your product or service isn’t particularly photogenic, use a chart or
graph that illustrates benefits or cost savings.
3. If it’s appropriate, include the price of your product. In some cases,
your prices may vary by customer or season, so you’ll want to main-
tain separate price lists.
4. Finally, you’ll want a call to action. Tell people where and how they
can order your product or get further information.
W EE K SI X | 299
AT A business lunch
WHAT
WOULD Many people take prospective customers to lunch (or breakfast or dinner) to try to
make a sale. But how, exactly, can you make the most of that opportunity with a pros-
RHONDA pect? Most inexperienced lunchers believe the main purpose of a business lunch is
DO? either to: (1) conduct business, or (2) eat lunch, and they’re unsure how to mix the two.
Don’t worry! Business lunches aren’t about either business or lunch; they’re about building relationships.
Here are the keys to a successful business lunch:
n Listen. Listen to what the other person cares about, what makes him or her tick. Many of us, when
we’re nervous, tend to talk a lot. Instead, let your guest do the talking. Ask questions. You don’t want
to conduct an interview, but you’d be surprised how smart people think you are if you ask questions
and listen to their replies.
n Go for no reason. Don’t make the business lunch seem like a sales call. Instead, ask for an informal
get-together: “I’m starting a new business, and perhaps I can take you to lunch and pick your brain for
some advice.” Or, “I’m often in your area, how about having lunch some time?” Once you’ve taken the
time to get to know your guest, setting up a sales call in the future will be easier.
n Order slow food. Preferably, have the other person suggest a place to eat. If you have a limited bud-
get, you choose a nice, midpriced restaurant. Forget McDonald’s. Don’t be in a rush. Order “slow food,”
not “fast food.” You want as much time with your guest as possible.
n Don’t order messy food. Pass on the spaghetti, and be careful about piling chili on the burger. Forget
the “three-martini” business lunch. It’s wisest not to drink any alcoholic beverage at lunch, and only do
so if your companion orders one first. No matter what your companion does, stick to an absolute one-
drink limit. This, after all, is still business.
n Turn off your cell phone. Stay focused on your companion—you’ve taken the time to arrange a
lunch meeting, so don’t waste it away on phone calls with others. It sends the message that you aren’t
really interested in them. Your goal is to listen and learn from your guest.
n Bring your credit card or sufficient cash. If you did the inviting, pick up the tab, even if your guest
says, “I can put this on my company’s credit card.” But don’t have a scene arguing over the check. You
can just say, “You can get the next one.” Some companies have policies that don’t permit employees to
be treated; in that case, split the tab.
Good luck and bon appétit!

Now, it’s time to take all this copy and put it on the page. Here are
secrets professional designers use to make print materials look polished:
1. Divide your page into columns. Short spans of text are easier to
read and more visually appealing than long lines. Divide your letter-
sized sheet into columns.
2. Leave “white space.” Text and graphics “pop” when they have
some breathing room. At the very least, make sure you have about
one half-inch margin on all four sides of your sheet and leave one
quarter-inch space between columns and other graphics. It’s better to
eliminate some text than cram in too much.
3. Use a maximum of two typefaces. Your computer is loaded with
wonderful, fun fonts; save most for your kids’ school projects. For text,
use a serif font (with those tiny lines—or feet—at the ends of letters;
the text you are reading now is set in a serif font) and for headlines and
captions, use a sans serif font (without the decorative lines, such as the
font we used for the first sentence in this paragraph). Times Roman is
a good serif choice and Arial is a popular sans serif font. Serif fonts are
easier to read; sans serif fonts look cleaner and more modern.
4. Use color and boldface type sparingly. While you may want to
make a few key words or phrases jump off the page by using colors
or fat type, if you try to make everything pop out, nothing will.
There! You’ll have a sophisticated, effective one-page sales sheet you can
proudly distribute to potential customers.
Responding to prospective customers

Your phone rings. It’s a prospective customer wanting information about
your services, requesting a bid or proposal. That’s a good thing, right?
Well, yes and no. Obviously, it’s great to have potential customers knock-
ing on your door. But not all prospects will convert to paying custom-
ers—no matter how good your sales skills, how competitive your prices,
or how outstanding the quality of your products or services. The sad
truth is you can waste a lot of precious time and money answering inqui-
ries and preparing bids or proposals for prospects who are not ready to
buy or who are just plain “looky loos.”
Figuring out how much time and energy to spend on prospective
customers is a delicate and difficult balancing act. You need to devote
W EE K SI X | 301
sample one-page sales sheet
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enough time to make a sale to a genuine prospect, but you don’t want
to waste too much time on those who won’t ever buy.
Realistically, you have to be responsive to all potential customers. But

there are ways to limit the amount of time, money, and effort you spend
on dead-end shoppers. Here’s how:
1. Have general information prepared and available, such as your
one-page sales sheet. Most prospects will try to figure out whether a
company is a good fit for them before taking up too much of their—
or your—time. Let’s say you sell and install floor tiles. Do you special-
ize in commercial or residential? Do you only serve a specific geo-
graphic area? Do you install countertops as well as floors? That kind
of information enables prospects to weed themselves out before calling
you. Be sure to provide this information on your website.
2. Ask questions of the prospect. Professional salespeople refer to this

as “qualifying” the prospect. By asking a few simple, nonintrusive
questions, you can get a much better sense of how serious the pros-
pect is. Some questions to ask:
n What’s the scope of the project?
n What’s the time frame for the work to be started and completed?
n How soon will you be making a decision on a vendor?
n How many bids are you getting?
n What other alternatives (not competitors) are you considering?
(In the floor tile example, for instance, the question might be
phrased as “What other types of floor coverings are you
looking at?”)
n What are the most important considerations in your decision—
price, quality, convenience?
Questions such as those give you a much better sense of whether a

prospect is ready to make a decision, whether they’re likely to find
you a good choice, and how much time to spend with them.
3. Don’t get starstruck. It’s easy to get excited if you’re approached by a

large or well-known company or customer. Don’t lose your judgment.
Such customers often take up more of your time, take longer to make
decisions, and expect highly competitive bids. Sure, it would be nice to
have the biggest company in town or the star of the major league baseball
team on your customer list, but is it worth it if you don’t make a profit?
W EE K SI X | 303
4. Give prospects a reason to make a decision sooner rather than

later. It’s human nature to put off making choices until the last min-
ute, but that often puts your business in a crunch. If you can, come up
with realistic, positive ways to encourage customers to make a decision
quickly—“I’ve got an opening in my calendar in two weeks but then
I’m booked for a few more weeks” or, “I can get a discount on materi-
als this month only.”
5. Be cautious of prospects who want too much information. Some

prospects use proposals as a way of getting free consulting services.
This is true of both small customers and Fortune 500 companies.
6. Don’t count your chickens before they hatch. It’s easy to get excited
about a prospect, especially if it’s a big one. So, keep your sales pipe-
line full, and remember, a deal is not a deal until the check clears.
Finding sales leads

Before you can make a sale, you need someone to sell to. How are you
going to find potential customers?
Sure, if a prospective customer walks in your door or calls, it’s relatively
easy to make a sale. It’s much harder to find those who haven’t called but
have the potential to become customers—in other words, sales leads.
Your sales leads are a natural outgrowth of defining your target market
(see Week Two). The better you’ve defined your target, the easier it will
be for you to home in on your most likely prospects. If you manufacture
plumbing fixtures, for instance, you’ll be far more effective in finding
sales leads if you know whether your primary target is new construction
or remodels, residential or commercial, contractors or consumers.
So where can you find good leads for your company?
n Entrepreneurs’ groups. Most new and smaller companies get their first
sales leads by joining organizations. There are numerous kinds of local
entrepreneur groups: Chambers of Commerce, women’s or minority
groups’ business organizations, leads or referral clubs, and so on. Typi-
cally, these groups set aside time at meetings for members to network,
or even give direct sales pitches. Most entrepreneurs’ organizations make
available members’ directories, and you may use that list for leads. Some
groups hold “table top” mini-trade shows. To make your membership
effective, attend regularly, or even volunteer to serve on committees.
n Trade associations. These groups are similar to entrepreneurs’ organiza-

tions, but they are formed around one particular industry. You’ll find local
chapters of many national trade associations in most large or midsize cities.
Check It Out It’s a mistake to view others in your industry solely as “competitors.” They
To find a comprehensive can be a good source of referrals, as well as provide information and advice.
list of trade asociations, In addition to joining an association in your own industry, consider joining
visit www.planningshop. associations of industries that you sell to or serve. Often, as a member of an
com/associations
association, you are given a list of other members that you can then use as a
source of sales leads. Some trade associations sell their membership lists, but
typically only other members are given access to this valuable resource.
n Trade shows. Trade shows reach a large number of targeted prospects
in a short period of time. But one additional benefit of exhibiting at
a trade show is that you are often given (or are allowed to purchase) a
list of attendees. These lists can be incredibly valuable in giving you a
source of highly targeted sales leads.
n Newspapers. One of the very best sources of information about your
community, and thus potential customers, is your local newspaper. A real
estate agent in Miami I know relies on the obituaries for leads: He solicits
surviving family members of people who’ve died (without spouses) to see if
they want to sell the deceased’s home. Yes, I know it sounds ghoulish, but
it works for him.
You don’t have to be so morbid; try checking other parts of the paper
such as:
n Public notices or advertisements about new businesses or business
name changes
n Stories about new or expanding businesses
n Business sections of daily newspapers or business journals for
listings of companies, such as largest employers
n Wedding or birth announcements
n Help wanted ads
n General advertisements and classified listings
n Networking organizations. Some business groups form solely so that

their members can do business with one another and develop referral
sources. Most such organizations—though not all—are not-for-profit
associations of businesspeople. Generally, members come from diverse
industries, and meetings tend to focus on finding ways to help members
secure customers and referrals. There may also be an educational portion
to the meetings, but most often one or a few members will discuss their
W EE K SI X | 305
businesses. You may have a chance to be the featured speaker at a meet-

ing, or you might be able to showcase your business on their website or
newsletter. Look for business networking groups in your community;
they often meet at breakfast or lunchtime. Their goal is to help members
increase their income. The downside: There may be a number of mem-
bers from your industry, and many of the members may not necessarily
be good prospects for your business.
n Leads groups. Leads groups are a subset of networking organizations.
As the name suggests, these are organizations formed to help members
develop sales leads. They tend to maintain very specific group struc-
tures and formats, usually allowing only one or two members from Check It Out
each industry so that leads don’t become diluted. Generally, at meet-
Among the numerous
ings, members give brief statements about what they do and what they networking groups
need. If you get a customer lead that would be of interest to the group you’ll find at Meetup
member who represents a particular industry, you’re expected to refer (www.meetup.com)
that person to your leads group member. Some of these organizations is one dedicated to
are for-profit enterprises and may, in fact, be part of a franchised oper- developing leads
ation. One example is LeTip International, a for-profit business with (www.meetup.com/
hundreds of chapters throughout the U.S. and Canada. topics/lead-generation).
n Nonbusiness groups. Networking isn’t always about business. You’ll

find plenty of social networks based on a wide range of communities and
shared interests. These include nonprofit and community organizations,
service associations, religious organizations, environmental organiza-
tions, sports and hobby groups, social clubs, school and alumni groups,
and on and on. While these groups are not specifically designed to help
you build your business, your active involvement in them could lead to
many local clients, as well as to referrals throughout your community.
However, you’ll want to take a far less aggressive approach to networking
within these groups because people don’t generally join them to do busi-
ness. Build trust first, wait till your business comes up in conversation,
and present your card only if someone asks for it.
n Phone books. Don’t forget the good old-fashioned Yellow Pages. If you’ve
identified particular types of businesses as potential customers, you can find
a local list just by letting your fingers do the walking. Of course, unsolicited
telephone calls aren’t the most productive way to get new business!
n Public records. Many for-profit companies compile and sell lists of
public records that might be used for sales leads. These include new
business licenses or incorporations, building permits, wedding licenses,
and birth certificates.
n List brokers. Private companies sell lists of both businesses and con-
sumers, sorted virtually every conceivable way. You can buy targeted
lists of leads by industry, magazines subscribed to, products purchased,
schools attended, age, hobbies, even lists of new mothers. I’ve never
bought leads from a private broker, but my recommendation would be
to make certain you’ve very clearly targeted your prospects, and that
the list is new and continually updated. Then be sure to track your
results so you know whether the list was effective or not.
Cold calling
A “cold” call is a sales call—either on the phone or in person—when
the person you’re calling hasn’t previously indicated any interest in your
products or services. Obviously it’s tough to make cold calls because
you’re going to get a lot—and I mean a lot—of rejection.
It’s not easy to make (or get) cold calls. Who hasn’t been deluged with
telemarketers for timeshare properties calling during dinner or credit
card companies interrupting the workday repeatedly? But have you ever
stopped and wondered why they keep calling when we all hate them?
Here’s the dirty little secret: Cold calls work.
What’s the secret of cold call success?

n Change your perspective. Most of us start out thinking that mak-
ing a sales call is “bothering” the other person. But if you are offering
something you truly believe will meet a real need at a good value, then
you’re not a bother but a help. My company changed payroll services
based on a cold call. We were having problems with our old service,
and got a cold call from a reputable firm. The new payroll service
solved a problem for us—so the call was a genuine help, not a bother.
n “Qualify” your leads. We all really hate sales calls when they don’t
relate to us. So find reasonable ways to narrow down your target list.
That saves you time and increases your success rate. What makes a
qualified lead? A person or business that is likely to need your product
or service now.
n Give yourself a quota. When my sister—who’s been a top-notch sales-
person for 25 years—started out, she gave herself a quota every day.
She put 20 business cards in her pocket and couldn’t go home until she
gave out all 20 or made a big sale.
n Come up with a great pitch. Be clear about what you’re offering. Write
out your pitch and the most important points well before you make
W EE K SI X | 307
your first call, but don’t read it during the call! Introduce yourself right
at the beginning of the call. Think about the objections you’re likely to
hear and have responses ready. You’re not going to get it right the first
time—or the second or the third. So constantly practice your pitch
and refine it.
n Mind your manners. If you walk in on someone and they’re on the
phone, wait until they’re free. If you’re phoning, and the person says,
“Now’s not a good time,” ask when a good time would be to call back,
and get off the phone.
n Take people literally. If a prospect says, “I’m not interested right
now,” believe they mean right now. Perhaps they’ll be interested anoth-
er time. My sister called on a company for seven years before they
finally bought from her.
n Don’t be obnoxious. Take no for an answer. If someone’s not inter-
ested, why waste your time or theirs? Be polite.
n Stay in practice. Cold calling is difficult, and it’s easy to forget how
to do it well. So make calls from time to time—it reminds you what
you’re offering your customers.
Finally, don’t take it personally and don’t get discouraged. You’ve got to
kiss a lot of frogs before you find a prince. It took me four years of call-
ing on the business editor at Gannett News Service before I finally got
my nationally syndicated column in USA Today. And I’m still friends
with him!
Up-selling and cross-selling

Getting customers isn’t cheap. It takes money and time to attract new
customers. Perhaps you advertise, send direct mail, attend trade shows.
You put a lot of effort into getting each customer to walk through your
door, call you on the phone, or visit your website, and it costs you
the same amount of money whether that customer then spends $1 or
$1,000. So it’s far more profitable if you can make a bigger sale to each
customer who comes your way.
An example of “up-selling” occurred when I went to a neighborhood
beauty supply store. I was looking for a new eye shadow, and I went
straight for what I wanted. One eye shadow—$8. Then, the nice sales-
woman came over and advised me—in a very low-key manner—of a
much better deal. They had a special: for $25, I could get three eye shad-
ows of my choice, two lipsticks, one nail polish, and a cosmetic carrying
case. That seemed to be a lot better deal, and by the time I left, I had a
selection of beauty supplies and a $25 charge on my credit card.
When up-selling is done properly, the customer gets a good deal and you
get a bigger sale. How could the retailer afford this kind of offer? Because
their big expense is tied up in their overhead—rent, salaries, advertis-
ing—not in the cost of the eye shadow.
Up-selling doesn’t just occur in retail. If you need to get a will drawn up,
don’t be surprised if your lawyer offers you a complete estate planning
package, which includes a few other documents you should properly pre-
pare at the same time. The one-price package is a good value to you and
a better sale for them.
A slightly different approach is “cross-selling”—selling related products
or services. Examples of cross-selling include a cloth diaper service that
also sells baby care products, or a travel agent who books recreation
activities at your destination as well as airline reservations.
One of the best ways to make more money from each customer is to
look for ways to get continuing income rather than just making a one-
time sale. Are there products or services your customers use up or use
repeatedly—“consumables”—that you can appropriately sell? There’s
often more money in consumables than in the original product or ser-
vice. Decades ago, Kodak figured out there was more profit in the film
than the camera. The same is true today for inkjet printers.
Service businesses, too, can look for ongoing revenue streams. Accountants
frequently offer bookkeeping or bill-paying services—instead of doing cli-
ents’ income tax returns once a year, they work for them all year long. What
could you offer your customers on a continuing or consumable basis?
Of course, there’s a risk that if you’re too aggressive when you up-sell,
cross-sell, or offer consumables that a customer will view you as too
pushy and they’ll leave.
But if you can honestly provide a more complete product or service or a
better value by up-selling or cross-selling, both you and your customer
will benefit.
Nurture your contacts

Right from the start, as you try to land your first customer and find leads,
start to build your contact list. Every name and email address of customers,
prospects, or referral sources is valuable; every new follower on Facebook and
W EE K SI X | 309
Twitter is a potential new client. Names, contacts, and followers are prized
company assets and potential leads. The following techniques will help
encourage people to give you their names and contact information:
1. Ask. The simplest way to capture contacts is to ask people who come
to your store or website for their name and email address, and ask
people you meet for their business card. Something as simple as a sign
(“like us on Facebook”) or signup list by the cash register is a start.
2. Give an incentive. Offer a one-time discount to those who sign up

to receive emails from you or who “like” you on Facebook.
3. Tell them why they’re signing up. Let them know they’ll get notices
of sales, discounts, new products, “family and friends” specials.
Everyone likes a deal.
4. Send a newsletter. Many people will sign up to receive valuable

information relating to your products or services. In my company,
for example, we email a monthly newsletter with use-it-now tips for
small-business owners. And they get a discount for signing up, too!
5. Hold contests. Most people love the chance to win something,

and will gladly enter their name and contact information. This is a
particularly good strategy for building a Facebook or Instagram fol-
lowing. Hold a monthly contest where followers can win some free
products or services.
The single most important thing to remember to expand your contact

list is to set up a system to routinely capture and enter data. Remember,
a name is not just a name—it’s potential business.
Accomplishment #6:
Hold your grand opening
Now comes the big day. You’re ready to “officially” open your business.
It’s time for a grand opening!
Grand openings aren’t just for retail businesses. You can hold an “Open
House” at your new office space, a “Launch Party” for even a home-based
or virtual business (throw it at a restaurant or other rented or borrowed
space), or a “Product Launch” event for a new product or service.
While your grand opening is certainly a celebration of all the work,

time, thought, and money you’ve put in your new business, it’s primar-
ily a marketing event. Draw up an invitation list of all those you want
to know about your business, even if you know they won’t attend the
party or are located out-of-town. This should include potential custom-
ers, suppliers, friends, business reporters, trade association or community
organization leaders—and of course your family and employees’ families.
Print up an invitation that not only lists the time, date, and place of the
grand opening but also describes what your business does. Remember,
this is a chance to let the world know about your business.
Follow up with an email. The least intrusive marketing material you can
send someone is an invitation to a party. After all, you’re not trying to
sell them anything—not yet, at least!
To top it off, write up a press release announcing your new business and
send it to the business reporters of your local newspaper and any indus-
try publications. Call them to follow up and ask them to attend. They
probably won’t, but you’ll let them know you exist and that will make it
easier to pitch future stories to them.
And remember to take a moment to appreciate all that you’ve accom-

plished. You should be proud of yourself.
While up-selling and cross-selling are legal sales techniques, “bait-and-

switch” methods are illegal in most states and under some federal laws. “Bait-
RED TAPE and-switch” is the practice of using an advertisement or promotion to lure a
ALERT! customer (the “bait”) but when the customer requests the promoted item,
the salesperson tells them that it is unavailable or inappropriate for their
needs and suggests a more expensive option (the “switch”). If you use a low-cost promotion to
bring in customers, make certain you have reasonable quantities available and be careful not
to be too aggressive in suggesting other, more expensive products instead.
W EE K SI X | 311
Accomplishment #7:
Look toward the future
You’ve come a long way! Think about where you were when you first
purchased this book—and look at where you are now. Wow! What a
transformation!
I wish I could tell you that from here, you’ll cruise along with ease, that
now you can sit back, a tall glass of lemonade in your hand, and watch
the cash roll in. Unfortunately, that’s just not the case…at least not yet.
Certainly, getting a business up and running is one of the most difficult
periods for an entrepreneur. But if you’re like most businesses, the next
year or two will continue to be a significant challenge for you.
You’ll spend a lot of time in the coming months looking for and serving
customers, streamlining operations, figuring out which products or servic-
es are actually profitable and which are underperforming, reworking your
financial projections to better align them with the reality of your business
and market, worrying about cash, and keeping yourself energized, moti-
vated, and confident about the choices you’ve made.
You’ll probably have some sleepless nights, questioning your ability to

make the business work, worrying about details, customers, products,
and mistakes. You may find that the tenuous support you initially had
from family members wavers as some things don’t work out as you
planned. In fact, there may times that you want to ditch the whole busi-
ness, heed your father-in-law’s advice, and “go get a real job.”
If so, congratulations! You are a perfectly normal entrepreneur! In fact,

self-doubt isn’t just a normal feeling that comes with starting a business,
it’s a necessary one. Many successful business owners are perfectly willing
to admit that fear of failure is one of their single biggest motivators.
While it’s true that you need to be self-confident about what you’re
doing, you also need to be able to analyze your choices, learn from your
mistakes, and be honest with yourself about how you can change, adapt,
and grow. Don’t let your negative thoughts paralyze you—instead, har-
ness that energy toward a positive purpose. In other words, turn those
self-doubting thoughts into positive actions that will help you move for-
ward. Fear, when used as a catalyst for positive action, is a good thing!
Part of helping yourself overcome fears of failure and getting through

difficult times is recognizing that what you are doing is worthwhile and
important. Instead of seeing yourself as a struggling self-employee, recog-
nize that you’re the leader of a new but growing enterprise.
Feeling like the C.E.O.

Here’s a quiz: When you meet someone new, what’s the second question
you’re most likely to be asked? Answer: “What do you do?” People don’t
ask this question just to figure out whether you’re a welder or a writer—
it’s to determine how important you are. For the self-employed, that
question can be tough on the ego.
Most of us associate status with our jobs. We feel good about having a
fancy office or an important job title. Even if ours is an entry-level job,
if we work with a big company, we often feel a sense of reflected status
(“I’m a bottle-washer at Google”).
So when you go from employee to entrepreneur, giving up those trap-
pings of status and success can be tough.
Even good things can make you feel awkward: wearing very casual
clothes everyday, going to your child’s school performance in the middle
of the day, not having to report to anyone. When you’ve been used to
suits or supervisors, not having external recognition can be unsettling.
Even more frustrating—though you’ll get over it—is that when you
make a lot of money, often no one knows how well you’re doing. After
all, you still work at home and wear jeans. I had worked for myself for
seven years before my friends took me seriously. What changed their
impression? I got my first overseas client. Trust me: When someone pays
you to go to Australia, you suddenly get respect.
But I knew I was serious long before that. Although I had given up a
job where I had a private office, two assistants, and an expense account,
I didn’t miss any of that (well, maybe the expense account). Part of the
reason is that, early on, I realized I had to take some steps to make me
feel good about being self-employed.
I set up a part of my living room as my “office,” printed up business
cards and stationery, and changed the way I answered my phone (from
“Hello,” to “Rhonda Abrams speaking”). More importantly, I found a
symbol to remind me of my importance.
W EE K SI X | 313
For me, it was flowers. My first couple of years in business, I didn’t have
much money and every penny counted. I lived on cheap spaghetti I
bought in bulk. But every week, I bought flowers for my desk. Some-
how, looking at a bouquet made me feel like I’d arrived at a “real” office.
Little things matter. You can’t afford the assistant, you won’t necessarily
have a separate room for your office, and believe me, when you travel,
you’re going to fly economy instead of business class. See what kind of
symbols help you feel good about being in business day-in and day-out.
Here are a few you might try:
n Business cards. Absolutely! You can’t exist without them.
n Get dressed every day. No, of course, I didn’t think you were going to
work nude. But how about getting out of those sweats?
n Set up an “office” and decorate it.
n Get a gadget. Hey, many of us judge ourselves by our toys. Having a

smartphone or a cool computer can make you feel you’ve arrived.
n Give yourself a title. You really can grow up to be President!
When is it time to grow?

I know it’s hard to think about growing your business when you’ve just
opened your doors. But if you’ve done most of the things in this book—
and have a little luck—soon you’ll find yourself dealing with growth.
Even if customers are beating a path to your door, you must make an
active choice to hire employees, add locations, or extend product lines.
What makes the decision more difficult is that growth rarely occurs in
a straight line; you can go along for years with a healthy one-person, or
20-person business, when suddenly business booms, and you’re faced
with choosing how to handle it.
You’ll begin to get the itch to grow when you:
n Can’t get out from under your paperwork
n Can’t find time to send invoices to your customers
n Have more work than you can handle
n Need to add products, services, or locations to retain your current
customer base
n Want to take your business in new directions without ending your
current activities
n See a significant opportunity in the market

n Want to or need to substantially increase your income
n Require someone with specialized skills critical to your business
Perhaps the hardest step is deciding to hire your first employee. It took me
almost a decade before I hired my first full-time permanent employee. I’m
sorry now that I waited so long, but having an employee represents a huge
change in how you do your day-to-day work, and like many entrepreneurs,
I was reluctant to have both the responsibility and another person underfoot.
The next critical juncture comes when your company reaches roughly
10 employees. At this point, many customers may not have direct con-
tact with you. This can make you very nervous or it may be liberating.
Not all businesses can make the transition—many service businesses
depend on the abilities or charisma of the founder, so expansion stops
when they’re no longer immediately involved.
At around 20 employees, you’ll face another major turning point. This
is the stage where you can no longer supervise or regularly interact with
all employees, and you need managers. Many entrepreneurs consciously
choose to stop their growth at this point because they want to run an
enterprise where they know and manage everyone who works for them.
The final transformation from small company to big business comes at
approximately 100 employees. This is when a company needs substantial
outside financing to expand. Do you really want to be a public company,
maintain high bank debt, or have outside investors? Although these
choices greatly reduce your ability to control your own company, they
enable you to compete in much larger arenas.
With any growth comes a transition period in which you have to rede-
fine your own job responsibilities and learn to delegate more authority to
other people.
You may want to keep your business to a one-person shop or grow to
hundreds of employees. Who knows?
You’ve given yourself—and your business—a great foundation. From
that solid foundation, you can build a future of excitement, opportunity,
and success.
Go for it. You can make your dreams a reality. After all, look how far
you’ve come in just six weeks.
I N D E X | 315
Index
A budgeting for, 109
Accelerators, startup, 151 developing personnel policies, 115–118
Accountant, meeting with health insurance, 122, 124, 140, 198–201
on bookkeeping setup, 215 independent contractors and, 110, 112–114
on financing options, 235, 240 Better Business Bureau, 177
preparing for initial meeting, 206–207 BizSugar, 76
questions to ask, 208 Blogs, 183, 279
on stock issuance, 87 Boards of Directors, 87, 104–105
on tax issues, 98, 145, 211, 232 Bookkeeping
Accounting method, 215 accounting method, 215
Acquisitions, corporate, 24 in-house vs. outsourcing, 197, 207, 234
Address, business, 143–144 regular review of books, 217
Administrative procedures, 192, 194–197 software or apps for, 44, 169, 173, 185, 214–215
ADP Small Business Payroll, 235 tasks involved in, 194
Advertising, 68, 268–270, 276–277, 288–289. See also Box.com, 43, 184, 185
Marketing Brochure websites, 256
Advisory Committee, 90, 104 Budgeting strategies, 109–110, 217, 223–224, 260
Alibaba, 53, 67 Bundling, 68
AllBusiness.com, 76 Burn rate, 208
American FactFinder, 53, 59 Business cards
Americans with Disabilities Act (ADA), 122 company identity and, 30, 36, 39, 40
Angel investors, 22, 240, 241 mailing address and, 144
Apple Computer, 15, 36, 98, 184 marketing and, 260, 261
Apptivo, 43, 188 professionalism and, 313
ArtFire, 256 Business concept, 5–27
Asana, 126, 186 Basic Business Description, 16, 17
Attire, business, 122, 296, 312, 313 exit strategies and, 23–25
Attorney, meeting with family discussion of, 25–26
on contracts and agreements, 20, 22, 99, 140, 190 inspiration sources for, 11–13, 15
on employee issues, 114, 116, 122 investors and, 22–23
on financing options, 235 lean startup approach and, 17–18
hiring a lawyer, tips on, 80, 82 marketplace needs and, 15, 17
on intellectual property issues, 34, 35, 100, 101 partnerships and, 19–22
on licenses and permits, 92, 95, 96 personal goals and, 6, 7–9
on ownership issues, 20, 22, 87 SBDC counselors and, 26–27
preparing for initial meeting, 79 strategic position and, 18–19
on tax issues, 98 values and, 9–10
Auction websites, 289 vision of your business, 5, 7
AWeber, 187, 285 worksheet on, 14
Business name. See Name of business
Business plan, 26, 243, 244, 248
B Business Week, 61
“B” Corporations, 84–85, 86
BusinessUSA, 81
Bait-and-switch tactics, 310
Banks and banking, 218–219, 220, 237, 240
Basic Business Description, 16, 17 C
Benefits “C” Corporations, 84–85, 86
attracting good employees with, 120–122, 124 Calendar programs, 173, 195
Canada Internet connection and service provider (ISP), 142,

Business Number (BN), 92, 94 155, 180–183
intellectual property, 33, 34, 100 LAN (local area network), 183–184
Le Tip International, 305 leasing vs. buying equipment, 159
research sources, 53, 59 mobile marketing, 284–285
small business loans, 240 mobile needs, 184–188
Carbonite, 178 mobile payment processing, 184, 187–188, 222, 285
CareerBuilder, 120 organizing cords, manuals, etc., 167
Cash flow projections, 224–225, 230–231 phone system, 170–172
Census Bureau, 5, 49, 53, 58, 59 software needs, 168–169, 172–176
Certifications, 66, 92, 94–95 tech support services, 160, 177, 180, 184, 189
Chambers of Commerce, 72, 74, 303 Concepts in Advertising, 270
Child care, 147–148 Constant Contact, 187, 285
Chowhound, 278 Contact management, 43–44, 169, 173, 258, 281,
CircleUp, 244 308–309
Civic organizations, 74, 303, 305 Contracts and agreements
Civil Rights Act, 122 commercial real estate leases, 133–140
Closing the company, 25 distribution agreements, 68, 98, 190, 191
Cloud computing intellectual property protection and, 99–100, 101
accounting applications, 44, 214–215 overview of, 98
advantages of, 168–169, 173, 176, 178 partnership agreements, 20, 22, 23, 83
credit card processing, 221–222 Convertible debt, 235
CRM applications, 43–44, 169, 188 Copyrights, 34, 100–101
file storage/sharing, 43, 109, 184–185 Corporate culture, 10. See also Values, business
hiring applications, 113 Corporate identity. See Identity of company
mobile apps, listed by category, 184–188 Corporations, types of, 84–85, 86. See also
payroll applications, 197, 235 Incorporation
sales tax applications, 97 Cost of goods sold (COGS), 208
CNET, 168 County Business Patterns, 53, 58
Coca-Cola, 37 Coworking spaces, 132, 136, 151
Cold calling, 306–307 Craigslist, 120, 158, 289
Color Marketing Group, 39 CrashPlan, 178
Colors, company, 30, 39–40 Credit card financing, 236–237
Common Area Maintenance (CAM) charges, 138 Credit card processing, 219, 221–222, 225, 281, 285
Communications apps, 186 Credit records, 65, 211–213
Community involvement, 9, 10, 74 Cross-selling, 307–308, 310
Compensation packages, 121–122, 124 Crowdfunding, 185, 242–247
Competitors Customer loyalty programs, 272–274
analysis of, 51, 60, 62, 65 Customer relationship management (CRM), 43–44,
avoiding criticism of, 294 169, 173, 188, 261
pricing of, 61, 64, 65–66, 216 Customer service
as resources, 65, 67, 292, 304 large competitors and, 61
strategic position and, 18 loyalty programs and, 274
types of, 61 mobile apps for, 188
worksheets on, 63, 64 Nordstrom and, 118
Computers and technology, 165–189 online reviews and, 280, 285
approach to purchasing, 167–170 strategic position and, 19
data backup, 173, 176, 178, 183 as website function, 258
ergonomic workstations, 141 Customers
hardware needs, 177–179 attracting first customers, 292
I N D E X | 317
building long-term relations with, 294 The Economist, 61

business name and, 31 EDGAR database, 53
business values and, 9 Edward Lowe Foundation, 26
contact information, 43–44, 169, 173, 258, 281, Elevator pitch, 71, 75, 254–256
308–309 Email
home office and, 143 alternatives to, 186
loyalty programs, 272–274 customizing your address, 182
motivation for buying, 216, 253–254 developing proficiency with, 196
responding to prospects, 300, 302–303 grand opening invitations, 310
social media connections with, 75–76, 269, 280, newsletters, 43, 178, 187, 261, 285–287, 309
284, 308–309 smartphones and, 170, 195
worksheets on, 55, 56 software programs, 43, 173, 182
See also Target market taglines and, 39
templates or form letters, 195
D Emma, 187, 285
Daily deal websites, 280–281, 284 Employees, 105–128
Data backup, 173, 176, 178, 183 budgeting for, 109–110, 111
DBA (Doing Business As), 96 business values and, 9, 10
DCP Print, 260 company buy-outs by, 25
Debt, 212, 236–237 company growth and, 105, 108, 109, 120, 314
Debt financing, defined, 235 compensation packages, 121–122, 124
Discounts or coupons Employer Identification Number and, 94
contact information in exchange for, 309 hiring, 118–121, 123, 186
daily deals, 280–281, 284 independent contractors vs., 110, 112–114
email newsletters and, 286 insurance requirements and, 198, 199
guerrilla marketing and, 272 labor laws, 114, 115, 122
introductory offers, 292 management style and, 124–128
loyalty programs and, 273–274 offsite or remotely located, 140, 184
mobile marketing and, 284 personnel policies, 115–118
Discrimination, 114, 119, 122 promotional products and, 270
Distribution staffing needs, 105–109
agreements, 68, 98, 190, 191 stock shares/options, 25, 87, 90, 121
business concept and, 17 training, 124
finding and choosing distributors, 66–67, 189–190 work-space design and, 152, 154
retailers as distributors, 192, 193 Employer Identification Number (EIN), 92, 94
sales reps as distributors, 190 Energy Star, 154
strategic partnerships and, 68 Engadget, 168
target market and, 57 Entrepreneurs’ groups, 72, 74, 76, 303
Domain names, 28, 31, 35–36, 100, 182 Environmental practices, 9, 10, 154, 155
Double taxation, 82–83, 84, 85, 86 Equifax, 211
Dropbox, 43, 184, 185 Equipment, 158–163, 232, 235. See also Computers
Duda, 258 and technology
Dun & Bradstreet, 53, 65 Equity crowdfunding, 242–244
Equity financing, defined, 235
Ergonomics, 141, 154, 170
E Ethics, business, 9–10, 294
EBay, 53, 67, 289 Etsy, 188, 256
Ecommerce. See Online marketing; Online sales; Everlance, 44, 185
Websites, company Evernote, 58, 185
Economic Census, 53, 59 Exclusive Provider Organizations (EPOs), 199, 200
Exit strategies, 20, 23–25 banking, 218–219, 220

Expenses bookkeeping setup, 214–215
accounting method, 215 common financial terms defined, 207–209
accurate recordkeeping of, 42, 44, 211 credit card acceptance, 219, 221–222
bill payment, timeliness of, 212 credit record, personal, 211–213
Board of Directors and, 105 financial forecasts, 223–225, 226–231
deferring payments of, 225 personal assets and, 209–211
equipment purchases, tax implications of, 158, 159, personal issues and, 205
232 prices, establishment of, 215–218
home office deductions, 144–145 tax obligations, 225, 232–234
marketing budget worksheet, 227 Financing, 234–248
for meals and entertainment, 269 company growth and, 314
mobile apps for tracking, 44, 185, 214 credit record and, 211
profit/loss projection worksheet, 228–229 crowdfunding, 185, 242–247
types of, defined, 207–208 debt vs. equity financing, 235
Experian, 211 for equipment purchases, 160, 235
financial forecasts and, 223
F investor comparison chart, 238–239
Facebook loans from family or friends, 25, 26, 237, 240
building customer connections on, 258, 269, 284, questions to ask before seeking, 241
308–309 types of funding sources, 235–237, 240–241
entrepreneurs’ groups on, 76 FindForms.com, 98
marketing on, 186, 278, 279, 284 “Fintech” fast-cash loans, 237
new markets and, 15 Fixed expenses, defined, 207
Facilities, 152–164 Flashfunders, 245
floor plan layout, 152, 154, 156 Forbes, 61, 76
furniture and equipment purchases, 158–163 Forrester, 52
inventory and materials, ordering of, 164, 166 Four Cs (personal goals), 6, 7–9
production process, design of, 154–155, 157 Four Ps of marketing, 253
utilities and improvements, ordering of, 153, 155 Free applications and resources
warehouses, 137 for accounting tasks, 44, 214
See also Location for blogging, 279
Family for business cards, 260
discussing plans with, 25–26 for conference calls, 170
handing down company to, 24 for contracts and agreements, 98
home office and, 142–143, 146–148 for CRM, 43
lack of support from, 311 for email newsletters, 286
loans from, 25, 26, 237, 240 for equipment and furniture, 158
Fax connection, 142 for file storage/sharing, 43, 109
FedStats, 53, 58 for hiring workers, 110, 113
FICO score, 211 for legal advice, 81
Fictitious business names, 96 mobile apps, in general, 184
File management for note taking, 58
data backup, 173, 176, 178, 183 for project management, 126
online file storage/sharing, 43, 109, 184–185 public library databases, 54
setting up physical and digital files, 41–42, 195–196 for SEO and SEM, 276, 277
of vital statistics, 44, 93, 196 for social media marketing, 278
Financial forecasts, 223–225, 226–231 for tax management, 97
Financial management, 205–234 for website design, 259
accountant, initial meeting with, 206–207 FreshBooks, 185, 215
Fuel economy, 149
I N D E X | 319
Furniture, 141, 158–163 physical setup, 141–142

Future, planning for the, 311–314 professionalism and, 312–313
tax deductions for, 144–145
G telecommuting employees, 117
Gartner, 52 Hootsuite, 186, 278
General and administrative expenses (G&A), 208 Hoover’s, 53
General Partnerships, 83, 84–85 Hosted phone service, 172
Goals, business, 4
Goals, personal, 6, 7–9 I
Google IDC (International Data Corporation), 52
domain name registration, 35 Identification numbers, 92, 94–95
file storage/sharing, 109, 185 Identity of company, 27–40
Gmail, 182 business name and, 28–29, 30–32
industry research and, 52, 62 colors and, 39–40
local business listings, 284 domain name and, 35–36
mobile apps and, 184, 185, 186 graphic designer, hiring a, 40–41
new markets and, 15 logos and, 36–37
product development mantra, 18 overview of, 27, 30
SEO and SEM tools, 275, 276, 277 promotional products and, 270
social media marketing, 279 taglines and, 37, 39
Grand opening, 309–310 trademarks and, 32–35
Graphic designers, 30, 40–41, 101 worksheet on, 38
Gross profit, defined, 209 IDrive, 43, 178
Groupon, 280 Inc.com, 76
Growth Income, personal, 6, 9, 235
accelerators, startup, 151 Income taxes, 83–86, 92, 232
banking and, 218–219 Incorporation
business name selection and, 30 attorney fees and, 80
cloud-based applications and, 43, 44, 168 date of, as vital statistic, 44
employees and, 105, 108, 109, 120, 314 personal liability and, 82, 83, 84, 85, 86
exit strategies and, 24 stock issuance and, 87, 90
management of, 217, 236, 312–313 taxes and, 94, 232
personal goals and, 7, 8, 9 types of corporations, 84–85, 86
profitability and, 206 Incubators, startup, 151
technology purchases and, 167, 178, 184 Indeed, 120, 186
Guerrilla marketing, 271–272 Indemnity plans, 199, 200
Guru, 110 Independent contractors, 105, 110, 112–114
IndieGoGo, 185, 244, 245
H Industry associations. See Trade associations
Harvest, 185, 214 Industry research, 48–54
Health insurance, 122, 124, 140, 198–201 on competitors, 60–66
Health Maintenance Organizations (HMOs), 198, 199, online research tips, 52, 54
200 questions to research, 48–49, 50–51
Hightail, 109, 185 research sources, listed, 53
Hiring employees, 118–121, 123, 186 on suppliers, 66–67
Home office, 141–148 trade associations and, 49, 52
family or household distractions, 146–148 See also Market research
mailing address, 143–144 Initial public offerings (IPOs), 24
other business spaces vs., 132 Insightly, 43, 188
phone and Internet connections, 142 Inspiration, sources of, 11–13, 15
Instagram, 186, 258, 269, 278, 279, 284, 309 L

Insurance Labor laws, 114, 115, 122
company benefits package, 117, 122, 124 LAN (local area network), 183–184
coverage needed, 197–200, 202 Lawyer. See Attorney, meeting with
health care, 122, 124, 140, 198–201 Le Tip International, 305
for mobile office, 149 Leadership skills, 125, 128
multi-state operations and, 140 Leads, sales, 258, 303–306
workers’ compensation, 114, 198 Lean startup approach, 17–18
Integration, 17 Leases, 98, 133–140, 159–160
Intellectual property, 34, 98–101. See also Trademarks Legal issues, 79–101
Internal Revenue Service (IRS). See U.S. Internal attorney, tips on hiring, 80, 82
Revenue Service (IRS) Board of Directors, 104–105
International Organization for Standardization (ISO), contracts and agreements, overview of, 98
66 employees vs. independent contractors, 110, 112–
Internet connection and service provider (ISP), 142, 114
155, 180–183 equity crowdfunding laws, 242–244
Intuit licenses and permits, 91–92, 94–96
credit card processing, 221 ownership structure, 81–87
payroll service, 185, 235 resources for, 81, 98
Quicken, 173, 214, 215 sales tax collection, 96–98
See also QuickBooks stock issuance, 87, 90
Inventory management trademarks and intellectual property, 32–35, 98–101
just-in-time inventory, 164 LegalZoom, 83
outsourcing of order fulfillment, 197, 225 Let’s Eat (website builder), 183
production process and, 154 Liability, personal vs. company, 82, 83, 84, 85, 86
risks of overstocking, 217 Library of Congress, 53, 95
software or apps for, 168, 173, 184 Licenses, business, 91–92, 94–96
Investors Licensing agreements, 68
“accredited investor” rules, 242–243 Limited Liability Companies (LLCs), 83–86, 87, 90, 94
Board of Directors and, 104–105 Limited Liability Partnerships (LLPs), 83, 84–85
business plan and, 248 Limited Partnerships, 83, 84–85, 87
comparison chart, 238–239 LinkedIn, 76, 120, 186, 258, 278
corporate structure and, 83, 90 Liquidspace, 151
credit record and, 211 List brokers, 306
deciding whether to seek, 22–23 Loans
exit strategies and, 24 business plan and, 248
financial forecasts and, 223 debt financing, defined, 235
non-disclosure agreements and, 99 from family or friends, 25, 26, 237, 240
personal control and, 8, 22, 86–87, 235 from “fintech” lenders, 237
questions to ask, 236 personal business investments treated as, 211
time frame for securing, 240 small business loans, 240
types of, 240–241 Location, 132–151
Invoicing, 184, 194, 195, 214, 217 home office setup, 141–148
mobile office setup, 149–150
J real estate agents and terminology, 137–138
Jimdo, 187, 259 renting space, considerations in, 133–137, 140
sales tax collection and, 96–97
shared spaces, 151
K space comparison chart, 139
Kickstarter, 185, 244, 245
types of business space, 132–133
Kleiner, Eugene, 18
See also Facilities
I N D E X | 321
Logos, 30, 36–37, 270 social media strategy, 186, 278–280, 282–283, 284
Lunches, business, 269, 299 taglines and, 39
at trade shows, 261, 264
M vehicle comparison chart, 290–291
Mail (postal), 143–144, 194, 196 virtual company and, 70
MailChimp, 187, 286 website setup, 256–259
ManageFlitter, 278 McConnell, Patrick, 34
Management style, 124–128 McDonald’s, 36, 60, 99, 299
Manufacturing Media publicity, 261–262, 265–267
cash flow and, 225 Meetup, 74, 305
integration and, 17 Mentors, 102, 104
intermediaries and, 66–67, 189–190 Mergers, corporate, 24
location of facilities, 132, 135, 136–137, 140 Microsoft
prices for goods, 218 Bing, 275, 277, 284
production process, design of, 154–155, 157 company name, 27
reseller’s licenses and, 95 Office suite, 43, 173, 182, 195, 215
staffing needs, 105 Minimal viable product, 18
strategic partnerships and, 68 Mint, 44, 185
suppliers and, 164 Mobile apps, listed by category, 184–188
Market, target. See Target market Mobile marketing, 284–285
Market penetration, 223–224 Mobile office, 132, 149–150
Market research, 54–67 Mobile payment processing, 187–188, 222, 285
on competitors, 60–66 Money issues. See Financial management; Financing
demographic information sources, 49, 59, 136 Monster.com, 120
questions to research, 50–51 MyCorporation, 83
SBDC counselors and, 26–27
on suppliers, 66–67 N
on target market, 54–60 NAICS codes, 49
See also Industry research Name of business
Market size, 58–60 company success and, 27
Marketing, 252–291 comparison chart, 28–29
advertising tips, 268–270 considerations in choosing, 30–32
budget, 227, 260 DBA (Doing Business As), 96
business name and, 30 domain name availability and, 28, 35–36, 100
cooperative advertising, 68 trademarks and, 28, 31, 99, 100
customer loyalty programs, 272–274 National Association for the Self-Employed, 26
customer motivation and, 253–254 National Association of Insurance Commissioners, 197
elevator pitch, 71, 75, 254–256 National Association of Wholesale Distributors, 189
email newsletters, 187, 261, 285–287 National Association of Women Business Owners, 74
grand opening, 309–310 National Retail Federation, 96–97
guerrilla marketing, 271–272 National Venture Capital Association, 22
logos and, 36–37 Net profit/loss, defined, 209
media publicity, 261–262, 265–267 Network Solutions, 35
mobile strategy, 284–285 Networking
online ads, types of, 288–289 benefits of, 3, 71–72
online daily deals, 280–281, 284 evaluating organizations, 74–75
online review sites, 285 marketing as inclusive of, 252, 271
printed materials, 261, 263 online connections, 75–76 (see also Social media)
promotional products, 270–271 organizations to join, 72–74
sales vs., 252 sales leads and, 303–305
SEO and SEM, 275–277 Newsletters, email, 43, 178, 187, 261, 285–287, 309
Newspapers investor rights and, 22–23, 86–87, 235

DBAs and, 96 stock issuance and, 87, 90
industry/market research and, 52, 65 See also Partnerships, legal
networking and, 74
press releases, 261–262, 265, 310 P
sales leads and, 304 Packaging, 30, 39, 40, 57, 192
Niche markets, 15, 18, 57, 244, 253 Pantone Matching System, 40
NNN (Triple net) leases, 138 Partnerships, legal
Non-compete agreements, 98, 100 business concept and, 19
Non-disclosure agreements (NDAs), 98, 99 exit strategies and, 20, 23, 24
Nordstrom, 118 formal agreements, 20, 22, 23, 83
Note-taking apps, 58, 185 overview of, 83, 84–85
Not-for-Profit Organizations, 84–85, 86 questions to ask potential partners, 21
NPD Group, 54 tax ID numbers and, 94
Partnerships, strategic, 68–71, 90, 240
O Pass-through taxation, 83, 84, 85, 86
Office equipment. See Computers and technology; Patents, 34, 101
Equipment Pay per click (PPC), 277
Office space. See Facilities; Location PayPal, 187, 221–222, 285
Online forums, 76 Payroll software and services, 173, 185, 197, 234, 235
Online lenders, 237 Payroll taxes, 109, 110, 112–113, 234
Online marketing, 275–289 PeoplePerHour, 110
ads, types of, 288–289 Permits, 91–92, 94–96
daily deals, 280–281, 284 Personal assets, 82, 209–211, 236
email newsletters, 187, 261, 285–287 Personal goals, 6, 7–9
mobile strategy, 284–285 Personal income, 6, 9, 235
review sites, 285 Personal liability, 82, 83, 84, 85, 86
SEO and SEM, 275–277 Personnel policies, 115–118
social media strategy, 186, 278–280, 282–283, 284 Pets, 120, 124, 133, 147–148
website setup, 256–259 Phones
Online reviews, 280, 285 administrative procedures, 195
Online sales choosing a system, 170–172
competitors, 61 cold calling, 306–307
on daily deal sites, 280–281, 284 employee cell phones, 115, 117
intermediaries and, 57, 66 etiquette, 299, 307
on marketplace sites, 67, 256, 289 home office setup, 142
outsourcing of order fulfillment, 197, 225 leasing vs. buying equipment, 159
sales tax collection, 97 mobile marketing, 284–285
shopping cart applications, 97, 169, 183 mobile office setup, 149
website types and, 256, 258 mobile payment processing, 184, 187–188, 222, 225
See also Websites, company outsourcing receptionist, 197
Opening for business, 309–310 utilities for new facilities, 155
Operations plan or manual, 131, 195 VoIP, 170, 172, 173
Order fulfillment, 66, 192, 194, 197, 225 Yellow Pages, 305
Overhead, defined, 207 PhotoShelter, 183
Ownership Pinterest, 186, 258, 269, 278
comparison of different legal forms, 83–86 PlanningShop products and resources
considerations in choosing a legal form, 81–83 entrepreneurial advice, 26
exit strategies, 20, 23–25 Financials package, 225, 232
I N D E X | 323
Finding an Angel Investor in a Day, 241 Q

Hire Your First Employee, 120 Quick Facts, 53, 59
Successful Business Plan, 248, 271 QuickBooks
Successful Marketing, 252, 301 “fintech” lenders and, 237
trade associations, listing of, 52, 72, 304 integration of, with other applications, 169, 221,
Podcasts, 279 222
Point of Service (POS) plans, 198–199, 200 mobile apps, 185, 187
Post Office boxes, 143–144 mobile payment processing, 187, 222, 285
Preferred Provider Organizations (PPOs), 198, 199, 200 online resource center, 76
Premier Business Centers, 151 Quicken vs., 214, 215
Presentations, 168, 295–296, 298 software needs and, 173
Press releases, 261–262, 265, 310 templates and, 195
Pricing Quicken, 173, 214, 215
of competitors, 61, 64, 65–66, 216
establishment of, 215–218
sales sheets and, 298
R
RallyMe, 244
strategic position and, 19
Real estate agents and terminology, 137–138
See also Discounts or coupons
Record keeping. See Bookkeeping; File management
Printing needs, 261, 263
Red tape, origin of term, 80
Products
Regus, 151
believing in what you offer, 293
Renting business space, 133–140
business name selection and, 31
Republic (crowdfunding), 245
“consumables,” 308
Research. See Industry research; Market research
as crowdfunding rewards, 244
Reseller’s licenses, 95
daily deal sites and, 281
Restaurant businesses, 65, 105, 158, 183
distribution of, 66–67, 189–192
Retailers
email newsletters and, 286
big-box stores, 61
minimal viable product, 18
business licenses, 95–96
new categories of, 15, 34
cooperative advertising, 68
order fulfillment, 66, 192, 194, 197, 225
location and space, 132, 135, 136
packaging, 30, 39, 40, 57, 192
price markups, 218
promotional, 270–271
product distribution and, 57, 189, 192, 193
sales sheets for, 298
sales tax collection, 96–98, 232
sales tax exemptions, 97
signage, 155
samples, 57, 292
software needs, 168
strategic partnerships and, 68
suppliers and, 164
strategic position and, 18–19
up-selling, 307–308
target market and, 54, 57
Retirement, 23, 117, 122, 198
See also Manufacturing
Reviews, online, 280, 285
Professional associations. See Trade associations
Rewards-based crowdfunding, 244
Profits
Role models, 11, 12
cash flow and, 206, 224
employee expenses and, 109
gross vs. net, 209 S
ownership structure and, 83–86 “S” Corporations, 84–85, 86
price competition and, 216 SaaS (software as a service), 169, 173, 178, 197, 235.
profit/loss projection worksheet, 228–229 See also Cloud computing
Project management apps, 186 Salaries and wages, 109–111, 120, 121
Promotional products, 270–271 Sales, 292–309
Publicity, 261–262, 265–267 attracting first customers, 292
Sales (continued) Shoeboxed, 44, 185

business lunches and, 299 Shopify, 188, 256
cold calling, 306–307 Shopping carts, online, 97, 169, 183
contact lists and, 308–309 Showrooming, 61
leads, 258, 303–306 Sick leave, 115, 116, 122
loyalty programs and, 273 Signage, 30, 155
marketing vs., 252 SimpleNote, 58, 185
one-page sales sheets, 298, 300, 301 Size of business. See Growth
pitch, 294–295, 297, 306–307 Skype, 173, 186
point-of-sale tracking, 168 Small Business Administration, 26, 108, 211, 240
presentations, 295–296, 298 Small Business Development Centers (SBDCs), 26–27,
projections, 223–224, 226 74, 81, 95, 96
remote sales, defined, 97 SmugMug, 183
responding to prospects, 300, 302–303 Social media
revenues, as funding source, 236 connecting with customers on, 75–76, 269, 280,
techniques and tips, 293–294 284, 308–309
up-selling and cross-selling, 307–308, 310 crowdfunding and, 244
See also Online sales lenders checking your activity on, 237
Sales representatives, 57, 66, 190, 192 marketing on, 186, 278, 279–280, 282–283, 284
Sales taxes, 95, 96–98, 232, 233 strategy worksheet, 282–283
Salesforce, 44, 169, 188 website types and, 258
Scams, 219, 237 Social responsibility, 9, 10
Scheduling apps, 187, 292 Software
Search engine marketing (SEM), 276–277 for basic business functions, 43, 173, 182, 185
Search engine optimization (SEO), 275–276, 277 for bookkeeping, 44, 169, 173, 185, 214–215
SeedInvest, 245 cloud-based versions, advantages of, 168–169, 173,
Selling the company, 24 176, 178
Service businesses for CRM, 43–44, 169, 173, 188
believing in what you offer, 293 determining software needs, 168–169, 172–176
business name selection, 31 integration of applications, 169, 173, 215, 221, 222
cross-selling, 308 intellectual property rights and, 101
daily deal sites and, 281 mobile apps, listed by category, 184–188
growth limitations of, 314 templates and, 195
introductory discounts, 292 Sole proprietorships, 5, 83, 84–85, 86, 94
location of office, 132 Sperling’s Best Places, 136
new vs. existing markets, 15 Square, 187, 222, 285, 292
pricing, 65, 216–218 Squarespace, 35, 258
sales tax collection, 96, 97 StartEngine, 245
strategic position and, 18–19 StartupNation, 76
virtual company and, 70 State websites and resources, 53, 59, 81, 95
Service Corps of Retired Executives (SCORE), 26 Statements of work (SOWs), 98
Service marks, 32–33, 100 Stock
Shared spaces, 132, 136, 151 convertible debt and, 235
ShareDesk, 151 distribution worksheets, 88, 89
Shipping employee shares/options, 25, 87, 90, 121
facilities layout and, 152 initial public offerings (IPOs), 24
facilities location and, 132, 136–137 legal implications of, 87, 90
home office deliveries, 144 Strategic partnerships, 68–71, 90, 240
order fulfillment, 66, 192, 194, 197, 225 Strategic position, 18–19
production process and, 154–155 Strauss, Levi, 24
software system integration, 169 Strikingly, 187, 259
I N D E X | 325
Successful Meetings (website), 53 ThomasNet, 53, 67

SugarCRM, 44 Trade associations
Suppliers cooperative advertising and, 68
comparison chart, 166 distributors and, 189, 190, 192
competition research and, 62 financial forecasts and, 224
finding and choosing, 51, 53, 66–67 industry/market research and, 49, 52, 60, 65, 66
inventory management and, 164 insurance and, 198
price markups and, 218 networking and, 71, 72, 74, 76, 271
questions to ask, 165 pricing of services and, 217
trade associations and, 49, 67 sales leads and, 304
Support structure, 102–105 suppliers and, 49, 67
templates and, 195
T Trade secrets, 99, 100
Taglines, 30, 37, 39 Trade Show News Network, 53, 261
Target Corporation, 36, 37 Trade shows
Target market equipment purchases and, 158
colors and, 39–40 financial forecasts and, 223, 224
defining potential customers, 50, 54–58 industry/market research and, 49, 53, 54, 62, 65
determining market size, 58–60 as marketing vehicles, 261, 264
networking and, 74 sales leads and, 304
new vs. existing markets, 15 sales sheets and, 298
niche markets, 15, 18, 57, 244, 253 Tradekey B2B directory, 53, 67
offline marketing and, 260, 261, 268, 271 Trademarks, 28, 31, 32–35, 99, 100
online marketing and, 275, 278, 280, 288 Trans Union, 211
sales leads and, 303, 306 Transaction fees, 219, 221–222
underserved markets, 15, 17 Travel apps, 188
TaxCloud, 97 Triple net (NNN) leases, 138
Taxes TweetDeck, 278
accounting method and, 215 Twentieth Century Fox, 31
employees vs. independent contractors and, 110, Twitter, 186, 258, 269, 278, 279, 284, 309
112–114
equipment purchases and, 158, 159, 232 U
file management and, 42, 44 Up-selling, 307–308, 310
home office deductions, 144–145 Upwork, 110, 186
identification numbers, 92, 94 U.S. Bureau of Labor Statistics, 121
meal expense deductions, 269 U.S. Census Bureau, 5, 49, 53, 58, 59
mobile office deductions, 149 U.S. Copyright Office, 100
multi-state operations and, 140 U.S. Customs Service, 33
ownership structure and, 82–86 U.S. Department of Energy, 149
payroll taxes, 109, 110, 112–113, 234 U.S. Department of Labor, 115
personal business investments and, 211 U.S. Internal Revenue Service (IRS)
questions to ask accountant, 208 accounting method and, 215
sales taxes, 95, 96–98, 232, 233 on employees vs. independent contractors, 110,
stock issuance and, 87 112–114
understanding tax obligations, 225, 232–234 home office deductions and, 145
Teamwork.com, 126, 186 meal expenses and, 269
Tech support services, 160, 177, 180, 184, 189 on no-interest loans vs. gifts, 25, 240
Technology. See Computers and technology ownership structure and, 84, 85, 86
Telephone. See Phones tax ID numbers and, 94
Tenant improvements, 138, 155
U.S. Occupational Safety and Health Administration X

(OSHA), 114, 141 Xero, 185, 215
U.S. Patent and Trademark Office, 33, 34
U.S. Postal Service, 143–144
U.S. Securities and Exchange Commission (SEC),
Y
Yahoo! 182, 275
243–244
Yellow Pages, 305
U.S. Small Business Administration, 26, 108, 211, 240
Yelp, 284, 285
USA Today, 76, 307
YouTube, 278, 279
Utilities, 142, 153, 155
V Z
ZDnet, 168
Vacation leave, 115, 116, 122
Zenfolio, 183
Values, business, 9–10, 294
Zoho, 43, 109, 113, 185, 186, 188
Variable expenses, defined, 208
Vehicles, 30, 132, 149–150, 159
Venture capitalists, 22, 99, 105, 241
VerticalResponse, 285
Video marketing, 279
Videoconferencing, 170
Virtual companies, 70–71
Vision of your business, 5, 7
Vista Print, 260
Vital statistics, 44, 93, 94, 196
Voice over Internet Protocol (VoIP), 170, 172, 173
Volunteer Match, 9
W
Wages and salaries, 109–111, 120, 121
Wall Street Journal, 61
Warehouses, 137
Warranties and service contracts, 160–161
Wave, 185, 214
Websites, company
checklist of features, 257
colors and, 39, 40
company identity and, 30
domain names, 28, 31, 35–36, 100, 182
hosting and design, 183, 187, 258, 259
mobile version of, 284
SEO and SEM, 275–277
types of, 256, 258
Weebly, 187, 259
Wefunder, 245
WeWork, 151
Wix, 187, 258
Women’s groups, 74, 303
WordPress, 186, 279
Work space. See Facilities; Location
Workers’ compensation, 114, 198
Work-for-hire agreements, 98, 101
Wrike, 126, 186

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What people say about Six-Week Startup:

A Step-by-Step Program for Starting your Business,

“ What separates Rhonda Abrams from the crowd? She is an expert in

Business Plan In A Day

“ I’m growing my business this year by purchasing a commercial building,

Bringing the Cloud Down to Earth

“ No matter how you refer to it, working in the Cloud is a fundamental

Successful Marketing: Secrets & Strategies

“ Successful Marketing encourages students to think through standard

Successful Business Plan: Secrets & Strategies

“ [Successful Business Plan is] user-friendly and exhaustive…highly recom-

“ Successful Business Plan enables my Entrepreneurship students at the

“ As a 20 plus year veteran SBDC director, consultant and entrepreneur-

“ In my opinion, your book is the definitive guide for successful business

“ Successful Business Plan is thorough, well-organized, and a very useful tool

NEW! 4th Edition

©2018 by Rhonda Abrams. Published by PlanningShop™

Library of Congress Control Number: 2017947372

Services for our readers:

PlanningShop™ is a division of Rhonda, Inc., a California corporation.

Printed in the United States of America

Who this book is for

This book is for you if:

About Rhonda Abrams

Who this book is for. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Week 1 Lay the Foundation…. . . . . . . . . . . . . . 1

#2: Create your company identity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

#3: Get organized. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Week 2 Get the Information You Need . . . . . . . 45

#2: Research your target market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

#3: Check out your competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

#4: Find suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Week 3 Cut Through Red Tape. . . . . . . . . . . . . . . 77

#2: Build your team and personnel structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

Week 4 Take Care of Operations . . . . . . . . . . . 129

Option B: Set up a home office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Option C: Set up an “office” in your vehicle. . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

# 3: Research and purchase computers, software, and other technology. . . . 165

#4: Consider how you will distribute your products. . . . . . . . . . . . . . . . . . . . . . 189

Week 5 Deal with Money Issues . . . . . . . . . . . 203

n Open a bank account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

# 2: Consider financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234

Week 6 Open Your Doors!. . . . . . . . . . . . . . . . . 249

#2: Set up a simple website . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256

Stock distribution plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Each week consists of:

You can undertake these accomplishments in any order—or break up

In addition, throughout this book, you will find:

This book covers everything from taxes to trade shows, accounting to

week 3: cut through red tape

week 4: take care of operations

week 5: deal with money issues

week 6: open your doors!

Make appointments with:

One Year Five Years Ten Years

Extremely Somewhat Somewhat Not

Wealth desired in 2–5 years ___________________ Income needed currently _____________________

companies clobbering the competition, defining new product categories,

Identify your personal goals

Wealth desired in 2–5 years _ Income needed currently ___