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28 Businesses You Can Start for Less Than $1,000

Laura Cattano went from working in a restaurant to managing her own business in less than a year and spent “next to nothing” to get started.

Her biggest initial startup costs? Replacing an old computer and spending about $400 to create an LLC. Since then, Cattano’s client list for her professional organizing business has grown to be “in the thousands” and multiple major fashion magazines have featured her work.

“My advice is to go out there and do it,” Cattano said. “Starting a business is not easy. It’s a lot of hard work, but if you take your work seriously, people will notice.”

^{Luis Alvarez | Getty Images}

If you’re looking to start your own business, think about what skills you have, career experts said.

“Ask yourself, ‘What’s my passion?'” career and life coach Deborah Brown-Volkman said. “People want control over their career, and so creating their own business for under $1,000 gives them the ability to test it out, to see what works and what doesn’t.”

Experts say once you feel you’re onto something, purchase some sort of business insurance, which will likely be a big chunk of your costs. Basic business insurance usually ranges from $200 to $500 a month, varying depending on location.

1. Tutor

If you have a skill, teach it. The average wage of a tutor is $17.29 per hour, according to PayScale.

2. Dog walker

Love pets and getting some exercise? Dog walking is an easy business to start. Pet business insurance will make up the majority of your expenses, which usually cost $200 to 400 a month, according to onepet business insurance provider. Dog walkers typically make $8 to $20 an hour, with an average wage of $12.03.

3. Professional organizer

If you have a knack for turning clutter into cleanliness, why not try turning that into cash? The median hourly salary for a professional organizer is $2 5.

4. Fashion stylist

A great place to start is by styling a few of your friends for a party, and then encouraging them to tell their friends, career experts said. Soon you could have your own fashion business and be making a median of $15 an hour to above $40 once as you gain experience.

5. Translator

Multilingual entrepreneurs, this business is for you. Whether you want to take up projects people post online, approach companies or start-ups that do a lot of international business or check local job postings, there are multiple ways to start building your own translation business. Translators make a median income of $20 per hour.

6. Photographer

If you’re a stay-at-home parent with a knack for photography, creating family portraits or photographing events for people in your neighborhood could be the start of a fruitful business. The trick here is that you’ll probably need to have a nice camera, a tripod and equipment insurance — the total cost of which will most likely exceed $1,000. If you can get a deal on a good camera at a lower price or already have the equipment, then the start-up costs are low. Freelance photographers make a median of $24 per hour.

7. Errand runner

Lots of people don’t have the time to run errands daily, and a local errand service business could be a great solution. Errand runners make about $11 per hour.

8. Transcriber

From video shoots to audio interviews or speeches, there’s a lot out there that needs to be transcribed. If you’re a good typist with a few extra hours and a computer, you could start your own transcription service. The median hourly wage for transcribers is $15.

9. Freelance writer

Companies and content websites need good content, and you want to start your own business. Consider starting your own business as a freelance writer. Freelance writers typically are paid by the post or project, so wages can vary.

10. Jewelry maker

Jewelry makers would most likely make money on sales and projects, as opposed to hourly wages. Platforms for selling homemade goods like Etsy are a benchmark of what you could expect to charge for your products.

11. Avon or Tupperware sales person

Independent sales representatives for companies like Avon or Tupperware don’t have to worry about creating a product or inventing a business structure. If you like talking with people, this social business could be for you. Incomes differ based on the company you work for and the amount of sales you make.

^{Lew Robertson | Getty Images}

12. Makeup artist

If you’re a professional makeup artist or hairdresser at a salon, you could earn extra income by setting up your own side business. If you love makeup or hair care but aren’t an expert, consider investing in a class or certificate program. Talk with professionals to find what they recommend, experts said. Makeup artists earn a median salary of $16per hour, while hairdressers earn a median of $9.

13. Virtual assistant

Organized self-starters could find good work being a virtual assistant, a person who does all the things an assistant would normally do, just via the internet and phone. Virtual assistants earn a median salary of$16 per hour.

14. Personal chef

Roll up your sleeves and break out the spices. A personal culinary business where you are a chef for private parties could be a delicious venture. Personal chefs make a median of $20 per hour.

15. Personal shopper

If you love to shop or are interested in fashion retail, starting a personal shopping business could be a great fit. Personal shoppers earn a median of $14 an hour.

16. Graphic designer

Graphic design has be frustrating for the nondesigner. While there are free design tools out there, many do not offer customization or the insight an expert would. That’s where your business could come in. Graphic designers make a median of $15 per hour, which you can factor into project prices.

17. UI/UX designer

This one’s a little more obscure to the average entrepreneur than the others. User interface (UI) design and user experience design (UX) make sure your website or app is user friendly, intuitive and visually pleasing among other things. UI designers make a median of $32 per hour while UX designers make a median of $35 per hour.

18. Social media manager

Many small companies or other entrepreneurs can’t afford to have a social media manager or marketing team. Starting a social media company where you manage part-time or full-time other people’s accounts could be a profitable gig. Social media managers make a median of $14 per hour.

19. Consultant

“Every industry could have a consultant. In order to be a successful consultant, you need to have some sort of success in that particular field,” career expert Jill Jacinto said.

As a consultant, you could help businesses make contacts, form deals and guide their strategic plan as a consultant. This job has a median salary of $20 per hour.

20. PR professional

Have experience in a particular field? Recently retired? You likely have a lot of contacts and expertise in a specific industry, which you could leverage for your own venture. PR managers work with the media, government agencies and advertisers. They typically make $20 per hour.

21. Wedding planner

If you love detail and decor and don’t mind the stress of dealing with last-minute changes, a wedding planning business could be a great fit. Wedding planners earn a median of $17 per hour.

22. Event planner

Weddings aren’t the only events that need planning. Birthdays, anniversaries, graduation parties are just a few of many events people need help organizing. Event planners make a median of $17 per hour.

23. Property manager

This job is replacing what used to be known as the butler, experts said. A property manager looks after a household and ensures all property activities run smoothly. The manager would get the mail, do the laundry, stock the fridge, work with other professionals like gardeners and cleaning assistants. It’s especially helpful for people who own multiple properties and don’t have time to look after them. Property managers could make anywhere from $50,000 to $100,000 per year, experts said.

24. Caterer

While a personal chef usually caters to smaller groups, caterers prepare meals for big events. If you’re a great cook who can handle multiple meals cooking at once, you could start your own catering business. Personal caterers make a median of $11 per hour.

25. Personal trainer

Insurance is something you’ll need at the outset with this business. If you love to work out, look into certifications you could get to become a personal trainer. If you’re already certified, even better! Personal trainers make a median of $18 per hour.

26. Accountant

If you’re a certified accountant, you could start your own practice. Accountants make a median of $18 per hour.

27. Copy editor

Business pamphlets, grant proposals and blog posts all need copy editing. Why not take your literacy and grammar skills to the market? Copy editors make a median of $18 per hour.

eleanordrury310 April 30, 2016 Today's Business000, 28 Businesses You Can Start for Less Than $1, starting a business, startup 1 Read more >

8 Tips for Starting A Business

Seniors start more businesses than people under the age of 30! I know, I was surprised, too. It may surprise you even more that the ones started by seniors have a greater chance of success than those started by the young. These two facts taken together should show you that you are never too old to start your own business, and should also suggest that there may be more opportunities for seniors looking to fund a new business.

Here then are 6 tips to help you get started:

1. Pick something you are passionate about. Don’t just jump on the bandwagon of a product or service that is supposed to be “the next big thing,” instead, pick something you are passionate about. A new business will take a lot of time if you do it right, and you want to spend that time doing something you love.

It is also true that if you are passionate about something and you know that area well, then that experience will be a big leg up. It is also a major reason why senior entrepreneurs are so successful.

2. Don’t take a big risk when funding the business: When you are older, you have less time to make up for financial mistakes. Because a startup is, of course, somewhat risky, one way to hedge against that risk is by being prudent where

possible.

So, for instance, don’t look to take out a second mortgage on your home to finance your venture, and you shouldn’t tap into your retirement account. Instead, consider these options:

Talk to your state Department of Commerce and see what grants and loans may be available to senior entrepreneurs; you might be surprised.
Also, consider crowd funding sites like Kickstarter. If you have a unique idea, getting friends, family and the public to fund it is a more preferable way to go.

3. Come up with a strategy and/or business plan: Even if your plan isn’t to become a major global corporation, you need to treat your business venture as a serious proposition. This means that you need to sit and come up with a plan and a strategy. Your business plan doesn’t need to be elaborate, but you do need to have a strategy for how you plan on getting from A to B to C.

Click here to read more articles from small business expert Steve Strauss

4. Learn to love the Internet and social media. Like it or not, the internet and social media networks have become the place for word of mouth marketing and business promotion. Forget placing ads in print magazines or making flyers, because that is yesterday’s news. You will get a far better response using, for instance, a Google or Facebook ad. So, take some courses online or at your local community college, and research just what is available to you in internet marketing.

5. Embrace the mobile revolution. I was recently at an Internet marketing event and they said that 60% of all email is now read on a mobile device. Similarly, almost half of all searches now are done on a mobile device. Whatever business you start must be searchable and findable by a mobile device.

Mobile is not only the future, it’s also the present.

6. Become a lifelong learner. One of my favorite business authors (Barbara Winter, author of Making a Living Without a Job), says that one of the best parts of being an entrepreneur is that you have to become a lifelong learner. If you develop the habit of always learning about business and what is coming down the pike, you will be well prepared to serve your customers.

The bottom line is that as a senior, you have valuable experience that translates well into the world of entrepreneurship. Use it wisely.

About Steve Strauss

Steven D. Strauss is one of the wo rld’s leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

http://www.smallbusinessonlinecommunity.bankofamerica.com/people/Steve%20Strauss/content

eleanordrury310 November 4, 2014 Today's Business: home_office, business, business_opportunity, business_plan, business_start_up, business_structure, entrepreneur, entrepreneurs, funding, getting_started, home_based_business, money, new_business, new_business_idea, small_business, start_up, start_your_own_business, starting_a_business, starting_a_new_business, startup, website 0 Read more >

Running A Business with Little Resources

Running A Business with Little Resources
When I first started my business, I went to the bank for a business loan. Simple enough, right? I had my business plan in order, an itemized list of everything that I would need to successfully run my business, and all the necessary documents. To put it plainly, I was turned down. Why? Not because I did not have the credit to back it up, or did not have a good business plan. The reason the bank man gave me was “because I did not understand that over 90% of businesses fail within the first year, and that I was not prepared in case mine did.”

While I understand he was attempting to look out for my best interest, I felt cheated. He was not even going to give me the opportunity to fail. On some level, everyone that goes into business for themselves understand that chances are, the business will not make it past it’s first year, and I was no different. The only thing was I had faith in myself that I would not give up trying. The loan processor took that as I would spend my life savings before giving up, and he did not want to see me financially ruin myself.

So what did I do? I set out on the adventure on my own, only using the limited resources and financial backing that I had. I bought second hand office supplies and furniture. I bought the small cheap laptop instead of the multi-thousand dollar computer specifically designed for what I would be doing. Without the proper money for advertising, I had to get creative. My advertising methods was unconventional, but they worked. I found that I did not need large amounts of money in order to get my business to the world.

So would I have been so successful had the loan processor gave me the business loan I asked for? I am not sure, because after all, I made it without the money, what would have happened if I would have had the proper money for advertising? Whatever the case may have been, I am glad he did not, because I am not better able to understand the limited resources that many small businesses face.

So how can you run your business on limited resources? Here are a few things that I learned along the way.

1) New vs. Used- When starting your business, you do not need everything to be “new.” Second hand items cost substantially less then new items, and work just as well. Plus, if you think about it, customers will be more comfortable around your office if it feels “broke-in”, rather then new and sterile. It gives them the feeling that you have been in business awhile.

2) Creative Advertising- You do not need the hundreds of dollars that it takes to place ads in papers or put commercials on TV. It costs very little to design and print you own flyers and put them in places where your potential clients would gather. Turn your vehicle into a moving billboard by investing in a vinyl signage for your doors or windows. The best thing? Face to Face meetings with your potential clients do not cost a penny, so look for every opportunity to talk with our potential clients.

3) Work At Home- Depending on your type of business, you may consider working at home rather then renting office space. This will save you a lot of money on rent and furnishing an office. Once your business becomes more successful, then you can always rent office space later.

Overall, be thankful for the struggles that you go through now, because in the future, they will have been well worth it. Plus, it will give you a better understanding when it comes to other small businesses.

And, no matter what, never give up on yourself.

eleanordrury310 April 25, 2014 Today's Businessbusiness owner, new business, Running A Business with Little Resources, Small Business, startup, tips, website, work at home 1 Read more >

6 Great Apps for Small Businesses

The rise of mobile has certainly changed the face of business as we know it, and mostly for the better. Now that pretty much everyone has a smartphone, it is important that those phones are equipped with the right tools to keep up with the hectic life of a business professional. Having to put something off until you can get back to the office or hotel room could cost time, money, and even sales. That makes having everything you need in one mobile package a smart choice.

Take a look at these five apps that will add functionality to your phone – and life – with ease:

Audio Memos

Audio Memos is a great app that lets you record audio quickly and easily, whether you’re leaving yourself a reminder or recording a meeting or lecture.Lifehacker called it “the best voice recording app,” and it’s easy to see why – it’s simple, easy to use, and incredibly useful.

The app can even be set to start recording when it hears voices, so you can avoid long silences at the beginning of your recordings. Use the various extensions to trim your recordings, compress them for email, and upload everything to Dropbox, Box, Evernote, Google Drive, or simply send messages via email.

CardMunch

What do you do with those 20 or 50-odd, assorted business cards you’ve collected after you leave the conference? Most of us do a quick sort, and even then, the ones we keep often just get tucked away. Is there a better way to organize them? You bet.

With CardMunch, you just snap a picture of a business card and the app does the rest. It automatically converts the text on the business card into an address book contact using your mobile phone’s contact system. Snap a picture, ditch the card. Additionally, since CardMunch is owned by LinkedIn, you can take that contact information and add the person as a connection on LinkedIn, making it easy to view even more info through their profile right away.

MightyMeeting

MightyMeeting is a powerful tool that ensures you are never unprepared for a meeting. You can:

Store PowerPoint presentations and PDF files and share them any way you want to.
Set up online meetings that anyone can connect to using their phone, tablet, or computer.
Download documents to your device before you head out to a spot where you know that you are going to be without an internet connection, and use Nearcast to share them over Bluetooth between any iOS devices in the room.
You can even create an interactive whiteboard that everyone can use to share ideas.

TripIt

I travel a lot, giving speeches and what not, and TripIt is my go-to travel app. Here’s how it works: with each travel reservation you make – car rental, flight, hotel, etc– you simply forward the confirmation to TripIt and the site combines them all and sends you back a master calendar/confirmation/itinerary. The elegant itinerary then syncs with Apple and Google Calendars. It also contains weather info for where you are going, as well as maps and directions for each stop on your travels. TripIt Pro adds real-time flight information, a flight finder, and more to an already robust app.

Hightail

This is another of my favorite business apps. Hightail is a great way to share large files that might otherwise be practically impossible to send. The app lets you send files up to 2GB instantly from your computer or mobile device, and store an unlimited amount of files online. Such large attachments usually upset regular email servers.

At Hightail.com (formerly YouSendIt), you can see who has downloaded your files, and even control who can and can’t make changes to those files. Finally, you can also sign documents through Hightail and return them immediately, making sure that contracts, mocks, and other documents take as little time as possible to get approved.

These apps help make your phone or tablet the only device you need to get everything done. Do you have an app you can’t live without? Share it with us.

More apps for business http://www.businessinsider.com/50-best-business-apps-2013-8?op=1

eleanordrury310 April 10, 2014 Today's Business6 Great Apps for Small Businesses, applications, apps, business, device, entrepreneur, managing, mobile, mobile_apps, phone, small_business, social_media, starting_a_new_business, startup 0 Read more >

Small Businesses Running On Limited Resources: How To Make It Work!

Small Businesses Running On Limited Resources: How To Make It Work!
When I first started my business, I went to the bank for a business loan. Simple enough, right? I had my business plan in order, an itemized list of everything that I would need to successfully run my business, and all the necessary documents. To put it plainly, I was turned down. Why? Not because I did not have the credit to back it up, or did not have a good business plan. The reason the bank man gave me was “because I did not understand that over 90% of businesses fail within the first year, and that I was not prepared in case mine did.”

So how can you run your business on limited resources? Here are a few things that I learned along the way.

And, no matter what, never give up on yourself.

eleanordrury310 March 7, 2014 Today's Businessbusiness owner, new business, Small Business, Small Businesses Running On Limited Resources: How To Make It Work!, startup, tips, website, work at home 0 Read more >

Start-up A Retail Business

Start-up A Retail Business
Starting a business is always easier when you have some funding, and far too many business advisors will tell you to wait until you have a substantial amount of capital before launching. But what if you just can’t raise the money? Then it’s time to ignore the advice of those advisors and jump into the fray. Start-up A Retail Business

Obviously, if there’s no funding, and you want to bankroll your new retail business out of your own poorly-funded back pocket, you will have to seriously re-evaluate your concept. Notice, we’re saying “re-evaluate,” not “abandon.” In fact, it’s still possible to start a retail business without having to shell out big money for retail space, inventory and advertising.

It’s not an easy thing to get funding for a retail shop, especially one that is brand new. Expansion capital is a little easier to come by, if you already have a shop that is making money, but if you’ve got your eyes on running a brand new boutique, those funding dollars will be scarce. About the only way you’ll be able to convince a finance company or bank to give you money to start a new retail shop is if you are willing to put up the equity in your home as collateral against the loan. Start-up A Retail Business

And yes, if you have equity, you should expect to have to do this. But—what about the rest of us poor folks who don’t have any assets, no savings to speak of, and can’t get a signature loan? Are we doomed to a life of wage slavery? No. We just have to start out small, so small that our new business wouldn’t even show up in the radar of what most people call a small business. What we’re talking about here is a “micro business”—one that can be started with very little or no up-front capital.

Traditional business wisdom calls for a business plan that details your spending for the first year, and where that money will come from. Your original goal may have been to open up a small shop in the mall—but rents in most malls even for a small shop often go for thousands of dollars a month. A “bootstrap” retail business is one that is starting with either no, or very little funding, so that space in the mall is out of the question. Start-up A Retail Business

Obviously, your first concern is inventory, and without funding, you won’t be able to carry very much of it. Consider what you envision selling, and reduce those items to include only those that have the highest margin and the quickest potential turnaround. Starting off specializing in a dozen or so items that sell briskly will prime the pump so you can add more inventory later. Start-up A Retail Business

As for retail space, even though the mall is out, take a look at other areas that may offer cheaper rent, even if the space is a lot smaller than what you had in mind. There may be an existing business that would be complementary to yours, with some space to spare—there’s a possibility there of making a deal. And barring that, start out without any permanent retail space at all. Many successful retail shops started out selling exclusively at local festivals, farmers’ markets, flea markets and specialty shows, where you rent space by the day or week. While you’re selling at these venues, collect a customer mailing list so you can send your best customers a card when you are able to finally move into a permanent retail space. Start-up A Retail Business

Most importantly—don’t assume that you can’t go into business just because you don’t have a lot of money. Start-up A Retail Business

eleanordrury310 December 8, 2013 Today's Businessbusiness, home based, small, Start-up A Retail Business, startup 0 Read more >

Help Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?

Help Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?by Iris Dorbian.

When David Greenberg launched Parliament Tutors (an academic coaching service targeting students from kindergarten to college), in 2009, he did everything—from sales and marketing to training and recruiting. The multi-tasking paid off because a year later, the twenty-something wunderkind found himself in an enviable position: His startup, whose staff consisted of just himself and an academic advisor, was thriving, having reached $30,000 a month in sales. Upon hitting that figure, the NYU graduate decided it was time to hire his first sales rep.

It was an auspicious move. In January, Parliament Tutors, which now employs more than 500 tutors (most of whom are independent contractors), has four full-time employees and serves customers in 25 states, had its best month ever with sales of $52,000. A large part of that success, according to Greenberg, is attributable to his decision to hire a sales rep.

Still, it wasn’t easy. “Making that step was definitely intimidating because things obviously slowed a bit while [the sales rep] adjusted into his new role,” Greenberg admits. “However, it proved to make sense, while I focused on improving our business model and growth strategy.”

For entrepreneurs like Greenberg, hiring a sales rep can be a pivotal point in a company’s growth. The critical question is: When is the right time to make such a hire? Is it the obvious—when your company starts generating profits and you are unable to meet your business objectives without assistance? Or are there other circumstances that warrant it? Furthermore, how do you train and retain these new sales reps so they will fit in with your corporate culture and not flee for greener financial pastures once another opportunity arises?
Hire when it’s affordable

“New businesses should hire their first sales rep as quickly as they can afford it,” says Michelle Furyaka, executive vice president of NPD Global Inc., a five-year-old executive recruitment firm based in New York City.

However, she acknowledges there’s a catch. “It takes time to find the right personality to work for a small firm,” she cautions. “Don’t be fooled by a sales rep that promises you a lot of business. Small companies struggle to pay a top-notch person and they wind up leaving quickly because they are not used to rolling up their sleeves.”
PQ_SalesRep.jpgFind like-minded souls

For Greenberg, it helps that his first sales rep shared his vision about education and had done plenty of homework about the company well before the job interview.

“When we spoke, he was less focused on the deficiencies in the system, and was incredibly knowledgeable on what was working,” Greenberg recalls. “I was really impressed, considering most of my interviewees focused on the problems when asked to discuss the education environment today.”

NPD Global hired its first sales rep a year after its launch. “We stabilized our expenses and became self sufficient,” relates Furyaka. “Once all operational expenses were covered, we were ready to grow. In the beginning, one of the principals was doing all the sales, but once we reached a certain number and she was needed for another role, we were ready to hire.”

Although NPD Global’s first sales rep did play a key role in growing overall sales, profits were still flat. Management underestimated the total cost of hiring a sales professional. “We found the right person who helped us open a few new accounts, but there were expenses affiliated with him, such as salary, support, and client [costs].”
Analyze your sales cycle

The equation changes if the sales position is a straight commission role, says Tom Armour, co-founder of High Return Selection, which helps small- to medium-sized businesses attract and retain top talent. In this case, the cost can be relatively low.

The length of the sales cycle is a factor as well. “Sales roles vary dramatically across businesses,” continues Armour, an HR executive who once worked at Hewlett-Packard. “Basically there are sales roles that sell products, while others sell services. The length of the sales cycle can vary from one hour to 18 months.” Armour cites retail sales as an industry with a sales cycle that can be completed quickly, typically within an hour, while B2B product or service sales can take months to complete. Longer sales cycle jobs can cost a business 10 percent to 15 percent of new sales, he says.
Time it right

Other than when your company starts growing revenue, when is it time for your small business to hire a sales rep? Here are a few more hints from the experts:

You don’t have the time anymore to generate leads and follow-up with potential or existing customers in a timely fashion.
You are not a skilled sales person.
Your time is better served in working on other areas of your business.

Like a casting director seeking out the right actors for roles, small business owners should be deliberate when bringing on a sales rep that best matches their company’s culture.

Other best practices to employ:

Make sure your first sales hire has values that match your own. “Your first sales rep is going to be the new face and the front line of your business,” advises Greenberg. “Don’t just consider their ability to ‘sell’ a customer.”
Look for people with a solid work ethic. They don’t need to be from the same industry, says Furyaka. “If the foundation is there and they are willing to learn, you will retain them and everyone will be happy.”
Offer competitive compensation and enticing incentives. “A top sales professional can make good money in many businesses,” maintains Armour, “but it is the leadership and recognition that retains them.”

eleanordrury310 April 14, 2012 Today's BusinessHelp Wanted–Sales: When is the Right Time to Hire Your First Sales Rep?, hiring_decisions, sales, sales_cycle, sales_growth, sales_rep, sales_revenue, salesperson, small_business, staffing_plans, startup 0 Read more >

Franchising for Beginners

Do your homework before leaping into a franchise business model.

by Sherron Lumley.

“I didn’t want to start from scratch,” says Ann Bell who bought a Subway sandwich-shop franchise in 2010 with her husband Steve. “I was a stay-at-home mom and our kids are older now and off to college, so I decided it was time to go back to work,” she says. Although her husband had small business experience, Bell was more of an entrepreneurial beginner, so buying a franchise appealed to her as a safe way to invest in a business and re-enter the work force. “I work better under structure,” she says.

Pull-Quote.pngIn the franchise form of business, a franchisor licenses to a franchisee the right to operate under a trade name, sell its products and services, and receive guidance, in exchange for a fee. “My first step was to research the business model, to see if I could believe in it and embrace it,” says Bell. Typically, the franchisor provides business expertise in the form of marketing plans, management guidance, financing assistance, training, and sometimes site location. The Bells who are from Oregon, went to “Subway School” in Connecticut for training.

Here is a look at three early steps to franchise ownership.
Step One – Decision to buy a franchise: Yes/No

A franchise is a familiar form of business in America, accounting for 10.5 percent of all businesses with paid employees, according to the U.S. Census Bureau. Clearly, the decision to buy a franchise has some strong advantages. In The Franchise Bible, How to Buy a Franchise, or Franchise your own Business, author Erwin J. Keup, says that group advertising power, recognizable trademarks, franchisor experience, patents and designs, training from experts, and a lower risk of failure or loss of investments are top reasons to become a franchisee. Other reasons are uniform operation, assistance in financial and accounting matters from the franchisor, and ongoing support.

Although ongoing support is typically considered one of the greatest advantages of franchising, it comes with a price. Nolo.com, a legal resource publisher, provides a look at some of the disadvantages to franchise ownership, which include royalty payments to the franchisor, advertising fees, and high start-up costs. Indeed, nine of the top ten U.S. franchises have start-up costs averaging more than $100,000 and the top three (Hampton Hotels, ampm convenience stores, and McDonald’s) are beyond the million-dollar mark to start.

For a sense of the ongoing fees franchisors expect, Subway requires franchisees like the Bells to pay 12.5 percent of their gross sales every week to the company; 8 percent of this goes toward franchise royalties and 4.5 percent goes towards advertising. This is in addition to the initial franchise fee of $15,000 and Subway franchise capital requirements fall between $115,000 and $258,000. However, not all franchises require such a hefty investment. Number seven on the list of the Franchise 500, Vanguard Cleaning Systems, has start-up costs of just $8,000 to $38,000.

For more information on choosing between launching your own business or buying into a franchise, check out our recent story: “My Way or the Buy Way.”

Step Two – Shopping for a franchise

Certainly, cost will be a factor and franchise options will be far different for a small business owner with a few thousand dollars of capital versus another with a million or more to invest. Here are a few of the many ways to shop for a franchise at all budget levels:

The Franchise Registry, through a partnership with the U.S. Small Business Administration (SBA) maintains a list of companies with franchises that are pre-approved for expedited loans.

The Federal Trade Commission recommends attending a franchise exposition to compare a variety of franchise opportunities and using a franchise broker who can help with applications and paperwork. But remember, the brokers often work for the franchisor. Information about upcoming national and international franchise expos and trade shows is available online at FranchiseDirect.com.

Franchise.com is another popular online resource. It offers an interactive search of franchises for sale by budget, industry, and location. The Internet is full of franchise websites to research, but “be on the lookout for certain characteristics that are very common among untrustworthy or illegitimate franchising sites,” warns Kevin Murphy, author of The Franchise Handbook. He specifically cautions against dealing with a company that does not provide full financial details at the outset and says that websites with overly aggressive marketing and a lot of hype should also be avoided.

As with any small business venture, consider the demand, competition, and ability to operate the business in making a franchise selection.

Step Three – Follow a franchise investigation strategy

“Never do business with people you have not met,” say the authors of Street Smart Franchising, Joe Mathews, Don DeBolt and Deb Percival. “Franchising at its best is a highly personal relationship. You are entrusting your dreams and capital into the care of the franchisor leadership,” they say. Visit the franchisor’s home office and further investigate the franchise by interviewing franchisees in person, and reviewing the Franchise Disclosure Document (FDD) with an attorney with expertise in franchise law.

In interviewing other franchise owners, ask questions about their experiences, both good and bad. “It’s important to interview people so you know the bad and ugly,” says Bell, who found this helped her know ahead of time what it would really be like to own a franchise. For example, she learned that unlike working for someone else, “It’s nice to work for yourself, but you do take your work home with you,” Bell says.

A look at financial prospects for franchising

Using Census Bureau data, the International Franchise Association released a detailed report on this segment of the U.S. economy called The Franchise Business Economic Outlook: 2011. It forecast growth in all industries except Business Services, reporting: “The largest percentage increases in the number of establishments in 2011 are projected in Lodging (4.4 percent), Automotive (3.9 percent), Retail Products and Services (3.9 percent), and Commercial and Residential Services (3.7 percent).”

“The forecast of stronger growth in 2011 for franchise businesses is good news for our country. When franchise businesses are stronger, so is our economy as a whole,” said IFA President and CEO Stephen J. Caldeira. “However, while the forecast reflects a stronger outlook for the franchise industry and the overall economy, franchise businesses will continue to struggle with accessing sufficient credit that would enable business expansion and job growth,” he said.

Caldeira says that lending to franchise businesses was down in 2010. “For 2011, the credit gap between supply and demand should show some improvement, but we are a long way off from the pre-recession, more robust appetite for business investment and lending.” According to the SBA, total small business lending peaked in 2008, when depository institutions in the United States held small business loans valued at more than $711 billion, then declined by 8.3 percent to $652 billion by 2010. In the first quarter of 2011, the SBA reported bank lending to small business [including franchises] fell by $15 billion.

Since 2007 when the Census Bureau first gathered franchise data, the number of franchise establishments is estimated to have grown steadily from 765,723 to 784,802, whereas overall entrepreneurship has had a slight decline. (Bureau of Labor Statistics data for self-employment in non-agricultural industries.) Perhaps one explanation for this is that risk-averse behavior kicks in during times of economic duress. The Bells wanted to own a small business, without all of the risks involved with going solo. By buying into something larger, gaining considerable expertise and centralized marketing, advertising, and promotion, Bell says she felt comfortable with the decision to buy a franchise. “I’m really happy with my outcome,” she says.

Additional Franchise resources:

The Franchise Registry, in partnership with the U.S. Small Business Administration maintains a list of companies with franchises that are pre-approved for expedited loans.
Read the Federal Trade Commission Consumer Guide to Buying a Franchise.
Find franchises for sale by budget, industry, and location online at Franchise.com
Investigate franchise and business opportunities with the Better Business Bureau
Learn about upcoming franchise expos and tradeshows at FranchiseDirect.com.

eleanordrury310 December 1, 2011 Today's Businessbusiness_start_up, frachise, franchise, franchise_cost, franchise_fees, franchise_opportunities, franchise_tools, franchising, franchising_tools, right_franchise, starting_a_business, starting_a_new_business, startup 3 Read more >

Start-up Dollars and Sense: Estimating Start-up Costs for Your Business

The first step in beginning a new business is to understand the cost of getting started and getting to break-even.

by Sherron Lumley.

“It’s exciting to start my own business because it’s taken me a long time to figure out what I really want to do,” says Renee Fisher, who recently launched an event-planning business in Portland, Oregon. “I used to put on parties when I was a little girl,” she says, “and I enjoyed it and people noticed I was good at it.” With background experience in organizing bridal shows, this is the moment Pull-Quote.pngshe has been waiting for. For her and for thousands of other entrepreneurs, forming a new business is one of the most exciting experiences of a lifetime.

A business needs passion, capital, and time to succeed, but deciding whether a business idea will fly starts with a hard look at start-up costs and the amount of seed money needed to keep the business going until it makes a profit (the break-even point). It could be a lot or a little, depending on the business, the funds available, and the creative abilities of the entrepreneur.

Brandon Davis, founder of Precision Rail of Oregon, tackles break-even analysis regularly. “We absolutely have to do that,” he says, noting that beyond estimating start-up costs, such analysis is also important for the ongoing success of the company. Fully immersed in the details of his business, Davis can easily recite the basic expenses of his operation: “cost of materials, cost of labor, the rent on the building and fuel cost for the vehicles.”

Write a business plan and make more money faster

The amount of time it takes to get past the break-even point and start making a profit differs for every small business. However, according to research by the Kauffman Center for Entrepreneurship, the world’s largest foundation devoted to entrepreneurship, companies with written business plans have 50 percent greater sales growth and 12 percent higher gross profit margins than companies without plans.

Even for those who aren’t spreadsheet-friendly, the task isn’t that difficult. Just write down every imaginable expenditure pertaining to the business prior to opening and for at least the first three months of operation. The U.S. Small Business Administration (SBA) advises new business owners to calculate the costs for several months up to the full first year. In fact, some businesses will not turn the corner and start making a profit until year two or three and creating a business plan will help you to discover that. In performing a break-even analysis, there are three key areas to examine: the initial start-up expenses (the buy-in), the monthly fixed expenses (the nut), and the monthly variable expenses (the burn rate).

The Buy-in: pre-operational start-up expenses

One of the ways Davis cut costs initially was by building his own website, which he estimates saved him $5,000. However, in retrospect he says there were drawbacks to that strategy. “It would be worth the expense to have a website designed by professionals who understand search engine optimization,” he says, referring to the digital specialty that focuses on making sure a business appears toward the top of the results when online searches are performed. Getting good results may require spending money on professional services, and this should be considered in factoring start-up costs.

Among essential early expenses, one of the first costs to negotiate is technology, including the purchase of computers, software, and phones. Other pre-operational start-up expenses include marketing and advertising, inventory or raw materials, insurance, and the business license. Every business needs one or more federal, state, or local license to operate, according to the SBA. (To find out all the local regulatory requirements in your area, visit the SBA’s Business Licenses and Permits Search Tool, which provides an interactive platform for learning all the federal, state, and local permits, licenses and registrations needed to run a business.) In examining all these expenses, be sure you are not overspending. In The Small Business Start-Up Kit from the legal publisher Nolo, author Peri H. Pakroo counsels budding entrepreneurs to only buy what the business really needs. (For a free online worksheet for calculating basic start-up expenses, check out The Frugal Entrepreneur.)

The Nut: ongoing fixed expenses

After calculating pre-operational costs, estimating the nut means adding together the fixed overhead expenses that do not change from month to month. Location expenses (rent or lease costs), salaries, and insurance premiums make up the bulk of this category. Regardless of how much business is done, rent does not change, employees expect regular paychecks, and insurance must be covered. Anything that is a regular reoccurring fixed expense should be included in the nut.

So, how much for rent? First be sure you have correctly identified exactly what your business needs because costs differ depending on what the space includes. Consider the cost of rent, length of the lease, quality of the space, operational limitations (such as hours of operation), zoning restrictions, storage capacity, lighting, data lines, security, access, and parking. For a retail space, the history of previous tenants and the type of neighbors are important. Factors to consider when looking for manufacturing space include the number of loading docks, shipping facilities, waste disposal costs, and proximity to suppliers and distributors. For an office-based business, the appearance, layout, privacy, meeting rooms, mail and shipping capabilities, and kitchen areas of a potential space are of greater consequence.

Salaries are another example of fixed expenses that do not change with the volume of business. If at all possible, avoid the common error of many budding entrepreneurs who neglect to pay themselves adequately. Just as insufficient cash flow can often spell the end of a small business, so too can being unable to pay your personal bills.

Finally, there is the increasingly large share of the nut taken up by insurance, most notably health insurance, which becomes more and more burdensome for small businesses every year. Other types of insurance you may need to secure for your business or its employees are dental, vision, life/disability, fire, loss/theft, business interruption, and malpractice. Make sure you carefully analyze the costs associated with each.

The Burn Rate: variable expenses

The burn rate is how much money is needed each month to meet variable expenses that change, depending on sales. Items in this category include cost of materials (inventory and/or raw materials), equipment replacement, project-based or seasonal labor, utilities, and delivery. For example, when Davis travels to meet clients or do railing installations, he burns fuel to get there. The more sales he has, the more gas he will burn. A literal example of the burn rate, this is an expense that is directly tied to sales volume.

Calculating variable expenses for a start-up requires some research to do accurately, and any expenses associated with doing so are tax deductible. Other tax deductible business start-up costs include the following from the Internal Revenue Service website:

Business analyses of potential markets, products, labor supply, transportation facilities, etc.
Advertisements for the opening of the business.
Salaries and wages for employees who are being trained and their instructors.
Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
Salaries and fees for executives and consultants, or for similar professional services.

Resources

Books:

Birthing the Elephant, by Karin Abarbanel and Bruce Freeman

Business Plans Kit for Dummies, by Steven Peterson, PhD, Peter E. Jaret and Barbara Findlay Schenck

Ladies Who Launch, by Victoria Colligan and Beth Schoenfeldt

Six-Week Start-Up, by Rhonda Abrams

The Small Business Start-Up Kit, a Step-by-Step Legal Guide, by Peri H. Pakroo, J.D.

Interviews:

Renee Smith Fisher, owner

Renee Fisher Event Planning, Portland, OR

Brandon Davis, founder

Precision Rail of Oregon, Gresham, OR

Website: www.precisionrail.net

Web:

IRS.gov: “Business Startup Costs”

http://www.irs.gov/publications/p535/ch08.html#en_US_2010_publink1000208939

Kauffman Center for Entrepreneurial Leadership:

http://www.kauffman.org/section.aspx?id=entrepreneurship

Kauffman Index of Entrepreneurial Activity:

http://www.kauffman.org/research-and-policy/kiea-interactive.aspx

SBA.gov: “Business Licenses and Permits Search Tool”

http://www.sba.gov/content/search-business-licenses-and-permits

SBA.gov: “Estimating Startup Costs”

http://www.sba.gov/content/estimating-startup-costs

SBA.gov: “Writing a Business Plan”

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/writing-business-plan

The Frugal Entrepreneur, Free Business Forms and Templates:

http://frugalentrepreneur.com/free-business-forms-templates/

eleanordrury310 November 18, 2011 Today's Businessstart up, starting_a_small_business, starting_businesses, starting-a-company, startup, startup_costs, startup_expenses 5 Read more >

My Way or the Buy-Way? Should you start your business from scratch or buy a franchise?

by Cindy Waxer.

Cary Cheung wakes up at 4:30 a.m. every morning to run a business that requires him to pay a fee. He doesn’t own it outright, and it doesn’t even bear his name. And yet he couldn’t be happier.

That’s because Cheung is a franchise owner of Doc Popcorn, a maker of flavored popcorn that uses a variety of organic and all-natural ingredients. In fact, Cheung abandoned his career as an assistant vice-president at WaMu Investments to become Doc Popcorn’s very first franchisee in November 2009. And just a few weeks ago, Cheung and his wife, Judy, opened their second Doc Popcorn location in California.

Pull-Quote-Tall.pngThe Cheungs aren’t alone. According to the International Franchise Association, approximately 4 percent of all businesses in the United States are franchisee-worked. And the consultancy Franchise Marketing Systems says that franchising is a business model that generates more than $1 trillion in U.S. sales annually across more than 70 industries. Franchised businesses ran 767,483 establishments in the United States through 2008, including establishments owned by both franchisees and franchisors.

But while running a franchise business can be both professionally attractive and personally satisfying, not everyone is cut out for the task. Just ask Amy Bennett, owner of The Greene Grape, a Brooklyn, New York-based seller of fine food and wine. The choice was obvious to Bennett: “Part of opening my own business rather than a franchise was for it to be a creative outlet for me. I wanted something I could contribute to meaningfully.” Add that desire for creativity to the many negatives associated with franchising, such as royalty fees, restrictive licenses, meddlesome franchising authorities, and a lack of ownership, and it is easy to see why many are dissuaded from signing up to become a party to a franchise.

For many others, of course, those negatives are more than outweighed by the many benefits of running a business associated with an established brand and backed by the marketing muscle and support of a large corporation. So how do you know if you’re best suited to run a franchise or if you should strike out on your own? Answering these five questions can get you a step closer to the right answer.

1. How much legwork are you willing to do?

“When you invest in a franchise, you’re getting the brand name of the franchisor, the operating system, a proven track record, not to mention ongoing support, education and training,” says Brian Miller, president of The Entrepreneur’s Source, a business ownership consultancy in Connecticut. “If you started out running your own business, however, you really wouldn’t have anybody to rely on.”

That kind of pre-existing structure was precisely why the Cheungs opted to run a franchise. “My parents owned their own restaurant so I saw the struggles they had starting off and all those lessons they had to learn,” he says. “The attraction of a franchise is the system is created for you.”

“There are very few people who are true entrepreneurs and who can really go out and make a business their own,” says Miller. “But there are a lot of people who have that passion and fire in their belly and know that they want to take control of their own destiny but need a little bit of help.”

2. What are you willing to invest financially?

Launching your own business often requires little to no capital, especially if you start small. But many popular franchises demand lots of upfront capital and collateral—sometimes up to millions of dollars—from a prospective franchisee before offering a contract. These “working capital reserves,” as they’re called, are often required by franchisors so that they will feel comfortable that a franchisee can stay in business until he or she reaches the financial break-even point.

In the case of Cheung, he invested between $100,000 and $150,000 to open his first store, including upfront franchise fees. “That was a main reason why we chose Doc Popcorn—the low entry point.” Every other franchise he looked at was going to cost from $200,000 to $250,000 to start, he says.

Still, some franchises are willing to lend a helping financial hand. “My wife and I funded the store on our own, but I know that Doc Popcorn has third-party connections to help with funding,” says Cheung.

To learn more, check out our previous article on franchise startup costs.
3. Can you back someone else’s product?

While there’s definitely something to be said for creating your own business, many entrepreneurs are proud to peddle a franchise’s products. “The only reason we signed with Doc Popcorn is because of the product and what it represents,” says Cheung. “Of course, trying to make money is always a goal for all business owners but you have to believe in the product.”

For Bennett, however, launching The Greene Grape was an opportunity to express herself and act on her vision of a perfect wine shop. “At the time I opened my first wine store, there wasn’t really a franchise that focused on handcrafted, affordable wine,” she says. “My twist on a regular wine store was part of the creative process.”

4. How much say would you like in the business?

“The advantages to running your own business are mostly in creative control,” says Bennett. “I can market the way I want, my store can have a personality that reflects who we are. This means a lot more work, of course, but at the end of the day I can step back and be proud of how the store is presented.”

That’s not to suggest that franchisees don’t have any input. Rather, Miller explains, “As you become successful in a franchise system, there are opportunities for you to work collaboratively and to develop new products and services.”

5. How long can you wait to break even?

According to Miller, “the support given by a franchise in the beginning in terms of brand recognition means that you might have a quicker start in terms of sales. Educating the consumer for a new business definitely takes more time. Depending on how a franchise agreement is structured, that could mean breaking even for the franchisee earlier.”

Still, if the substantial franchise buy-in requirements are too steep, taking the franchise route (and its more desirable, early break-even point) may not be a realistic option for many budding entrepreneurs. Instead, they may have no other option but to launch on their own, either diving into entrepreneurship full-time and striving for a quick rise in profits or running a side or part-time venture for a longer period of time, until the business proves it can stand on its own.

eleanordrury310 November 8, 2011 Today's Businessbusiness_start_up, franchise, franchise_cost, franchise_fees, franchise_opportunities, franchising, new_business, right_franchise, start_up, starting_a_business, starting_a_new_business, startup 3 Read more >

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