Business Information for Entrepreneurs by an Entrepreneur

Finding a Host for Your Website

Getting a domain name registered for your website is only one part of the puzzle to getting your site up and running. Your next job is to find a web host.

A web host is the person or company where your website will be supported. This is usually a company with a number of large servers that can hold all the files necessary for your website to be operational.

There is no shortage of choices when it comes to selecting a web host. The problem is in making sure you get a host that will do what you need.

Today, many hosts are either free or very cheap.

Do Your Homework

But before you go the money-saving route, make sure it is worth it. If the host has slow or non-existent technical support, you could find yourself needing help to get your website online, or back online if there is a problem.

Worse, you could get no answer at all.

Research on any company you are considering to find out what other consumers think about their experiences with them.

Your needs may also partially dictate who you can work with. If you are going to have a complicated shopping website as part of your online business, you will need shopping carts and other special programs.

You should look for a host that offers these types of services.

Before you make a final decision make sure you compare and contrast companies.

Ask:

• What is the monthly cost?
• What’s included in the monthly cost?
• How much is the setup cost?
• How much space you get for the price?
• How much bandwidth do you get?
• What happens if you go over your allotted space?
• Is there technical support if you have problems?

Once you have taken a close look at all the options, choose the host company that offers the best service for your small business – and your money.

Developing a Viable Marketing Plan

Once you have a business plan in place for your company, you may think you are done with the paperwork. Not so.

If you want your small business to succeed, you need a marketing plan to figure out how to get your company to the top of the market.

The first things you are going to need in your marketing plan are an analysis of your competition and your customers.

Customers

Know who these people are (gender, age group, specialty field, etc), how to attract these customers, and what they need.

Competition

You need to know who else is trying to take the business you want. Many small business owners think they can ignore their competition and succeed just by doing their job.

While this may work from time to time, it is best to know your competition and what they may be offering to your customers so you can have a plan to counter them.

Attract More Customers

The next part of your marketing plan should be ways to get more customers to come to you.

You will need to come up with a strategy to get the attention of potential customers and convince them to give your small business a try.

Anticipate Changes

The business world is always changing. Those who do the best in times of change are those who were ready for it. Knowing the types of changes that could come in your field and how you will deal with them is key.

Making a list of ‘what if’ scenarios is a great way to consider possible changes in your market and how your company will react. By planning this in advance, you will have a plan, instead of panic, when the time comes.

There are plenty of online resources and software programs that will help you create an in-depth marketing plan to get your small business on the right path

Record Keeping 101

It is one of the least liked but most essential parts of running a business – record keeping. Unless you are an accountant, no one likes keeping the financial books in order.

For some, it may border on torture. But if you don’t do it properly, you will likely regret it down the road.

The best way to make your way through the maze of recordkeeping is to set up a plan before your start running your business, so you know what to records keep and where they go.

Here are some of the records you should be keeping:

• Invoices
• Receipts
• Contracts
• Important Correspondence

These all need to be kept separately to avoid a jumbled mess at the end of the year.

Make it a Regular Routine

If you’re smart, you will also make record keeping an ongoing part of your business, instead of stacking things up until the end of the year and trying to sort it all out in a frenzied panic.

If you have a small business, you likely don’t need an accountant, but you may want to enlist the help of accounting software. There are plenty of programs that will let you set up a small business account within them, such as MYOB or Quick Books, which will help you sort and separate all those papers into their appropriate categories.

If you do this as you go, instead of worrying at the end of the year, you will have a perfect print out of all expenses, payments and other financial information you need.

It is important to note that financial rules and requirements differ by state and region, so you may want to check with a CPA in your area when you are first setting up your financial record keeping program to make sure you haven’t missed anything.

Startup Money for Your Online Business

While you may be raring to jumpstart your new online business venture, there is one thing you can’t get around…start up money.

From where are you going to get the money to begin this great business of yours?

Save Your Cash

The first way to have the money you need to start up your own online business is to save up for it.

Many people know they are business-minded and start putting every extra penny they have away until it’s time to start their company.

This offers them complete independence, as they only have to answer to themselves when it comes down to how the money is spent.

Borrow

If you must, you may want to consider borrowing from your friends or family.

If they believe in you, they may also believe in your venture and be willing to help you out as you get your feet on the ground.

Start Small

Don’t try to make your company too big, at least at first. Most online businesses start small and are run out of a home office or part of a garage.

This is a smart way to start a business, as it keeps overhead costs low. As your profits grow, so can your small business.

Be Realistic and Be All Business

It’s easy to be ‘on the job’ all day and not get anything done.

Many people work on their business day in and day out, but are not necessarily doing things that will make money for the business.

Make sure the things you are doing are for a purpose, to increase your profit making potential.

Make Your Business Look Professional

While in the online world having a website can make you look like a legitimate business, there are a few more things you need to do to make sure you have the complete look of a fully operational company.

If you ever plan to promote your business, either in person or through mailings or other means, you need to have a professional appearance.

Business Cards and Stationary

These are essential pieces of paper. Any correspondence you send relating to your company should be sent on company letterhead. This gives your small business a more professional appearance than just a regular piece of paper stuffed into an envelope would.

At meetings you want to hand out professional-looking business cards.

When you are having your stationery designed, make sure to put your website address and phone number on everything, as this is how customers are going to find you.

Business Phone Line

Whether it’s a landline or on your cell phone, make sure your phone is answered in an appropriate and professional manner at all times.

You should have a dedicated line for your business, if possible. If you are using a phone that is used for personal reasons as well, err on the side of professionalism – always answer as if it were a business call until you know otherwise.

Can You Talk Business?

You should know how to talk about your company and present it to anyone you encounter in a business environment. Practice an ‘elevator speech’ (1-2 minutes) about your company that you can use to tell someone about your business.

For people to take your company seriously, you have to make sure it has a professional look. Use the tips above to do just that.

Legal Considerations – Business Structure

Once you are ready to start your business, do you know what kind of business entity it needs to be?

Many business owners don’t consider this right away – but not knowing the difference between your choices could land you in a world of legal trouble down the road.

Here’s a quick look at your options:

• Sole Proprietorships and Partnerships – For most entrepreneurs, this is how their small business will start.
  
  While all the profits will be yours, so are all the responsibilities and liabilities – because the business is tied to your personal finances.

• Limited Partnerships – In Limited Partnerships, there is one main partner who makes the decisions, and others who are investors in the company.
  
  The main partner will be the one who is personally liable if things go wrong, while the other partners put in money to take a share of the profits.

• Limited Liability Corporation (LLC) – An LLC takes the liability away from the owners of the business. Instead, the business becomes its own legal entity in the eyes of the law.
  
  While the owner(s) will still take care of business taxes on their personal returns, they will not be forced to take on personal liability if the business is sued.

• Corporation – Incorporating is when a business becomes completely its own entity, both legally and financially.
  
  This type of business will pay corporate taxes; and instead of being labeled an owner, the owner will be come an employee of the company.

Depending on the type of business you plan to run, and the risks associated with it, you need to carefully choose which type of business structure you need.

How to Write a Business Plan

Writing a business plan is one important step of starting a business that many small business owners overlook. Thinking they know how they want the business to run, they figure there is no need for a real business plan.

But the truth is that sometimes, while you are running a business, you are too close to it to see that it may not be on the path it needs to be. A business plan will be a map of sorts to keep you on track.

Additionally, if you need to get a little financial help in the form of a loan to keep your business up and running, financial institutions will insist on seeing a business plan before they will consider your request.

Here are the basics of what should be in your business plan:

Description

A description of the business is important, as this is essentially your company’s resume.

Your mission statement and company purpose should be clearly defined in this section.

Marketing

From naming your competition to how you will show you are a different entity, this section needs to explain the way you will market your company to succeed.

Finances

How much capital will it take to get your company started and keep it running?

A break-even analysis, as well as profit and loss projections, should be in this section of your business plan.

Management

How is your business going to run? All the details of what it takes to keep your business operational and the procedures that you will follow to be successful should be clearly described in this section.

If this seems like an overwhelming task, there are plenty of software programs that will walk you through the process of creating a business plan. Just make sure to do it, check it often, and update it as needed.

When you bid on a contract, your prospect will often come back and ask for a lower price. Here is a proven strategy to negotiate pricing. The goal is to make quality of service and deliverables the issue, not price.

1. Plan: Know what you can compromise on and what they would have to compromise on.

It’s only fair: if you give up something, so should they. But before you offer up anything, know what you can do. Fast negotiators can think on their feet and usually have planned out a strategy to get a better price from you. Make a list of what you can compromise and assign a cost to it. Then, jot down what you would not be able to provide (i.e., what they would give up) as a result.

2. Find out who and what you are up against.

“Have you gotten lower bids from others?”

They will probably say yes, even if they are lying to you just to beat your price down.

Who?

Try to get the names of your competitors so you can respond to their level of competency or reputation. Ideally, you should have a solid handle on your competitors before you talk to your prospect so you can respond on the fly.

If you find that they are comparing you to a company with a less-than-stellar reputation, do not put the other firm down. It will make you look bad. Instead, say something like “I would encourage you to do a little due diligence on that company, perhaps do a Google search the terms ‘Widget Corp quality’ or ‘Widget Corp customer service’ just to see what you find. You might also do a related search on our company.”

Never negotiate against yourself.

Do not say things like a used car salesman: “Where do I have to be to get your business?” The moment they know they have negotiating room, an experienced prospect will take you to the cleaners.

3. Make sure they are comparing comparable deliverables.

“Well, there must be a reason they are pricing it lower so let’s make sure we are comparing apples to apples. Usually, if they are priced significantly less, they have to cut corners somewhere. Exactly what are they including line-by-line for the quality of goods/services they proposed?”

Take price off the table. If you are a very experienced consultant with rock solid credentials and your competition will have junior level staff working on the project, make sure your prospect understands the difference in the quality of the deliverables they will get.

Say something like “Well, it seems like there is a pretty good reason they’re pricing this project lower: they’re going to have less experienced people work on it. You will be getting a completely different experience with us.”

You might find that the person negotiating just wants to look good to his boss to show they got the best deal they could. So if it looks like you can land the deal if you just show that you are compromising, leverage the list of compromises you made earlier (see item 1).

If you have to compromise, get something in return for what you give up. Example: “If I reduced the price on this item, would you be able to give me net 15 day terms instead of net 30?” There should always be a “give” for every “take”.

4. Know when to walk away.

Sometimes the best decision is to turn away business. In my experience, the people who want to pay the least are the most demanding ones. Rather than ending up with the client from h***, spend your time focusing on another prospect. You might even find that by turning them down, they’ll rethink their position and come back to you.

“I’m sorry but we just can’t give you BMW quality at a Ford Escort price. If a lower cost is really what you’re after, then we’re probably not the right company for you. There is always going to be a company that is cheaper. But we pride ourselves on the quality of our work and our reputation depends on it. We just wouldn’t be able to provide that level of quality at a lower price.”

5. Practice.

Try saying some of these phrases to yourself in the mirror. Look like you’re believing it – your facial expressions will come across during phone calls. Role play with a colleague, a friend or your spouse. Remember, practice makes perfect.

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Tell me about your experiences and negotiation stories, good and bad.

How to Handle Multiple Businesses

In these competitive times, you might find that one single small business is not enough to take care of rising expenses.

If you are thinking of running another business along with your current one, then here are some pointers to help you to handle them concurrently.

Practice Good Time Management Techniques

You will need to devote sufficient time to your businesses so that one doesn’t progress at the cost of another.

Manage your time so that you are present when crucial decisions need to be made, or during peak hours of that particular business.

Try to avoid handling multiple businesses that are labor-intensive; you might not have the time or energy left to handle them.

Learn Money Management

You will need to maintain separate accounts in order to keep each business as its own entity.

By robbing Peter to pay Paul or vice versa, you will only end up with a bankrupt Peter and Paul. If one of your businesses is struggling, then it may be better to abandon it.

Manage Your Employees Effectively

Since you might not be physically present in your multiple businesses, hire the right employees for the job – and maintain close tabs on them.

Get regular updates so that potential problems can be quickly nipped in the bud.

Learn To Be Accessible

You should be accessible for your clients as well as your employees, so that they feel that you are actively involved in that business.

Even if you are at another office, you should be accessible by phone or email. Use technology to the fullest.

By keeping all these aspects under your control, you can successfully manage your multiple businesses – and bring in multiple profits.

What to do if Your Small Business is Sued

Even if you are running a small business, you could get sued for a ridiculously large amount of money due to a single mistake.

In addition to some basic precautions, you will also need to take other steps to counter the attack and increase the probability of winning the lawsuit.

Let’s look at some steps you should take if your small business is sued.

• Hire An Attorney Immediately. You should immediately hire an attorney in order to file a response to the lawsuit.
  
  If your insurance policy specifies that the insurance company will defend you, then that is even better. Ultimately, it might be the insurance company that will have to cough up the money if you lose the case.
  
  This brings up another important point – and that is to take out an adequate insurance policy in the first place.

• Do Not Waste Time. Do not treat a lawsuit as a low priority. If you do, you and your attorney will not have enough time to prepare for your defense.
  
  It might also send the wrong message to the court if you are unable to file your response during the required time frame.

• Get The Relevant Papers Ready. If an employee has sued you, then you need to get all the papers related to him/her or their attorney.
  
  If a client has sued you for lack of service or due to a faulty product, then you will have to gather factual data on your service or product.

• Launch A Counterattack. In addition to filing your defense, you will also need to find out the chinks in the armor of the employee or client that is suing you.
  
  If you are not at fault, then you will also need to plan your counterattack along with your attorney.

If you find yourself in this unfortunate situation, there is no need to panic. Instead be prepared – that is the best defense.