Tag Archives: business

30 days to Becoming an Entrepreneur: Full post list and wrap-up

Starting a business is an unbelievably rewarding experience that I hope everyone can experience at some point in their lives. Once you start one business, it’s hard to stop. I know I definitely have caught the entrepreneurship bug 🙂 I have many business ideas that I am considering for my next business – two of which are in process. As my plans begin more concrete I’ll post more information (likely later this fall). I hope you have found this series to be helpful in your pursuit for entrepreneurship! Below is the full series post list:

30 Days to Becoming an Entrepreneur Series Introduction

Photo Credit: Markus Eckstein

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30 days to Becoming an Entrepreneur: My biggest regrets

I will never regret starting a business. Not only did I learn a tremendous amount about entrepreneurship, but I met so many amazing people along the way and learned what it is like to become self-sustainable. There’s nothing better than knowing that all of the extra work you put, the late nights, and long hours are going towards your own personal success – not your employers. With that being said, I do have some regrets about how I did things in the beginning, that I would change if I could. My biggest regrets are:

  • Being extremely cheap.Yes, it is important to be frugal. That does NOT mean you should sacrifice on important things and put in cheap finishes that won’t even last a year. I wish we would have just taken out a small business loan to invest in the infrastructure for our business. Instead, we used our own personal investments – and credit cards to pay for everything. Because of that, we had limited funds to work with and were forced to choose things because they were cheaper – not because they were the best. We have learned our lesson the hard way as we have had many, many things we needed to upgrade, replace, or fix because it was cheap. Remember, there is a difference between frugal and cheap – make decisions for the long-term and don’t go cheap just to save a small amount.
  • Not spending more time doing due diligence before starting. With Deckci we had no idea how to treat linens when we first got started. We didn’t take the time to figure out how to clean them and that led to us throwing away a significant amount of linens that we could not get stains out. Now, we have a process stained linens go through that gets out almost any stain. If we had taken the time to do some testing early on we would have saved that money. Similarly, we didn’t spend enough time researching business structures prior to starting and less than a year after starting we had to switch our business structure to an LLC which took some paperwork and time. If we had done more research to start we would have started as an LLC to begin with.
  • Needing efficient processes. We have had many, many mistakes over the past few years with both businesses and oftentimes it is because we do not have a well-defined process or policy in place, so the ball gets dropped somehow.

While it was hard to learn these things as we went, I’m glad we did. Now I know that the next business I start won’t (hopefully) have these issues. I also want to add, that I think it is more important to take the plunge and start a business cheaply than to not start one at all. So, if you know going in you’ll have to do some of these things because you truly have no other choice – then that’s ok. You’ll be able to plan to replace things sooner, etc. Just start your business, don’t wait, because before you know it someone else will start it for you.

Next, 30 days to Becoming an Entrepreneur: Full post list and wrap-up

Photo Credit: Anon Photography

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30 days to Becoming an Entrepreneur: Promoting your business through social media

Every business should include social media in their marketing strategy. Social media can be a valuable tool to promote your business. It can help you create a community that people enjoy being a part of and want to participate in. There are many options for social media ranging from YouTube to Facebook, Twitter to blogging. You need to figure out what will be the best fit for your business.

For small businesses, I think Facebook and Blogging are the best options to consider when you first start. While tons of people are on Twitter, it just isn’t a good fit in my opinion for small businesses. YouTube can be a good fit for advertising – but it could be a costly endeavor unless you or someone you know has some skills in video making. Blogging is a great fit for some businesses – but not all. We have blogs for both The Woof Room and Deckci Decor. The Woof Room’s blog focuses on highlighting dogs that visit us, promoting dog events, and providing dog tips and advice. It helps create a community with our clients providing them with useful information and featuring their dog. We’ve had many clients comment to us that they love reading about all the dogs that visit us. Our blog is also helpful in providing a forum for us to explain changes in our policies and pricing. Deckci’s blog provides wedding tips and advice, and features pictures from the events we do each weekend. Since weddings are a one day event that people invest significant time and money in planning, clients want to feel confident that we know what we are doing and can provide what they need. The blog satisfies this as they see that we do many events each weekend and are able to see our work.

Facebook is the best all-around option for a new business. It can be used similarly to a blog by providing pictures, updates, and information – but allows you to get in front of people daily. Facebook can be used to run promotions to get more likes – and do polls of clients. While it does take time to manage, it’s a free service. We have a Facebook page for The Woof Room – but haven’t focused on it for Deckci yet. For The Woof Room we have linked our blog to Facebook so that anytime we write a blog post, it automatically gets posted to Facebook. We also will add random pictures of dogs in daycare, run contests, or ask clients questions. We have found Facebook to be very useful in reaching our clients.

The most important thing to remember about social media, and specifically about Facebook and blogging, is that you need to be active. Do let weeks or months go by between postings. If you want to build your community and raise awareness about your business, you need to be active in promoting it!

Next, 30 days to Becoming an Entrepreneur: My biggest regrets

Photo Credit: Gee Ranasinha

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30 days to Becoming an Entrepreneur: Tips for hiring your first employees

Your staff can make or break your business. If you hire the right staff, customers will love your business and will come frequently. If you choose the wrong staff, you will have unnecessary stress and unhappy customers. You can usually weed out some of the “bad” staff in hiring. Most of this is common sense, but make sure to:

  • Have applicants complete an employment application. This is where you collect their job history, references, availability, etc.
  • Have a well-written job description. Make sure to clearly outline the details about the position, expectations, and availability required. If people know that you want someone to work 20 hours per week on M, W, F then you won’t waste time with those that want to work less or more – or aren’t available for those shifts.
  • Consider a multi-step interview process. At The Woof Room, we did phone interviews, then in-person interviews, then working interviews. The working interviews had someone coming in for a 4-5 hour shift to actually do what they’d be doing if they were hired (they were paid for this). This was an excellent opportunity to see if they’d be a good fit – and make sure the job is someting they’d want. We did have people decide the job wasn’t a good fit for them (and some we decided weren’t a good fit for us) so this was an important step for us.
  • Invest the time in training. Training is critical in hiring. Don’t skip this step or spend too little time on it. Create a training protocol to ensure each new hire is trained in everything they need to know – and has the opportunity to test that knowledge before they are on their own.

Don’t forget about the logistics of hiring! I highly recommend you use a payroll service. While I am all about doing as much as possible in-house, dealing with payroll taxes can be time consuming. Payroll services typically charge a flat rate and then an amount per employee. The cost is minimal, when we had less than 5 employees it was around $25-$30 per month. With our 10+ employees now with The Woof Room we pay about $55 per month. Considering the amount of work involved with payroll and payroll taxes (and keeping up with human resources notices for employees) it’s well worth the money.

Once you make your selections and have payroll set-up, you’ll need them to complete a W4. You should already have their employment application. You’ll also need to get proof of legal status – which is usually a social security card and drivers license – both of which you copy and keep on file just in case. Lastly, if they are doing direct deposit you’ll need a voided check and direct deposit authorization form from them. Make sure when you get this information to triple check what you write down and turn in to payroll. A typo can be costly – particularly when payroll does checks on their social security number.

Next, 30 days to Becoming an Entrepreneur: Should you hold an open house or grand opening party?

Photo Credit: Daniel Ted Feliciano

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30 days to Becoming an Entrepreneur: Doing a daily deal – negotiation and preparation

Everything is negotiable. When we did our first daily deal we were desperate for new business and just took what they offered and did the deal they wanted. It wasn’t in our best interest – but we really wanted the deal. I wish I knew then, what I knew now.When negotiating with a deal site, there are three primary things you can negotiate on:

  • Deal specifics: It’s up to you what your deal is. Don’t agree to do a deal on something you may lose money on. At The Woof Room, we book out of our hotel suites for dogs every weekend the entire summer – and every holiday. Because of this, we will not do deals on boarding. We learned this lesson the hard way with our very first deal (which included boarding). You can also say it’s only for new customers and place limits (i.e. one per customer or cannot be used on Friday nights).
  • Percentage you keep: They will negotiate with you on what percentage you keep. They might not come up as high as you want, but as long as they come up – event a few percentage points – it’s more money in your pocket. It doesn’t hurt to ask and it’s just money you’re losing if you don’t.
  • Expiration date: They will tell you 6 months (or 1 year) is standard – but that doesn’t mean anything. You can choose whatever expiration date you want – within reason. So,  if Christmas is your busiest time then make sure your deal expires in November so you don’t get normal customers for Christmas at discounted rates.

Once you have hammered out the details and you feel comfortable with your deal you will need to prepare. You will get A LOT of inquiries the few days your deal is for sale. How many? It varies greatly. A good way to estimate is take the normal amount of phone calls, emails, and visits you get in a day and multiply that by 10 – 15. That will give you a good idea of what to expect in terms of increased traffic. You’ll also have a lot of work after the deal handling the new clients. Three tips to make this process smooth are:

  1. Make sure you (or a very experienced staff person) is the “voice” for your business during the sale period. The last thing you want is someone coming in months after the deal telling you an employee told them something was ok when it’s not. When we do deals we put together a fact sheet about them and focus on the rules and restrictions so that everyone is aware of them.
  2. Be proactive. You can see the list of people buying your deals as they buy them (while the deal is still live). If you notice the same person buy 7 deals or a current customer buy deals for new customers, deal with it right away! Contact the customer to let them know they aren’t eligible – or contact the deal site to refund the deal. Take care of it right away, but months down the road it won’t be very easy.
  3. Collect sales tax! The deal sites do NOT collect sales tax and explicitly state on the deal that they do not include sales tax. You are going to have to pay sales tax and you definitely don’t want to have that come out of the already small amount you are getting from the deal so make sure you and your staff collect sales tax from every customer bringing in a deal.

Next, 30 days to Becoming an Entrepreneur: Tips for hiring your first employees

Photo Credit: Seth Anderson

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30 days to Becoming an Entrepreneur: Negotiating for your lease

Usually the landlord presents you with a lease and you sign it. Don’t do that! Everything in that lease is up for negotiation. By just accepting whatever the landlords gives you, you are missing out on an opportunity to save money and cover yourself down the road. What should you negotiate on? Most things. Here are the key things to negotiate on:

  • Lease start date: No one can sign a lease and open for business within a day or two. It will take at least a couple weeks – but for most people it can take months. For us, it took us almost four months to renovate our space for The Woof Room and Deckci. As a new business, we did not want to pay rent when we weren’t open so we were able to negotiate that we could get in to the space beginning in August to renovate, but our lease wouldn’t officially start until mid-October. We opened for business at the end of November. This saved us over $10k in rent. Try to push back the lease start date as far as possible to lower your upfront costs. Ideally your lease would start when you actually open for business (or later).
  • Lease term: Many landlords for commercial or industrial spaces want long-term leases. At least 5-10 years (one building we looked at wanted us to sign a 30 year lease!). As a new business, you don’t want to sign a lease that long if possible because you never know what might happen with your business. We were able to negotiate our lease to be a 3 year lease. Also, this is also where you should negotiate any conditions on your lease. For example, you should make your lease conditional on city (or other governmental) approval. For The Woof Room, we made our lease contingent on getting approval from Roseville to open.
  • Rent (and rent increases and what rent includes): Negotiating your rent to be lower is worth a shot – but don’t be surprised if rent is a sticking point. Try to get taxes and cam included in your rent. Make sure to have a note in the lease about the landlord needing to provide proof of taxes/cam going up before they can increase your rent because of it. Also, make sure to spell out rent increases (if any) in your lease. For example, our rent increases by 2% annually. Lastly, try to get some or all of your utilities included in your rent. We were able to get water included in our rent. Because we wash a ridiculous amount of linens for Deckci, this was a huge win for us.
  • Renovation: Oftentimes landlords will cover some of the costs associated with building out or renovating your space. This is something you should negotiate for. Some will just flat out pay for contractors to do some work, others will give you a rent credit for $x amount. We negotiated that the landlord would remove all of the glued down carpet throughout the space, construct about 100 feet of interior walls (carpentry, drywall, tape, mud), demo a concrete landing, and add a drain and plumding to the room we planned to do laundry in. These things saved us at least $4,000-$5,000. Make sure you write a deadline for this work to be done by in the lease. Make sure to also note that you have permission to do any renovations necessary for your business.
  • Parking: Write out any parking spaces that will belong to you as part of the least.
  • Care & Maintenance: Our lease says this “Lessee shall be responsible for routine repair and maintenance of HVAC, lights, interior walls & floors, and general interior repairs. Lessor shall be responsible for roof, exterior walls and building structure.” What is considered “routine maintenance and repair” has been big. About 6 months after moving in the space the AC wasn’t working – we hadn’t even used it yet (it was right after winter). We called the landlord and they tried to make us pay for it. Fortunately, we were able to talk to the contractor who confirmed that the problems were NOT routine maintenance and repair, so the landlord had to pay for it. Make sure to have that terminology in your lease – and always make sure any repairs are actually your responsibility.

Most importantly, make sure that anything you discuss is in the lease. Make sure all of the above items are spelled out in the lease!

Next, 30 days to Becoming an Entrepreneur: Tips for building out your space

Photo Credit: Simon Van Der Linden

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30 days to Becoming an Entrepreneur: Applying for SBA/Bank Financing – the nitty gritty details

Now that you know what your business is going to cost to get started and have considered the options for paying for it, you may have decided to go for Small Business Administration (SBA) financing. When I first started working on the process to get financing for my new business idea, I had no idea how to go about getting a SBA loan. I thought I applied to the SBA and they gave me the money – I didn’t realize that I’d still need a bank to get involved.

I should note, my experience with the SBA is with their 504 program. I am not as familiar with their 7(a)  and microloan programs. The 504 program is for purchasing/building capital projects (i.e. building a new office, purchasing land, etc). When I first got started I spent a lot of time on the SBA website. It’s packed with tons of helpful tips and resources. It was reading through their website that I realized that I couldn’t just send in an application to them – that I’d need to go through a bank – which would then submit my application them (after the bank had approved it). In fact, I’d need not one but three different financing approvals. The 504 program loans are provided by community development corporations and banks. Technically, the SBA doesn’t provide any money at all out-of-pocket. They just guaranty the loan for the community development corporation (CDC) – the bank’s loan is guaranteed by the property purchased with the loan. So, the process is first you put together all the documents they need (see below). Then you send it to the bank. The bank will review things (usually takes 1-3 weeks) and will make a decision. If they approve, the CDC will review and make a decision. If they approve as well, then it gets sent to the SBA for their approval. If they approve, then you get the loan.

So, what will you need when applying?

  • Personal financial statement (usually the bank will provide you with a blank one to complete) – this outlines your income, expenses, assets, etc
  • Copies of your tax returns for the past 2-3 years
  • If you own another business (or this loan is for a current business) you’ll need the tax returns for your business
  • Profit and loss for your current businesses, balance sheet for current businesses
  • Business plan
  • Cash flow projections for at least 3 years

You’ll also need a decent credit score. If you need a smaller loan (under $50k) then you could go through a nonprofit (who also goes through the SBA) for the loan to avoid dealing with a bank. Nonprofits also tend to be a little more flexible in working with not so hot credit. If you get denied on your first try – don’t give up! Keep trying. There are TONS of banks out there, some are very experienced in working with certain types of businesses and do hundreds of SBA loans a year, while others do just handful and are much more particular. Trying to find a bank that does a lot of SBA loans to increase your odds.

Have any of you applied for a SBA loan before? Any thoughts on the process?

Next, 30 days to Becoming an Entrepreneur: NIMBY – Hurdles to opening your doors

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30 days to Becoming an Entrepreneur: Picking a location for your business

Where should your business be located? Urban, suburban or rural? Busy intersection or strip mall? These are some of the things you’ll need to consider when picking a location. Before you decide any of these things you need to narrow down the geographic location.

Where are your competitors? Note areas where there is a gap in service. For The Woof Room, we made a list (which was short) of the areas that were not served with a dog daycare and board facility. We were not interested in starting a dog daycare and going head to head with a competitor. We wanted to ensure our success and growth so were targeting under-served areas. There were only 2 or 3 cities without a dog daycare already, so we began the long process of trying to find a space. You should take a map of your metro area and use push pins to note where competitors are located. That will help you identify gaps.

Market research is important. Once you have your possible areas, do a little research on them to make sure they have your target market. There might be a reason the competition isn’t there. For example, individuals looking for dog daycare/boarding typically have higher incomes. So, I looked at census data on household income within 3 and 5 miles of the prospective area. This will help determine whether the market we aim to serve is in our prospective area. Use the information you put together from your market research to help you in picking your location – you’ll regret it if you don’t.

Lastly, use common sense. Obviously being on a busy road is a good thing. Try to find a location that has good visibility on a highly trafficked road with easy highway access and ideally proximity to large nearby attractions. With The Woof Room, our location is on a highly trafficked road (anywhere from 20-30% of new clients “saw us driving by”) only two blocks from several popular restaurants and 1/2 mile from a large, busy shopping mall.Remember to be patient though. It’s hard to find the “perfect” location. It takes time, don’t settle!

Good luck hunting for your location!

Next, Applying for SBA/Bank Financing – the nitty gritty details.

Photo Credit: Terence Faircloth

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30 days to Becoming an Entrepreneur: Business Office – Renting vs Buying

Rent or buy? While most people have asked themselves this about where they live – there are unique factors that come into play when considering whether to purchase or rent for your business. For some business owners, this won’t be a question that is even considered. Buying property is usually much more expensive than renting. With purchasing you need to get a loan (usually) and put down 10 – 35%. When buying that is usually a hefty sum putting this option out of reach for many.

If you have the means to make this choice, then I would strongly urge you to buy for three reasons:

1) Save money long-term. While you will need more cash up front, you will save money if you are in this for the long haul. Most SBA loans max at 20 years. That means you won’t have to pay rent once the loan is paid back. That can be a saves of thousands – and even tens of thousands per month. Also, your monthly payment stays the same if your rate is fixed providing helpful stability for a new business. If you rent, it’s indefinite and it will usually go up each year.

2) Better return on investment. When you are forced to put in a $30k ventilation system it doesn’t hurt as bad when you own the business. Landlords are very reluctant to help pay for your build out – or upgrades to the space for your business. That usually means its up to you. When you own the building it’s much easier to put money into it because you’ll get that return on investment – not your landlord.

3) Stability and security. This is the most important reason to buy instead of rent. For many businesses, their location is the reason they are profitable. Can you imagine putting $100k into your space, building up your clientele, and then having your landlord decide not to renew your lease? Or doubling your rent? With many businesses, their location is critical. When you own your building and land, no one can make you move or cancel a lease (except for the uncommon exception of eminent domain).

Next, 30 days to Becoming an Entrepreneur: Picking a location for your business

Photo Credit: HLIT

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